Friday, 29 August 2014

Markets | 29/08/2014 | Clutch of key economic readings on tap

Equity markets across Asia have broadly found sufficient strength to mount a rally into the weekend break, despite earlier fears that tensions between Russia and Ukraine were poised to flare up. Sentiment in Tokyo was however hampered by a slew of worse than expected economic data ranging from the industrial production reading to housing starts, leading traders to mark down Japanese stocks as a result. The big number for many however will be the official Chinese manufacturing PMI reading that’s due on Monday as any dip below the break-even 50 mark here would prove unsettling for markets not just in the region but globally, too. 

Futures are suggesting we’ll see a higher start to the final session before the long weekend on Wall Street, again with the relative calm on the geopolitical spectrum lending some support here. There are however a clutch of key economic readings due for release including the July core PCE print before the bell and the University of Michigan confidence reading after trade gets underway. These are just two items on the agenda that could serve to shift sentiment in what could well prove to be a rather thinly traded session. For now however we’re calling the DOW up 69 at 17149 and the S&P up 8 at 2005. 

Thursday, 28 August 2014

Markets | 28/08/2014 | Wall Street rally ran out of steam

Asian markets have had something of a muted session as the Wall Street rally ran out of steam and we're also seeing a degree of risk aversion creeping into play now with concerns that the situation could escalate between Russia and Ukraine. There are reports of a border incursion by Russian troops so we're seeing some classic defensive moves in markets with gold appreciating relatively rapidly towards the $1300/oz level, whilst the Yen is also appreciating. As such, although the regional markets may have finished Thursday's session relatively undamaged, there's every chance that if we don't see a stabilization in the geopolitical agenda today, then the sell-off could accelerate into the month-end.

Against this backdrop, Wall Street futures are currently eyeing a softer start to the session but again the downside pressure could well be exacerbated depending on the tone of the rhetoric from Kiev and Moscow. There's also the US GDP update due before the opening bell which again could provide some direction, but once again it's a case of all eyes on the geopolitical situation. Ahead of the open we're currently calling the DOW off 31 at 17091 and the S&P off 4 at 1996. 

Markets | 27/08/2014 | U.S. Stocks: S&P To Stick Above 2,000

Despite another record close being posted on Wall Street on Tuesday, enthusiasm for stocks appears to be ebbing a little in Asian markets and although most of the major regional indices managed to grind out some modest gains, the Hang Seng looks set to finish the day well underwater. The support we are seeing at the moment appears to be stemming from upbeat US economic data and if consumers are spending then Asian manufacturers and service providers should benefit. Asian economic data has however been rather thin on the ground of late although with a new month starting next week, more high profile readings here will serve up some meaningful direction in due course.

Looking ahead, US markets remain undaunted by the dizzying highs they're currently standing at and futures are suggesting there's more gains to be seen at the open. Last night saw the S&P close above 2,000 for the first time in history and there's little on the economic calendar that looks as if it has the potential derail the bullish sentiment before the opening bell. We do have some mortgage approval stats but against numbers like that massive uptick in durable goods orders yesterday, it's going to take some significant disappointment to rock sentiment. Ahead of the open we're calling the DOW up 20 at 17127 and the S&P up 2 at 2002.

Thursday, 21 August 2014

Markets | 21/08/2014 | US rate hike fears knock Asian equities; Wall Street unmoved...

It’s been a broadly disappointing session for Asian equities with traders electing to book profits off the back of suggestions that US interest rates could rise before the year is out. A shortfall in Chinese manufacturing PMI also added to the downside and although the reading of 50.3 shows there’s still expansion, it’s a borderline print. The one index that stood out regionally however was the Nikkei, which finished almost 1% higher as expectations of further Yen weakness were priced in ‪#‎Valutrades‬ ‪#‎USD‬ ‪#‎PMI‬ ‪#‎Equities‬

Wall Street however appears undeterred by the prospect of higher interest rates sooner than had been expected. Markets did admittedly fall back in the wake of the FOMC meeting minutes but this was short lived and futures are pointing towards further gains at the open. We're now within easy reach of fresh all time highs for the S&P and assuming there are no surprises in the economic data that's due this afternoon or any further deterioration in terms of the geopolitical landscape then it's difficult to imagine we won't see this level fall in the near term. Ahead of the open we're calling the DOW up 31 at 17010 and the S&P up 2 at 1989.

Wednesday, 20 August 2014

Markets | 20/08/2014 | Markets nudging back into inflated territory | MarketWatch

Equity markets have been buoyed in recent sessions as a result of a generally calm geopolitical backdrop, but the rally does now appear to be running out of steam. This is perhaps no real surprise – markets are now nudging back into that inflated territory and there’s still the risk of one or more of the conflict hotspots escalating significantly, although the risk-on trade remains in favour – we have USD/JPY back above 103 and gold resolutely below $1300/oz. As such, regional markets have finished the day mixed, but the overall moves have been relatively limited despite that strong lead from Wall Street yesterday.
Futures are currently suggesting that we’ll see a softer start to the day’s trade on Wall Street and with little on the economic calendar, unless there’s a shift in geopolitical affairs then any real change here may seem somewhat unlikely. We do however have the FOMC meeting minutes due for release later in the day and there’s certainly going to be scope to pick through the detail here for further clues as to what the Fed is thinking. In the event that we see another dovish bias then equities could well find an excuse to move higher once again but for now we’re calling the DOW down 27 at 16893 and the S&P down 6 at 1976. 

Tuesday, 19 August 2014

Markets | 19/08/2014

It’s been another upbeat session for Asian equities with traders finding reassurance in the fact that there’s been no further escalation in tensions between Russia and Ukraine. As a result all major indices in the region have finished in positive territory, with the Nikkei being the best performer as renewed Yen weakness helped valuations and although we saw a raft of economic data released from Japan overnight, again there was little here that caused any surprise and even the dip in department store sales was by all accounts expected as the impact of tax hikes continues to be felt.
Wall Street is eyeing some relatively modest gains at the open although we do have inflation data due before the bell. Anything that shows price pressures building could well encourage the Fed to take a slightly more hawkish view over monetary policy and with equities marching higher once again, there’s certainly the scope for profits to be booked. For now however we’re calling the DOW to start up 31 at 16870 and the S&P up 2 at 1974.