Sharply Lower U.S Stock Market Open Expected

Apparently Asia was also disappointed by last Friday’s poor U.S. consumer sentiment report with Far East stock averages sustaining sharp losses. China didn’t help matters when it indicated that it’s recent step-up in commodities stockpiling was slowing. This is raising fresh concerns as to the sustainability of an economic global recovery. As a result; the large overseas stock declines are front running an expected sharply lower U.S stock market open.

The Dow which lost a sum total of 48 points last week is indicating a 180 point lower open this morning. Confirmation of the weaker open is being felt in both the Euro and Oil. Crude dropped another $1.76 per barrel adding to last week’s loss of $3.42. Last on Oil $65.75.

In forex currency trading, the Euro is 1.24 U.S cents lower against the Dollar at $1.4061. The metals are broadly lower as well. Silver is off 60 cents at $14.09. Gold is down $11.00 at $936.00. Palladium eased $1.00 to $274.00. Platinum is $1229.00 down $28.00 per ounce.

Traders in all markets are now nervously awaiting this week’s slate of economic data desperately hoping to see some positive economic signals. Traders need a reason to start buying again. Unfortunately today’s calendar is thin with only the New York Empire State Index of Manufacturing for traders to hang on to. The latest estimate calls for the August index to rise into positive territory. Look for a reading of 2.2 versus last month’s contraction on .55.

On the domestic front it seems the White House may now be willing to drop it’s divisive plan for a direct government run health care system. While President Obama continues to defend his plan; he is now leaving the door open to alternative approaches succumbing to public outcries over the matter.

Fed Paints a Happy Face on US Economy

Yesterday the Fed gave the impression that economic activity is leveling out after it’s sharp and prolonged slide. Adding to the positive trading environment are reports out of Europe indicating the Eurozone economy is improving as well. It was reported that Germany and France are officially out of recession. As a result the metals rallied, the Euro climbed, and Oil surged.

The Euro jumped a little over a half cent against the Dollar with the last trade $1.4274. Crude Oil spiked on a presumed jump in future demand. Last trade on Oil $71.72 up $1.56 per barrel.

Over in Europe we find Silver up 23 cents at $14.75. Gold gained $4.00 to $954.00. Palladium jumped $9.00 to $282.00. Platinum is $1252 up $10.00 per ounce.

The Dow finished the Wednesday session up 120 points and appears to be headed for another 103 point rise this morning. The higher indications may temper somewhat as we approach the open.

We have two pieces of fresh economic data for traders to consider before the stock market opens. The Initial Weekly Jobless Claims are expected to show a slight improvement over last week with the latest estimate calling for 545,000 first time unemployment claims versus last week’s 550,000. Next comes Retail Sales for July where the picture is less bullish.

Wall Street expects to see a .7% rise is spending compared to June’s rise of .6%. That’s the good news. If however you strip out the impact of auto sales (Remember Cash for Clunkers is a temporary government subsidized bail out program) the rise in overall retail spending is up a mere .1% versus June’s rise of .3%.

Today’s economic calendar:

U.S. Initial Claims
U.S. Retail Sales
U.S. Import Prices
U.S. Business Inventories

Friday’s economic calendar:

U.S. Consumer Prices
U.S. Industrial Production
U.S. Consumer Sentiment
EZ Consumer Prices
EZ GDP
German GDP

Here’s an insightful video on why the cash for clunkers program hurts most those it was intended to help:

Late Afternoon Pre-Fed bounce in the Euro

With about a half hour to go before the Fed releases it’s data; the metals ended the New York session on a firm note.

The Euro gained 62/100ths of cent versus our Greenback with currency traders front running their expectations of what the Fed will say. The Euro got a little extra support when the U.S.Trade Deficit expanded by $1 billion from the prior month.

Traders took their cue from a surge in Oil and a late afternoon pre-Fed bounce in the Euro. Silver ended the session at $14.56 up 22 cents. Gold gained $4.00 to $950.00. Palladium and Platinum remained slightly down,losing $7.00 per ounce for a close of $1235.00 and $2.00 for Palladium and a close of $273.00. Volume was moderate.

Crude Oil jumped by $1.24 per barrel on the Dollar’s weakness along with a powerful surge in the Dow. The rise in Oil comes despite today’s higher than expected inventories. Last on Crude $70.69.

In the stock market the Dow is presently up 134 points with traders pointing to the warm reception on today’s treasury debt auctions. Other traders are buying in advance of expected optimism on the part of the Fed. More in the AM

Fed Statement Later Today has Traders in Waiting…Again

The metals continued trading in a tight range during the overnight Asian and European sessions. Again today traders are virtually immobilized as they wait for today’s Fed interest rate announcement along with the accompanying statement before committing. What will the Fed say regarding their perception of the economy? This is what has traders in most markets anxious. We will know at 2:15 pm eastern today.

Currently we find Silver changing hands at $14.20 off 11 cents. Gold is $3.00 lower at $943.00. Palladium remains unchanged at $275.00. Platinum is $1235.00 off $9.00.

Forex

In the currency markets it’s the same thing with the Euro treading water at $1.4163 up 3/100ths of cent versus our Dollar. Crude Oil is also flat with traders waiting for today’s Weekly Oil Inventories along with the Fed announcement. The latest estimate calls for Oil supplies to show rise of 1.2 million barrels.

In stock trading the Dow ended Tuesday with a decline of 96 Dow points as traders made a final hour scamper to the sidelines in advance of today’s pearls of wisdom from the Fed.

Today’s calendar also contains the latest look at our Balance of Trade. The weakening Dollar continues to cut the disparity between our exports and imports. The weaker Dollar makes our products for export cheaper to buy. Look for imports to still exceed exports by $28.6 billion. The expected deficit is a shade higher than last month’s $26 billion.

In domestic matters; President Obama continues to push for his health care reform bill. On the geo-political front U.S missiles struck a suspected Taliban camp in Pakistan killing 14 militants. In Kuwait an al Qaeda linked group was arrested for planning an attack on a U.S military base there.

Today’s economic calendar:

U.S. Trade Balance
U.K. Employment

Tomorrow’s:

U.S. Initial Claims
U.S. Retail Sales
U.S. Import Prices
U.S. Business Inventories

Traders Twiddle Thumbs as Market Idles

The metals ended the trading day remarkably quiet as many participants continue to point to Wednesday’s Fed rate announcement and the accompanying statement as reason to thumb twiddle and wait.

In the currency markets the Euro roller coastered most of the day but is currently close to the morning levels at $1.4160 up 40/100ths of U.S cent.

With mixed signals from Oil and the Dollar, as well as uncertainty over tomorrow’s Fed announcement our markets might as well have remained closed today. Silver closed 4 cents lower at $14.34. Gold was up $2.00 closing at $946.00. Palladium finished the day unchanged at $275.00. Platinum slipped $8.00 ending at $1238.00. Volume was light.

In the energy markets traders spent much of the day on the sell side after OPEC announced lower oil demand expectations for 2010. Last on Crude $69.53 off $1.07 per barrel. Remember traders will also face the Weekly Oil Inventories tomorrow.

Stocks remain under water with the Dow currently down 82 points at 9255. Tomorrow traders will have the latest U.S Balance of Trade, Weekly Oil Inventories, and the FOMC results to guide their decision making.

In a final note of interest; Chevrolet announced that their new vehicle the Volt will get 230 miles per gallon. I expect you will see this story plastered all over tonight’s news broadcasts.

« Previous Page — Next Page »