US indices struggle to push higher despite stronger housing data

Wednesday, November 27, 2013

US equity markets closed flat yesterday with both the S&P 500 and DJIA paring gains towards the close despite stronger housing data. Homebuilders and technology stocks were among the best performers yesterday. Tech stocks supported the Nasdaq composite index higher as it closed past 4000 for the first time since 2000, the index has gained 30% ytd. Data yesterday indicated an improving housing market as building permits increased 6.2% m/m in October and the S&P/CaseShiller Home Price Index accelerated 11.18% in Q3 y/y. However, stocks struggled to build on the recent rally despite gaining significant momentum as the uncertainty surrounding a timeframe for tapering prompted cautious investors to remain side-lined.

Asian markets ex-Japan rebounded as financial and industrial companies supported indices higher. Chinese stocks gained significant ground after spending the first half of the week struggling with direction. Both the CSI 300 and Shanghai Composite reversed losses accrued earlier on in the week to close 1.13% and 0.82% higher respectively. Stocks in Japan snapped a two day rally as cautious investors took profits ahead of Japanese retail sales data, expected later today, both the Nikkei and TOPIX dropped 0.4% ahead of the release. Markets struggled to find support for moves higher as the US consumer confidence index unexpectedly fell to 70.4 in November from 71.2 previously.

The euro strengthened against the dollar, pushing towards 1.3580 as speculation that the ECB will not loosen monetary policy further supported the currency against most major peers. Many market participants expect the ECB to hold off from outlining further changes to policy, at least for the next few meetings, which has supported the euro higher in recent sessions, gaining 0.4% since the start of the week.  

A busy day for economic data today as investors anticipate the release of Q3 preliminary GDP figures for the UK, with analysts polled by Bloomberg expecting a 0.8% expansion. Over in the US market participants will look towards durable goods orders, initial jobless claims, the University of Michigan confidence index and Chicago PMI figures for any signs of a faltering recovery which could threaten to derail the current rally in equity markets.


US housing recovery back on track

SPCSUSAY Index SP Case Shiller 2013 11 27 09 24 24


The euro strengthens towards 1.3600 amid ECB speculation

EUR Curncy Euro Spot Daily 27 2013 11 27 09 27 01


Ev
ents for today: Wednesday, 27 November 2013

0930

UK

Q3

GDP

1330

US

Oct

Durable Gds & New Orders

1330

US

w/e

Jobless Claims

1445

US

Nov

Chicago PMI

1530

US

w/e

EIA Energy Stocks

OE: 

Dec  Natural Gas (NYMEX)

Dec Heating Oil & RBOB (NYMEX)

Dec  Copper, Gold & Silver (COMEX)

View Economic Market Calendar

Topics: DJIA, GDP, SP 500, ECB
More from: Kash Kamal