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Commodities Manage a Turnaround After Yesterday's Losses


Today's financial recap and tomorrow's financial outlook.

Overnight, news reports indicated that Japanese Prime Minister Shinzo Abe was contemplating dissolving his country's Parliament and holding snap elections. That would be done in tandem with putting off another sales tax increase that would bring the rate up to 10% from its current 8%. This was viewed as a positive for the country's risk assets and a negative for the currency. The USDJPY FX cross rose 1.05% overnight, but gave up most of those gains by the end of the US session. The Japanese Nikkei closed up 2.05%.

General market activity was on the lighter side because of the Veterans Day holiday. Total equity trading volume clocked in at 5.5 billion shares versus the 7.48 billion average from the last 30 days. US bond markets were closed, although electronic futures trading was open. Futures prices on the 10-year Treasury fell by 3/64th's from yesterday's cash close or the equivalent of a 0.6bp increase in the yield.

The S&P 500 (SPX) traded within a tight band of five points during today's session. That compares to the average daily trading range of 0.92% over the last two months. The materials and consumer discretionary sectors led today with utilities lagging for a change.

Oil managed to overcome some of its losses intraday and close higher. Similarly, gold produced a positive return after months of losses. Market participants have begun looking towards the Swiss gold repatriation referendum at the end of the month as a positive catalyst for the yellow metal.

Tomorrow's Financial Outlook

The only major economic report scheduled for tomorrow is September wholesale inventories. They are expected to increase by 0.2% from the prior month after a 0.7% gain in August. Also scheduled are speeches from Fed Presidents Plosser and Kocherlakota.

The main event for global risk assets tomorrow is the Bank of England's (BOE) inflation report. The central bank is expected to downgrade its assessment of growth and inflation, and probably point towards a still large amount of labor slack. The result should point towards lower interest rates. The UK's employment data for September will also be released.

On the schedule for earnings tomorrow is Macy's (M), ADT (ADT), JC Penney (JCP), Cisco (CSCO), and Plug Power (PLUG).

Twitter: @Minyanville

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No positions in stocks mentioned.

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