Major US stock indexes fell sharply, reaching a 3-week low, as weak quarterly results from retailers, including Target (TGT) and Kohl (KSS), as well as the fall in the energy sector caused Wall Street, which still retreat from the collapse of the technology sector.

In addition, the focus was on data on the US housing market. As it became known, US housing construction rose in October amid a rebound in multi-unit housing projects, but the construction of single-family homes fell for the second month in a row, suggesting that the housing market is still weak as mortgage rates rose in March. Bookmarking new homes rose 1.5% to a seasonally adjusted annual rate of 1,228 million units last month, the Commerce Department reported on Tuesday. The data for September were revised from 1,201 million units to 1,210 million units.

All components of DOW finished trading in the red (30 out of 30). Apple Inc.’s shares turned out to be an outsider. (AAPL, -4.78%).

All sectors of the S & P recorded a decline. The largest decline was in the commodity sector (-3.2%)

• Light, sweet crude for December delivery was 3.9% lower at $54.96 a barrel on the New York Mercantile Exchange.

• Brent crude fell 2.8% to $64.93 a barrel.

U.S. stock-index futures pointed to a lower open on Tuesday as a decline in Target (TGT; -11.9%) shares pressured retailers, while the technology rout in the previous session sparked by concerns over iPhone sales sapped investors’ appetite for high-growth names.

Global Stocks:

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

Exxon Mobil (XOM) downgraded to Underperform from Mkt Perform at Raymond James

Privately‐owned housing units authorized by building permits in October were at a seasonally adjusted annual rate of 1,263,000.  This is 0.6 percent below the revised September rate of 1,270,000 and is 6.0 percent below the October 2017 rate of 1,343,000. Single‐family authorizations in October were at a rate of 849,000; this is 0.6 percent below the revised September figure of 854,000.  Authorizations of units in buildings with five units or more were at a rate of 376,000 in October.

Privately‐owned housing starts in October were at a seasonally adjusted annual rate of 1,228,000.  This is 1.5 percent above the revised September estimate of 1,210,000, but is 2.9 percent below the October 2017 rate of 1,265,000.  Single‐family housing starts in October were at a rate of 865,000; this is 1.8 percent below the revised September figure of 881,000. The October rate for units in buildings with five units or more was 343,000.  

Lowe's Companies (LOW) reported Q3 FY 2018 earnings of $1.04 per share (versus $1.05 in Q3 FY 2017), beating analysts’ consensus estimate of $0.98.

The company’s quarterly revenues amounted to $17.415 bln (+3.8% y/y), generally in-line with analysts’ consensus estimate of $17.358 bln.

The company also issued downside guidance for FY 2018, projecting EPS of $5.08-5.13 (versus analysts’ consensus estimate of $5.16) and revenues of +4% y/y to ~$70 bln (versus analysts’ consensus estimate of $71.59 bln and its prior guidance of +4.5% y/y).

LOW fell to $85.15 (-6.79%) in pre-market trading.

Target Corp. (TGT) reported Q3 FY 2018 earnings of $1.09 per share (versus $0.91 in Q3 FY 2017), missing analysts’ consensus estimate of $1.11.

The company’s quarterly revenues amounted to $17.590 bln (+5.7% y/y), missing analysts’ consensus estimate of $17.810 bln.

TGT fell to $69.95 (-9.33%) in pre-market trading.

• CNBC reported, citing analysts, that bitcoin's ongoing sell-off was due to technical levels and stop orders in the market. The uncertainty surrounding bitcoin cash's hard fork also added to the fall.

Manufacturing output growth picked up in the quarter to November, and firms saw overall order books rebound from a fall in October, according to the latest monthly CBI Industrial Trends Survey.

The survey of 381 manufacturers found that output volume growth accelerated in the three months to November, outpacing the long-run average. Output expanded in 13 of the 17 sub-sectors, with growth driven by the food, drink & tobacco, motor vehicles & transport equipment, and chemicals sub-sectors. Firms expect output growth to slow somewhat over the next quarter.

Meanwhile, total order books strengthened in November after worsening in October, and were more robust than the long-run average. Export order books improved marginally following a weakening in October, and, likewise, remained stronger than the historical average.

• As Things Stand Spain Will Vote Against Brexit Deal

• BOE not intending to provide additional analysis of a no-deal Brexit scenario

• MPC will look at a scenario related to the withdrawal agreement

• A withdrawal agreement would support the UK economy

• MPC is working through Brexit scenarios on an accelerated timeline

• Previously Saw 2018 After-Tax Profit Between EUR3.4B and EUR4.4B

• 9-Mos After-Tax Profit EUR2.67B

• Continues to See 2018 Net Liquidity of Between EUR700M and EUR1.2B

• Guidance Change Related to Volkswagen

• Last Night We Decided to Send A Message To UK PM May

The euro is likely to be stagnant "because investors will probably be reluctant to take action ahead of the EU Commission's expected response to the Italian budget draft tomorrow," says UniCredit. Euro is last trading slightly higher at $1.1464 and it is likely to consolidate around 1.14 "as market caution and softer U.S. data are raising doubts about more Federal Reserve rate hikes," UniCredit says. This favors "some spread tightening against Europe, which is also helping to reduce selling pressure on the common currency" - via WSJ.

• Further Progress Expected in Lowering Unemployment

• Higher Probability of a Rate Increase Than of a Rate Decrease

• Likely That Rates On Hold for a While Yet

EUR/USD

Resistance levels (open interest**, contracts)

$1.1523 (2433)

$1.1500 (865)

$1.1488 (109)

Price at time of writing this review: $1.1460

Support levels (open interest**, contracts):

$1.1434 (1840)

$1.1413 (4480)

$1.1387 (3456)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date December, 7 is 125145 contracts (according to data from November, 19) with the maximum number of contracts with strike price $1,1200 (6204);

GBP/USD

Resistance levels (open interest**, contracts)

$1.3027 (1275)

$1.2989 (647)

$1.2946 (273)

Price at time of writing this review: $1.2866

Support levels (open interest**, contracts):

$1.2802 (1817)

$1.2767 (2505)

$1.2745 (2837)

Comments:

- Overall open interest on the CALL options with the expiration date December, 7 is 58111 contracts, with the maximum number of contracts with strike price $1,3100 (5267);

- Overall open interest on the PUT options with the expiration date December, 7 is 48173 contracts, with the maximum number of contracts with strike price $1,2500 (4394);

- The ratio of PUT/CALL was 0.83 versus 0.82 from the previous trading day according to data from November, 19

* - 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.

A negative start of trading on the stock markets of Europe is expected, following basically similar tones on Wall Street. Meanwhile, Asian stock markets are also showing negative results.

• Fed Is On Gradual Rate Rise Path

• Fed Goal Is To Keeping Expansion Moving Forward

• Economy Is In A 'Great Position' Right Now

• Employers Reporting A Shortage Of Workers

• The U.S. Economy Isn't Running Out of Jobs

In October 2018 the index of producer prices for industrial products rose by 3.3% compared with the corresponding month of the preceding year. In September the annual rate of change all over had been 3.2%, as reported by the Federal Statistical Office (Destatis).

Compared with the preceding month September the overall index rose by 0.3% in October 2018 (+0.5 % in September 2018 and +0.3% in August 2018).

In October 2018 the price indices of all main industrial groups increased compared with October 2017: Energy prices were up 9.4%, though the development of prices of the different energy carriers diverged. Prices of petroleum products were up 19.2%, whereas prices of natural gas (distribution) rose by 9.2% and prices of electricity increased by 9.1%. Prices of intermediate goods were up 2.3%. Prices of durable consumer goods rose by 1.7%, of capital goods by 1.4% and prices of non-durable consumer goods by 0.2%.

The overall index disregarding energy was 1.6% up on October 2017 and unchanged compared with September 2018.