Crude oil continue to moved lower in today’s session on fear of global economic growth and worries about Spanish debt crisis spinning out of control. Energy traders as well traders of growth commodities became cautious on Monday when Federal Reserve Bank of New York index was reported to have fallen to -10.4 for the month of September hitting a 3 year low. The previous months reading was -5.8 with analysts’
Can U.S. markets move higher after a broad sell off Monday? Two weeks ago trader overcame the broad sell off but future’s today look basically flat in pre-markets with implied opens for Dow Jones at 13.34, S&P 500 0.03 and the NASDAQ at 2.26 as of 8:40 a.m. ET.
All 3 U.S. stock indexes are pointing to a higher open as investors focus on the FOMC meeting and domestic issues facing U.S. economy. The question of the day is “what will the Fed do?”
Markets closed mixed on the first day post Greek elections. Since the bailout party appears to be able to form a government markets are now looking to next shoe to drop as the Spain debt yield has moved to 7% during today’s bond action.
U.S. traders are coming off the best week thus far in 2012. The EU announcement of a plan to bailout Spanish banks is helping to continue the market drive into the start of the new trading week.
Asian markets begin the week off with a big bang Monday morning – Sunday evening in the U.S after the European Finance Ministers approved to provide Spain euros for a banking bailout.
The Euro bounced sharply off of multi-year lows in a week of impressive recovery for the US S&P 500 and broader financial markets.
Any way you cut it, the dollar’s recent performance is impressive. So far this month, the Dow Jones FXCM Dollar Index (ticker = USDollar) has climbed 1.9 percent to its highest weekly close since the middle of December. Looking at currency’s performance in specific corners of the market, we find the EURUSD is below 1.3000, AUDUSD is at its lowest level this year and the greenback has even been able to muscle gold (another safe haven) into a potentially critical reversal of a trend that goes back over three years.
Most of the major currency pairs continue to show significant correlations with the MSCI World Stock Index, suggesting that broad-based risk appetite trends remain dominant as drivers of price action. This puts thematic macro-level concerns – specifically, the durability of the US recovery and its ability to offset headwinds from Europe and China facing global growth – squarely at the forefront. The US economic calendar is relatively quiet, with headline event risk clustered at the end of the week as PPI and UofM Consumer Confidence readings cross the wires on Friday. This puts the onus on evaluating the extent of downward pressure.
The ongoing political turmoil in Europe continues to shake the markets, with the inability for Greece to form a government now fueling speculation that the country might soon exit the Eurozone. Although an exit by Greece would have only a minimal impact on the broader economy, given the country’s size, fears of contagion seem to be the bigger problem right now, as investors start to price in the impact this will have on larger economies like Spain and Italy.
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