Major US stock indices rose strongly, as investors gave impetus to the technology and health sector against the background of the results of the US midterm elections.

According to the results of the elections held on the eve of the elections, the Democratic Party won a majority in the House of Representatives, while the Republican Party of Donald Trump managed to maintain control over the Senate. Market participants estimate this outcome as the most favorable, since it is expected that such a distribution of forces in Congress will allow Trump to continue his economic policy, but will restrain his aggressive actions in the trade sphere.

Meanwhile, oil prices fell moderately, responding to data from the US Department of Energy, which reflected a larger than expected increase in oil reserves, an unexpected increase in gasoline reserves and an increase in oil production to a new record maximum. The US Department of Energy reported that in the week to November 2, oil reserves jumped 5.753 million barrels, to 431.787 million barrels. Analysts had expected an increase of only 2.433 million barrels. Oil reserves in the Cushing terminal increased by 2.419 million, to 34.296 million barrels, against an expected increase of 2.1 million barrels. Gasoline inventories rose by 1.852 million barrels, to 228.021 million barrels, compared with an expected decline of 1.7 million barrels.

Almost all the components of DOW finished trading in positive territory (29 out of 30). The growth leader was UnitedHealth Group Incorporated (UNH, + 4.20%). Outsiders were The Procter & Gamble Company (PG, -0.24%).

All sectors of the S & P recorded an increase. The health sector grew the most (+ 2.6%).

At the time of closing:

Dow 26,180.30 +545.29 +2.13%

S & P 500 2,813.89 +58.44 +2.12%

Nasdaq 100 7,570.75 +194.79 +2.64%

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 5.8 million barrels from the previous week. At 431.8 million barrels, U.S. crude oil inventories are about 3% above the five year average for this time of year.

Total motor gasoline inventories increased by 1.9 million barrels last week and are about 8% above the five year average for this time of year. Finished gasoline inventories decreased while blending components inventories increased last week.

Distillate fuel inventories decreased by 3.5 million barrels last week and are about 6% below the five year average for this time of year. Propane/propylene inventories increased by 1.5 million barrels last week and are at the five year average for this time of year. Total commercial petroleum inventories increased last week by 4.8 million barrels last week.

US policy direction is not likely to change significantly following the November 6 US midterm elections, says Moody's Investors Service in a new report. The rating agency expects President Donald Trump's administration to continue to drive federal policy in the key areas of trade, healthcare and immigration over the next two years, with varying credit impact across sectors.

"Amid high levels of political polarization, passing major legislation through a split Congress will be challenging and we expect the administration will likely continue to advance its policy goals using executive powers and administrative rulemaking rather than seeking legislative action," says Rebecca Karnovitz, a Moody's assistant vice president. "However, the likelihood of increased congressional scrutiny over the administration, led by the House, will slow the pace at which the executive branch can implement its agenda."

Wall Street. Stocks before the bell

(company / ticker / price / change ($/%) / volume)

Downgrades before the market open

Freeport-McMoRan (FCX) downgraded to Underperform from Sector Perform at RBC Capital Mkts

American Intl (AIG) downgraded to In-line from Outperform at Evercore ISI

Twenty-First Century Fox Inc (FOXA) reported Q1 FY 2019 earnings of $0.52 per share (versus $0.49 in Q1 FY 2018), matching analysts’ consensus estimate.

The company’s quarterly revenues amounted to $7.177 bln (+2.5% y/y), generally in-line with analysts’ consensus estimate of $7.226 bln.

FOXA rose to $47.25 (+0.19%) in pre-market trading.

• Brent, the global oil benchmark, was trading up 1.5% at $73.21 a barrel midmorning on London's Intercontinental Exchange.

• West Texas Intermediate futures, the U.S. oil standard, were trading up 1% at $62.83 a barrel on the New York Mercantile Exchange.

New emissions rules in Europe, the high costs of product recalls and the U.S.-China trade dispute, the company said Wednesday. 

In September 2018 compared with August 2018, the seasonally adjusted volume of retail trade remained unchanged in the euro area (EA19) and decreased by 0.1% in the EU28, according to estimates from Eurostat, the statistical office of the European Union. In August, the retail trade volume increased by 0.3% both in the euro area and in the EU28. In September 2018 compared with September 2017, the calendar adjusted retail sales index increased by 0.8% in the euro area and by 1.5% in the EU28.

Among Member States for which data are available, the largest increases in the total retail trade volume were registered in Ireland (+2.9%), Latvia (+1.5%) and Estonia (+1.4%). The highest decreases were observed in Portugal (-1.7%), Austria (-1.0%), as well as in Belgium and the United Kingdom (both -0.8%)

Year-on-year estimates of value of retail trade index showed a drop for September 2018, decreasing by 2.5% compared with September 2017. The quantity sold in retail trade fell too, contracting by 2.8% compared with the same month a year earlier.

On the month, the retail trade indices decreased compared with August 2018, dropping by 0.8% in value terms and by 0.7% in volume terms.

Despite a fall in both year-on-year and month-on-month growth rates, the underlying pattern in the data, as suggested by the three-month on three-month movement, continued to show growth. While the value was up 0.3%, the volume was up 0.2%.

The retail trade index for large scale distribution was down 1.2% and small scale distribution decreased by 4.3% when compared with the same period a year earlier. The value of sales made online rose by 2.7% compared with September 2017.

• Prices in the three months to October were 1.5% higher than in the same three months a year earlier – slowing from the 2.5% annual growth recorded in September, and recording the lowest rate of growth since March 2013  

• House prices in the latest quarter (August-October) were 0.2% higher than in the preceding three months (May-July)  

• On a monthly basis, house prices rose marginally by 0.7% in October, following two consecutive monthly falls  

• The average house price is now £227,869

Russell Galley, Managing Director, Halifax, said: “The annual rate of house price growth has fallen from 2.5% in September to 1.5% in October, which is the lowest rate of annual growth since March 2013. However, this remains within our forecast annual growth range of 0-3% for 2018. House prices continue to be supported by the fact that the supply of new homes and existing properties available for sale remains low. Further house price support comes from an already high and improving employment rate and historically low mortgage rates which are creating higher rates of relative affordability. We see this continuing to be the case over the coming months and we remain supportive of our 0-3% forecast range.”

EUR/USD

Resistance levels (open interest**, contracts)

$1.1565 (4989)

$1.1528 (2897)

$1.1498 (1851)

Price at time of writing this review: $1.1462

Support levels (open interest**, contracts):

$1.1401 (4565)

$1.1372 (4061)

$1.1335 (5427)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date November, 19 is 97237 contracts (according to data from November, 6) with the maximum number of contracts with strike price $1,1350 (5427);

GBP/USD

Resistance levels (open interest**, contracts)

$1.3234 (2712)

$1.3201 (1777)

$1.3174 (1578)

Price at time of writing this review: $1.3128

Support levels (open interest**, contracts):

$1.3041 (2324)

$1.3011 (2466)

$1.2976 (4397)

Comments:

- Overall open interest on the CALL options with the expiration date November, 19 is 28941 contracts, with the maximum number of contracts with strike price $1,3500 (3172);

- Overall open interest on the PUT options with the expiration date November, 19 is 35406 contracts, with the maximum number of contracts with strike price $1,3000 (4397);

- The ratio of PUT/CALL was 1.22 versus 1.20 from the previous trading day according to data from November, 6

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.

• ABC News projects that Republican Mike Braun will win the Senate race in Indiana, effectively ending Democrat hopes of overturning GOP majority in Senate

In the September 2018 quarter, the seasonally adjusted unemployment rate fell to 3.9 percent, down from 4.4 percent (revised) in the June 2018 quarter.

For women, the unemployment rate fell to 4.0 percent, down from 4.6 percent last quarter. For men, the unemployment rate fell to 3.9 percent, down from 4.2 percent.

The number of unemployed people fell 13,000 (down 10.5 percent) to 109,000. This mainly reflected 11,000 fewer unemployed youth (15–24-year-olds).

The fall in the unemployment rate in the latest quarter reflected a fall in the number of unemployed people and a strong rise in employment.

This fall, in tandem with a fall in underemployment, was key to the underutilisation rate falling to 11.3 percent, down from 12.0 percent last quarter.

A positive start to trading on the stock markets of Europe is expected, following the positive tone on Wall Street and on Asian markets. The results of the midterm elections in the United States remain in the focus of the markets. As already known, the Democrats received a majority in the House of Representatives.

• Democrats win net gain of 16 seats in U.S. House

In September 2018, production in industry was up by 0.2% from the previous month on a price, seasonally and calendar adjusted basis according to provisional data of the Federal Statistical Office (Destatis). In August 2018, the revised figure shows an increase of 0.1% (primary -0.3%) from July 2018.

In September 2018, production in industry excluding energy and construction remained at the same level of the previous month. Within industry, the production of intermediate goods was down by 1.0% and the production of consumer goods showed a decrease of 0.3%. The production of capital goods increased by 0.9%. Outside industry, energy production was down by 3.3% in September 2018 and the production in construction increased by 2.2%.