Mixed Earnings Send Dampen The Markets

U.S. markets were mixed in narrow trading overnight as investors are cautious ahead of the monthly Federal Open Market Committee (FOMC) meeting scheduled to begin today. Also a mixed batch of corporate earnings weighed on the mood as well. However, the S&P 500 did manage to hit another intraday record.

We saw the same in the Asian and Pacific Rim today as indexes widened losses. Again, investors here are nervous ahead of the FOMC policy setting meeting this week.

STOCKS

The Dow Jones lost 1.35 points to close at 15,568.93. We saw the blue chip index trading in a very narrow 65 pip range all day. The index also remains within one percent of its record high.

The S&P 500 managed to gain 2.34 point to close at 1,762.11. During the trading session we did touch an intraday record high of 1,765.01. The Nasdaq Composite lost 3.22 points and closed at 3,940.14. We are within reach of 4,000 still and could break that within the next day of trading.

Shares of Apple Inc. (NASDAQ: AAPL) are trading 1.2 percent lower in after trading hours after the maker of the iPhone and iPad announced a rather disappointing margin outlook.

The Shanghai Composite has shed over one percent so far today. We are now below 2,125 points and at the lowest level the index has recorded since September 3, 2013. Investors are nervous ahead of the policy meeting of the Communist Party. This is set in November and President Xi Jinping is expected to announce key policy and economic reforms.

At one point today the Nikkei 225 was down one percent. Mixed corporate data and stronger than expected economic data is confusing investors who are wondering about the overall health of the Japanese economy.

In Australia, the ASX 200 is lower as it appears investors are locking in profits. The index is coming off a five year high which was recorded at yesterday’s close. The Kospi, in South Korea, is also lower, as economic data showed that South Korea’s surplus fell to $4.97 billion from August’s $7.7 billion current account surplus.

CURRENCIES

EUR/USD (1.3777) has fallen a bit after testing 1.3800. We are still bullish while above 1.3750 and could test 1.4000 on a break above 1.3850. The EUR/GBP (0.8553) rose convincingly yesterday and could continue to rise as the euro continues to gain momentum.

GBP/USD (1.6106) has declined sharply. We are noticing the appearance of a double top on the chart, below, which means we are bearish for 1.6000 and 1.5950.

USD/JPY (97.544) is trading in a narrow range from 97.05 to 99.00 and we expect his range to continue a little while longer. We will get movement after both the FOMC and BOJ finish their meetings this week.

COMMODITIES

Copper (3.258) is trading in a sideways pattern above the support at 3.250. While above that support, we remain bullish for 3.300.

Gold (1355.10) is moving higher as we can target 1400 while above 1350. Silver (22.535) is trading steady and testing resistance at its current level. If it holds, we can see a dip lower below 22.50.

TODAY’S OUTLOOK

Today, the much anticipated FOMC meeting begins. We are expecting no tapering of the massive asset purchase program. We will find out tomorrow the outcome.

As for economic data, the U.S. will release the PPI, home price index, business inventories and consumer confidence.