Daily Comments

More rhetoric between North Korea and the U.S. didn’t seem to move markets too much, but Asian markets did settle mostly lower. The Nikkei 225 fell -0.25% and the Shanghai Composite edged down -0.15%. Eurozone September Markit manufacturing PMI and composite PMI, along with German Markit/BME manufacturing PMI were all stronger than expected. European equities were mixed The DAX fell -0.03%. Yields on the 10-yr. Bund was flat at 0.451%. All 3 components of the PMI Composite Flash (composite – 54.6, manufacturing – 53.0, and services – 55.1) were in the middle of the consensus range. Baker-Hughes reported that the U.S. oil rig count fell by 5 to 744. Yields on the 10-Year Note eased somewhat to 2.262%. The US$ Index was close to flat. December gold edged higher, adding +0.2% to $1,294.80. November crude was also up +0.2%, closing at $50.66. Apple was a drag on the DJIA and Nasdaq 100 all day. The small-cap Russell 2000 climbed to new all-time highs and the Nasdaq 100 bounced off support at the 50-day Moving Average. At the close, markets were narrowly mixed.

For the 1st time since 1999, S&P Global Ratings lowered the ratings on China’s sovereign credit based on strong credit growth. Asian markets settled mostly lower. The Nikkei 225 was up +0.18%, but the Shanghai Composite fell -0.23%. European equities were mixed. The DAX moved up +0.25%. Yields on the 10-yr. Bund reversed yesterday’s losses, climbing to 0.453%. Initial Claims for the week of 09/18 were surprisingly low at 259K. The September Philadelphia Fed was strong at 23.8. The July FHFA House Price Index rose +0.2%, below expectations. August Leading Indicators beat expectations, rising +0.4%. Yields on the 10-Year Note rose slightly to 2.280%. The US$ Index gave back a portion of yesterday’s gains. December gold sank to its lowest level in almost a month, falling -1.6% to $1,294.80. November crude (October has expired) was off -0.3% to $50.55 ahead of a key producers meeting tomorrow. After a steady open, equities quickly sank well into the red, but just as quickly stabilized and recovered back near unchanged. Technology shares, led by Apple, were weakest. Following a late sell-off, markets closed modestly lower.

The Japan August trade balance shrank, but was still wider than expected as both imports and exports rose. Asian markets settled mixed. The Nikkei 225 was almost flat, up +0.05%, and the Shanghai Composite added 0.28%. German August PPI was slightly above expectations. European equities were completely flat ahead of the Fed’s announcement. The DAX was up +0.06%. Yields on the 10-yr. Bund edged lower to 0.440%. August Existing Home Sales at 5.4% failed to meet expectations. Last night the API reported a build in U.S. crude inventories of +1.4M barrels, accompanied by a large decline (-5.1M barrels) in gasoline stocks. This morning, the EIA reported a much bigger increase of +4.6M barrels with a smaller draw of gasoline, -2.1M barrels. As expected, the Fed left rates unchanged at 1.125%. Yields on the 10-Year Note rose to 2.266%. The US$ Index powered higher. December gold closed up +0.4% at $1,316.40 but reversed after the Fed’s announcement. October crude rose 1.6% to $50.69. Equities were flat ahead of the announcement. They sold off sharply afterwards, then recovered to close narrowly mixed.