We are seeing a bounce overnight in the US markets and some recovery in Asia this morning. This comes a day after a 300 point drudging suffered by the Dow Jones. Looks like bargain hunters are stepping in.
This global route started with a poor manufacturing report in China, a few short weeks ago, then we have had problems in the emerging markets, particularly with Turkey and Argentina. This was the excuse investors needed to start this correction.
Today’s economic reports will be market movers. We have the ADP employment data in the States, a leading indicator of Friday’s NFP as well a report on the services sector. These two reports will help move the markets one way or the other.
STOCKS
Early on the DJIA rose 109 points then dipped into negative territory. By the time it was over, the Dow Jones was up 72.44 points to close at 15,445.24. This ended 4 sessions of triple digit moves. Three of those were losses.
The S&P 500 gained 13.31 points to close at 1,755.20. We are still within reach of a key support at 1,750. The real big test will come at 1,700. Consumer discretionary and telecommunication led winners. Utilities lagged. The Nasdaq Composite was up 34.56 points to finish the day at 4,031.52.
For every on share that fell, two gained on the NYSE. We saw 836 million shares traded on the exchange and the composite volume was over 4 billion shares exchanging hands.
Asian markets are a bit higher today as well. At one point the Nikkei was up 1.4 percent as the benchmark is struggling to reclaim some lost ground. Panasonic (Nikkei: 6752.T-JP) has soared nearly 15 percent after announcing quarterly earnings that almost tripled. They stated they are nearing the end of their long running corporate restructuring plan.
The Shanghai Composite and the Hang Seng Index will reopen tomorrow. They remain closed for the Chinese New Year.
The Kospi is also up, recovering from yesterday’s five month closing low. The Australian ASX 200 is lagging the area as it is down 0.58 percent. It was up early but lost its gains for the day.
CURRENCIES
USD/JPY (101.285) remains in bearish territory below the key support at 101.60. As long as we remain here, we could dip to 98 over the next coming days.
EUR/USD (1.3520) we are testing the minor resistance at 1.3539/40. We remain bearish for 1.33 at this point and remain so while below 1.3450. Our target remains at 1.30 and lower. GBP/USD (1.63230) fell below 1.63 this week and has since recovered slightly. A fall below, or sustained trading below 1.63 is bearish for 1.62 and lower. A break below 1.6150 is a serious bearish indicator.
COMMODITIES
WTI Brent (105.86) remains trading low. We are trapped in a range from 105.30 and 106.50 over the last several days. We have key support at 105.65 and if this holds we can bounce to 108. A failure here is bearish for 104.50. WTI Crude (97.64) has moved higher and is testing resistance at its current level, near 97.68. A break there can target 98 then 100. Copper (3.2025) recovered from the support near 3.17 and is back above 3.20. We can now target 3.35 if we break above 3.25.
TODAY’S OUTLOOK
We will have some market movers today. The U.S. will release its ADP payroll report later in the day. This is a gauge for Friday’s NFP as they tend to follow each other. We will get a report on the service sector. This is an area not usually affected by the weather.