U.S. Markets Set Record Closes, Asian Markets Up On Iran

At the close last week, U.S. markets saw a record close for the S&P 500 as it is now above 1,800. The Dow Jones also has its longest weekly win streak in three years as investor’s cheered good economic reports which are countering worries the Federal Reserve will start curbing QE as early as December.

The markets digested the better than expected unemployment benefits report from Thursday and a number of positive reports from the week. With that said, unemployment was good but not great, then again investors are accepting okay news as opposed to getting bad news at this point.

As far as Asian markets today, they are tracking the U.S. higher and are quite pleased with the new Iran accord which will limit its nuclear program Crude oil has already retreated two percent on the news.

STOCKS
The DJIA was up 54.78 points to close at a record 16,064.77. The Dow was above 16,000 on Thursday while setting an intraday record then at 16,068.78. The blue chip index was up 0.7 percent for the week. The last time the index had a seven week long winning streak is back on Jan. 21, 2001 when it had an eight week rally.

The S&P was up almost nine points to close at 1,804.76. This is its first time ever above 1,800. This is also a seven week long winning streak win for this index. The Nasdaq Composite was up 22.50 points to close at 3,991.65. The tech heavy index was up 0.1 percent for the week.

In Japan, the Nikkei was up 1.3 percent at one point, and is still up over one percent, as the benchmark was above 15,580 for the third straight trading day. We could see some dampening here as investors are worried about overheating and an increasing bubble. The Yen has now hit a new four year low against the Euro and six month low against the Dollar. In 5 trading sessions, the Nikkei is up three percent.

The Shanghai Composite on mainland China reversed losses and is now just above the flat line, up 0.3 percent. The index was up three percent last week. The Australian benchmark is up 0.35 percent on subdued trading. A weak AUD/USD is keep upward pressure on equities as miners and other exporting firms like a weak Aussie Dollar. The AUD/USD is at 0.9164 near its two month low at 0.9139.

CURRENCIES
The AUD/USD (0.9146) continues to fall as we expected. As long as we do not bounce back to 0.9200 and above, we will remain quite bearish as we target 0.9100 and lower.

EUR/USD (1.35409) is hitting some resistance and dampening upward pressures near 1.35550. While above 1.3510 we can target 1.36 and then 1.3650. GBP/USD (1.6218) is now testing 1.6261, which is the high set in 2013. A break and close here is a breakout signal and the beginning of a multi month rally. USD/JPY (101.852) is still moving up quite nicely and at a six month high. We are still targeting 104.00 with any break of that shifting focus for 105.00.

COMMODITIES
WTI Crude (108.54) is down over two percent at one point today. We are retreating from 111.41 and are near the key support at 107.50.

Gold (1238.20) is down and still below 1250. We have support at 1233.50 and if that breaks, we can test 1225. If it holds we could bounce higher and test 1260.

Copper (3.213) hit a high at 3.263 and moved back lower. We are range bound from 3.15 up to 3.23/4 for now.

TODAY’S OUTLOOK
Expect the Iran accord to wreak havoc in the oil markets, as crude will fall. As for the equities markets, they seem happy that the likelihood for conflict has dimmed a bit.

Asian markets will be focused on a whole lot of Japanese economic data as well as the Q3 GDP from India. U.S. markets will be quite subdued with the Thanksgiving holiday this week. We should pay attention to U.S. durable goods, and housing prices. These will be good gauges to when the Fed could begin to taper.