S&P 500 (Sep 10) INTRADAY
Review U.S. stocks fell, sending the Standard & Poor’s 500 Index lower for a second day, after orders for durable goods unexpectedly decreased and the Federal Reserve said economic growth slowed in some areas. Boeing Co. fell 1.9 percent, while WellPoint Inc. slumped 3.7 percent as second-quarter sales missed ana-lysts’ estimates. Nine of 10 industries in the S&P 500 retreated after government data showing orders for goods meant to last at least three years declined 1 percent. The S&P 500 lost 0.7 percent to 1,102.50 as of 4:30 p.m. in New York.
Strategy Looking ahead we are expecting a continuation of this month’s uptrend, as we predict positive sentiment about U.S. com-pany earnings may override the concerns about a still fragile U.S. macroeconomic picture. Yesterday’s weak durable goods orders and disappointing consumer confidence on Tuesday have negative-ly impacted the investor confidence, adding some pressure to Equi-ties. We think today’s Jobless Claims should be closely watched to better assess the current U.S. macro situation ahead of tomorrow’s second-quarter GDP results.
Alternative Scenario Negative US and Euro zone fundamental news flow could lead to a break-out of yesterday’s low at 1,099.25 opening the way for a more aggressive move to Friday’s low at 1,084.00.
EUR/USD INTRADAY
Review The dollar declined against the euro as orders for U.S. durable goods unexpectedly fell last month and the Federal Reserve said economic growth slowed in some areas. The central bank underscored in its Beige Book its view that the economic recovery, while still moving forward, is progressing at a slower pace than earlier in the year. Two of the Fed’s 12 districts reported the economy “held steady” and two said the expansion slowed. The dollar traded at $1.3000 per euro at 4:30 p.m. in New York, compared with $1.2989 on Tuesday.
Strategy Our strategy for today is neutral, favouring the upside, after better than expected European company earnings and concern-ing comments from Moody’s about a potential U.S. rating review if the US government fail to articulate a credible fiscal consolidation plan. Our view is that the EUR/USD direction will be dictated by Austerity in both Europe and U.S in the medium-long term. This may add uncertainty in the short term as the two biggest regions in the world need to take drastic decisions that may impact their own economic growth.
Alternative Scenario Negative Euro zone fundamental news flow could lead to a break-out of Tuesday’s low at 1.2952 opening the way for a more aggressive move to S3 at 1.2889.
Crude Oil (Sep 10) INTRADAY
Review Oil tumbled to a one-week low after the government reported an unexpected increase in supplies as imports jumped to the highest level in almost four years. Crude inventories climbed 7.31 million barrels, or 2.1 percent, to 360.8 million in the week ended July 23, the biggest increase since March 19, according to the Energy Department. Imports climbed to the highest level since August 2006. Crude oil for September deliv-ery fell 57 cents, or 0.7 percent, to $76.93 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Oil touched $75.90, the lowest level since July 20, after the report was released at 10:30 a.m. in Washington.
Strategy Our strategy for today is neutral, favouring the upside, as we predict positive sentiment about U.S. company earnings may be partially off-set by bearish oil inventory outlook. Crude oil has been stuck in a $70-to-$80 range in the last few weeks and we may need better than expected GDP and consumer confidence data to-morrow to see a return to confidence that may push oil through $80.00 per barrel. Further direction could also be provided by earn-ings today from Exxon and tomorrow from Chevron and these re-sults should be closely watched.
Alternative Scenario Negative US and Euro zone fundamental news flow could lead to a break-out of last week’s low at $75.90 opening the way for a more aggressive move to S2 at $75.08.
