Written by Gary
Opening Market Commentary For 11-05-2013
Premarkets were down -0.35% from yesterday’s close because of Fed’s Rosengren, speaking on CNBC this morning, warned that while inflation was not a problem, the costs of QE were a potential problem and risk to financial stability. Gold went up, the oils melted down and the SP500 futures slid.
Markets gaped down and very much in the red with some heavy buying activity from the BTFD crowd. The DOW, along with most of the other averages, left an unusual 7 point gap on the opening bell a good sign the markets will at least melt back up sometime in the very near future.
At 10 am the all important US ISM Non-Manufacturing Composite for October came in at 55.4 up form the previous 54.4 and higher than the 54.0 expected.
The averages melted up ~ +0.05% on the news and stabilized while the oils continued to fall along with gold. The USD is melting upwards this morning.
The short term indicators are leaning heavily towards the sell side again this morning but because of the Fed’s reluctance to give any hints of when the taper will begin, I would take any pundits opinions with a grain of salt as they don’t really know what the Fed is going to do – all speculations. The longer outlook remains 60% to 70% sell.
SDVFN.com said today, As speculation continues to increase over the impending start to the tapering of asset purchases by the Fed, investors are beginning to prepare for Friday’s all-important jobs report with analysts estimating a meagre 125,000 increase in non-farm payrolls in October, well below the 148,000 gain the month before.
“The impact of the shutdown will almost certainly affect Friday’s non-farm payroll figure in a negative way, which in turn would make a December taper even more unlikely,” said Market Analyst Craig Erlam from Alpari.
However, President of the Dallas Fed Richard Fisher has said that the central bank could begin to taper sooner than expected.
Meanwhile, St Louis Fed President and well-known dove James Bullard said that the Fed shouldn’t wait for a permanent budget deal before making its move. “I think we can’t really wait for the political situation in Washington to be just right because, evidently, they could be bickering forever,” he said in an interview with CNBC.
However, he did say that the central bank should not hurry to scale back stimulus because of low inflation.
If we get Fed tapering in December the markets will certainly react in a negative fashion. If the tapering begins in March 2014, like many believe it will, the markets are going to price that in by declining sooner. I am expecting weak to negative markets for the foreseeable future.
The DOW at 10:15 is at 15547 down 91 or -0.58%.
The SP500 is at 1758 down 10 or -0.54%.
SPY is at 175.88 down 0.95 or -0.54%.
The $RUT is at 1100 down 8 or -0.71%.
NASDAQ is at 3917 down 19 or -0.49%.
NASDAQ 100 is at 3367 down 18 or -0.53%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been sideways and the current bias is negative.
WTI oil is trading between 94.82 and 93.65 today. The session bias is bearish and is currently trading down at 93.70.
Brent Crude is trading between 106.53 and 105.68 today. The session bias is bearish and is currently trading down at 105.69.
Gold fell from 1319.11 earlier to 1306.56 and is currently trading down at 1307.10.
Dr. Copper is at 3.249 falling from 3.276 earlier.
The US dollar is trading between 80.57 and 80.89 and is currently trading up at 80.87, the bias is currently positive.
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Written by Gary