Stock Market Trading: 27 September 2013
European equities are set to edge up on the open as four days of modest losses now sees the mean reversion trade come into play.
Markets look set to drift back to the middle of this week's range as directional conviction looks to be in almost perfect equilibrium at the moment.
It appears that nothing apart from a decisive decision about tapering or the US debt ceiling will be able to dislodge traders from their slightly uncomfortable position on the side-lines.
Economic data may bat the indices around a bit, but in reality it will all take second place until we get clarity surrounding the market unknowns.
This means that the big money is likely to stay firmly out of the game until we know more.
gained for the first day in six, moving 55 points higher to close at 15,328.30, after figures showing that US unemployment claims fell close to their lowest level in six years.
We also saw encouraging news from some big retailers after the Consumer Comfort Index rose for the third straight week, boosting the stock market.
Stock Market Trading: 26 September 2013
Another day of gentle declines is expected on the European open as the big market unknowns of tapering and the debt ceiling keep traders on the bench.
Markets have been ebbing and flowing within an ever tighter range this week as traders take the default course of action when facing such uncertainty; doing nothing.
No one is putting on any trades of decent enough size to nudge the market out of its well-worn groove and we are unlikely to get any until something definitive about tapering or the debt ceiling breaks.
The growing threat of another political impasse over US government spending pushed American stocks lower for the fifth day in a row yesterday.
In addition, signs of a cooling housing sector rebound, as indicated by the new home sales data, also fuelled investors' pessimism.
As a result, the Dow Jones index dropped 72 points to 15,277.
Stock Market Trading: 25 September 2013
A subdued start is expected in Europe, with marginal declines on the open as Fed uncertainty and a lack of cues keeps traders on the side-lines.
Despite another couple of Fed members speaking yesterday, spread betting and CFD
markets are none the wiser as to what is going on with regards to tapering.
Today's lack of Fed speeches may give us a brief respite, as this is the only day this week without a Fed member speaking, but another source of global market uncertainty seems to be brewing once again as the debt ceiling approaches.
Markets seem to be treating the debt ceiling issue quite nonchalantly as they've been to the 'brink' many times before and there has always been a last minute deal to save the day.
However, overnight Treasury Secretary Jack Lew also highlighted the lack of seriousness that markets were ascribing to the potential problems that could ensue.
Profit taking in the Dow Jones continued yesterday, with the US index dropping 45 points to 15,350 on fresh concerns regarding the economic outlook.
In particular, consumer confidence tumbled to a four month low in September.
That raised some alarm bells as it is widely accepted that consumer spending is responsible for about 70% of economic growth in the US.
Stock Market Trading: 24 September 2013
Stock markets in Europe are set to sag on the open as tapering uncertainty keeps traders' risk appetite in check.
Yesterday's dovish speakers gave a conflicting account of the future of Fed tapering than Bullard's assessment on Friday, leaving markets even more perplexed.
The only thing that got traders nodding in agreement was when Dallas Fed President Richard Fisher said that doing nothing would hurt the Fed's credibility.
With little in the way of major economic data
and another two opportunities for Fed members to confuse the markets tonight, we are likely to continue drifting lower as clarity remains elusive.
Last night, the financial sector continued to lead US stocks lower as the optimism which supported the September rally looks to be fading.
The economic data was also weaker than expected, with manufacturing PMI coming in at 52.8 versus forecast of 54.2.
As a result, the Dow Jones ended the day 103 points down at 15,394.
Stock Market Trading: 23 September 2013
European equities are set to open mixed as an encouraging Chinese Manufacturing survey and Angela Merkel's victory in Germany fails to shake off a downbeat close in the US on Friday.
Despite last week's shock reversal on tapering and subsequent bullish moves, St. Louis Federal Reserve President James Bullard let slip that an October taper was still on the cards.
What is highly unnerving for markets is that there is no concrete plan, or at least the Fed are struggling to communicate it, and they appear to be playing one of the most crucial issues in finance by ear.
The Dow Jones closed the session 185.46 points lower on Friday, falling to 15,451.09.
This was the second consecutive fall for the index after the Fed surprised economists with its decision to delay scaling back its stimulus, however, it had still risen 0.6% for the week.
In addition, trading volume was heavier than usual on Friday due to the event known as 'quadruple witching' when stock index futures, stock index options, stock options and single stock futures all expire on the same day.
Following on from the overnight Chinese data, we will also get insights into the state of the European and US manufacturing sectors this morning, with expectations for a similar pickup.
However, even if the results do follow suit, moves may be muted ahead of 3 Federal Reserve members speaking, 2 doves and 1 hawk, as traders expect at least one of them to drop another market moving clanger.