S&P 500 Hits New Record High

U.S. markets moved higher, albeit in a very quiet day for the Dow Jones. The S&P 500 has hit a new record high as investors are trying to decide the Federal Reserve’s (Fed) next move with quantitative easing (QE).

Jeffrey Lacker, Fed President for Richmond, sad the FOMC will definitely discuss tapering at its December meeting. The meeting is scheduled for next week. Fed President James Bullard said recent gains in the labor market make tapering even more likely this month. Fed President Richard Fisher also reiterated that the Fed should taper back its QE program “at the earliest” opportunity. Could December be the month the Fed pulls the trigger?

STOCKS
The DJIA was up 5.33 points in a quiet day to close at 16,025.53. The Dow seems ready for some profit taking at these levels. Need to be cautious. The S&P 500 was up 3.28 points to finish at a new record of 1803.37. The last record high was set on Nov. 27 at 1807.23. Technologies and materials were the best performing sectors. Utilities was an underperformer for the day as was consumer discretionary. The Nasdaq Composite was up as well. We have a new 13 year high in the tech heavy composite as it rose 6.23 points to finish at 4068.75.

Volume was very quiet, as investors are probably gauging levels and next week’s FOMC policy meeting. The NYSE (DJIA) traded 696 million shares and the Composite volume was at 3.1 billion.

Asian markets are mixed, in a range trading pattern ahead of data from Beijing. At 1:30 HK time, they will release retail sales and industrial production.

The Nikkei is down 0.38 percent after rising 2 percent yesterday. We closed at a one week higher in the previous session. The USD/JPY is over 103 near 103.37 at this point. The EUR/USD has also hit a 5 year high putting exporters in focus. Sony lost over one percent in trading and Advantest has fallen sharply, 2.3 percent. The Shanghai Composite is up 0.17 percent at 2242. Investors are dampened as the People’s bank of China missed Tuesday open market operations. We are waiting on data here. In Sydney, the ASX 200 is off a bit after rebounding from its three month low hit in Monday’s session, the index is currently down a little over 3 points.

CURRENCIES
The U.S. Dollar is seeing heavy losses everywhere except in the USD/JPY (103.372). The EUR/USD (1.3756) is above the trend line. We expect resistance near 1.3800.

The GBP/USD (1.645) is above the temporary top which was at 1.644.we are now targeting 1.60 and then 1.66. The AUD/USD (0.9102) is trading steady but looks bullish to target 0.9165.

COMMODITIES
Gold (1240.50) is having a tough time rising to 1250. Looks like we are range bound from 1219.90 to 1250. We break 1250 we can target 1290. Silver (19.795) is up but while below 20 we can trade sideways here as well. Still we could see a bump to 21 or 21.50 at some point. Copper is near 3.2520 and is range bound to 3.30 for now. We need to break 3.30 to go bullish and 3.20 to go bearish.

TODAY’S OUTLOOK
The FOMC meets next week so jitters could be this week’s problem as investors worry about QE. We are waiting on data out of China, see stocks section. The U.S. releases the NFIB small business survey and wholesale trade numbers for today.