OVERNIGHT MARKETS AND NEWS
December E-mini S&Ps (ESZ14 +0.25%) this morning are up +0.25% and European stocks are up +0.41% ahead of U.S. economic data on Aug new home sales that are expected to post an increase. Gains in European stocks were limited after German business confidence fell for a fifth month to the lowest in 17 months. Asian stocks closed mixed: Japan -0.24%, Hong Kong +0.35%, China +1.77%, Taiwan +0.15%, Australia -0.74%, Singapore -0.16%, South Korea +0.15%, India -0.12%. China’s Shanghai Stock Index climbed to a 1-week high and closed higher on a rally in brokerage stocks and defense companies. Brokerages gained after data from the China Securities Depository and Clearing showed Chinese investors opened 217,000 new trading accounts last week, the most in 2 years, amid speculation an exchange link with Hong Kong will boost trading. The exchange link with Hong Kong will start next month and allow a net 23.5 billion yuan ($3.8 billion) of daily cross-border stock purchases. Chinese defense companies moved higher on speculation of increased state spending after China’s President Xi Jinping called on the People’s Liberation Army (PLA) to boost their combat readiness. Commodity prices are mixed. Nov crude oil (CLX14 -0.15%) is down -0.16%. Nov gasoline (RBX14 -0.66%) is down -0.45%. Dec gold (GCZ14 -0.05%) is up +0.05%. Dec copper (HGZ14 +0.08%) is up +0.15%. Agriculture and livestock prices are mostly higher. The dollar index (DXY00 +0.13%) is up +0.02%. EUR/USD (^EURUSD) is down -0.04%. USD/JPY (^USDJPY) is down -0.17%. Dec T-note prices (ZNZ14 -0.05%) are down -2 ticks.
The German Sep IFO business climate fell -1.6 to 104.7, a bigger decline than expectations of -0.5 to 105.8 and the lowest in 17 months.
Kansas City Fed President George said that the economy is moving forward “on about a 3% trajectory” and that interest rates “should have been off zero by this point.” She added that the Fed should raise rates gradually and systematically and that its balance sheet should revert to holding Treasuries only.
