Markets Live: Time to take profits

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    Allianz’s Mohamed El-Erian is one potential candidate to be vice chair at the US Fedaccording to the Wall Street Journal.The vice chair position has been vacant since Stanley Fischer resigned last month.Earlier this month, US President Donald Trump nominated Fed governor Jerome Powell to succeed Janet Yellen as chair of the central bank. Powell needs to be confirmed by US lawmakers. Yellen’s current four-year term expires in February.El-Erian came to prominence during his tenure as chief executive officer and co-chief investment officer at PIMCO, which is owned by Allianz. Earlier in his career he spent 15 years at the International Monetary Fund. He holds a doctorate in economics from Oxford.In a comment on Powell’s nomination, El-Erian wrote that it “is a very wise decision that will be welcomed by markets. It brings a highly respected, well-informed and experienced professional to the helm of the world’s most powerful central bank.“And while Fed policy is essentially on automatic pilot for the next few months, Powell’s Senate confirmation would need to be followed by a rounding out of the Fed’s leadership, including the nomination of a vice chair after the departure of Stanley Fischer, to ensure that the institution continues to function well at the intersection of economics, finance, policy and market technicals, both domestically and around the world.”Nickel fell more than 5 per cent, leading a broad-based pullback in base metals prices after weaker-than-expected economic data from China sparked concerns about demand.Nickel, chiefly used in stainless steel, is still correcting from this month’s surge to two-year highs on hopes for a bounce in demand for electric vehicles.“The Chinese data out earlier today was broadly speaking negative. They paint a view of the Chinese economy where growth looks to be slowing,” Danske Bank analyst Jens Pedersen said.“The way we see China here in the big picture is for credit tightening, which is feeding through to the real economy, and that will mean lower demand for base metals.”Nickel, which has risen nearly a quarter this year, could be due a deeper correction, he said. “We are still at elevated levels, so in the short term, nickel is perhaps more sensitive to negative news.”Three-month nickel on the London Metal Exchange closed down 5.7 per cent at $US11,780 a tonne, its biggest one-day drop since March 2016. It has reversed sharply since hitting its highest since June 2015 on November 1 at $US13,030.The economy in China cooled further last month, with industrial output, fixed asset investment and retail sales missing expectations as the government extended a crackdown on debt risks and factory pollution.US producer prices rose more than expected in October, with data showing the biggest annual increase in wholesale inflation in over 5-1/2 years. The numbers are seen supporting expectations for the Federal Reserve to raise interest rates in December.LME three-month copper ended the day down 2 per cent at $US6759 a tonne. Zinc finished 1.9 per cent lower at $US3,151 a tonne. Tin closed down 0.2 per cent at $US19,470 a tonne, lead ended 2.1 per cent lower at $US2470, and aluminium finished 1.2 per cent lower at $US2082 a tonne.SPONSORED POST And here are the overnight market highlights:SPI futures down 26 points or 0.4% to 5950AUD flat at 76.25 US centsOn Wall St: Dow -0.3%, S&P 500 -0.2%, Nasdaq -0.6%In New York, BHP -2.7% Rio -2.7%In Europe: Stoxx 50 -0.5%, FTSE flat, CAC -0.5%, DAX -0.3%Spot gold +0.2% to $US1280.34 an ounceBrent crude -2% to $US61.91 a barrelUS oil -2.1% to $US55.55 a barrelIron ore +1.2% to $US63.17 a tonneDalian iron ore -4.6% to 444 yuanLME aluminium -1.2% to $US2082 a tonneLME copper -2% to $US6759 a tonne10-year bond yield: US 2.37%, Germany 0.39%, Australia 2.65%In economic data:Westpac monthly consumer confidence at 10:30am AEDT, ABS wage price index and new motor vehicle sales at 11:30amRBA assistant governor Luci Ellis speaks at 6pmJapanese preliminary GDP at 10:50amBritish average earnings data tonightUS inflation and retails sales numbers, crude oil inventoriesWorld stocks were down for the fourth day in a row overnight, while strong economic growth in Germany boosted the euro to an almost three-week high.Wall Street was lower on weak oil prices, uncertainty about US tax policy and the economy’s ability to deal with more interest rate hikes. European stocks fell to a two-month low.US Treasury two-year note yields climbed to a nine-year peak while long-dated debt yields fell, flattening the yield curve flattened for a second straight day, while investors braced for a Federal Reserve December rate hike.“Particularly outside of the US, last week wasn’t a great week on the economic data front. We had sort of slowing growth in China, some potential impacts from currencies and some of the export data out of Europe,” Shannon Saccocia, chief investment strategist at Boston Private Wealth, said. “We also see that the yield curve continues to flatten, and so those are things that I think are all weighing on markets a little bit as we go into this sort of shortened, less volume period over the next couple of weeks over the holidays.”In Germany a 0.8-percent third-quarter growth reading beat forecasts and showed the economy expanding at annualised rates of more than 3 percent.“It’s been a euro trade today, and it’s stronger against just about everything,” Brad Bechtel, managing director FX at Jefferies in New York, said. The US dollar index fell 0.7 per cent, with the euro up 1.1 per cent to $US1.18.On Wall Street, investors sought updates on rival US House of Representatives and Senate tax reform proposals. Republican Senator Rand Paul said he would seek to add a provision to repeal Obamacare’s requirement Americans obtain health insurance and scale back its elimination of a federal deduction for state and local taxes.After an upcoming break for the Nov. 23 US Thanksgiving holiday, there are only 12 legislative days before year-end.The Dow Jones lost 0.2 per cent, the S&P 500 dropped 0.4 per cent, and the Nasdaq Composite fell 0.5 per cent.Good morning and welcome to the Markets Live blog for Wednesday.Your editors today are Vesna Poljak and Patrick Commins.This blog is not intended as investment advice.Fairfax Media with wires.

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