[MM_Member_Data name=’firstName’],

U.S. markets stayed strong with the S&P 500 and Nasdaq trading higher for the 8th-straight session, their best streaks since May, while pushing fresh all-time highs into the close. The Dow is on a 7-session roll while the Russell 2000 returned to its winning ways after having its 8-session winning streak snapped on Wednesday.

Both indexes also set fresh lifetime intraday highs. The Financial and Tech sectors led the way higher following 1% gains while Utilities were the only laggard after slipping 0.1%.

Global Economy – European markets settled mostly higher despite slightly disappointing economic news out of the UK and Germany. UK’s FTSE 100 and the Belgium20 rose 0.5% while France’s CAC 40 gained 0.3%. The Stoxx Europe 600 added 0.2% and Germany’s DAX 30 slipped 2 points, or 0.02%.

UK September new car registrations dropped 9.3% year-over-year to 426,170 and are down 3.9% to 2,066,411, year-to-date.

The German September Markit construction PMI fell 1.5 to 53.4, the slowest pace of expansion in 8-months.

Asian markets showed gains as markets in South Korea and China remained closed for the entire week, while Hong Kong and Australia’s S&P/ASX 200 were also idle on Thursday for a holiday. Singapore’s Straits Times index rallied 0.7% while Japan’s Nikkei climbed a point, or 0.01%.

The U.S. trade deficit fell to $42.4 billion in August versus forecasts of a decline to $42.7 billion.

Initial jobless claims fell 12,000 to 260,000 in the final week of September. Expectations were for a drop of 7,000 to 265,000.

Factory orders jumped 1.2% in August, which was stronger than expectations for a rise of 1%.

U.S September Challenger job cuts fell 1.5k to 32.3k in September after rising 5.5k to 33.8k in August.

Market Sentiment – Philadelphia Fed President Patrick Harker continues to expect another rate hike in December and still projects three tightenings for 2018. He said the economy is incredibly resilient as it’s absorbed the devastation from the hurricanes.

He mentioned there are issues with the Phillips Curve and inflation dynamics and believes the lack of skilled workers is the top issue for the economy. As far as the Fed chair position, he thinks one needs to be a consensus builder and team player, while having a deep understanding of the economy and markets.

San Francisco Fed President John Williams also expects one more rate hike this year and another three next year are likely to be the appropriate path, as inflation need not support another hike since other data points to economic strength. He views Trump tax plans as more favoring the demand side rather than supply side, while the tax reform shouldn’t overlook the country’s long-standing unsustainable fiscal position.

He said another recession would probably force the Fed to rely on unconventional policy again, if unsustainable growth leads to imbalances again. Williams said that Yellen has done an amazing job, but didn’t comment on her replacement.

The iShares 20+ Year Treasury Bond ETF (TLT) continued to trade in a tight range and towards the lower end following today’s dip to $123.69. Lower support at $124.25-$124 failed to hold into the closing bell and opens up risk to $123.50-$123. Lowered resistance is at $124.50-$124.75.


Market Analysis- The Spiders Dow Jones Industrial Average ETF (DIA) continues to show momentum following a tight trading range between $222-$224 for 11-straight sessions. We mentioned a rally towards $226-$227.50 could come on a breakout with today’s record high reaching $227.66.

A move above the latter could lead to a run at $230. However, RSI is approaching overbought levels above 80 level and represents the late July and early August highs.

Current support is at $226-$225.50 with a move below $224 and the top of the prior trading range likely signaling a short-term top.


The Energy Select Sector Spider (XLE) has been consolidating in a tight range following the recent breakout above the 200-day moving average and the late August surge above the 50-day moving average.

Resistance is at $68.75-$69 and the top of the trading range with continued closes above the latter being a bullish signal for a push towards $70. A drop below $67.50-$67.25 and the bottom of the trading range could lead to additional weakness. RSI is above 80 and remains in slightly overbought territory.


All the best,
Roger Scott