Written by Gary
Opening Market Commentary For 10-01-2013
Yesterday's aftermarket remained elevated, but flat as this mornings premarket opened with a slight trending downward, but up +0.05%.
The markets opened up +0.10 on very low volume as investors now wait for the US government to do something regarding the shutdown. The $VIX fell from 17.10 yesterday, a very bearish sign, to 16.00 this morning, still in the 'no-so-good' level. By the 15 minute mark the averages had made their high mark and appeared to be settling in for a lackluster day on falling volume.
The partial government shutdown is the first one in 17 years and as long the shutdown continues the markets will first react lackadaisically in any move one way or the other. Going on beyond 3 days the markets will become increasingly bearish and have tendency to fall on the slightest news provocation. Markets do not like uncertainty and the longer this shutdown is dragged out the larger the market swings tend to be.
Unlike the unleashing of hell that so many politicians have bloviated on in the last few hours/days/weeks, Douglas Holtz-Eakin explains to Bloomberg TV's Trish Regan that in fact around 60% of the government will continue to tick along despite the "shutdown."
As Regan summarizes, "shutdown is an elaborate way of saying the government will be partially downsized temporarily..." to which Holtz-Eakin adds, "...and then re-upsized later."
Sadly, while this will cost a modest amount, this will do nothing to stop the big mandatory spending programs and is simply bad governance.
This brief interview will allow one to sleep at night knowing that when you awake in the brave new world of a US government shutdown, the sun will still rise and the kids still need to go to school... perhaps that explains the rally in stocks?
The DOW at 10:15 is at 15143 up 14 or 0.09%.
The SP500 is at 1687 up 5 or 0.31%.
SPY is at 168.36 up 0.36 or 0.20%.
The $RUT is at 1078 up 4 or 0.38%.
NASDAQ is at 3783 up 12 or 0.32%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been bearish and the current bias is sideways.
WTI oil is trading between 102.57 and 101.51 today. The session bias is negative and is currently trading down at 101.70.
Brent Crude is trading between 108.40 and 107.51 today. The session bias is negative and is currently trading up at 107.84.
Gold fell from 1337.86 earlier to 1288.13 and is currently trading down at 1291.50.
Dr. Copper is at 3.264 falling from 3.337 earlier.
The US dollar is trading between 79.95 and 80.31 and is currently trading up at 80.24, the bias is currently bullish.
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Written by Gary