Hit the Mark Trading’s Brief Review of Overnight Market Action Setting the Tone for the Trading Day
The negative news on the global economy keeps rolling in…
- Japan’s economy sees 6.8% contraction.
- China reports slowing loan growth; below market expectations and infrastructure investment stopped rising.
- Chinese industrial production declined slightly to 9%.
- Chinese retail sales growth dropped 12.2% year over year.
- Bank of England says UK recovery faces “external challenges” (BMO Capital Markets). This talk, of course, designed to keep the Pound falling. Reason cited is lower inflation expectations.
- Euro zone factory output fell 0.3% in June after falling 1.1% in May. Forecasts called for a rise of 0.3% (Reuters). This is the lowest reading in factory out put for the Euro zone since August 2013.
Wonder why oil is not going through the roof with all the Iraq / Libya turmoil? The International Energy Agency (IEA) said yesterday a supply glut is holding price down. (Bloomberg). Not mentioned is the idea of the mega banks getting out of the commodity business shedding those units where speculation and manipulation were possible.
- It’s show down time in Ukraine with the separatists.
- No change in Iraq.
Without further negative news in the War Department, pre-market equity index futures are higher.
Grain futures are quiet this morning after yesterday’s USDA report increasing yield in corn and soy beans. However, prominent brokers are expecting continued yield increase as summer passes, especially for corn based on kernel size (CHS Hedging).
Today’s Reports and FED Activity
7:00 MBA Mortgage Applications
8:30 Retail Sales
10:00 Atlanta Fed’s Business Inflation Expectations
10:00 Business Inventories
10:30 EIA Petroleum Inventories
1:00 PM Results of $21B, 10-Year Bond Auction
- Equity index futures looking for continued follow-through price action higher as judged by pre-market action. All major global indexes we follow are higher.
- Bonds trade lower
- Gold shows nothing special, although leaning lower.
- Silver is flat.
- Copper takes a dip.
- Crude in side-way congestion.
- Natural gas in tight congestion for the last three days.
- Softs are quiet.
- US dollar stronger testing recent resistance.
- Euro manages to maintain support in consolidation.
- Pound drops violently.
- Yen lower.
- Aussie higher.
Think About This!
Markets are higher, yet the nervous tension remains. We have our upward price targets in ES and TF, yet we are aware markets could rise in the AM only to fall late afternoon. Geopolitical concerns remain the wild card. USA retail sales were just reported missing consensus. Don’t forget Friday is expiration for August options.
I have an excellent long term stock pick I will share via separate email. We will use very long term options, although buying the stock is perfectly fine for this one in my opinion. You make take the idea and perform your own due diligence.
Have a great trading day! Trade nimble if day trading.
To learn more from Martin, visit HitTheMarkTrading.com to join his mailing list and receive blog updates.