Market Overview: The precious metals complex is mixed in early trade this morning, with gold drifting slightly higher while silver drifts slightly lower. The precious metals and other markets are still digesting this week’s Presidential debate, and the close race will likely be the main area of focus for investors over the next several weeks. Markets appeared to point to a Hillary Clinton debate victory, as precious metals fell and stocks rose. Her performance may have removed a degree of uncertainty from the marketplace, although the race remains very close and could potentially see some lead changes in the coming weeks. The closer the race is, the more anxious investors may get and this could potentially keep a floor under gold and silver prices.
Key Data Points: The latest reading on MBA Mortgage Applications was released earlier this morning and showed a one percent rise last week from the week before. This reading puts the purchase index 10 percent higher than the same week one year ago in what may be considered an encouraging sign of the housing market. Refinancing applications, however, saw a slight drop last week from the prior week despite a decline in mortgage rates.
The latest data on Durable Goods Orders showed no change in August from July, while consensus estimates were looking for a decline of 1.9 percent.
There are a number of Fed officials speaking today in various engagements, however, none of the speeches appear to be potentially market-moving.
Outside Markets: Stock index futures are slightly higher early this morning and pointing to a higher open. Equities have been trying to stem some recent bleeding and return to previous highs. The market is not far off from these levels, however, stocks remain vulnerable to headline risk and may also see heightened volatility as the Presidential election approaches.
Crude oil is higher today but appears to be losing recent steam. There seems to be a lot of doubt about the potential for an output freeze or cut, and that may drive selling in the oil market which could potentially see crude fall back below the $40 per barrel level.
The dollar index is slightly higher today but has been in a tight range. Action in the dollar may remain somewhat subdued until the election gets closer.
The Big Picture: Now that the latest Fed meeting is over and a December rate hike appears to be a foregone conclusion, investors will likely pay close attention to the Presidential race. The race remains very tight, and with several weeks to go and additional debates, the race may come down to the last minute. Uncertainty over the who will be the next American President could potentially drive heightened volatility in stocks and risk assets, while some investors may flock to perceived safe haven assets, such as gold and silver.