July 3rd, 2012
in Gary's blogging
Opening Market Commentary For 7-3-2012
The markets opened in a muted fashion with hardly anyone present it seems. SPY was up 0.02, the $RUT was up 0.03 and the DOW was down a couple of points. The volume was so low that it didn't even show up on the charts as a bar, but that didn't bother DaBoyz as they started their game of 'melt up' as the markets showed a sliver of green. The HFT crowd is going to jerk themselves around today and probably create some light choppiness, but it will be on a small scale. Hardly worth coming in for actually.
By 9:45 you could finally see a small green mark for volume as the markets crept just up beyond yesterday’s highs. Melting up just like yesterday.
The DOW at 10 am is at 12902 up 31.07 or 0.25%.
The 500 is at 1369 up 4.15 or 0.30%.
The $RUT is at 812.36 up 4.42 or 0.55%.
SPY is at 136.95 up 0.45 or 0.33%.
The trend is up and the current bias is neutral to bullish.
WTI oil is at 87.33 trading between 83.60 and 87.90 and the bias is positive.
Brent crude is at 100.69 trading between 97.06 and 101.50 and the bias is positive.
Gold is up today at 1616, trading between 1613 and 1619 with a positive bias.
Dr. Copper is at 3.54 up from 3.47 earlier.
It is so slow in the market place they might as well close it for lack of interest. In fact 75% of the Econintersect building is empty as employees have started their Fourth Of July Holiday last night. I'll start mine after the close today at 1 pm or so and return on the following Monday (7-9-2012) unless I win the Power Ball. The after market will close at 5, so I may stay around for a while and torture myself looking for news.
Leavitt has summarize the week correctly and points out that Thursday will be another snoozer waiting for Friday's employment numbers. The employment figures may or may not move the markets having seen how the ISM numbers yesterday (6-2-12) did nothing and should have. It is hard to believe that investors believe the news from the EU is more important. What exactly are they waiting for? The writing is on the wall and is written in bear script.
Today is a half day; the market closes at 1:00 pm EST. Tomorrow is a day off for the 4th of July. Then Thursday is the day before the latest employment numbers are released. Today will be slow, and Thursday may be slow too once the pent up energy from the previous day-and-a-half dissipates.
China’s services PMI jumped to 56.7 in June (from 55.2 in May); this is a 3-month high. This is most likely what is causing commodities to be strong this morning. China is a big consumer of commodities, and if their economy slows and they cut back on purchases, commodity prices fall, but if their economy is healthy and expanding, commodity prices move up. Yes the US dollar matters, but China matters a lot too.
Yesterday the market shook off a low ISM number and rallied again to add to its Friday’s gains. The indexes are now either at new higher highs or very close to it. It’s a bullish development, but there’s work to be done (work to be done isn’t a bad thing – that’s the wall or worry the market tends to climb during an uptrend), but we are not “in the clear.” If the employment numbers Friday are good, the market could soar. If they aren’t good, it’ll be one more piece of bad news that needs to be absorbed. At least the bulls have a cushion to work with.
The only news today is about LIBOR and will most likely be buried on the last page if the newspapers even print anything about it at all. More in the scandal can be read here: Why Aren't LIBOR Manipulating Banksters in Prison?
Dow Jones reports that Jose Manuel Barroso, the European Union president, said today that the Libor scandal strengthens the case for a financial transaction tax.
In a speech at the European Parliament in Strasbourg, Mr Barroso said:
We have seen once again in recent months and weeks both in the United States and in Europe, including in some of the major financial institutions, that practices that have fuelled the financial crisis are not yet eradicated from the sector.
Once again, we have been confronted with reckless trading and market manipulation. It is time that these practices stop once and for all. And it is time that a sector that owes so much to the taxpayers' support accepts handing back a fair share to society.
Other comments from the Telegraph is Louise Cooper, markets analyst at BGC Partners, reckons the European Central Bank is not fit for purpose. She writes:
“The European banking industry is teetering on the brink of disaster but the ECB has never been given the right tools to deal with such a crisis - it is not fit for purpose. It does not have the ability to print money neither has it the ability to save failing banks.”
The other important EU news that we need to follow is the possibility that Finland would block the ESM fund from buying government bonds in the open market. According to the Telegraph, Angela Merkel, the German chancellor, was asked about this today. She said, “we must accept decisions of other states and there is no need to make decisions now... “ This will become bigger news by next Monday after the 'behind the doors' meeting are conducted.
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Written by Gary