Markets Shrug Off Good Chinese Data

Asian markets were mixed to start September after two different readings of China’s PMI showed the Chinese Economy could be on the mend.

The HSBC PMI has crossed the 50 level. This is the first time in 4 months showing expansion. This is following the government’s PMI release, which was even more bullish, and showed its PMI hitting a new sixteen month high in August.

Stocks

At one point, the Nikkei 225 was up over 1 percent as investors loved a weakening yen. The yen fell half a percent against the Dollar. The market closed up 1.46 percent at 13,583.85. The Australian benchmark has now hit a three month high at 5,189.60 and the Shanghai Composite is below 2,100. The Kospi came off a one month high.

On Friday, DJIA fell 30 points and closed 14,810.31. For the month, the DJIA lost over three percent and is trading below 15,000. The S&P 500 lost 5 points to close at 1,632.97. All sectors were in the red for the month. The NASDAQ Composite lost 30 points to close at 3,289.87. For the month the NASDAQ was down 1 percent.

European markets closed in the red on Friday. They also finished August mostly lower. For the week, the IBEX, in Spain, was down 4.5 percent for the week and the DAX in Germany lost 3.5 percent for the week. For Friday’s trading, both the English FTSE and the German DAX lost over one percent each.

CURRENCIES

The U.S. Dollar Index has moved higher near 82.13 and could target 84.95. The EUR/USD (1.3209) moved lower after week after falling below 1.3300. We could be targeting 1.3000 at this point. Please see the below chart.

The USD/JPY (98.60) has moved higher but see a critical resistance level at 99.00 and then another at 99.90. We break above those levels we can target 103.00, but while below that we can target 95.00. We seem to be stuck in a range waiting for clear signals which way to go. The Pound is gaining ground against the Euro and is near 0.8500 but needs to break above 0.8482 with strength to be really bullish. The AUD/USD (0.8964) is trading just above a key support level at 0.8895. The market is still short the Aussie and could break even lower at this point.

COMMODITIES

Commodities are weak overall as Gold (1390.40) has broken below 1400 on a strong dollar. We could test 1350 today. Silver (23.925) is now trading below 24.00 as the recovery from 19.00 has ended. While below 24.00 we can test 22.00.

Nymex Crude (106.17) has moved lower and looks bearish. We see support at 105.00 and then at 104.90.

TODAY’S OUTLOOK

Today will be a quiet trading day as not a lot of data is due out. Markets in the United States are closed for Labor Day.