Global Markets Lower Today

U.S. markets snapped winning streaks and fell of all-time highs as we received mixed earnings results and investors locked in gains from the previous sessions.

Economic data out of China this morning showed the HSBC Flash PMI came in a t50l9 thanks to a rise in new orders. Last month’s PMI was at 50.2 and this is yet another piece of positive economic data out of China.

STOCKS
U.S. markets were markedly lower overnight. The S&P 500 ended a four day winning streaks of record highs. On Tuesday, the S&P was above 1,750 for the first time and the DIA was, and still is, within 1.5 percent of its all-time record reached last month.

The Dow Jones lost 54 points to close at 15,413.33. The S&P 500 lost 8.29 points to fall below 1,750 at 1,746.38 and the tech heavy Nasdaq Composite lost 22.50 points to close at 3,907.07.

Caterpillar Inc. (NYSE:CAT) tumbled over six percent after poor earnings and the company also cut its full year guidance as they are seeing heavy losses in their mining equipment operations.

The Nikkei is down 0.4 percent as the benchmark is now seeing its lowest level since October 11. We sold off over two percent yesterday. The USD/JPY is continuing to trade below $98 and has seen a low of $97.30. This is really close to its two week low near $91.10.

The Australian benchmark is trading higher on good economic news out of China, see above PMI data. The Aussie dollar also continues to strengthen against a weak dollar. The Shanghai Composite has shrugged off the good data and is below 2,177 points. This is its lowest level since October 8.

CURRENCIES
The GBP/USD (1.6193) is trading sideways, mixed, from 1.6266 to 1.6100. We are still bullish here and on a break above 1.6200 will target 1.6400. See below chart.

USD/JPY (97.337) has been falling and could be targeting 96.81 if not 96.60. We have support at 97.20 which needs to hold or look out. We think we will see a trading range from 97.00 up to 99.50 for some time.

EUR/USD (1.3787) is aiming to test 1.3800. We see a very strong resistance level at 1.3850 and another one at 1.4000. This area will be hard to break and we expect a corrective dip to 1.3700 and maybe 1.3600/50.

COMMODITIES
Copper (3.2775) fell off sharply hitting low at 3.2600. We could find support at 3.2500 and if that holds recover back to 3.30. The support at 3.25 has to hold.

Gold (1335.70) is trading higher and can now target 1350. Silver (22.735) is also higher and could test 23.50 and then 24.00.

TODAY’S OUTLOOK
Investors will, in most likelihood, trade the European markets a bit higher at open thanks to the good economic data out of China and the probability the U.S. Federal Reserve will hold off tapering until sometime in 2014.

The data deluge out of the U.S. continues today. We get jobless claims, PMI numbers, new home sales, Fed balance sheet and the money supply. We also will see natural gas inventories released.