Markets retreat, S&P 500 snaps 4-day advance - 20.11.2014

The US stocks traded in a narrow range on Wednesday as the latest minutes from the October meeting of the Federal Open Market Committee were published and closed marginally lower. The S&P 500 closed 3.1 points lower at 2,048.72, ending its four-day winning streak and posting its 43rd record high previous day. The Dow Jones Industrial Average ticked down 2.1 points to 17,685.73. The Nasdaq Composite finished down 26.73 points, or 0.6%, at 4,675.71. The Fed minutes revealed that several Federal Reserve officials pushed colleagues to say more publicly about the pace of interest rate increases, suggesting that the central bank is still planning to raise rates next year despite low inflation and weak global economic outlook. No additional information was revealed about when interest rates would be hiked. It is expected Fed will increase rates near the end of 2015. Earlier Wednesday the Commerce Department reported that construction started on new US homes fell in October as multifamily-home construction dropped 15.5%, while single family home construction actually rose 4.2% to its highest pace since November 2013. Today at 14:30 CET the Consumer Price Index for October (YoY) will be released in US, the tentative forecast is 1.6% against 1.7 percent in the previous month. At the same time the Continuing Claims and Initial Jobless Claims for the weeks ended November 8 and 15 will be released, and the tentative forecast is positive. At 15:45 CET Markit releases preliminary US Manufacturing PMI for November. And at 16:00 CET Existing Home Sales for October, the Leading Indicators for October and Philadelphia Fed Manufacturing Index will be released, which are expected to come out lower compared with the previous month.

European stock markets posted marginal gains after hitting a seven-week high earlier on Wednesday as investors adopted cautious stance ahead of minutes of Fed’s October policy meeting. The stocks were also under pressure as mining shares fell following a 5% drop in China’s iron ore futures, indicating a supply glut and weak demand. Germany's DAX rose 0.17 percent and France's CAC was up 0.09 percent. UK’s FTSE 100 index fell 0.2% to 6,696.60. The euro moved higher against the dollar for the second consecutive session, briefly climbing to $1.2605 immediately after the FOMC minutes before falling back to $1.2543. Japan’s exports rose the most in eight months in October, as data from finance ministry indicated overseas shipments rose 9.6 percent from a year earlier to the highest level since October 2008. The Bank of Japan yesterday maintained record stimulus after the economy slipped into recession. China’s preliminary Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics fell to 50, the borderline between expansion and contraction and the lowest in six months.

Crude-oil futures extended losses to a third straight session on the backdrop of the US Energy Information Administration report earlier Wednesday showing a surprise increase in supplies. January Brent crude on London’s ICE Futures exchange fell 0.5%, to finish at $78.10 a barrel. Brent prices slid 1.7% in the last three sessions. Gold declined on reports Wednesday that support for a Swiss November 30 referendum to require the country’s central bank to hold 20% of its reserves in gold will likely not secure more than 50% support to pass. Gold for December delivery slid $3.20 to settle at 1,193.90 an ounce.