Daily Comments

China’s state media warned that some stock prices were rising “too fast." Asian markets settled mixed. The Nikkei 225 ended well off its highs, but still up +0.20%. The Shanghai Composite fell -0.50%. ECB President Draghi gave an optimistic outlook for the Eurozone economy which included inflation levels reaching the banks’ goal of +2.0%. European equities turned lower as the day progressed. The DAX fell -0.41%. Yields on the 10-yr. Bund edged lower again, now at 0.364%. October Housing Starts at 1.290M and Building Permits at 1.297M both beat expectations. Baker-Hughes reported that for the week of 11/10, the U.S. oil rig count was unchanged at 738. Yields on the 10-Year Note eased to 2.347%. The US$ index wobbled and finished lower. December gold surged +1.4% to $1,296.50. December crude jumped +2.6% to $56.55, although it was still down -0.3% for the week. Some early profit taking after yesterday’s big rally was stemmed by strength in the small-cap sector, which offset weakness in the DJIA. After a volatile week, volume dried up as traders began to think about Thanksgiving. Except for the small-cap Russell 2000, markets were generally lower.

The PBOC eased credit fears by injecting the most yuan in 10 months into their banking system. Asian markets settled mostly higher. The Nikkei 225 jumped +1.47% while the Shanghai Composite trimmed early losses to close down only -0.08%. Strong October Eurozone new car registrations were another indicator of an expanding economy. European equities finished moderately higher. The DAX rose +0.55%. Yields on the 10-yr. Bund edged lower to 0.374%. Initial Claims for the week of 11/10 rose to 249K. October Import Prices rose a mild +0.2% while Export Prices were flat. October Industrial Production was a robust +0.9% with Capacity Utilization at 77.0%. The November Philadelphia Fed Business Outlook Survey was below expectations at 22.7 while the NAHB Housing Market Index at 70 beat them. Yields on the 10-Year Note rose to 2.372% The US$ index firmed slightly December gold was up $0.50 to $1,278.20. December crude lost -0.3% to $55.14. After a week of selling pressure, equities saw nothing buy buyers today and moved back near all-time highs. Markets pulled back slightly at the close, but still finished broadly higher.

Japan Q3 GDP and related indicators rose less than expected. Asian markets settled lower. The Nikkei 225 dropped -1.57% and the Shanghai Composite shed -0.79%. European equities finished modestly lower. The DAX fell -0.44%. Yields on the 10-yr. Bund continued their recent decline, now at 0.378%. September Business Inventories were unchanged. October CPI (+0.1%, core +0.2%) and Retail Sales (+0.2%, ex-autos +0.1%) were in line with expectations. November Empire State Manufacturing Survey was weaker than expected at 19.4. Last night, the API reported a surprise build in crude inventories of +6.5M barrels. This morning’s EIA reported a more modest (but still large) increase of +1.9M barrels. Yields on the 10-Year Note fell back to 2.324% The US$ index was flat. December gold fell -0.4% to $1,277.70. December crude finished down -0.7% to $55.33. Equities got off to another rocky start, with the S&P 500 trading below support at 2560. As usual, selling pressure eased and markets recovered, with the Russell 2000 actually moving temporarily into the black. Markets drifted back down from there and closed moderately lower.