U.S. futures are pointing to a mixed open once again on what
should be light trading day, with most European and Asian markets
closed today. With light trading we find Europe is mixed with the
FTSE in the green while the DAX, CAC 40, and SMI are solidly in
Trading volume is down in Europe and several major Asian markets
due to the May Day holiday through Thursday's ECB's monthly
policy meeting and the U.S. non-farm payroll data. The London
Stock Exchange will remain open providing some liquidity in the
markets as well as the forex market.
Gold spot price action took out the top of a falling channel
from early March. Traders will be watching to see if the
bulls can muster enough strength to break and close above the
next level of resistance at $1,680 on light volume. Gold is back
in favor since the FOMC has announced it stands ready to step in
if needed. Couple this with the Reserve Bank of Australia's rate
cut and mixed global economic data, and traders are putting cash
into safe haven assets.
The RBA cut interest rates by a surprisingly aggressive 50
basis points to 3.75%, a level set back in late 2009. The RBA
also left the door open for further easing.
The Japanese yen hit fresh highs on Tuesday as a safe haven
currency when the rebound in China's factory sector was
announced, while the big rate cut from the RBA failed to offset
concerns about the U.S. economy. The move could be little more
dramatic with a vacuum being caused by the euro zone holiday.
The move in the yen sent Japan's stock market to a two and
half month closing low. The MSCI index also moved lower by -0.15%
to 328.26, and is down- 1.5% for the month of April.
) Oil reported an unexpected drop in profits overnight, even
though crude oil prices are trading near the highs. BP said that
production fell after the company was forced to sell fields to
pay for the Deepwater Horizon Gulf oil spill. BP reported the
replacement cost net profit was $4.93 billion in the quarter in
comparison to $5.61 for the previous quarter.
Earning are quiet today for the Emerging Money Index, however,
international pharmaceutical company Pfizer (
) beat Q1 expectations, earning 58 cents per share vs. 56
per share excluding items. Revenue, however, was in line
with analysts' expectations of $15.4 billion.
Global economic data releases will be relatively light due to
the overseas holiday. Traders will get a glimpse of
how the housing market is doing with construction spending for
March scheduled to be released at 10:00 a.m. EDT. Estimates
forecast an 0.8% increase in construction spending compared to a
drop of 1.1% in the prior month.
The Institute for Supply Management manufacturing index for
April is scheduled for 10 a.m. EDT with analysts excepting to see
a drop to 53.0 from a prior reading of 53.4.
Powered by Forexpros - The Leading Financial Portal
Notable Pre-Market moves:
Solar company Yingli Green Energy Holding Co Ltd (
) is up nearly 8% in pre-market trading. My personal opinion is
to always sell your position when a solar company is up.
Trading volume could be light allowing the market to push
around slightly. Currency market volume will also be light but
traders are reacting to the Aussie rate cut and the euro is still
on the move. Traders will be positioning themselves ahead
of the non-farm payroll report this Friday.