U.S. Equities closed at all-time highs for a second consecutive day after President Donald Trump said he’s been talking to Chinese President Xi Jinping and that they continue to work for a trade deal. Treasuries rose. The S&P 500, Dow Jones Industrial Average and Nasdaq Composite climbed to fresh records. China said earlier that negotiators “reached consensus” on certain issues in a phone call and agreed to stay in contact on the remaining points. The Stoxx Europe 600 Index edged higher for a third day, while Asian shares were mixed. The US Dollar was mixed versus major peers after five consecutive days of gains. Brazil’s Central Bank intervened in the foreign exchange market for the first time in three months, selling Greenbacks to prop up the Real after it slumped to a record low. Crude oil gained. Meanwhile, the Pound slipped as polls showed the ruling Conservative party’s lead narrowing into a December election, with the tightening race raising investor fears about an inconclusive result. The U.K. currency weakened versus all of its Group-of-10 peers as the latest surveys of voting intention showed the opposition Labour party making up some ground following the release of its manifesto last week. The most positive outcome for investors betting the Pound will rise is a Conservative win, whereas if no party gains a majority it raises the prospect that an impasse over Brexit will drag on into next year.
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Hopes that a partial trade deal is just around the corner have pushed a global benchmark of stocks to within 1% of an all-time high. A flurry of buyouts has also helped. We are getting to the point where they need to show us the money. Talk is one thing but an actual deal on paper, pen to paper, is what is going to dramatically change the market narrative. Investors are continuing to weigh the dispute’s impact on the world’s largest economy. Federal Reserve Governor Lael Brainard painted a mostly positive picture of the near-term outlook for the U.S. economy while advocating longer-term changes in the conduct of monetary policy in an era of low interest rates and subdued inflation.
The S&P 500 Index advanced 0.1% to close at a new record high of 3140.
The Dow Jones Industrial Average also closed 0.1% higher at 28,120, the highest on record.
The NASDAQ Composite Index increased 0.2% to 8,647, the highest on record.
The Stoxx Europe 600 Index climbed 0.4%.
The MSCI All-Country World Index gained 0.1% to 548, the highest in 22 months..
Here is a summary of the main Changes in F.X. Markets:
The Bloomberg Dollar Spot Index was little changed.
The Euro closed 0.1% higher at $1.1024, the first advance in a week.
The British Pound dipped 0.3% to $1.2864.
The Japanese Yen fell 0.1% to 109.02 per dollar, the weakest in two weeks.
The yield on 10-year Treasuries dipped one basis point to 1.74%.
Germany’s 10-year yield fell two basis point to -0.37%, the weakest in three weeks.
Britain’s 10-year yield fell five basis points to 0.64%, the lowest in more than three weeks.
West Texas Intermediate crude advanced 0.6% to $58.37 a barrel.
Gold strengthened 0.5% to $1,462.44 an ounce.
This morning on the Economic Front we already had the release of the October German Import Price Index which came in as expected with a fall of 0.1%. Next, we have U.S MBA Mortgage Applications and this is followed at 1.30 pm by GDP, Weekly Jobless Claims, Durable Goods and Personal Income/Expenditure. Finally we have Pending Home Sales at 3.00 pm and the Fed’s Beige Book at 7.00 pm.
December S&P 500
The S&P traded in a narrow range on low volume as shown by the VIX which closed at a new 14 month low of 11.54, while the McClellan Oscillator closed unchanged at +7. This morning the S&P has traded higher to my 3146 sell level. I am still short and I will add to this position on any further move to 3158 with a now higher and tight 3165 stop. I will now raise my T/P level on this position to 3140 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
The boring sideways action in the Euro shows no sign of ending with the market rallying to my 1.1025 T/P level on last Friday’s 1.1020 long position and I am now flat. We have a clatter of US Economic releases this afternoon which may spark some movement but as Thanksgiving is tomorrow most traders are on vacation. Today my buy level will be from 1.0940/1.0980 with a 1.0905 stop.
December Dollar Index
No Change as I am still a seller on any rally higher to 98.50/98.90 with the same 99.35 stop.
The DAX is still struggling to rally despite the ‘’Risk on’’ markets and I am still flat. Today I will raise my buy level slightly to 13090/13150 with a higher 13045 stop. I still do not want to be short the DAX at this time.
I am still flat the FTSE as the market remains severely overbought and trading at the top of both its Daily Bollinger Band and Williams Index. As I am now short the S&P I will raise my FTSE sell level slightly to 7450/7500 with a higher 7535 stop.
Dow Rolling Contract
I am still flat the Dow as yet again the market is trading at new all-time highs. I will now raise my sell level slightly to 28230/28380 with a now higher 28450 stop. Given how overbought the Dow is trading I no longer want to be a buyer of the market at this time.
This morning the NASDAQ also traded higher to my 8415 sell level. I am still short with a now lower 8465 stop. I will now raise my T/P level on this position to 8385 and if any of the above levels are hit I will be back with a new update for my Platinum Members. I am still expecting a decent correction in all U.S. Indices from at or near current prices.
Even the Bond Markets are rallying despite the record closing prices in the U.S Indices. I am still flat the Bund and I will now raise my buy level to 170.45/170.85 with a 170.15 stop. I still do not want to be short the Bund at this time.
Gold Rolling Contract
I am still flat Gold and I will now raise my buy level to 1438/1446 with a higher 1431 stop.
Silver Rolling Contract
Silver has hardly moved over the past three weeks and I am still flat. Today I will raise my buy level to 16.45/16.85 with a 16.18 stop. If I am taken long I will have a T/P level at 17.05.