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European shares mostly higher. Spain’s Ibex up 0.9%. UK FTSE flat.

Modest gains for the major indices

The European stock markets are closed with major indices are closing higher.  Spain’s Ibex rose 0.9%.  UK FTSE was flat.
The provisional closes are showing:
  • German DAX, +0.2%
  • France’s CAC, +0.3%
  • UK’s FTSE, flat
  • Spains Ibex, +0.9%
  • Italy’s FTSE MIB, +0.67%
In the European debt market, yields for the benchmark 10 year sector are closing lower.
Modest gains for the major indices

In other markets:

  • spot gold is up $9.28 or 0.60% at $1510.50
  • WTI crude oil futures are down $0.95 or -1.65% at $58.37.  Crude oil inventories rose 1058K which was higher than the -2250K estimate.
IN the US stock market, major indices are lower:
  • S&P index -9.37 points or -0.31% at 2996.40
  • NASDAQ index -29.86 points or -0.36% at 2156.29
  • Dow industrial average -84.58 points or -0.31% at 27026.68
In the US debt market yields are also lower and trading near the lows for the day.
US yields are trading at the lows for the day

Pompeo to meet with Saudi crown prince later today

The meeting will be in Jeddah to coordinate efforts in order to counter Iranian aggression in the region

The above is being confirmed by the US embassy in the UAE. It looks like more of a meeting to try and get the Saudis on board that Iran were behind the attack and to plot out the next course of action in response.

Just something to take note of in case we hear of anything on the matter later today.

Eurozone July construction output -0.7% vs 0.0% m/m prior

Latest data released by Eurostat – 18 September 2019

  • Prior 0.0%; revised to +0.6%
  • Construction output +1.1% y/y
  • Prior +1.0%; revised to +1.6%
The positive revisions sort of take away some of the negative impact from the headline monthly figure but nonetheless, it still underscores some weakness and sluggishness in construction activity in the region too start Q3.
A minor data point but feeds into the overall softness of economic activity in the euro area as we navigate through the second-half of the year.

Nikkei 225 closes lower by 0.18% at 21,960.71

Japanese stocks slump after poor trade figures once again

Nikkei 18-09

A mix of poor data and geopolitical tensions are weighing on Japanese stocks today as Asian markets look more tepid in anticipation of the Fed decision later today.

The Hang Seng is trading flat while Chinese stocks are a tad higher on the day, with positioning flows cited ahead of the Fed announcing another rate cut in US trading later.
Overall risk sentiment remains more flat/cautious with bond yields little changed as we begin the session. US futures are a little weaker – down by ~0.2% – and European equities should reflect that at the open as well.
Looking ahead, it’s all about the countdown to the Fed so we may be in for a more slow-paced and subdued session in European trading today.

Guggenheim’s Recession Probability Model shows US recession can not be avoided

Guggenheim recession forecast model showed a 58% chance of the economy being in a recession by mid-2020

  • 77% chance of one beginning in the next 24 months
  • “aggressive policy action can delay recession, but not avoid it.”
From a note written by Guggenheim Partners global chief investment officer Scott Minerd.
  • Minerd oversees more than $US240 billion in assets under management
via Reuters, more at the link
As an aside, when folks quote probabilities at something like 77% instead of rounded to 70, or 80, or 75 or some such they tend to gain more credibility.
I’m not dissing Guggenheim here, just making an observation. Which is accurate 76.38% of the time.
😉
And another thing …. if the probability is 77% then it can be avoided, right? (at least in the time frame specified)

Hedge funds turned bullish on oil before Saudi attacks

An analysis piece from Reuters, this from overnight so an ICYMI.

And, an interesting read.
  • Hedge funds and other money managers purchased …  the largest one-week increase for more than a year
  • The jump came after five months in which fund managers had been mostly sold oil, suggesting the market had reached a turning point even before the attack on Abqaiq.
Timing …. sheesh. Link is here for the article.