03 Dec A DOWN DAY
Posted at 13:43h
in Market Commentary
Equities came under pressure, the result of trade fears and disappointing factory data. Treasuries also declined in price, the inverse of what was expected to yesterday’s events. Oil on the other hand advanced on speculation that OPEC+ could defy expectations by deepening its production cuts.
Commenting on the manufacturing data, the ISM declined for the fourth consecutive month. The data, while no longer in a freefall, lacks upward momentum, perhaps the result of trade questions and corporate uncertainty. Globally however, factory gauges in China and Germany suggest the worst may be over for the sector.
Later this week the ISM non-manufacturing index is released. A third tier data point released yesterday rose to a seven month high, the result of business-equipment demand rising to the most in nine months. What data point will the ISM non-manufacturing index validate?
Speaking of validation both the ADP and BLS labor report are released later in the week. Both statistics can be pivotal to determining the immediate direction of the economy.
I will continue to maintain an optimistic view until both housing and employment turns weak.
What will happen today?
Last night the foreign markets were down. London was down 1.06%, Paris down 0.41% and Frankfurt up 0.54%. China was up 0.31%, Japan down 0.64% and Hang Sang down 0.20%.
The Dow should open moderately lower on trade fears. The 10-year is up 6/32 to yield 1.80%.
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