Stock Rise as Investors Expect Non-Farm Payrolls to Rebound from Poor Weather

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Stock Market Trading

: 04 April 2014

European equities are set to creep higher as traders expect a solid Non-Farm Payrolls figure.

Following last month's upside surprise, many think that the bad weather effect will have finally thawed and now expect the data to be back to trend.

Only a short while ago, traders and markets were stuck in the quandary of whether good news was actually good if it led to the Fed exiting it's stimulus program and speeding up the monetary policy normalisation process.

Despite Yellen's hiccough at her first press conference, her comments about 'considerable slack' in the economy earlier this week have given the bulls the green light to rally on good news.

Having said that, yesterday we saw unemployment claims rise by more than forecast and the trade balance deficit was also larger than estimates.

Despite this, investors discarded the negative economic data ahead of today's Non-Farm Payrolls, pushing the Dow Jones 26 points higher to 16,591.

If we see a gain of more than 200,000 jobs today, the rally could continue.



Stock Market Trading

: 03 April 2014

The Dow Jones continued its uptrend yesterday, gaining 39 points to 16,570 which was the highest level since late January.

The rally was inspired by ongoing strong economic data which showed that US companies added 191,000 jobs last month according to the ADP Research Institute.

So ahead of the Non-Farm Payrolls due on Friday, it seems that US investors' sentiment is cautiously optimistic.

Despite that, European equities are set to open flat this morning as traders bed down ahead of a busy day of economic releases.

The main event will be the ECB rate meeting and press conference, but before that we will get the UK services PMI.

Expectations are that the Services industry will continue to follow the improving-but-not-brilliant theme that is currently characterising the UK economy.

Therefore, as long as the figure remains in expansionary territory, there should be no downside shocks.

And now, drum roll please.

The conundrum that traders will be facing ahead of the ECB rate decision is whether or not Mario Draghi will pull the trigger.

Even if there is no rate cut as markets expect then, just like the Euromillions lottery where even if you don't win the main jackpot you may come up trumps on the raffle, Draghi may hand the bulls some dovish rhetoric at the press conference.



Stock Market Trading

: 02 April 2014

European equities are set to start with a spring in their step as traders speculate that bullish signals are on the horizon.

There was a huge amount of mixed data out yesterday but markets looked on the bright side and bid up stocks.

With pressure mounting on the ECB to finally put aside rhetoric and take some action on low inflation, possibly at this week's meeting, and an expectation that US jobs growth will shrug off those winter blues on Friday, the momentum remains with the bulls.

Although the increase in the US manufacturing index was lower than expectations, it bolstered investors' sentiment that the economy is heading the right way.

It played down fears of a negative impact from the severe winter, with bulls appearing to take back control.

The Dow Jones rallied 77 points to 16,533 a new recent high last seen on 21 January.



Stock Market Trading

: 01 April 2014

In a sign that tensions between Russia and Ukraine might start to ease, the former appeared to start pulling some of its troops from the border.

At the same time, Federal Reserve Chair Janet Yellen said that 'extraordinary commitment is still needed' which is being taken as ongoing support for loose monetary policy.

So understandably the Dow Jones rose 81 points to 16,454.

The gains in the US are set to help European equities recoup yesterday's losses as they drift higher in range bound trade.

Yesterday saw lower than expected EU CPI, overnight dovishness from Yellen and some more weak manufacturing data from China.

Despite these signs suggesting that central banks are going to be firmly committed to easy monetary policy, traders are still likely to tread cautiously ahead of upcoming data releases.

Today should provide an insight into the state of global manufacturing, with several key regions releasing their own data.

Expectations are that the global economy is chugging along in an acceptable manner just above contractionary levels, but still susceptible to a downside shock.

Bar any surprises though, markets may drift as attention is firmly focused on events later this week.



Stock Market Trading

: 31 March 2014

Overnight gains in Asia are seeing European equities set to open higher.

Despite the positive adjustment on the open though, traders will be hesitant to take markets much higher ahead of a packed calendar of heavy-hitting, market moving data this week.

Today's big piece of data will be the EU CPI Flash Estimate.

With the downward trend of disinflation looking fairly solid, and the threat of deflation just around the corner, another weak number will fuel speculation that the ECB will start firing off bazookas, possibly as early as this Thursday's meeting.

Amid a choppy trading day, the Dow Jones gained 40 points to 16,316 after rising above 16,400 shortly after the US opening.

Investors had been sellers in the previous sessions and going into the weekend decided to square their positions.

However, the Dow futures are firmly on an upwards trajectory at the time of writing, up already 60 points.


By Jonathan Sudaria, 4 April 2014


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