Daily Comments

China October new yuan loans and aggregate financing were both weaker than expected. Asian markets settled mixed. The Nikkei 225 fell -2.06% but the Shanghai Composite reversed early losses to close up +0.93%. The German November ZEW survey expectations of economic growth rose unexpectedly. European equities close higher. The DAX added +1.30%. Yields on 10-yr. Bunds recovered to close at 0.408%. The October NFIB Small Business Optimism Index edged lower to 107.4 when a gain had been expected. The October Treasury Budget came in better than expectations at -$100.5B. Yields on 10-Year Notes fell back to 3.143%. The US$ Index retreated. December gold slipped -0.2% to close at $1,201.40. In what some may see as capitulation, December Crude tumbled -7.1% to $55.69. Equities began the day firmer, but gave way to a volatile session of big swings. For the Russell 2000, the 50-day moving average is close to moving below the 200-day moving average which would create a bearish “death cross” chart formation. On a day when bulls had hoped for a bounce, markets closed narrowly mixed.

Japan October PPI rose more than expected. The PBOC promised to act preemptively if global economic conditions worsen. Asian markets settled mostly higher. The Nikkei 225 was up a narrow +0.09% but the Shanghai Composite bounced +1.22%. European equities sank as the tech sell-off continued. The DAX lost -1.77%. Yields on 10-yr. Bunds fell back further, closing at 0.387%. Most banks and government offices were closed today in observance of Veteran’s Day. To all those who were or are in the military, we thank you for your service. Yields on 10-Year Notes eased back to 3.186%. The US$ Index keeps on climbing, now back at levels last seen in June 2017. December gold lost -0.4% to close at $1,203.50. December Crude gave up early gains despite the likelihood of output cuts and closed down for an unprecedented 11th straight day, losing -0.4% to $59.93. A mildly negative start quickly turned into a rout as selling accelerated through the morning. Averages tried to trim gains during the afternoon, but selling pressure returned, and losses again accelerated into the close. With new lows late, markets closed broadly lower.

China October CPI rose in line with expectations. There were reports that the Chinese government is setting quotas for banks to expand credit into private companies. Asian markets settled mostly lower. The Nikkei 225 fell -1.05% and the Shanghai Composite lost -1.39%. Italy faces a Tuesday deadline for reaching a resolution in their budget impasse with the European Commission. European equities were mostly lower. The DAX eked out a gain of +0.02%. Yields on 10-yr. Bunds fell to 0.410%. September Wholesale Trade rose +0.4%. October PPI was “hot,” rising +0.6% (core +0.5%). Preliminary November Consumer Sentiment stayed strong at 98.3. Baker-Hughes reported that the U.S. oil rig count for 11/02 jumped by 12 to 886, the highest since March 2015. Yields on 10-Year Notes fell to 3.189%. The US$ Index is just below the 2018 highs. December gold tumbled -1.4% to close at $1,208.60. December Crude lost another -0.8% to $60.19. Equities began the day under pressure and traded sharply lower but on relatively light volume. Selling was quite orderly. In the final hour, buyers finally stepped in and markets trimmed losses, closing moderately lower.