Summary:
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US indices continue to trade near record highs
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Will tumbling Asian stocks start to weigh on Wall St?
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Oil pulls back as inventories and production rise
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Pound little changed as UK consumer spending falls
US stocks remain not far from recent all-time highs (ATH) with the S&P500 futures trading around 0.5% from their record peak of 3101 ahead of the cash open. The market has closed above its 10 day EMA for an incredible 25 consecutive sessions, reflecting the absence of any significant pullbacks during the recent rally.
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Create account Try a demo Download mobile app Download mobile appThere’s a growing disparity between US and Asian stocks this week with the former holding up well and major benchmarks close to all-time highs whereas the latter has come under some pretty heavy selling pressure. The worst hit has been shares in Hong Kong, with the Hang Seng index declining by almost 5% on the week largely due to the flaring up of troubles once more and the large scale civil unrest.
The weekly crude oil inventory data has caused some selling in the oil markets with the headline rising more than expected and production in the US hitting a new record high.
The breakdown of the report was as follows:
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Crude oil inventories: +2.2M vs +1.5M exp. API: -0.5M
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Gasoline: +1.9M vs -1.3M exp
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Distillates: -2.5M vs -1.0M exp
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US production: 12.8M bpd - new record high
The initial reaction has been negative in Oil, with the market respecting resistance around the 63.30 level once more. Last week’s inventories showed a large build (+7.9M) and caused a sustained sell-off in the market.
Rounding off a disappointing series of UK data points this week, the retail sales figure for October came in worse than expected with sizable misses on several fronts. For the 3 months to October the pace of increase in consumer spending was the slowest since April 2018 with food stores the only main sector to see growth compared to the prior 3 months. The pound was gaining heading into the release but the poor data has capped the advance for now with the attention turning away from economics and back to politics. The pound is trading in a narrow range this week despite a barrage of data from the UK with politics remaining the main driver.
