Apple’s disappointing revenue numbers and guidance have been dragging on US indices in proportion to the heavyweight’s weighting within of each index. It has had the biggest impact on the NASDAQ 100, a smaller impact on the S&P 500, and of course, no impact on the Dow Industrials as it is not a member of that club.
The Dow is trading slightly higher today on the back of better than expected US jobless claims and strong flash PMI. Yesterday’s House vote to suspend the debt ceiling until May to give politicians time for more negotiations and to pass a budget also appears to be supporting bullish sentiment. Combined this action suggests that the US economy is starting to move past its political problems and that economic growth appears to be finally be gaining some traction.
Commodities are drifting lower pretty much across the board today with USD rebounding, with the exception of US crude oil which is bouncing back ahead of today’s inventory numbers. Grains appear to be resuming their primary downtrends after recent rallies failed at lower highs.
There have been a lot of big moves in currency markets today. JPY has been pounded again giving back much of this week’s rebound on comments from the country’s deputy economy minister who suggested that 100 JPY to USD would not present a problem but that 110 or 120 could put pressure on import prices. This suggests that even though the Bank of Japan postponed its unlimited QE program for a year, the government remains interested in talking JPY down and boosting economic growth.
CAD is under pressure today, breaking through par in follow through from yesterday’s news that the Bank of Canada cut its 2013 GDP growth forecast to 2.0%, and indicated that monetary tightening is “less imminent than previously anticipated”.
European markets are mixed today following flash PMI numbers and yesterday’s speech from UK Prime Minister Cameron. EUR is outperforming GBP but at the same time, the FTSE is outperforming the DAX. Currency action suggests that the street is still trying to decide how much to worry about a possible UK referendum on the EU (a lot can happen in five years with an election in between), but also that haven flows into the UK of recent years may be returning to the continent. Index action suggests that the street is trying to figure out whether Germany’s strengthening economy and reduced political risks can pull the rest of Europe up this year, or if the struggling Eurozone may catch up to Germany as has apparently occurred with France.
The Reserve Bank of South Africa maintained its benchmark interest rate at 5.00% as had been widely expected.
There is a lot of data out overnight and this morning, led by flash PMI numbers. Highlights include:
China manufacturing 51.9 vs street 51.7 and previous 51.5
New Zealand PMI 50.1 vs previous 48.8
France manufacturing 42.9 vs street 44.9
France service 43.6 vs previous 43.5
Germany manufacturing 48.8 vs street 46.0
Germany service 55.3 vs street 52.0
US jobless claims 330K vs street 355K and previous 335K
Spain unemployment rate 26.0% vs previous 25.0%
Italy retail sales (3.1%) vs previous (3.8%)
South Korea Q4 GDP 1.5% vs street 1.8%
New Zealand credit spending 4.6% vs previous 3.9%
Upcoming announcements include:
US leading indicators 10:00 am ET
US natural gas storage 10:30 am ET
US DOE energy inventories 11:00 am ET
Japan consumer prices 6:30 pm ET
Germany IFO survey 4:00 am ET Friday
UK GDP 4:30 am ET Friday
Canada consumer prices 8:30 am ET Friday
Today is a big big day for earnings reports out of the technology, railroads, consumer products and other sectors. Highlights include:
Apple $13.81 vs street $13.53, Revenue $54.1B vs street $54.9B, revenue guidance $41-43B vs street $45.8B
Agrium raised Q4 guidance to $2.00+ from $1.50-$1.90.
Bristol-Myers $0.47 vs street $0.43
Tonight after market close MicroSoft, Starbucks, AT&T
North American indices
The Dow Industrials (US30 CFD) is advancing again today testing 13,800 with next resistance near 14,000-14,050 on trend.
The S&P 500 (SPX500 CFD) is holding above 1,490 keeping its uptrend intact with next upside resistance near 1,500 then 1,520.
The NASDAQ 100 (NDAQ100 CFD) was knocked back from 2,775 toward 2,720 where it has started to stabilize with more downside support near 2,700 then 2,660.
The S&P/TSX 60 (Toronto60 CFD) is holding above 732 new support consolidating its breakout with next resistance near 750 then 770.
Copper is steady in the $3.60-$3.72 range.
US crude has rallied up off of a successful test of $94.75, keeping its uptrend intact with next resistance near $96.50 then $97.50.
UK crude continues to test the high end of its $110.00 to $113.75 trading channel but falling RSI suggests it may need to consolidate further in the near term.
Gasoline failed to carry through $2.85 for now but an ascending triangle base continues to form below that level with initial support near $2.80 then $2.75.
Natural Gas is holding between $3.50 and $3.65 ahead of today’s storage numbers with next key tests near $3.35 and $3.85 depending on the move.
Corn is breaking down again after peaking at a higher low near $7.30. Next support appears near $7.10 then $6.75.
Soybeans have fallen back under $14.50, setting a lower high on trend and dropped toward $14.30 with next downside support near $14.00 then $13.65.
Wheat has dropped back toward $7.60 to retest old trend resistance as new support. A breakdown would confirm the start of a new downleg where $7.55 or $7.30 could easily be retested.
FX this morning
Gold has slumped back under $1,675 suggests that its downtrend may be resuming. Next support appears near $1,660 then $1,640.
Silver ran into resistance near $32.60 and has fallen back under $32.00 but its upswing remains intact if it can hold above $31.50 with next support after that near $31.00 and $29.75.
Platinum is holding key trend support near $1,675 so far but a break of that level would cause an ascending triangle pattern to fail and signal a new downswing that could restest $1,660 or $1,650. Resistance remains in place near $1,700.
USDCAD continues to rally today, breaking out over par and driving toward $1.0020. Next resistance appears near $1.0050 although a measured move from the recent channel suggests that $1.0120 could potentially be tested.
EURUSD is consolidating in the $1.3260 to $1.3400 range keeping its uptrend intact.
GBPUSD is breaking down today in a big way. I has taken out its November low near $1.5830, signalling the start of a new downleg with next potential support near $1.5740 then $1.5600.
USDJPY has rallied within an emerging 87.75 to 90.25 trading channel although RSI still suggests that more consolidation may be needed to ease overbought conditions.
AUDUSD is falling again, taking out $1.0490 with key uptrend support looming near $1.0440 followed by $1.0400 and $1.0365.
NZDUSD has dipped back under $0.8400 but remains in an uptrend as a bullish ascending triangle continues to form between $0.8340 and $0.8475.