A Looming Strike On Syria Concerns Investors

Interesting trading session overnight. Asian markets finished a mixed and choppy session as fears that the U.S. will strike Syria mount and U.S. durable good failed miserably adding hopes that the Federal Reserve Board will delay tapering off its bond purchase program in September.

U.S. Secretary of State, Mr. John Kerry is talking of a potential military attack on Syria is looming after it has been found that Syrian President Bashar al-Assad has used chemical weapons to slaughter women and children. His comments tanked the U.S. markets and has sent jitters through the Asian markets as well.

On the economic front, a weaker than expected U.S. durable goods report, has eased investor worries that the Federal Reserve will begin to taper back its stimulus package at the September meeting. It will become clearer after next week’s Non-Farm Payroll Report (NFP) what they will do.

STOCKS

The Nikkei 225 lost 0.2 percent on the day as did the Shanghai Composite. The Korean KOSPI was the only winner as it gained 0.3 percent and the Australian S&P/ASX was flat.

Emerging markets are taking a beating as well. The Philippines PSE Composite was down 5 percent and has hit a two month low. This comes after imports hit a four month low in June. The Jukarta Index (Indonesia) slumped 2 percent as well. Thailand’s SET index fell one percent.

Thanks to remarks by John Kerry, regarding Syria, U.S. indices reversed early gains trading near session lows in the last hour of trading. The Dow Jones is back below that key 15,000 level.

The DJIA lost 64 point to close at 14,946.46. The S&P 500 lost nearly 7 points to end at 1,656.78 and the NADAQ Composite finish basically flat at 3,657.57. Down 0.22 points in the session.

European markets were all dragged lower as fears grew that the government in Italy will collapse grew. The British FTSE was closed for a holiday.

CURRENCIES

The Forex market is indecisive right now. Traders are on the sidelines waiting for clearer signals.

EUR/USD (1.3374) is trading steady but in an indecisive sideways pattern from 1.3300 towards 1.3390/1.3400. We need to break above 1.3400 to bring the bulls back. Please see the below chart.

The GBP/USD (1.5568) is trading similar to the euro at this time but we look a bit more bearish for a fall towards 1.5525 with a break lower testing 1.5400. The USD/JPY (98.34) is also trading sideways at this point. We are hovering around 98.39/40.

COMMODITIES

Commodities universe is looking strong for the most part.

Copper (3.333) is trading in a consolidative pattern for now. We look bullish to test 3.4500, midterm resistance and then 3.500.

Gold (1397.40) is back above 1375.00 breaking a two day losing streak. We see resistance at 1424.90 and higher up at the key 1450 level.

TODAY’S OUTLOOK

Syria will plague investors today. Will the U.S. strike? Oil futures will be in play as supply from the Middle East can be effected.

U.S. Fed President Williams is speaking today and we will listen for any hints regarding the stimulus package. On the data front we will get the Case-Shiller home prices index and consumer confidence.