Axi | Apr 26, 2018 09:42
Originally published by AxiTrader h2 Market Summary (6.09am Thursday, April 26)/h2
Who’s afraid of 3% then?
Not US stocks, at least not today when the 10-year Treasury rate is sitting at 3.02% while the S&P 500 is up around 0.2% at 2,639.
And that’s the point folks. Yes 3% 10’s and 2.5% 2 year rates are changing the valuation metrics. But it seems it’s the nature of this earnings season which is the key here. Earnings are strong but guidance is less strong. Caterpillar's (NYSE:CAT) comment Tuesday night that Q1 might have been the high water mark is what is troubling traders.
That and a still negative technical outlook of course.
Elsewhere in stocks the Dow is up 0.25% at 24,083 and the Nasdaq is down 0.1%. Europe had a poor night, as was Asia’s day yesterday, with the DAX down 1%, the CAC off 0.57%, and the FTSE down 0.62%. Yesterday the Nikkei, Shanghai Composite, and Hang Seng all closed lower.
SPI traders have marked prices down just a few points from Tuesday’s highs. Yesterday morning’s weakness (after the S&P 500 dipped 1.3% Tuesday) has given way to a recovery overnight in the London and New York sessions. It’s a balance between the US move last night, earnings announcements subsequent, and the performance of global miners across many bourses overnight might provide a drag on the physical market today when trade gets under way. For the moment though June SPI futures are up 41 points.
To currencies now and the US dollar is breaking higher at 91.20 in US Dollar Index terms. But it’s still yet to decisively break the bottom of the recent range against the euro at 1.2150 (1.2160 as I write) but the single currency has lost another 0.6% overnight. Likewise the Greenback has gained half a percent against the yen with USD/JPY at 109.32 while the Aussie has lost a similar amount at 0.7565 – it’s a shot duck and heading substantially lower it seems. 0.7475/80 remains my next target. Below that it is 0.7333 and perhaps even 0.7142.
Speaking of shot birds the kiwi and the Loonie are weaker as well with the New Zealand dollar remaining under intense pressure down another 0.7% to 0.7065. USD/CAD is up just 0.1% at 1.2844.
On commodity markets despite the US dollar strength, some sense that maybe President Trump won’t automatically repudiate the Iran sanctions deal, and a build on US inventories crude is still higher. WTI is up 0.35% at $67.94 while the price of Brent has risen just 0.11% to $73.94. It’s a bull market, but prices are looking a little toppy.
Gold is down again and sits at $1322, Ali lost more ground as the pressure eased on Rusal, and copper is just a little lower at $3.13 a pound.
On the day today we get export and import prices in Australia as well as South Korean GDP and tonight the Gfk consumer confidence is released in Germany.
But the big one is the ECB decision or more correctly the statement from the ECB and Mario Draghi’s press conference subsequent. Durable goods in the US will also be interesting.
Oh, and the really big news folks, HUGE in fact, is that for the first time since 2015 Collingwood is in the top 8. We have a big game against Richmond Sunday to see how we are really travelling in 2018. But gee whiz it looks like it might be a good year for the Pies.
h2 Here's What I Picked Up (with a little more detail and a few charts)/h2 h2 International/h2@soberlook )
Have a great day's trading.
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