Another wild day on Wall Street ended with an impressive rebound in stock markets but a concerning dip in consumer confidence. It was the biggest intraday market gain since 2010.
The FX market had a more risk-averse takeaway with the Swiss franc leading and Australian dollar lagging. US trade balance is the data point to watch on Friday.
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The rollercoaster in US equity markets at what's usually a quiet time of year continued on Thursday. The S&P 500 fell by nearly 3% late in the day then stormed back to close nearly 1% higher. Importantly, Thursday was the final day to settle US equity trades before year end, meaning that anyone selling for tax reasons needed to do so Thursday. That paradigm may have signaled the 'all clear' for dip buyers, at least for the moment. A hint came earlier in the day as European equities had a late surge to pare losses.
While this was a second small victory for the bulls, there are some fresh concerns about the economy. December consumer confidence fell to 128.1 from 135.7. the consensus was for a dip to 133.7. It's the second data point this week (following the Richmond Fed) that's badly missed estimates.
Still, the picture remains mostly positive in the hard data with initial jobless claims and the FHFA both matching estimates Thursday.
One number to watch on Friday is the US November advance goods trade balance report due at 1330 GMT. The consensus is for a $76.0B deficit and economists are rarely more than $3 billion off the mark but this is an unusual time as tariffs hit. A miss would raise fresh questions about the impact of the trade war.