Progress? Obama To Talk To Republicans?

The U.S. markets avoided a three day losing streak but the Washington stalemate dampened any gains.

As the shutdown enters its tenth day, President Obama is making plans to talk with Republicans at the Whitehouse. There is talk to allow, possibly, a short term increase of the debt limit to give negotiations more time with the broader issues concerning the budget.

In other news, Obama announced, officially, his nomination for the next Federal Reserve Board Chair. Current Vice Chair Dr. Janet Yellen will replace ben Bernanke. She is a dove like Bernanke who favors a soft monetary policy and investors are expecting here to follow in Bernanke’s tracks to take a slow route in tapering back the bond buying stimulus program.

STOCKS
The DJIA eked out a small gain of 25 points to close above 14,800 at 14,802.98. Earlier in the day the Blue Chip Index was near a three month low. The S&P 500 was virtually flat as it closed up 0.95 points to end the day at 1,656.40. The Nasdaq Composite lost 17 points closing at 3,677.78. This is its worst three day losing streak in over three months as investors are repositioning themselves out of riskier tech stocks.

Asian and Pacific Rim markets saw a mixed day of trading today as investors are watching the dealing in Washington DC very closely.

The Nikkei has hit a weekly high as the average now has a three day win streak. We got positive economic data as machinery orders jumped five percent. This indicates the government stimulus is filtering into corporate buying. Also the yen weakened further form its two month high versus the Dollar.

The Shanghai Composite was 0.3 percent lower as investor are cautios before a large batch of data next week. We will see China releasing its GDP, loan growth, trade datat and inflation. The Kospi was also modestly lower. Sydney fell 0.3 percent as investors shrugged off some decent job numbers. The unemployment rate came in better than expected at 5.6 percent. However only 9,100 jobs were created. Economists called for a 15,000 gain.

CURRENCIES
The USD/JPY (97.735) is moving up slowly as it is testing the upper trend line of its bear channel. We are recovering from 96.84 and could test 97.95 then 98.00. From there we could see 99.10. See the below chart.

The AUD/USD (0.9404) dipped a bit on the job growth numbers but we remained range bound from 0.9410 to 0.9510.

COMMODITIES
WTI Crude (101.68) dipped as oil inventories grew in the states resistance at 104.00 is holding well. Gold (1303.80) fell on the Dollar recovery. The resistance at 1325 is proving to be strong and we could break below 1300 to test 1275. Copper (3.2365) is below 3.275. We now look to target 3.20 which should hold bringing a bounce.

TODAY’S OUTLOOK
We have long day ahead of us. ECB Chief Mario Draghi will give a speech today. The U.S. will release jobless claims, imports and exports, natural gas inventories, money supply, chain store sales and Fed Reserve President Williams will give remarks.