Daily Comments

China announced a five-year, $1.4T package to swap out local government debt, but the plan fell short of expectations for more fiscal stimulus. Asian markets were mixed. The Nikkei 225 rose +0.30% and the Shanghai Composite slipped -0.53%. European markets closed lower. The DAX Index fell -0.76%. 10-year Bunds yield 2.371%. For 11/02 Baker Hughes reported that the U.S. rig count fell 6 to 792. Preliminary November Consumer Sentiment was expected at 70.8, but printed at 73.0, up from 70.5 prior and printing its 4th consecutive increase, with Year-ahead Inflation Expectations going from 2.7% down to 2.6%. 10-Year Notes yield 4.313%. The December US$ Index jumped +0.45% to 104.835. December Crude Oil lost -2.7% to $70.38. December Gold fell -0.4% to $2,695.10. In the last 24 hours Bitcoin hit a record $77,253 then finished the period about +0.3% higher at $76.702. After-hours, U.S. stock index futures fractionally retreated after hitting new highs, partly in response to what appeared to be a $1.4T Chinese stimulus package that underwhelmed. In the day session the indexes edged upwards nearly the entire time, only paring gains near the close, but still closing positive. With the prospect of deregulation, tax cuts and further rate cuts teed up, US stocks printed their most bullish week in a year.


China’s October exports blew past estimates, rising +12.7% year-on-year. Imports, on the other hand, fell a little more than expected. The Nikkei 225 fell back -0.25% while the Shanghai Composite jumped +2.57%. The BoE cut rates to 4.75% as expected, with the BP rallying. European markets were mixed. The DAX Index jumped +1.70%. 10-year Bunds yield 2.449%. For 11/02 Initial Claims ticked up from 218K to 221K, on track with consensus, and Continuing Claims increased to 1.892M a 3-yr high. Preliminary Q3 Nonfarm Productivity went from a prior revised print of 2.1% (annualized) up to 2.2%, but below expectations of 2.5%, and Unit Labor Costs fell from 2.4% prior to 1.9% vs. 1.0% anticipated. Preliminary September Wholesale Inventories fell -0.2% (1st decline in 6 mos.). The Fed cut rates by 25 bps to 4.5%-4.75%, as expected (see Looking Ahead). Sep. Consumer Credit fell to $6.0B vs. $12.0B exp. 10-Year Note yields fell from Wednesday’s 5-mo highs, sliding 13 bps to 4.335%. The December US$ Index sank -0.72% to 104.230. December Crude Oil gained +0.9% to $72.36. December Gold recovered +0.9% to $2,700.00. After yesterday’s largest post-election DJIA rally in 128 years (of over 1,500 points), the major indexes continued upwards, with the ES, NQ and YM ending at fresh record highs.


As Donald Trump secured his return to the White House, Asian markets were mixed. The Nikkei 225 jumped +2.61% but the Shanghai Composite eased down -0.09%. European markets sold-off. The DAX Index lost -1.13%. 10-year Bund yields fell to 2.408%. For 11/02 the MBA Mortgage Applications Index sank from -0.1% prior to -10.8% as rates have risen, with the Purchase Index falling from 5.0% to -5.1% and the Refinance Index plunging from -6.3% to -18.5. EIA Crude Inventories fell by -0.5M bbls. Final The October PMI Composite Index came in near expectations at 54.1, with the Services Index at 55.0. 10-Year Note yields jumped to a 5-mo high of 4.439%. The December US$ Index soared +1.64% to 105.020. December Crude Oil was near even at $71.95. December Gold sank -3.0% to $2,670.00. In the last 24 hours Bitcoin surged to a record high $76,120, ending the period up +9.2% at $75,857. In the overnight session, as Trump was seemingly approaching victory, stocks began to surge, then after the race was called for him (with the GOP taking the Senate…the House remains undecided) U.S. stock index futures soared to record highs. Today’s $25B 30-Yr Treasury Bond auction found strong demand. Stock bulls were in complete control as prices incessantly moved upwards. The ES and YM screamed to finish at all-time high.