[MM_Member_Data name=’firstName’],

U.S. markets showed strength throughout Thursday’s session to end multi-session losing streaks ahead of a key budget deal to keep the government running.

The Russell 2000 led the way higher after gaining 0.8% while the S&P 500 added 0.3% with both indexes snapping four-session losing streaks.

The Dow closed in the green for the first time in six sessions after climbing 0.3% and the Nasdaq rose for the second-straight session after advancing 0.5%.

Industrials were a standout with the sector jumping 0.9% followed by Materials and Technology which rallied 0.7% and 0.6%, respectively. The only laggard was Consumer Staples with the sector sinking 1%.

Global Economy- European markets settled mostly to the upside on hopes Prime Minister Theresa May will meet a Sunday deadline of presenting a Brexit deal to the European Union.

The Belgium20 and Germany’s DAX 30 rose 0.4%. France’s CAC 40 gained 0.2% while the Stoxx Europe 600 was up fractionally, or 0.02%. UK’s FTSE 100 declined 0.4%.

German October industrial production unexpectedly fell 1.4% month-over-month, weaker than expectations for a gain of 0.9% and the steepest decline in 10 months.

Eurozone Q3 GDP was revised upward to 2.6% year-over-year from 2.5%, the strongest pace of expansion in 6-1/2 years.

Asian markets closed mixed with the Japan’s Nikkei surging 1.5% but still showing a 1.6% loss so far this week. If the losses hold it would be the biggest weekly decline in three months for the index. Australia’s S&P/ASX 200 spiked 0.5% higher while Hong Kong’s Hang Seng climbed 0.3%. China’s Shanghai gave back 0.7% and South Korea’s Kospi was off 0.3%.

The Challenger Job-Cut Report announced layoffs rose 5,200 to 35,000 in November, rebounding after the 2,500 decline to 29,800 in October.

The computer and food industries led the layoffs. Compared to a year ago, planned job cuts are up 30.1% year-over-year versus -3.0% year-over-year in October and -27.0% in September.

Cost cutting and store/plant closings were the main reasons for the job reductions. Meanwhile, holiday hiring plans are at 608,100 this year.

U.S. initial jobless claims dipped 2,000 to 236,000 in the week ending December 2nd. This brought the 4-week moving average down to 241,500 versus 242,250 previously. Continuing claims dropped 52,000 to 1,908,000.

The Quarterly Services Survey revealed a 5.2% Q3 year-over-year gain in the aggregate selected services measure that fell well shy of the 5.9% rise in Q2.

For the larger components, analysts saw a 6.1% year-over-year gain in the finance and insurance component, and a 4.6% year-over-year rise for the healthcare and social assistance component.

The components used to calculate the GDP growth figure suggested no revision in service consumption along with a $1 billion trimming for intellectual property investment, leaving no net revision in the 3.3% Q3 GDP growth pace.

Consumer Credit grew by $20.5 billion in October, versus expectations of $17.3 billion.

Market Sentiment- Fed’s Dudley stuck to the topic of education financing in his comments today. As anticipated, he did not stray into policy or the the economy ahead of next week’s FOMC meeting.

The iShares 20+ Year Treasury Bond ETF (TLT) tested a low of $126.30 to end a four-session win streak with backup support at $126.50-$126.25 holding.

A close below $126 would signal a possible short-term top with continued risk towards $125.50-$125 and the 50-day moving average. Lowered resistance is now at $127-$127.25. RSI reversed trend and could make a backtest towards late November support at 50 on continued weakness.


Market Analysis- The Russell 3000 Index ($RUA) has been volatile after reaching a lifetime high of 1,580. Today’s rebound reached a peak of 1,563 with lower resistance at 1,565-1,570 holding.

Continued closes above the latter would be a bullish development for a retest and run towards 1,580-1,600. Support is at 1,550-1,545 with a move below 1,540 being a slightly bearish development.

RSI is back in an uptrend with resistance at 70-75 and levels that served as early and late November resistance.


The Financial Select Sector Spiders (XLF) bounced back to gain 0.3% and is challenging fresh 10-year highs after peaking at $28.20 earlier this month.

Today’s high tapped $27.94 with breakout potential to $29.50-$30 on continued closes above $28.25. Support is at $27.50 with risk to $27-$27.25 on a move below this level.

The 50-day moving average remains is a solid uptrend and has been holding following the mid-September breakout above this indicator.

RSI is trying to stay above near-term support at 70 and a level that has been holding since late November. A run towards 80 could come on continued strength.


All the best,
Roger Scott