Financial stocks led by the banking sector are helping to support the stock indices today in light trading. Volume is low ahead of tomorrow’s option expiration and because of end of the summer inactivity. The market received a little support this morning when the leading indicators report showed a modest gain. Traders are beginning to believe the recession is over despite reports of new foreclosures and job losses.
The current rally began yesterday when crude oil took off to the upside driving oil stocks higher. Today oil is down but stocks have found other reasons to rally. Thin conditions may have something to do with. The lack of traders makes this market vulnerable to wide swings in either direction. Today’s rally may fade into the close as traders decide to even up positions ahead of tomorrow’s option expiration.
Treasury markets are trading mixed today. Firmer equity markets are helping to limit gains. The Treasury’s announcement of another debt auction next week could also have a bearish influence on bonds and notes into the close.
The U.S. Dollar is under pressure today in light trading. Firmer equity markets are indicating a slight interest in higher yielding assets. The rest of the day will be dictated by the direction of the stock market. The Dollar is likely to weaken against most major foreign currencies if the equity markets strengthen into the close. Look for the Dollar to gain strength if the equities weaken.
December Gold is trading slightly better. The weaker Dollar is encouraging some light buying but traders seem non-committal at this time. Economic issues in China may begin to weigh on December Copper. Traders expect demand for industrial metals to drop if China stops providing stimulus.
There has been no follow-through to the upside in December Crude Oil following yesterday’s huge move. This could be because yesterday’s move was overdone or traders are waiting for more confirmation that demand for energy will increase as the economy improves.
The current rally began yesterday when crude oil took off to the upside driving oil stocks higher. Today oil is down but stocks have found other reasons to rally. Thin conditions may have something to do with. The lack of traders makes this market vulnerable to wide swings in either direction. Today’s rally may fade into the close as traders decide to even up positions ahead of tomorrow’s option expiration.
Treasury markets are trading mixed today. Firmer equity markets are helping to limit gains. The Treasury’s announcement of another debt auction next week could also have a bearish influence on bonds and notes into the close.
The U.S. Dollar is under pressure today in light trading. Firmer equity markets are indicating a slight interest in higher yielding assets. The rest of the day will be dictated by the direction of the stock market. The Dollar is likely to weaken against most major foreign currencies if the equity markets strengthen into the close. Look for the Dollar to gain strength if the equities weaken.
December Gold is trading slightly better. The weaker Dollar is encouraging some light buying but traders seem non-committal at this time. Economic issues in China may begin to weigh on December Copper. Traders expect demand for industrial metals to drop if China stops providing stimulus.
There has been no follow-through to the upside in December Crude Oil following yesterday’s huge move. This could be because yesterday’s move was overdone or traders are waiting for more confirmation that demand for energy will increase as the economy improves.
