Mid Morning update

Good economic News from U.S. ADP, Chicago PMI and Pending home sales all beat consensus. official China PMI data both manufacturing and Non beat expectations also helping with the ” economy is healing” type sentiment so far today. A handful of companies announced A new round of layoffs ,horrible for workers but eventually good for companies Bottom line. The Endless carrot dangling of Stimulus deal continues today Dems want more aid for states McConnell wants No lawsuits against companies from Covid, This is the true problem all the other stuff is fluff. If it can be resolved then a deal is likely. But does either side want to give in before election?

Spoos and Nasdaq +1.3% Dollar active in to the 10:00 AM London Fix and now choppy to lower,Risk On sentiment as Stocks higher Bonds lower. All SPX sector higher on day led by Health Care, due to positive Covid treatment comments. Ex Goldman CEO blankfein out with a tweet and I paraphrase markets appear to not care about possibility of more regulation higher taxes if Biden wins. In My opinion all market cares about is more stimulus, regulate all you want give me free money

Bullish Surprise in Quarterly Grains report corn +4% Soy +3.55%

Morning 9-30

Layoff news, past 24 hours: (CNBC)

  •   Disney: 28,000 jobs cuts
  • Shell: 9,000 *
  • Dow: six percent of workforce
  • Marathon Petroleum looking towards more layoffs
  • CONTINENTAL APPROVES RESTRUCTURING, MAY LEAD TO 30,000 LAYOFFS

More News:

  • China preparing to launch an anti-trust prob into Google (New squawk)
  • JAPAN TO OFFER COVID-19 VACCINE FOR FREE TO ALL JAPANESE: JIJI
  • Rumor: London lockdown reportedly coming next week. But remember, the virus is now “localized”.

Debate:

That debate last night did not damage Biden in the least, but it did long-lasting damage to our system of democracy and to our ever-declining standards as Americans. (@girlsreallyrule) …. 69% of people who watched were annoyed,19% pessimistic (CBS poll) This did nothing but diminish the country’s dignity Bloomberg opinion. Per the Hill Biden campaign says it raised a one-hour record $3.8 million during debate… people positioning for chaos post-election may have gotten a taste of it last night as the debate was an acrimonious affair and could be a sample of the fight post-election.. Markets not a fan of chaos and the prospect for more to come

 Lost in the shuffle yesterday both French and German Inflation data missed to expectations, does not present confidence in overall EZ CPI data released on Friday.   Watching 1.1632 in the spot Euro as the level that could indicate that the Up move or the trend higher in Euro is done.  hate to repeat as the Dollar so goes markets. End of Quarter and End of Month today   Crop report at 11:00 A.M.  ADP released this morning beat Consensus but fell within range of Expectations, Some positive Virus news from Moderna and Regeneron not helping market sentiment as A feel of  angst prevails over stocks  treasuries lower could just be Month/Quarter end  movement.

lack of Good News

  • NYC’s test positivity rate is over 3 percent today – tripled in the last few days. If we are at over 3 percent for the next 7 days all public schools will automatically close. This is a big deal” – NYT reporter
  • NYC hospitalizations rise to most since Aug 7th- BBG
  • CUOMO: 20 ZIP CODES AVERAGE A POSITIVE TEST RATE OF 5%
  • GERMANY SAYS DELAY IN EU RECOVERY FUNDS `INCREASINGLY LIKELY’
  • *FED’S HARKER SAYS U.S. EMPLOYMENT WON’T RECOVER UNTIL
    2023

Stocks Lower Bonds higher most importantly Dollar off her Lows.Crude oil out to wood shed along with Nat Gas and gasoline.Demand worries continue to prevail.

Economic Data

US trade balance at an all time wide,or largest Deficit on record.Led by an increase in Consumer goods which jumped by 7%-BBG Getting ready for holidays? possibly ? not a good looking Chart if you are hoping for a US export boom

German CPI missed expectations and continues to trade lower,But Euro not caring too much M/M chart

SPX sectors

Not much love for SPX sectors this week

not a surprise then to read that “according to BofA Investors pulled a massive $25.8 billion out of U.S. equity funds in the week to Wednesday, the third biggest outflow ever from the asset class, BofA’s weekly fund flow report showed on Friday.” Reuters I mentioned this briefly in my Morning outlook

Durable goods this morning received little attention, not much of a surprise. I prefer to look at the proxy for business spending Capital goods orders and shipments,they pulled back for second consecutive month after printing higher for 2 consecutive months. thus a choppy pattern of recovery.Below Shipments of Capital goods ex aircraft.

today’s trade so far sees a subtle rebuff of the Dollar rules all trade. yes stocks and Gold traded inversely to dollar moves but not with same momentum as earlier this week,The weak hands have folded possibly .Dollar sitting near session highs and Nasdaq now making new highs ,One day does not change a trend

Morning 9-25

 Sentiment Sour for Stocks, Europe A touch weaker than U.S

Week to date % changes:

  • Dax -5.5
  • Ftse -3.5
  • Stoxx 50 -5
  • Hang Seng -5
  • CSI 300 -3.5
  • SPX -3.3
  • Nasdaq -2.1

No place to hide in metals from Weaker stocks as it is the Short Dollar Long everything else unwind,

Week to date changes:

  • Gold -5%
  • Silver -15.5%
  • Platinum -10%
  • Copper -5%
  • LME nickel -6%

Dollar for the week +1.75 % if holds biggest weekly gain since spring. as usual treasuries doing nothing going no where and providing very little in the way of “information” for traders’ The Bond market is useless. from the FT more sings of Risk Off FT writes “Investors flee US junk bond funds as concern for the economy grows” as “the asset class suffers its worst weekly outflow since first wave of the pandemic in March”.    European banks Measured by stoxx 600 bank index probing all-time lows, no matter how you slice it Not good sign For the Economy when banks are weaker.  Per Bloomberg U.S. Stock Funds suffered the third worst outflow on record this week everyone running for the Exits!

Virus Data ITC Markets

  • – UK Reports 6634 New Cases of Covid-19, vs 6,178 prev; UK testing is now double what it was when the last daily peak was reached.
  • – Spain: 10653 Covid cases in the past 24hrs
  • – Dr. Fauci: re covid-19, “there’s good enough data to say that aerosol transmission does occur”
  • – ​France: Cases rise by 16096
  •  CDC director Redfield: a covid-19 vaccine will likely not be widely available until summer or fall 2021. children are far down on the priority list, so they would not be offered the vaccine right away.

News:

  • Trump: not sure the election can be honest; getting close to final choice on supreme court nominee
  • – Pelosi: Democrats Ready for negotiations on stimulus 
  •  Sources: Dems stimulus bill would be about $2.4Tn and would incl airline aid and new PPP funds
  •  Quinnipiac Poll: Biden and Trump in statistical tie in Ohio  All from ITC markets

9-24

 From Mizuho” The past four days have seen the biggest strengthening of the dollar versus its peers since the March turmoil, as measured by the Bloomberg dollar spot index.”   The Euro touched a 2 month  low this morning even though German Business Climate, IFO touched a 7 month high of 93.4 even though strong it did miss expectations of 93.8..Speaking of Currencies Turkish central bank  surprised forecasters by raising  rates by 200 bps today in an attempt to  halt the depreciation of  her currency

 Year to date SPX is +.19% 3230 ish unchanged for the year Nasdaq +18.5% YTD

  A bit of Risk off continues for the markets, a possible shift from Buy the dips  to press the dips may be  occurring. Copper below support -1.9% today all markets or most markets were in sideways range for past month and it appears all are breaking out to the downside, Dollar to upside. Some flagging up a Powell comment from yesterday as another reason to worry in an answer to a question he said  that “We have done basically all of the things we can think of”  .More reliant on Fiscal stimuls  which likely isn’t coming anytime soon

 Markets

 Silver -3.5% Gold -.5%,Platinum -1.7%,European Bourses sideways to lower, Nasdaq -.95%,Spoos -.3%.Roller coaster Nat gas continues today +5%  as  a bit below possibly much below temps blanket eastern half of country according to 6-10 forecast. Weekly jobless  claims unchanged from last week markets paying little attention  Nasdaq -14% over last 3 weeks  sentiment is changing . Numerous fed speakers again today .. FTSE -1%,Stoxx 50 -.7%

News

  • JPMorgan is nearing an agreement to pay a fine of about $1 billion to settle civil and criminal charges that its traders rigged futures and securities markets, wrapping up several investigations into whether they manipulated prices for metals and Treasury securities. The proposed agreement wouldn’t jeopardize JPMorgan’s ability to operate in certain markets, a person familiar with the matter said.  WSJ
  • https://cnn.it/2G1599V
VIA WSJ

A change happening?

Spoos and Nasdaq below yesterdays lows with a bit of momentum,Dollar index easing higher no sustained push. But we look at other crosses peso -2.8%,Brazil -1.8 ,Rand -1.7%,JPM Latin American Currency index -1.5% Risk being shed.

Another example of worries is the Credit suisse Fear barometer ” From Bloomberg

Fear gauge continue to price in more worries moving forward.Something has changed whether it is realization that no new stimulus is coming or proximity to eelction but fear is in the air and Risk is being taken off the table