US: S&P 500 Index -1.6%, Dow -2.2%, Nasdaq -2.2%
Europe: STOXX Europe 600 -2.2%, German DAX -1.63% France CAC 40 -1.6%, U.K. FTSE 100 -1.0%
Asia: Japan Nikkei -2.6%, China Shanghai Composite +3.1%, Korea KOSPI  +0.3%
Rates/Commodities: 10-Year Treasury yield -12 basis points to 3.07%, WTI crude oil -6.23%, COMEX gold +0.3%

U.S. equities moved lower for the week, but ended on a high note as the S&P 500 Index broke a five-day losing streak on Thursday and then closed higher Friday as well, partly boosted by positive comments on U.S.-China trade talks. Oil snapped a record 12-day losing streak on Thursday, Continue reading →

Daily Insights

• S&P 500 snaps 5-day losing streak on Thursday. The S&P 500 Index rallied throughout the day yesterday, closing higher for the first time last Wednesday. The advance was led by the technology and energy sectors, which have been relative underperformers since the start of the correction, while the more-defensive consumer staples, utilities and real estate sectors lagged. The S&P 500 remains about 1% below its 200 day moving average, which may serve as resistance, along with the 2,814 level where the last two rallies have failed. On the positive side, we remain well above the intraday lows from late October (which should serve as potential support), and seasonally, we are in the strongest part of the year.

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The U.S.-China trade dispute has reached its eight-month mark, and the global economy has avoided a trade breakdown so far. However, economic cracks have started to appear as producers brace for possible unintended consequences of the trade dispute. Continue reading →

Daily Insights

• Retail sales reverse two-month slide. Retail sales rose 0.8% in October, reversing a two-month slide from weather-related weakness and beating consensus estimates for a 0.5% increase. Retail control-group sales, which are used to calculate gross domestic product, climbed 0.3%, below consensus estimates of a 0.4% gain, showing that core retail spending was slightly weaker than expected. We still believe that the U.S. consumer is the healthiest in years, aided by fiscal stimulus and modestly accelerating wages, and strong consumer demand will drive output going forward.

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Daily Insights

• Oil tumbles 7%, extends record string of declines. WTI posted its largest single-day decline in three years yesterday, extending its record losing streak to 12 days. The slide came after OPEC revised down its 2019 demand estimate by 500k barrels per day (bpd) while forecasting an “alarming” resurgence of non-OPEC supply, led by the U.S. The report likely underpins recent calls from Saudi Arabia and other cartel members to cut supply by 1+ million bpd when it meets in Vienna next month, but criticism from President Trump helped prices sustain downward momentum in Tuesday’s session. Losses have been mounting as traders fear a supply glut comparable to the one seen in 2014 may be forthcoming, and recent data has heightened worries that global growth may be moderating (gross domestic product out of Germany, France, and Japan contracted in Q3). However, traders are getting some of the blame with money managers’ combined bullish positions currently at 14-month lows, reflecting both an increase in short positions and a decrease in long positions, and U.S. high yield spreads-a gauge for monitoring credit risk in the energy sector-remain well off the late-2015 levels, a period also characterized by plunging oil prices and global growth concerns.

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Daily Insights

• Stocks pause after back-to-back weekly gains. After rebounding from October’s volatility spike over the past two weeks, investors used negative headlines tied to a few bellwether firms in the U.S., along with political tensions in Europe and Washington as reasons to take some gains off the table yesterday. Equity flows went into defensive sectors, with growth-oriented technology shares bearing a brunt of the selling pressure. Stocks are rebounding this morning, however, with major U.S. indexes opening higher on the heels of bargain hunting and upbeat earnings from a major home improvement retailer.

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