Daily Comments

Japan November PPI was weaker than expected and manufacturing data was mixed. Asian markets settled higher. The Nikkei 225 jumped +2.15% and the Shanghai Composite added +0.31%. Eurozone October industrial production rose more than expected. Ahead of the confidence vote in Britain, European equities finished with strong gains. The DAX was up +1.38%. Yields on 10-yr. Bunds moved up to 0.269%. November headline CPI was unchanged while CPI less food and energy rose +0.2%. Last night’s API report showed a draw in crude inventories of -10.2M barrels. This mornings EIA report revealed a far more modest decline of -1.2M barrels. Yields on 10-Year Notes moved higher to close at 2.913%. The US$ Index fell back from the highs. February gold climbed +0.2% to $1,250.00. January Crude gave back early gains and closed down -1.0% to settle at $51.15. Signs of a thawing in China/U.S. relations shot equities higher again at the open. Averages moved steadily higher into the afternoon. Some of the enthusiasm waned early in the afternoon and markets trimmed gains. An attempt to resume the rally failed, but markets still closed with solid gains.

China November credit grew more than expected. Asian markets settled mixed. The Nikkei 225 fell -0.34% while the Shanghai Composite added +0.37%. The German December ZEW survey expectations of economic growth rose unexpectedly. European equities maintained gains through the close. The DAX rose +1.49%, but yields on 10-yr. Bunds slipped to 0.237%. The November NFIB Small Business Optimism Index missed estimates at 104.8. None of the 10 components rose and 8 fell. Weakest were expectations that the economy will improve and a drop in expected real sales. November PPI was above expectations of unchanged at +0.1% and up +0.3% excluding food and energy. Yields on 10-Year Notes moved up to 2.875%. The US$ Index is at the highs of the year. February gold slipped -0.2% to $1,247.20. January Crude rose +1.3% to $51.65. After yesterday’s rally, equities were drifting lower overnight until reports emerged on progress between the U.S. and China on trade negotiations. Markets jumped higher, then reversed to fall sharply. After some wild swings, markets closed narrowly mixed.

China November data on imports, exports, CPI, and PPI were all weaker than expected (though all rose). Asian markets settled lower. The Nikkei 225 tumbled -2.12% and the Shanghai Composite lost -0.82%. Brexit turmoil sent European equities lower. The DAX fell -1.54%. Yields on 10-yr. Bunds fell back again to 0.240%. The October JOLTS – Job Openings were 7.079M, the second most on record and the 4th straight month above 7M. That number is more than 1M above the number of unemployed looking for work. The number of quits, a gauge of worker confidence, actually fell -1.4%. Yields on 10-Year Notes were relatively flat at 2.850%. The US$ Index jumped on British pound weakness. February gold lost -0.3% to $1,249.40. January Crude fell back toward recent lows, losing -3.1% to $51.00. Overnight losses had evaporated prior to the U.S. open After moving higher early, markets were again under pressure, crashing through support. Once again, the tone shifted and large-cap technology led the reversal. Those technology shares finished strong, but other averages closed narrowly mixed.