US private sector rebounds in November according to Markit Economics, as USA pending home sales fall yet again

Nov 26 • Morning Roll Call • 1467 Views • Comments Off on US private sector rebounds in November according to Markit Economics, as USA pending home sales fall yet again

shutterstock_50097079According to Markit Economics U.S. private sector activity increased in November after slowing during the previous month, whilst new orders grew at their fastest pace since April 2012. Financial data firm Markit stated that its preliminary composite Purchasing Managers Index (PMI), a weighted average of its manufacturing and services indexes, rose to 57.1 in November from 49.6 last month. This is the first month that Markit is publishing its composite and service sector data together, which it has been compiling since October 2009.

USA pending home sales fall again…

The latest housing data from America suggests that the debt ceiling deadlock of October has had a delayed negative effect on the US economy. Pending home sales fell by 0.6% last month, worse than the 1%+ rise which many economists polled were expecting. The shutdown on Capitol Hill in October/November is being blamed for the fall, suggesting that Americans were more cautious about moving to a new home due to the uncertainty.

Nasdaq hits highest level since 2000

On Wall Street, the tech-heavy Nasdaq index broke through the 4,000 point mark for the first time since the final days of the dot-com boom when it reached over 5,100. However, the celebration was short lived on Monday as the index then slipped back in later trading.

In Greece, more talks have taken place over troika demands

In Greece senior government officials met in Athens in order to draw up another revised strategy for the pending demands the debt-stricken country faces from its “troika” of creditors. Greece apparently faces challenges on five fronts:

* dismissing up to 4,000 civil servants by the end of the year;
* ending the ban on home foreclosures for those who owe in excess of 200,000 euros to lenders;
* closing down the country’s loss-making defence industry;
* improving tax collection;
* agreeing on ways to close the fiscal gap next year.

Market overview

The DJIA closed up marginally by 0.05%, the SPX down 0.13% and the NASDAQ up 0.07%. In Europe the STOXX 50 closed up 0.55%, CAC up 0.55%, DAX up 0.88%, FTSE up 0.30%.

Looking towards the equity index futures the DJIA is currently down 0.07%, SPX down 0.06% and the NASDAQ down 0.05%. The DAX future is up 0.95%, CAC up 0.53% and the FTSE up 0.37%.

NYMEX WTI oil is at the time of writing flat on the day at $94.09 per barrel, NYMEX nat gas is up 0.56% at $3.79 per therm. COMEX gold is down 0.24% at $1241.60 per ounce with silver flat at $19.93 per ounce.

Forex focus

The yen fell 0.4 percent to 101.67 per dollar late in New York time after reaching 101.92, the weakest since May 29th. It slid 0.1 percent to 137.43 per euro after touching 137.99, the weakest since October 2009. The dollar added 0.3 percent to $1.3517 against Europe’s shared currency. The U.S. Dollar Index, which tracks the currency against 10 major counterparts, rose 0.2 percent to 1,020.95.

The loonie, as the Canadian dollar is known fell 0.3 percent to C$1.0543 per U.S. dollar late in Toronto. The currency touched C$1.0583 per U.S. dollar, the lowest since July 8th. One loonie buys 94.85 U.S. cents. The Canadian Dollar dropped to its lowest level in four months as the price of oil, Canada’s biggest export, fell after Iran and world powers reached an interim deal to set limits on its nuclear programme.

The pound fell 0.5 percent to $1.6143 late in London time after climbing to $1.6240, the highest level seen since Oct. 25th. The decline is the steepest since Nov. 12th. Sterling traded at 83.63 pence per euro after appreciating to 83.01 pence on Nov. 7th, the strongest level since Jan. 17th.

Bonds

The yield on the current two-year note maturing in October 2015 was little changed at 0.28 percent late in New York. The benchmark 10-year note yield dropped one basis point, or 0.01 percentage point, to 2.73 percent, the third consecutive drop in the security’s yield. The U.S. will sell $35 billion of five-year debt today and $29 billion of seven-year securities Nov. 27th.

Fundamental policy decisions and high impact news events that may affect market sentiment on November 26th

Tuesday in the UK will see the publication of the UK’s Nationwide Building Society’s house price inflation report. As one of the more modest/reasonable indices the house price increase is expected to come in up 0.6% month on month. The UK also holds inflation report hearings during the day.

The USA publishes data on building permits and housing starts, expected in at circa 0.92K for both. The Standard & Poor’s Case Shiller house price index is published with the expectations that annual house price inflation in the USA will rise to 13% year on year. The Conference Board     Confidence index is published, expected in at 72.1, with the Richmond Manufacturing index expected up at 3 from the previous reading of 1.0.

In the late evening New Zealand publishes its trade balance, expected down at -345 million, whilst construction data (completed) for Australia is published.

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