Stock Market Trading: 04 July 2014
A tepid start is expected for European indices as traders take stock following a solid performance in yesterday's session.
The bulls have gotten up to a canter and the question is whether they can pick up enough pace to stampede through some pretty solid resistance levels.
Yesterday's events were an interesting display of selective interpretation.
The good US jobs number was cheered by the bulls as a sign that the real economy is starting, for the umpteenth time, to take off, but they completely shrugged off the increased likelihood of a rate hike in Q1 2015.
In contrast, Europe's weakness, as the economy jolts about at stall speed, was a boon for the bulls as it highlights the need to keep monetary policy loose for an extended period.
Although economic performance and monetary policy around the globe is diverging, the fact that the bulls can keep pumping markets up in unison is probably a sign that equities are still the only worthwhile game in town.
The US Non-Farm Payrolls data, which was released a day early due to today's Independence Day holiday, indicated a rise of 288,000 jobs that surpassed estimates for a 215,000 advance.
At the same time, the jobless rate fell to 6.1% in June.
The impressive figures sparked a rally in the Dow Jones which topped 17,000 for the first time in intraday trading, closing 82 points higher at 16,974.
Stock Market Trading: 03 July 2014
European equities are set to open flat ahead of a big day on the news front.
Although the UK will get an eye into the engine of its economy through the Services PMI, it will be the double header of the ECB press conference and Non-Farm Payrolls
which markets will be eagerly anticipating.
Despite Draghi's extraordinary measures announced at the last meeting, the light under the Eurozone economy is still to be lit.
Although it's early days yet, the run of sub par economic data out of Germany, Europe's buoyancy aid, has traders concerned that even the latest measures won't be enough.
Having said that, no new action is expected today, so for the bulls to really get animated they will need to hear something about the rising threat of deflation and/or that the threshold for quantitative easing has been lowered.
Expectations surrounding the June Non-Farms figure are a mixed bag.
The good ADP figure earlier in the week saw US bonds take a beating on the expectation that higher rates will come sooner rather than later, but equities lapped up the improving economy story.
If today's figure shows a similarly above expectation number, one would assume that stocks would rally again on the implications for the economy and shrug off the monetary tightening implications.
However, if one thing has characterised the markets over the last few years, it has been its bipolar nature, flipping between 'good news is bad news' and 'good news is good news' with frustrating regularity.
In a risk on day, the Dow Jones gained another 13 points in its quest to reach 17,000 for the first time ever, helped by transportation and industrial shares.
The index stopped just short of that target at 16,976, with the advance being supported by the pickup in factory output ahead of the latest earnings season.
Stock Market Trading: 24 June 2014
are set to open flat this morning following a lacklustre session in the US.
We saw a sharp rally in the early part of yesterday's session following some positive Chinese economic data, with the Dow Jones hitting a record intraday high of 16,992.
However, despite a rise in existing home sales, US house prices increased at their slowest pace for 2 years.
This saw investors square some of their positions, with many probably still thinking that as the index reaches new highs, a selloff could happen at any time.
Perhaps it's the summer weather that's keeping traders in the pub for long lunches, but it feels like we are seeing a continual decline in volatility, volume and interest in the markets at the moment.
What's interesting is that the global macro environment is far from devoid of potential catalysts.
Given that the threat of Iraq and Ukraine could lead to higher oil prices stalking the global economy for a prolonged period, you'd think we would be seeing a few more jitters.
However, with the bulls showing uncanny complacency and an ability to shrug of bad news, I'm sure I'll be writing about new all-time highs again before the month is out.
Stock Market Trading: 23 June 2014
A tepid move higher is expected for European bourses this morning following modest US gains on Friday and a pick up in Chinese economic data overnight.
However, for all the bullish spin that is being placed on this rally, spread traders
cannot ignore the situations in Iraq and Ukraine, hence the apparent hesitation and scepticism with each move higher.
Still, the Dow Jones
did manage to reach a new record high on Friday as M&A activity in the pharmaceutical sector saw the index close 33 points higher at 16,935.
The gains were helped by Fed Chair Janet Yellen's comments from earlier in the week where she was fairly confident about US economic growth and suggested that monetary policy will remain accommodative.