Market Brief – Wednesday 9/4/19

A flood of liquidity came back to the markets in overnight trading as Hong Kong’s Lam withdrew the extradition bill. While U.S. investors are eagerly bullish on the news, this is only one of five demands by Hong Kong protestors. Due to the protesting, Hong Kong’s economy is rapidly moving into a recession as their manufacturing PMIs are contracting.

U.S. equities gapped higher and kept running in early trading as Treasury yields headed lower. Crude oil prices also jumped in early trading ahead of tonight’s API crude oil inventory report as the dollar fell to confirm yesterday’s break of overhead resistance.

The broad equity market closed higher with the S&P 500 about to form an unusual sextuple top on lower than average volume. Treasury yields fell today as 30-year Treasuries were once again rejected at 2%. Crude oil closed higher on reports of further sanctions against Iran and output cuts from Russia. Gold is trying to rally but running out of steam. Agricultural commodities closed higher on fears of frost ruining this year’s crop.

The American Petroleum Institute reported crude oil inventories as Crude: +401k (-2.5mm expected), Cushing -238k, Gasoline -877k (-1.5mm expected), and Distillates -1.2mm (+500k expected). Crude oil prices gave back today’s gains following the report.