Originally published by Rivkin Securities
The S&P 500 declined overnight but held on a fraction above 2,500. The stock market clearly views the announcement by the Fed of the start of the balance sheet reduction process as a non-event. Apple (NASDAQ:AAPL) stock continues to drag after reviews of some of its new products were lacklustre. The stock price has fallen almost 5% in the last week. The S&P/ASX 200 had a weak day yesterday with no obvious catalyst. The index now risks breaking below the lower end of the three-month trading range although futures are pointing to a higher open.
The gold price has broken through the $1,300 support level and now sits at $1,292. The prospect of higher rates sent gold plunging as the probability of a December rate hike now sits at 75%. The AUD/USD exchange rate also fell last night for the same reason. The Australian dollar now sits at US$0.792.
Oil prices have been moving gradually higher despite builds in crude inventories over the last three weeks. Offsetting those builds have been large declines in gasoline and distillates inventories as the effects of Hurricane Harvey still work their way through the system. The International Energy Agency also released a report this week stating that it expects oil demand to continue rising and that the low capital spending by oil producers will eventually cause an oil shortage. For now WTI oil sits at $50.71 per barrel.
Data Releases:
- Euro Flash Manufacturing PMI 6:00pm AEST