Summary:
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All 3 major US indices post new all-time highs
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US500 moves above 3010
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Industrial production contracts more than forecast
It’s been another good week for US stock markets and unless there’s some late drama the S&P500 will chalk up its 6th consecutive weekly gain. Two eagerly awaited speeches from President Trump and Fed Chairman Powell failed to live up to expectations whilst there’s still been no further tangible progress on the trade front. The fact that equities keep rallying on this shows once more that the path of least resistance remains higher and until there’s a clear negative catalyst or exhaustion signal then further gains ahead look probable.
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US stocks continue to march higher and the breakout above the rising trendline which occurred a couple weeks back is showing little sign of ending anytime soon. An RSI reading of 66.1 suggests mildly overbought conditions but nothing to imply that the market has really gone too far too fast and is therefore due a snapback. Source: xStation
The earlier retail sales and manufacturing data was fairly mixed and since then the industrial production figures for October was below forecasts. A print in M/M terms of -0.8% was well below the -0.4% expected and even though the prior was revised higher by 10 basis points to -0.3%, it is still a sofft data point on the whole. This data may have been adversely impacted by the GM strike but it still looks weak, with capacity utilisation also disappointing with a read of 76.7 compared to 77.0 expected and 77.5 prior.
In year-on-year terms industrial production is now contracting, tracking the ISM manufacturing gauge lower. Source: XTB Macrobond
