It’s long been said generally around the markets that January tends to set the tone for the year and the first five trading days of January tend to set the tone for the month. So far, not so good. Stocks have returned from the New Year’s holiday on their back foot for the most part with disappointing manufacturing PMI numbers from China and India along with mixed results from Europe getting the blame. As we start the year, traders should remember that 2013 finished very strong and that because of this, the historical New Years Rally may have been pulled forward a bit and now we could be seeing some profit taking. With many traders still off on holiday this week, we may see lighter than usual volumes today and tomorrow. The profit taking/short covering theme to start the year also appears to be playing out in metals markets with gold, silver and platinum rebounding from their truly dismal 2013 performance on what appears to be some bargain hunting. The rebound in precious metals appears particularly impressive considering that USD is also strong today. The greenback is up against all of the other paper majors likely on anticipation that the Fed may continue tapering back its QE3 program throughout the year. Twitter, which was kicked around quite a bit over the holiday period may also remain active as enthusiasm about the company battles it out with high valuations and uncertainty about what the company’s first public earnings report may bring. Next week’s trading may provide a better indicator of sentiment moving into 2014 with everyone getting back to work in time for European central bank meetings and US employment numbers. Economic News Manufacturing PMI reports: US Chicago (Tue) 59.1 vs street 61.0 China official 51.0 vs street 51.3 China HSBC 50.5 vs previous 50.8 India 50.7 vs previous 51.3 UK 57.3 vs street 58.0 Germany 54.3 vs street 54.2 France 47.0 vs street 47.1 Spain 50.8 vs street 49.9 Italy 53.3 vs street 51.8 Greece 49.6 (highest in 52 months) Brazil 50.5 vs previous 49.7 Other significant economic announcements released yesterday afternoon and overnight include: US jobless claims 339K vs street 334K Economic reports due later today include: 8:58 am EST US Markit manufacturing PMI 9:30 am EST Canada manufacturing PMI 10:00 am EST US ISM manufacturing PMI street 57.0 10:00 am EST US construction spending street 0.6%