U.S. markets traded on both sides of the ledger before closing slightly higher with the Dow and S&P 500 snapping two-session slides. The Nasdaq finished higher for the second-straight session while the Russell 2000 extended it marginal win streak to 3-straight.

 Although all-time highs are on hold at the moment, the major indexes easily held near-term support on the opening weakness.
Utilities led sector strength after surging 1.2% while Consumer Staples and Materials added 0.6% and 0.5%. Energy and Industrials were laggards with the sectors falling 0.6% and 0.3%, respectively.
Global Economy – European markets fell for the 3rd-straight session despite upbeat comments about the Eurozone economy. France’s CAC 40 and the Stoxx Europe 600 fell 0.7% while the Belgium20 declined 0.5%. Germany’s DAX 30 gave back 0.4% and UK’s FTSE 100 slipped 0.2%
ECB Vice President Constancio said the Eurozone economy is experiencing a broad-based, robust and resilient recovery, but knows the process still relies significantly on their monetary policy support.
Asian markets were mixed with China’s Shanghai Composite rising 0.5% and closing at a new 1-3/4 year high, led by a rally in the Financial stocks. Hong Kong’s Hang Seng Index rose 0.2% while Australia’s S&P/ASX 200 was up 0.1%. Japan’s Nikkei tumbled 1.3% and South Korea’s Kospi was unchanged.
China October new yuan loans were at 663.2 billion yuan, weaker than expectations of 783 billion yuan and the least amount of new loans in a year. October aggregate financing increase 1.04 trillion yuan, weaker than expectations of 1.1 trillion yuan and the smallest increase in a year.
Japan October PPI of 0.3% month-over-month and +3.4% year-over-year was stronger than expectations of 0.1% and 3.1%, respectively.
October Treasury Budget checked in with a deficit of $63.2 billion versus expectations for a deficit of $58 billion.
3-Month Bill Auction Total Amount was at $42 billion.
6-Month Bill Auction Total Amount was at $36 billion.
Market Sentiment- Philadelphia Fed Patrick President Harker said he’s looking for another Fed rate hike this year and that the balance sheet unwind will be boring. He added that he would be more confident with three rate hikes next year if underlying inflation picks up above 2%.
FOMC November quantitative tightening is off and running as of October 31st where the Fed allowed $6 billion to mature. Another roll-off is slated for November 15th, as well as November 30th.
Fed funds futures market is pricing in a 25 basis-point rate hike at the December 12, 13 FOMC meeting, with over 90% probability.
The iShares 20+ Year Treasury Bond ETF (TLT) snapped its 3-session slide after trading to a high of $124.81. Resistance at $124.50-$125 was split but levels that failed to hold into the closing bell. Support remains at $124-$123.50 with a move below the latter being a continued bearish development.
Market Analysis- The Spider Small-Cap 600 ETF (SLY) held near-term support at $128.25-$128 and the 50-day moving average on the opening low of $128.38.
This area represents the late September breakout above these levels with risk to $127-$126 on another move below $127.75. Today’s rebound to $129.25 and second-straight up session failed near-term resistance a $129.50-$130. Continued closes above the latter would be a slightly bullish development.
RSI is trying to flatten out near the 45 level with a move below 40 being a bearish development. A close back above 50 would signal momentum.
The Spider Gold Shares (GLD) has formed a mini-trading range between $122-$120 since mid-October with today’s high reaching $121.55. Continued closes above $121.75-$122 would be a slightly bullish development but would face additional hurdles a $122.75-$123 and a downward sloping 50-day moving average.
A move below $120 and the 200-day moving average would be a bearish development and would open up risk to $119-$118 over the near-term. RSI recently peaked near resistance at 50 with a move above this level a slightly bullish signal. Current support is near the 40 level.
All the best,
Roger Scott