Stock Market Trading: 17 January 2014
Despite overnight weakness in the US and Asia, European indices are set to buck the trend and start the session with gains, albeit modest ones.
Even though we did see a minor pull back yesterday, the stock markets don't seem to be in a rush to head back into their previous ranges.
Having said that, the bulls are naturally nervous as we head towards uncharted territory.
If they can hold above support as we move into the weekend, then that will give some reassurance to traders that this isn't a top and could encourage a bullish start to next week.
In the UK, today's retail sales may provide support for the FTSE
at these lofty levels.
Whilst we've had a mixed bag of results from different retailers, expectations of a significant pick up in online sales is giving traders optimism that the UK consumer remains resilient and is still able to hit the high street, albeit virtually, even in constrained times.
The US consumer price index gained just 0.3% yesterday, meaning that 2013 saw a rise in prices of only 1.5%, which might have put the Fed on the back foot with regards to tapering.
However, the US banking sector, as represented by Citigroup
and Goldman Sachs
, disappointed investors, with both firms falling short of estimates.
This spurred a sell off in the equity markets, with the Dow Jones losing 71.5 points to 16,396.
Stock Market Trading: 16 January 2014
European equities look likely to maintain the bullish mood by opening higher this morning.
Yesterday's rally pushed the major indices
into positive territory for the year and, whilst there may be more high ground to be taken, traders will be keeping a close eye on the broken resistance levels just in case they have to make a hasty retreat.
With markets now seemingly comfortable with tapering, an easy outlook for monetary policy on the immediate horizon and no imminent crisis brewing somewhere in the global economy, the bulls may well pick up the pace.
The Dow Jones continued to rally yesterday, gaining 109 points to 16,468 as the World Bank upgraded its global growth forecast for 2014.
In addition, Bank of America beat estimates with its latest corporate update, sparking gains in the financial sector.
Meanwhile, the Fed's Beige Book pointed to 'moderate growth' being spurred on by an improving labour market and stronger manufacturing.
Stock Market Trading: 15 January 2014
European equities are set to open higher after staging a remarkable turn around in sentiment yesterday.
What looked like the start of a sizable sell off didn't last long as the weak opening was quickly pared back.
The indices have been trading in a fairly tight range and, now that the markets have seen where near-term support is, it's only natural for traders to see if there's an interest in moving higher.
Confidence in the US economy remained strong as shown by the better-than-expected retail sales figures, a rise of 0.2% vs 0.1% projected.
As such, the Dow Jones
rebounded 85 points to 16,358, with some investors speculating that companies will have seen an increase in earnings during the fourth quarter.
Later today, inflation data might give an indication of the pace of the Fed's stimulus cuts.
Stock Market Trading: 14 January 2014
Following an overnight sell off in the US and Asia, European equities are set to open lower this morning.
Thus far, the New Year hasn't brought out the usual bout of bullishness that we so often see when traders come back from their holiday with renewed vigour.
Instead, the markets have stalled as we have not had any new catalysts to keep the bulls going.
In fact, we are now seeing some concerns that the markets could start rolling back down the hill.
US indices made a decisive move out of their ranges yesterday, with the Dow Jones losing 172 points to 16,272, as investors woke up from the disappointing employment report.
With Asian indices
having been already trending lower since late December, the question is whether European indices will follow suit today.
Worth noting is that we are still in the early days of the US earnings season and, whilst sentiment remains optimistic for now, we will need to see some good numbers soon if that's to continue.
Stock Market Trading: 13 January 2014
European equities are set to open marginally higher, but the mood remains resolutely cautious.
Despite the weak jobs data on Friday, European equities
managed to eek out some gains.
The bulls are scratching their heads just as much as the bears as to how that one played out, but are thankful for the rally.
With tapering under way but the US economy not showing the expected strength, there will be just as much furious debate amongst traders as there will be within the Fed.
The US Non-Farm Payrolls report showed a gain of just 74,000 jobs, significantly less than the consensus expectation of 196,000 jobs, with the unemployment rate dropping to 6.7%, the lowest since October 2008.
Having rallied during the first part of the day, the Dow Jones reversed course as a reaction to the employment figures, ending 8 points down at 16,442.