August 1st, 2012
in Gary's blogging
Opening Market Commentary For 08-01-2012
The SP500 closed yesterday afternoon at 1379.92. The SP500 futures took a 9 point nosedive in after market activity and rose to 1381.42 this morning indicating volatility in the market prior to the FOMC meeting today at 2:15. The ADP report this morning added 163,000 jobs to the private sector while analysts were expecting only 120,000 to be added but that was good enough to keep the market up at the opening. (Reality check: Average 3,260 per state-nothing to get excited about)
The market opened under low to moderate green volume and the 500 rose 3 points while the DOW rose 50 points while the SP500 futures actually fell to 1377.76. The first 30 minutes basically saw the market slide sideways as the long ETF's indicated a bearish tone to the market while the DOW, 500, SPY and the $RUT remained in the green as everyone waited for Construction spending, Market PMI, and the US ISM Manufacturing Index (July) at 10 am.
The medium rated US Market US PMI Final (JUL) fell to 51.4 expecting 51.8. The high rated ISM came in at 49.8, expecting 50.2 which the markets yawned and did NOTHING. Medium rated Construction Spending stayed even at 0.4% to , expecting 0.4%. Also rated medium, the ISM Prices Paid fell to 39.5 while expecting 40.0.
The FOMC will announce its rate decision today at 2:15. Some economists are expecting the target level for the federal funds rate to remain unchanged between 0 and 0.25%, and others are expecting a continuation of low rates into 2015. The consensus of further QE is unlikely after the central bank extended Operation Twist. The RRR** is untradeable at this time.
The DOW at 10:15 is at 13022 up 13.81 or 0.11%.
The 500 is at 1379 up 0.14 or 0.01%.
The $RUT is at 785.40 down 1.55 or -0.20%.
SPY is at 138.08 up 0.38 or 0.27%.
The trend is neutral and the current bias is down.
WTI oil is at 88.65 trading between 87.49 and 88.70 and the bias is positive.
Brent crude is at 105.86 trading between 104 and 106 and the bias is positive.
Gold is down today at 1599.94 trading between 1618 and 1594 with a negative bias.
Dr. Copper is at 3.38 down from 3.42 earlier.
Earlier the USD tumbled from 82.90 yesterday to 82.54 this morning and recovered to 82.75. Like the markets it is moving sideways for the time being.
Market Jumps On EU Speculation Once Again, Big Sell-Off Still Coming by Mike Williams
“Once again, market participants have been suckered by the EU charade, and today's market ramp was courtesy of the following (from Bloomberg):
Draghi said to speak to Weidmann before Aug. 2 council meeting
Draghi said to favor giving ESM banking license in longer term
Draghi's proposal said to included bond buys, rate cut, new LTRO
Granted, most of today's gains came before the unsourced rumor, thanks to in-line GDP growth.”
** RRR = Risk Reward Ratio
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Written by Gary