MARKET COMMENTS Dec E-mini S&Ps (ESZ14 -0.40%) this morning are down -8.50 points (-0.41%). The S&P 500 index on Friday posted a new record high but fell back and closed lower: S&P 500 -0.25%, Dow Jones unch, Nasdaq +0.46%. The main bearish factor was a slump in energy producers after crude oil prices plunged to a 4-1/3 year low. Bullish factors included (1) a rally in retail stocks amid optimism that this year’s holiday shopping season will be strong, and (2) a rally in airline stocks on speculation that the fall in crude oil prices to a 4-1/2 year low will reduce airlines’ fuel costs and boost profits. Mar 10-year T-notes (ZNH15 +0.23%) this morning are up +6.5 ticks at a new 5-week high. Mar 10-year T-note futures prices on Friday rose to a 5-week high and closed higher: TYH5 +0.00, FVH5 +6.50. Bullish factors included (1) reduced inflation expectations after the 10-year U.S. break-even inflation expectations rate fell to the lowest level in 3 years, and (2) carry-over support from a rally in German bunds that pushed the 10-year bund yield down to a record low of 0.694%. The dollar index (DXY00 -0.33%) this morning is down -0.270 (-0.31%). EUR/USD (^EURUSD) is up +0.0008 (+0.06%). USD/JPY (^USDJPY) is down -0.14 (-0.12%). The dollar index on Friday closed higher. Closes: Dollar index +0.749 (+0.85%), EUR/USD -0.00195 (-0.16%), USD/JPY +0.902 (+0.76%). Bearish factors included (1) weakness in EUR/USD on speculation the ECB will expand stimulus after the Eurozone Nov CPI eased to a 5-year low of +0.3% y/y, and (2) weakness in the yen as USD/JPY climbed to a 1-week high on speculation the BOJ may expand stimulus after Japan Oct national CPI eased to a 7-month low of +2.9% y/y, less than expectations of +3.0% y/y. Jan WTI crude oil (CLF15 -0.51%) this morning is down -63 cents (-0.95%) at a fresh 4-1/3 year low and Jan gasoline (RBF15 -0.69%) is down -0.0189 (-1.03%) at a 4-1/4 year low. Jan crude and Jan gasoline on Friday sold off sharply with Jan crude at a 4-1/2 year low and Jan gasoline at a 4-year low. Closes: CLF5 -7.54 (-10.23%), RBF5 -0.1917 (-9.53%). Bearish factors included (1) OPEC’s decision not to cut production at its meeting on Thursday, which was a clear declaration of a price war against high-cost oil producers, and (2) the rally in the dollar.
Posted on: Mon, 01 Dec 2014 13:07:45 +0000
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