Mid-day stocks are basically flat with the S&P 500 and Nasdaq hovering around a 9bps decline and the Russell and Dow hovering around a 3-4bps increase. Crocs has been an outperformer on the day on the back of a key investment from Blackstone. Mid-Day the stock is up 20%.
In the American session, Canada’s TSX is trading slightly higher posting a 2bps increase. The Bovespa is also in the green by 84bps.
European stocks finished the day mostly in the red with the Stoxx down 17bps, CAC down 5bps, Dax down 39bps and FTSE down 29bps. A bright spot in the area was the FTSE MIB and IBEX which finished near flat up 6bps and 2bps respectively. In the Asian session, stocks were mostly in the green. The ASX, Hang Seng, and Nikkei all closed higher posting gains of 61bps, 1bps, and 69bps respectively. The Shanghai Composite and Sensex finished the session down 18bps and 24bps respectively.
The CBOE Volatility Index is trading higher today up 6.5%. The index is in the red over the past 5 days, down approximately 3%.
Commodities are lower on the day with WTI and Brent both in the red by 1%, Gold posting a decline of 83bps, and Silver down by 2.17%. Corn and Gasoline are trading lower posting a decline of 93bps and 63bps respectively. The bright spot continues to be Nat. Gas which has been the best performing commodity this year up 1.13%.
In today’s session, yields have come down slightly with the US 10year yield now at 2.97%, German 10 year at 1.94%, Italian 10 year at 4.11%, U.K. 10 year at 3.03%, Spanish 10 year at 4.18% and Japan 10 year at .732%.
US pending home sales numbers were slightly worse than expected. Pending home sales rose MoM by 2bps lower than the 1% expectation. Yet, the numbers were better than the prior revised numbers at which sales posted a 1.2% decline. On a YoY basis, pending home sales remained steady with prior numbers posting a 1.6% decline YoY. The Dallas Fed Manufacturing numbers were also released intraday and came in better than expected posting an increase of 3.1. This beat the consensus of 2.0 and also the prior number of 1.9. In overnight trading, Hong Kong’s balance of trade deficit widened to -44.6B. This number was worse than expectations. The consensus was for a -39.9B which is a greater deficit than the prior trade balance of -38.1B.
The Greenback weakened against the majors. The Euro strengthened in overnight trading and is trading in the 1.3800 area. In prior sessions, the Euro pierced the 1.3900 area but was unable to hold. This pierce was a great short entry point based on my prior analysis. The Euro continues to trade in a rising wedge pattern. The US data has outperformed that of the Eurozone’s in recent times. This was the bias I held in making a December Taper prediction. The retrace back to the 1.3800 should serve as another entry to the short side. I would look to hold the short position to the 1.3100 area, taking profits and tighten my stops in the 1.3500 and 1.3300 areas.
The Aussie strengthen against the Dollar in overnight trading. After the 1st Taper, the Aussie broke the key support area of .8900 but has since retraced and is trading just above that support area. From a technical perspective, I would be looking to go long the Aussie. If we don’t hold the .8900 area, we have a ways to fall to the next support area of .8200.
The Pound strengthened overnight and during intraday trading. In the prior session, the pound came very close to piercing the 1.6600 area. The next resistance area is around 1.6560. The 1.6440 area should serve as short term support. If this area is broken, the next support level should fall within the 1.6320 area.
Dollar Yen weakened in overnight trading but has since found support within the 105.000 area. In Friday’s session, USD/JPY strengthened and continued its upward trajectory in trading on Sunday, later to find resistance at the 105.40 area.
USD/CAD experienced a selloff that started late Sunday. The pair found support near the 1.0700 area early in overnight trading, but moved lower once this area was cracked around 9am EST and found support at 1.0640 area. This area is the 76.4% retracement of the prior move up that began on Friday. If this support area is broken, the pair could test the 1.0615 area, and later test the 1.0580 area. If we hold this support level, the pair could trade back up to the 1.0735 area.