Markets Wait On Jobs Data

U.S. markets were mixed overnight as investors went through a batch of economic reports. Investors are increasingly shaky waiting on tomorrow’s non-farm payroll, as that will help determine when the Federal Reserve begins to reduce its asset purchase program.

Reports showed the U.S. trade deficit narrowed last month by $40.6 billion. We had expected it to reduce by $40 billion. Other data released yesterday showed that new home sales fell 6.6 percent in September and was up 25.4 percent in October. The non-manufacturing from the Institute of Supply Management came in at 53.9 from 55.4 last November.

The ADP jobs report showed that 215K jobs were created in November. Expectations were for 173K. The ADP is a leading indicator for tomorrow’s NFP.

STOCKS
The DJIA rose nearly 46 points early in the day before moving lower. At one point we were down 123 points. The blue chip ended up lower by 24.8 at 15,889.70. The Dow found support at 15,800. A break below that is very bearish. The S&P 500 was down 2.34 points closing at 1792.81. We are below the key 1,800 level here. Both the DJIA and S&P have their first four day losing streak since back in September. The tech heavy Nasdaq Composite bucked the trend and was up about one point ending at 4,038.

The Nikkei is down 0.35 percent and at a new two week low for the second straight day. The yen is continuing to strengthen as the USD/JPY falls back from the six month high at 103. The USD/JPY is around 102.28 at the time of this report. The Shanghai is off by 0.12 percent as we are seeing profit taking from yesterday’s surge. We are trading near the key 2,550 level after bouncing higher on trade reform news regarding the Shanghai Free Trade Zone.

The Australian benchmark was down nearly 0.8 percent. We are near yesterday’s two month low after data indicated Australia’s trade deficit widened more than expected. The AUD/USD was below 0.90 for the first time in over three months.

CURRENCIES
USD/JPY (102.173) is seeing profit taking and experiencing a technical correction. We remain viable in the lower end of this range as long as 101.53 holds. We could be moving sideways from 101.59 to 103.59/60 for some time.

GBP/USD (1.6378) is trading sideways after failing at 1.6444. Only a move below 1.63 signals a bearish change. That happens we target 1.6250 and lower. The long term target remains 1.6650 and 1.67 are still viable. EUR/USD (1.362) is also consolidating. Here we are bouncing from 1.3521 up to 1.3620/25. We have been testing both ends of this range over the last three days. Therefore we need to break either side to ascertain a clear direction. A break above 1.3620 is bullish for 1.3650.

COMMODITIES
Gold (1239.40) failed near 1250 and moved lower. We appear to be range bound for now and bearish below 1250. Silver (19.655) also could not break higher and has moved lower. We remain bearish and looking to target 18.50/18.00.

Copper (3.246) has fallen after its nice recovery yesterday. We seem to be range bound from 3.16 up to 3.24/25 for now. A break above 3.24/25 area is bullish for 3.30.

TODAY’S OUTLOOK
Financial markets are going to be jittery today as investors are waiting anxiously for tomorrows NFP from the States. It will indicate when and how much the Fed will taper its asset purchase which now might happen in December.

Today’s data includes week jobless claims, factory orders and the U.S. GDP Q3 3 revision. We will get these reports starting at 0830 EST and ending by mid-morning.