Daily Comments

Japan’s Prime Minister Abe’s ruling party seems set for a strong showing in this weekend’s elections. Asian markets settled mostly higher. The Nikkei 225 rose +0.13% while the Shanghai Composite climbed +0.28%. European equities were mostly higher. The DAX rose +0.37%. Yields on the 10-yr. Bund were higher, closing at 0.397%. While lower, September Housing Starts (1.127M) and Building Permits (1.215M) were in line with expectations. Last night, the API reported a draw in crude inventories of -7.1M barrels. This morning, the EIA report showed a slightly more modest decline of -5.7M barrels. The September Fed’s Beige Book showed growth in the U.S. “split between modest and moderate.” Yields on the 10-Year Note jumped to 2.343%. The US$ Index was a little soft. December gold was off - 0.3% to $1,283.00. November crude added +0.3% to close at $52.04. On the back of better-than-expected earnings from IBM, the DJIA soared to a new record. Although new records were in evidence in other averages, too, the gains were much more muted, with the Nasdaq 100 finishing lower on the day. At the close, markets were mostly higher.

China’s Communist Party congress is set to kick off its once every five year meeting tomorrow. Asian markets settled mostly higher. The Nikkei 225 rose +0.38% while the Shanghai Composite slipped -0.15%. The German October ZEW survey of growth expectations was up, but weaker than expected. The tensions in Catalonia led Spain to lower its forecast for 2018 GDP from +2.8% to +2.3%. European equities were narrowly lower. The DAX fell -0.14%. Yields on the 10-yr. Bund fell to 0.363%. September Import Prices (+0.7%) and Export Prices (+0.8%) both rose more than expected. September Industrial Production was up +0.3% and Capacity Utilization slipped to 76.0%. The October NAHB Housing Market Index was 68, the best reading in 6 months. Yields on the 10-Year Note were flat at 2.303 and the US$ Index was firm. December gold fell -1.3% to $1,286.20. November crude rallied late to close up $.0.10 at 51.88. Despite a raft of earnings news, markets seem completely mired down. Once again volume was very light and trading ranges were compressed. At the close, markets were narrowly mixed.

China September CPI was in line with expectations while PPI and new yuan loans were stronger than expected. Asian markets settled mostly higher. The Nikkei 225 was up +0.47% and the Shanghai Composite lost -0.35%. Spain has given its Catalonia region until Thursday to clarify its position on declaring independence. European equities were narrowly mixed. The DAX was up +0.09%. Yields on the 10-yr. Bund sank further to 0.374%. The October Empire State Manufacturing Survey was strong at 30.2, a 3-year high. A fall in some components, like new orders, was more than offset by increases in others, like shipments and number of employees. Yields on the 10-Year Note rose to 2.300%. The US$ Index firmed slightly. December gold fell -0.1% to $1,303.00. With concerns over supply beginning to rise, November crude added another +0.8% to $51.87. Once again, markets jumped out at the open with most major averages recording new all-time highs, and once again, markets pulled back to the flat line on anemic volume. With little interest and no willing seller, markets drifted higher, closing with modest gains.