US DATA: Kansas City Fed Manufacturing Still Stagnant, But Big Rise In Optimism
Dec-19 19:45
The Kansas City Fed's manufacturing composite index fell to -4 in December from -2 prior (and -1 expected), continuing to point to stagnant ongoing manufacturing activity in the region. The report notes that "most month-over-month indexes were negative".
- Regional Fed surveys have been increasingly difficult to read in the last couple of months - potentially due to respondents' reactions to the November 5 election results - and Kansas City's is no exception.
- For instance, the survey saw a 29-month high in the 6-month outlook (18, up from 11 in November and 7 in September) in what appears to be an increasing divergence with current conditions (see below). That optimism came, for example, as new orders fell from -9 to -17. So while expectations for everything from production to new orders to capex and employment are expected to rise in the coming months, the upbeat view is at unusually large odds from the current conditions.
- As we saw in the Philly Fed survey earlier, optimism faded in December after a large (post-election) leap in November, more closely corresponding with current conditions.
On the inflation front, "price increases accelerated from last month, and raw materials prices continue to increase at a faster pace than finished product prices."
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COMMODITIES: Gold Extends Recovery From Last Week’s Lows
Nov-19 19:43
- Spot gold has risen another 0.7% to $2,630/oz today, amid the escalation in geopolitical tensions between Russia and the West.
- Despite President Putin's move to revise Russia's nuclear doctrine, however, US State Department Spokesperson Matthew Miller has told reporters that the US has seen no reason to adjust its own nuclear posture.
- Technicals for gold remain bullish, with eyes on the 20-day EMA at $2,651.1.
- A clear break above this average would highlight a possible reversal and signal the end of the recent bearish corrective cycle. This would open $2,710.4, the Nov 11 high.
- Copper has also risen by 0.7% to $420/lb.
- A bearish theme remains intact, however, with attention on $401.35, the Aug 7 low and a bear trigger. Key short-term resistance is at $452.85, the Nov 5 high.
- Meanwhile, WTI is headed for the close higher on the day, after earlier struggling for direction. News of Iran’s pledge not to further enrich weapon’s grade uranium added downside, while the increase in Russia tensions was supportive.
- WTI Jan 24 is up by 0.3% at $69.4/bbl.
- Iran has agreed to stop producing uranium enriched close to the level required for nuclear weapons, according to UN inspectors.
- For WTI futures, support at $65.74, the Oct 1 low, remains exposed. Initial firm resistance is at $72.41, the Nov 7 high.
US STOCKS: Late Equities Roundup: IT, Communication Services Continue to Lead
Nov-19 19:41
- Stocks continue to climb off early session lows, S&P Eminis and Nasdaq indexes still outperforming modestly weaker DJIA late Tuesday. Currently, the DJIA trades down 160.92 points (-0.37%) at 43228.04, S&P E-Minis up 9.25 points (0.16%) at 5929.25, Nasdaq up 140 points (0.7%) at 18930.95.
- Information Technology and Communication Services sectors led gainers in late trade, IT most notably led by Super Micro Computer that gapped more than 40% higher in early trade after the company hired a new auditor and filed plans to come into listing compliance with the Nasdaq. Off highs, Super Micro Computer was +31.34%, Nvidia +3.87%, Crowdstrike Holdings +2.56%.
- The Communication Services sector was buoyed by interactive media and entertainment shares: Netflix +2.96%, Alphabet +1.59%, Warner Bros +1.11%.
- On the flipside, Energy and Financial sectors underperformed in lat etrade, Oil and gas stocks weighed on the Energy sector even as crude prices rebounded (WTI +0.14 at 69.30): APA Corp -2.09%, Devon Energy -1.91%, Schlumberger -1.62%.
- Insurance companies weighed on the Financials sector: Prudential Financial -2.51%, Principle Financial -1.82%, Chubb -1.43%.
- Big names still to report earnings this week include: Target, Williams-Sonoma, TJX, Nvidia, Palo Alto Networks, Intuit, Copart and the Gap.
USDJPY TECHS: Trend Structure Remains Bullish
Nov-19 19:30
- RES 4: 158.68 2.50 proj of the Sep 16 - 27 - 30 price swing
- RES 3: 157.86 High Jul 19
- RES 2: 156.88 2.236 proj of the Sep 16 - 27 - 30 price swing
- RES 1: 156.75 High Nov 15
- PRICE: 153.90 @ 15:46 GMT Nov 19
- SUP 1: 153.05 20-day EMA
- SUP 2: 150.79 50-day EMA
- SUP 3: 149.09 Low Oct 21
- SUP 4: 147.35 Low Oct 8
The USDJPY trend condition remains bullish and last Friday’s pullback appears corrective. Last week’s gains confirmed a resumption of the uptrend that started Sep 16 and the move higher maintains the price sequence of higher highs and higher lows. Sights are on 156.88 next, a Fibonacci projection. Initial firm support is 153.05, the 20-day EMA. A clear breach of this EMA would signal the start of a stronger corrective phase.
