Icahn Talks Stocks Down, Fed Comments in Focus

Big names in the financial world can drive the markets. U.S. markets pulled back aft investor Carl Icahn said he was “very cautious” on the markets and equities at this time. We also got comments from various Federal Reserve Presidents.

New York Fed chief William Dudley said the fundamentals behind the economic recovery were improving. He also said that there was a good case to be made regarding the pace of the growth. He feels growth will pick up in 2014.

Philadelphia chief Charles Plosser, in his comments, suggested the Fed should communicate the amount of its asset purchases to the public better and begin to taper QE sooner than later. In a conference in the United Arab Emirates, Boston chief Eric Rosengren told reports the capital ratios have gotten better in the U.S. Commercial bank loans are beginning to rise to households and businesses.

STOCKS

U.S. markets are very Fed orientated right now and are being driven on the hopes they will not taper anytime soon. The fact the S&P crossed 1,800 and the Dow crossed above 16,000 are proof of this.

The DJIA was above 16,000 intraday as it touched 16,030.28 before falling back to close up 14 points to 15,976.02. The S&P hit an intraday high at 1802.37 before closing down 6.65 points to 1791.53.

Looking at the Asian markets this morning, they are trading mostly lower on the mixed fed comments and profit taking. The Nikkei is down 0.6 percent and coming off yesterday’s six month high. We are seeing strong profit taking in the financials.

The Shanghai Composite is trading near the flat line after hitting its highest level in over a month. The composite is up almost five percent over the last three days.

The South Korean benchmark, the Kospi, is bucking the down trend as it up nearly one percent. It is currently in the midst of a four day winning session and near a two week high.

The ASX 200 is extending its losses today as it is down 0.5 percent. This is now the second day of losses.

CURRENCIES

EUR/USD (1.3507) tested 1.3540 and failed to clear it. We are now retesting the support at 1.3500 (former resistance). A failure to break above 1.3550 keeps up the bearish pressures. If it breaks above this level we target 1.36.

USD/JPY (99.799) is at a crossroads. We saw a high at 100.42 which is close to a key resistance at 100.60. We need to hold above 99.50 and then recover. Failure will bring back the bears and put us back below 99.00 to trade in the consolidative range we just broke out of. EUR/JPY (134.829) failed at 135.50 but then found support near 134.5150. We need to break above 135.50 to target 138 and higher.

COMMODITIES

Commodities are lower all over today.

WTI Brent (107.97) has fallen and is now below 108. We need to close back above that area to keep our bullish target of 110. WTI Crude (92.84) has fallen quite a bit and could now target 92.00. That breaks we can see 91.90 and then 91.50.

Gold (1273.60) is well below 1275 and is bearish for 1250. Should we move higher and back above 1275, we can target 1300 again, we will have to wait and see.

TODAY’S OUTLOOK

Today we get even more comments from the Federal Reserve. Markets are very driven by what the States is going to do with its QE program. Chicago chief Charles Evans will make comments and Ben Bernanke will speaking at the National Association of Business Economists. As far as data is concerned we will get the employment cost index later in the day.