Market Update: Wednesday, October 11, 2017

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Market Recap

  • U.S. equities posted slight increase across major indexes as small caps lead. S&P 500 Index +0.2%, Dow +0.3%, Nasdaq +0.1%, Russell 2000 +0.3%.
  • Consumer staples lead market, utilities, financials other standouts. Consumer discretionary, technology, energy lagged-despite WTI crude oil rally.
  • Positive breadth on NYSE (2:1) amid continued low volume (~84.1% of 30-day avg.).
  • 10-year Treasury note closed near flat, yielding ~2.35%.
  • U.S. dollar weakened further against both euro and pound sterling.
  • Commodities – Announcements of Saudi Arabia’s planned export cuts lifted WTI crude oil (+2.7%) to $50.9/bbl.; COMEX gold inched higher (+0.4% to $1290/oz.).

Overnight & This Morning 

  • U.S. stocks opened lower as traders digest earnings from BlackRock, Delta; look ahead to big bank releases tomorrow.
  • Asia mostly higher. U.S. gains provided tailwind amid few drivers. Nikkei (+0.3%) passed 20k level for first time since 1996. Technology boosted KOSPI (+1.0%); Shanghai Composite +0.2%.
  • Europe lower amid choppy trade, though Spain’s IBEX +1.3% after Catalonia postponed independence; STOXX Europe 600 -0.1%.
  • 10-year note -2 basis points (-0.02%) to 2.34%, U.S. dollar weaker though gaining vs. euro, yen.
  • Commodities – Oil (+0.2%) building on prior day jump, COMEX gold (-0.1%) retracing some of previous gain, industrial metals broadly higher.

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Macro Notes

  • Two decade high for the Nikkei. The Japanese stock market closed at its highest level since December 5, 1996. Driving the recent gains have been strong earnings, an improving economy, and loose monetary policy. This is yet another global equity market that is breaking out to multi-year highs, further supporting our view that the global bull market is alive and well. For some stock market trivia, December 5, 1996 is the same day as Alan Greenspan’s “irrational exuberance” speech.

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Click Here for our detailed Weekly Economic Calendar

Wednesday

  • MBA Mortgage Applications (Oct 6)
  • Jolts Job Openings (Aug)
  • FOMC Meeting Minutes (Sept 20)
  • Evans (Dove)
  • Williams (Dove)
  • BOJ: Outright Bond Purchase
  • Japan: Machine Tool Orders (Sept)
  • Japan: PPI (Sept)

Thursday

  • PPI (Sept)
  • Initial Jobless Claims (Oct 7)
  • Powell (Dove)
  • Brainard (Dove)
  • Continuing Claims (Sept 30)
  • Monthly Budget Statement (Sept)
  • France: CPI (Sept)
  • Eurozone: Industrial Production (Aug)
  • ECB: Draghi
  • Bank of England: Credit Conditions & Bank Liabilities Survey
  • China: Trade Balance (Sept)
  • China Imports & Exports (Sept)

Friday

  • CPI (Sept)
  • Core CPI (Sept)
  • Real Average Weekly & Hourly Earnings (Sept)
  • Retail Sales (Sept)
  • Evans (Dove)
  • Kaplan (Hawk)
  • Powell (Dove)
  • Germany: CPI (Sept)
  • Germany: Wholesale Price Index (Sept)
  • Italy: CPI (Sept)
  • China: Foreign Reserves (Sept)
  • Business Inventories (Aug)

 Past performance is no guarantee of future results.

The economic forecasts set forth in the presentation may not develop as predicted.

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Commodity-linked investments may be more volatile and less liquid than the underlying instruments or measures, and their value may be affected by the performance of the overall commodities baskets as well as weather, disease, and regulatory developments.

Government bonds and Treasury bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.

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