Stocks have spent the past hour moving sideways along session highs.
Both the Dow and the S&P 500 have made modest moves above their best levels of the prior session to set fractionally improved two-year highs. The Nasdaq Composite has about eight points to go before it can challenge its two-year high.
Consumer discretionary stocks have jumped out in front of the broader market to trade with a gain of almost 0.6%. Most of that move has been underpinned by education service providers (+1.7%) and department stores (+1.4%). Sears Holding (SHLD 74.47, +4.45) is a standout in the group as it spikes to a 6% gain. Some of that move is owed to short covering, given that the stock has short interest of 32% of the float.
Financials continue to trail. The sector remains in the red, although it has eased off of its opening low to trade with a slight loss of just 0.1%.
Advancing Sectors: Consumer Discretionary (+0.6%), Energy (+0.5%), Industrials (+0.3%), Materials (+0.3%), Health Care (+0.2%), Tech (+0.2%), Consumer Staples (+0.1%)
Declining Sectors: Utilities (-0.3%), Financials (-0.1%)
GBP/USD showing some signs of pulling away from the $1.5448 Fibonacci level, which marks 61.8% of the range seen during the decline of the European afternoon on Tuesday. Offers still tipped to be at this level/$1.5450.
USD/JPY eats through bids at Y82.00 and finally breaks below that level. Stops sub Y81.80 (Tues low at Y81.79), traders say. Market is thin and scrappy, so preditory accounts can more easily press the weak link, they add.
EUR/USD holds a firm tone with traders reporting good two-way flows. Overnight, the pair bounced off a key support line at $1.3078, as well as its 200-day moving average, which comes in Weds at $1.3084, so players are willing to try a euro long position, they say. Nevertheless, these accounts will want to see the euro vault overnight highs around $1.3157 and Tuesday's highs around $1.3274 before embracing a new uptrend that may lead to the December peaks just shy of $1.3500.
USD/JPY offers from Y82.50 as well as Y82.70/00 said to have been left by exporters. Rate triggered bids on Y82.00 and currently holds around Y81.91. There is now talk of stops in place below Y81.80.
U.S. stocks were poised to nudge higher Wednesday, though trading is likely to remain quiet during the holiday week, as investors close their books for the year.
On Tuesday, stocks ended the day mixed as investors mulled a disappointing report on consumer confidence, and ongoing weakness in the housing market.
Overall stocks have climbed 6% in December, and are on track to post double-digit gains for the year.
Companies: Bank of America's (BAC, Fortune 500) stock rose 0.2% in premarket trading, after Allstate Corp. (ALL, Fortune 500) filed a lawsuit against the bank and its Countrywide Financial unit for more than $700 million in mortgage-backed securities that the insurance giant had purchased. The suit also named former Countrywide CEO Angelo Mozilo, who agreed to pay $67.5 million in fraud charges in October.
Economy: The U.S. government's weekly crude oil inventories report is due in the morning, though it is typically not a market mover.
Further talk of offers on EUR/JPY at Y108.35/50, which coincide with the previous Y108.36 lows seen at the start of the month. Stops said to have also built on a break of Y108.50, however.
EUR/USD holds around $1.3137. Bids said to lie at $1.3085/90 ahead of stops at $1.3070. Above the market, offers noted at $1.3150/80 with stops also tipped above $1.3210 and further offers $1.3250.
09:00 European Monetary Union M3 Money Supply (QoQ) (Nov) 1.3% 1.3% 1.0%
09:00 European Monetary Union M3 Money Supply (YoY) (Nov) 1.9% 1.6% 0.9%
10:30 Switzerland KOF Leading Indicator (Dec) 2.10 2.10 2.13
10:38 Germany Consumer Price Index (MoM) (Dec) Preliminar 1.1% 0.9% 0.7%
10:39 Germany Consumer Price Index (YoY) (Dec) Preliminar 1.8% 1.5% 1.5%
The dollar found a firmer footing on Wednesday after a sharp reversal against the euro the previous day in whipsaw action exaggerated by thin year-end flows.
Partly due to the erratic nature of the market, the Swiss franc held near a record high against the euro and the dollar as investors sought refuge from euro zone debt, while the dollar threatened to break below a familiar range against the yen.
"The market is not driven by factors, but the thin conditions mean there could be more volatile moves," said a trader at a Japanese bank. "A lot of positioning has been flushed out after last night, so I don't expect much action today. There's nothing around in the order books at the moment."
The euro stayed flat after a whipsaw move on Tuesday that took it to $1.3275, its best level since Dec. 17.
Although it slipped from that high, the euro held above its 200-day moving average, now at $1.3086, which has served as a strong support for more than a week.
But the euro remained near a record low against Swiss franc, a safe-haven currency that has attracted funds escaping euro zone debts on worries that some euro zone countries could face severe financing problems.
The franc also held not far from a record high against the dollar.
The yen, which tends to be favoured when investors grow risk-averse, was also supported after having hit a 6-week high against the dollar and a near two-year high against the British pound on Tuesday.
Meanwhile commodity currencies also maintained momentum.
The Aussie stayed within sight of retesting a 28-year peak of $1.0182 set in November. But depending on how the Aussie performs from here, a double-top could be in the making, traders cautioned.
The Aussie is up around 14% on the U.S. dollar so far this year, and has surged 23% against the euro.
However, some analysts doubt the Aussie can perform as well next year.
EUR/USD holds within the $1.3110/$1.3150 range.
GBP/USD holds within the $1.5360/$1.5410 range.
USD/JPY set stable around Y82.00/30.
There is no major news for today.
The Swiss December Kof leading indicator came out in line with expectations at a reading of 2.1 earlier, while the previous reading was revised up to 2.13. USD/CHF holds in the middle of the trading range, although as elsewhere that range is a slim one. Offers still expected to return at Chf0.9530/35. Demand appeared earlier at Chf0.9495/00.
EUR/GBP had an upward bias through Asia and the European morning, trading close to stg0.8555 before pulling back to the stg0.8526 area. Above the market, offers are said to be around stg0.8575 as well as at stg0.8693/00. Support comes from interest at the current stg0.8530/20 level (61.8% retracement of the day's range). Bids are also staggered to stg0.8510/15.
GBP/USD extended the highs to the $1.5410 area before the US name sales in euro-dollar prompted a pullback to the $1.5365 lows. Since then the pair had chopped about in a range around $1.5380 but offers are said to remain at $1.5300/10 with bids down at $1.5345/55.
The dollar traded near a six-week low against the yen as U.S. data signaled an uneven recovery in the world’s largest economy.
The greenback was close to a seven-week low versus the Australian dollar before a report forecast to show U.S. businesses expanded at a slower pace.
The euro fell against most of its 16 major counterparts after the European Central Bank said it failed to fully neutralize the extra liquidity created by its bond purchases for a second time since the program began in May.
EUR/USD: the pair shown low in the field of $1,3080 then become stronger.
GBP/USD: the pair bargained within the limits of $1,5350-$ 1,5410.
USD/JPY: the pair decreased in around Y82,00.
We should get the start of the German state releases for flash HICP for December today.
US dollar gained ground against the main rivals as house prices and consumer confidence have fallen by more than expected, according to data released on Tuesday, emphasising the lingering risk that a weak housing market will dent domestic demand and undermine the US economic recovery. According to the widely followed Case-Shiller index, house prices dropped by 1.3 per cent between September and October, the fourth consecutive month in which prices have fallen. Prices across 20 US urban areas stood 0.8 per cent below the level of October 2009, a sharper fall than economists had expected. Separately, the Conference Board, a research group, said that its index of consumer confidence had declined to 52.5 in December from a revised reading of 54.3 in November, confounding the expectations of most economists who had predicted an increase to nearly 57.
Consumers’ assessments of the current situation and their expectations for the future also fell back in December. The Swiss franc strengthened to a record against the dollar and snapped a three-day decline versus the euro after a government report showed French economic growth slowed more than originally estimated. Last week, by contrast with Tuesday’s Conference Board measure, the rival University of Michigan consumer survey reported an improvement in household confidence.
EUR/USD: on results of yesterday's session the pair decreased in around $1,3100.
GBP/USD: on results of yesterday's session the pair decreased below a mark $1,5400.
USD/JPY: the pair shown low in the field of Y81,80 then become stronger in around Y82,50.
We should get the start of the German state releases for flash HICP for December today.
Japanese stocks fell as concern China’s interest rate increase will slow growth dragged down commodity prices and after the yen advanced, damping the outlook for export earnings. Trading was the lightest in two years.
Inpex Corp., Japan’s No. 1 oil explorer, retreated 1.7 percent. Mitsubishi Corp., Japan’s largest commodities trader, sank 0.6 percent. Tokyo Electron Ltd., a maker of semiconductor equipment that derives more than 60 percent of its revenue abroad, retreated 1 percent. Mizuho Financial Group Inc., Japan’s third-largest bank by market value, climbed 1.3 percent after its chief executive officer said the lender will exceed capital requirements.
Tokyo Electron retreated 1 percent to 5,170 yen. Honda Motor Co., Japan’s second-largest carmaker, lost 0.7 percent to 3,260 yen. Nissan Motor Co., Japan’s third-biggest automaker by sales, dropped 1.3 percent to 781 yen. Kyocera Corp., an electronics maker that gets more than half of its revenue outside Japan, fell 0.7 percent to 8,360 yen.
The yen appreciated to 82.42 against the dollar from 82.75 when the market opened, the strongest level in intraday trading since Dec. 7. A stronger yen reduces income at Japanese companies when overseas revenue is converted into their home currency.
European stocks rebounded from the biggest decline in a month, while trading volumes stayed close to the lowest levels of the year.
Alcatel-Lucent SA advanced 1.9 percent after it resolved U.S. criminal and civil probes into allegations of bribes. Randstad Holding NV rose as Dutch temporary staffing revenue increased. Roth & Rau sank 11 percent after saying it will be unable to meet its sales and earnings forecasts for 2010.
Stocks pared some gains after a report showed confidence among U.S. consumers unexpectedly fell in December. The Conference Board’s confidence index fell to 52.5 this month, lower than the most pessimistic forecast of economists surveyed by Bloomberg News. Separate figures showed American home prices dropped more than predicted in October.
U.S. stocks drifted between gains and losses as data on retail sales, consumer confidence and home prices presented a mixed picture of the outlook for the world’s largest economy.
General Motors Co. rose 2.8 percent after at least seven firms including JPMorgan Chase & Co. and Morgan Stanley initiated coverage of the automaker with a positive view. American Express Co., Caterpillar Inc. and Walt Disney Co. lost at least 0.6 percent to lead declines in the Dow Jones Industrial Average. Homebuilders retreated as home prices dropped more than forecast in October.
The Conference Board’s consumer confidence index decreased to 52.5, lower than the most pessimistic forecast of economists surveyed by Bloomberg News and down from a revised 54.3 in November. U.S. retail sales, excluding autos, rose 5.5 percent to $584 billion from Nov. 5 through Dec. 24 for the biggest holiday-season increase since 2005, according to MasterCard Advisors’ SpendingPulse, which measures retail sales by all payment forms.
Homebuilders fell after the S&P/Case-Shiller index of property values decreased 0.8 percent from October 2009, the biggest year-over-year decline since December 2009. The drop exceeded the 0.2 percent drop projected by the median forecast of economists
PulteGroup Inc. slipped 2.3 percent to $7.32, Lennar Corp. declined 1.2 percent to $18.36 and D.R. Horton Inc. tumbled 2.6 percent to $11.84 as an index of 12 homebuilders in S&P indexes lost 1.5 percent.
General Motors rose 2.8 percent to $35.57. The automaker was rated “overweight” in new coverage at JPMorgan, Barclays Plc and Morgan Stanley. GM was rated “outperform” at Credit Suisse Group AG and RBC Capital Markets, which also initiated coverage of the stock. Citigroup Inc. and Bank of America Corp. have a new “buy” recommendation for GM.
Resistance 3:Y83.20 (МА (200) for Н1)
Resistance 2:Y83.00 (Dec 27 high)
Resistance 1:Y82.50 (resistance line from Dec 21)
Current price: Y82.43
Support 1:Y81.90/80 (61,8 % FIBO Y80,20-Y84,50, Dec 28 low)
Support 3:Y80.20 (low of November)
Comments: the pair remains under pressure. The nearest support - Y81,90/80. Below losses are possible to Y81.00. The nearest resistance - Y82,50. Above growth is possible to Y83.00.
Resistance 3: Chf0.9640 (Dec 27 high)
Resistance 2: Chf0.9590 (МА (200) for Н1)
Resistance 1: Chf0.9530 (Dec 27 high)
Current price: Chf0.9514
Support 1: Chf0.9430 (Dec 28 low)
Support 2: Chf0.9400 (psychological mark)
Support 3: Chf0.9300 (psychological mark)
Comments: the pair remains under pressure. The nearest support Chf0,9430. Below loss may extend to Chf0.9400. The nearest resistance Chf0,9530. Above is located Chf0.9590.
Resistance 3: $ 1.5510 (Dec 28 high)
Resistance 2: $ 1.5460 (МА (200) for Н1)
Resistance 1: $ 1.5410 (session high)
Current price: $1.5383
Support 1 : $1.5350 (Dec 22 low)
Support 2 : $1.5300 (low of September)
Support 3 : $1.5120 (Jul 21 low)
Comments: the pair bargains below a mark $1,5400. The nearest resistance - $1,5410. Above growth is possible to $1,5460. The nearest support - $1,5350. Below decrease is possible to $1.5300.
Resistance 2: $ 1.3275 (Dec 28 high)
Resistance 2: $ 1.3250 (resistance line from Nov 22)
Resistance 1: $ 1.3150 (МА (200) for Н1)
Current price: $1.3120
Support 1 : $1.3070/50 (around of Dec 21-27 low)
Support 2 : $1.2970 (Dec and Nov low)
Support 3 : $1.2790 (61,8 % FIBO $1,1870-$ 1,4285)
Comments: the pair bargains above a mark $1,3100. The nearest resistance - $1,3150. Above growth is possible to $1,3250. The nearest support - $1,3070/50. Below decrease is possible to $1.2970.
09:00 EU(16) M3 money supply (November) adjusted Y/Y 1.6% 1.0%
09:00 EU(16) M3 money supply (3 months to November) adjusted Y/Y 1.2% 1.1%
13:00 Germany CPI (December) preliminary 0.9% 0.1%
13:00 Germany CPI (December) preliminary Y/Y 1.5% 1.5%
13:00 Germany HICP (December) preliminary Y/Y 1.6% 1.6%
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