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Poor US Economic Data Fails to Dent Market Optimism


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

Three OPEC delegates from the Gulf states said in press comments that a consensus had been reached on not cutting the production ceiling, according to the Saudi energy minister. Other members of OPEC had contradicting statements. Ultimately, crude oil was down marginally from yesterday and did not appear to react to the various statements after reacting negatively to cautious comments from the Saudi delegate on Tuesday. However, energy stocks were down more than 1%.

Chinese stocks were the best performer overnight, led by the offshore H-shares market.

Many traders filtered out early as heavy snow and rain forecast for the Northeast created trouble for holiday travel plans. Trading activity thinned noticeably in the early afternoon and US equities drifted listlessly into the closing bell. The S&P 500 (SPX) closed up 0.20%. For a third day, the tech and small cap indices outperformed on a risk-adjusted basis. The energy sector lagged, however, and was the worst performer for a third day as well.

There was an avalanche of economic data released today. It included personal spending and income, durable and capital goods orders, weekly jobless claims, the Chicago regional manufacturing survey, and home sales data. All of the data was worse than expected and cast a negative pall over the market. Additionally, it caused a number of economists to reduce their fourth quarter GDP forecasts. With an already slow start to the quarter and a very severe winter expected, residential construction and business investment should slow, which have been large drivers of growth lately.

The US sold $29 billion of 7-year notes early in the day. Demand was at its second strongest level of the year due to continued a large bid from foreign sources, but the heady price was too much and the auction yield failed to meet expectations.

Tomorrow's Financial Outlook

US markets will be closed for the Thanksgiving holiday tomorrow. They will be open for a half day on Friday. There are no economic reports scheduled for either day.

Most global markets will not be closed, however. The preliminary November German consumer price index will be released tomorrow morning. This has become an important indicator of late with inflation slow in the eurozone's largest economy and across the entire currency bloc. The OPEC meeting will also finish tomorrow, and comments from members has indicated it will be a one-day affair. Although professional forecasters are divided on whether or not the oil-producing group will cut its production target, most market participants are leaning towards that outcome.

There are no major earnings reports planned on Thursday or Friday.

Twitter: @Minyanville

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