(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers.)
LET THE BATTLE ROYAL BEGIN
August 3, 2012
For the second time in a row, a major piece of U.S. economic data came better than expected. Last week it was GDP, today it is the employment data.
Weekly non-farm payrolls came at 163k vs. 100k consensus; the whisper number was 86k.
Let the battle royal begin between those who will buy stocks and sell bonds and gold because the economy is stronger than expected, and those who will sell stocks, buy bonds and sell gold because QE3 is less likely. The side that wins the battle over the next couple of days will determine the direction of the markets.
Gold futures are at $1589, silver futures are at $27.15, and oil futures are $88.64.
S&P 500 resistance levels are 1380, 1400, and 1410; support levels are 1368, 1358, and 1352.
DJIA futures are up 136 points.
SUPER MARIO DOES NOT DELIVER, GOLD AND STOCKS FALLING
August 2, 2012
Mario Draghi, the ECB chief, raised expectations too high last week. Today after the ECB meeting he did not deliver. Gold, silver and stock market are falling; bonds are going up.
ECB left interest at 0.75%. Initially strength was seen in euro because of high interest rates compared to the dollar, but the strength quickly precipitated. Draghi’s statement was not all negative. He is apparently getting ready to do a huge bond buying program.
From an investor point of view, the point is that nothing is resolved making investment decisions difficult. The best course of action is to be vigilant and not take any dramatic actions here.
Gold futures are at $1600, silver futures are at $27.38, and oil futures are $88.24.
S&P 500 resistance levels are 1368, 1380, and 1400; support levels are 1358, 1352, and 1348.
DJIA futures are down 54 points.
ADP DATA A BRIGHT POINT ON THE U.S. ECONOMY
August 1, 2012
The ADP employment change came at 163k vs consensus of 125k. This is the first important positive data on the U.S. economy in recent weeks. We will be looking for corroboration from other pieces of data in the near future. If there is corroboration, our models will switch from a cautious view to a bullish view.
All eyes are on the Fed. FOMC statement will be released at 2:15 pm EDT. Please be alert to opportunities around that time.
Overnight economic data from China shows more weakness than generally expected, but in line with our estimates.
Gold futures are at $1604, silver futures are at $27.13, and oil futures are $88.35.
S&P 500 resistance levels are 1380, 1400, and 1410; support levels are 1368, 1358, and 1352.
DJIA futures are up 48 points.
RISK REMAINS HIGH AHEAD OF THE FED AND THE ECB
July 31, 2012
Markets have run up on the assumption that the Fed and ECB will announce major steps this week. If bulls turn out to be wrong, look out below. Fundamentals do not support the recent run up.
Gold futures are at $1623, silver futures are at $28.10, and oil futures are $90.02.
S&P 500 resistance levels are 1380, 1400, and 1410; support levels are 1368, 1358, and 1352.
DJIA futures are down 5 points.
MARKETS LEVITATING ON HOPES OF MONETARY EASING
July 30, 2012
Both the Federal Reserve and the ECB meet this week. Markets ran up strongly last week and continue to levitate this morning on hopes of monetary easing.
There is high risk in the markets if the actions taken by the Fed and ECB are less than expectations look out below.
Gold futures are at $1615, silver futures are at $27.60, and oil futures are $89.84.
S&P 500 resistance levels are 1380, 1400, and 1410; support levels are 1368, 1358, and 1352.
DJIA futures are down 25 points.
