Registered: Feb 2012
10-08-12 07:07 AM
Last Monday strong ISM Index which was reported at 51.5 against the expectations of a 49.7 reading. Most regonal reports have been bad recently but...
Tuesday was riskoff as Spanish aid request is not imminent.
On Thursday, stocks began the day with a bullish bias. Romney rally after
great debate. August factory orders report indicated a 5.2% decrease. The number was not positive in itself, posting its worst reading since January 2009. However, it was better-than-feared as expectations called for a 6.0% pullback.
Friday NFP = 114k. big increase inpartime workers. Big adjustment from last month 96k to 140k jobs added.
WEEKLY NET CHANGE:
Strong + correlation in everything excluding FXA.
Risk on week.US dollar reversed and sold off all week.
SPY up 1.5% for the week no selling/red days
Bonds down only the last two days hard with Romney rally and NFP and better news in general. Easing in Austalia , not ECB. China next?
Bonds are trending down in risk-on inflationary trade since QE3. Long bond
looking to to 3%
YEN down with dollar and bonds
GLD mixed , lagged up .5% this week but PA still very strong and advancing.
FXA rate cut and caution of weakness in China and rest of world. FXA strong correlation with SPY and risk on in general fell apart.
Strong + correlation in 4 major European markets with US markets.ECB no rate cut and Drahgi says ECB has done enough. Next move is Spains.
ISM Monday 51.5 better than expected even though recently most regional manufacturing reports bad.
NFP 114k but unemployment 8.1 to 7.8. Lot of part time workers added. Big up revision to last monts 96k added to 140k aded.
Early in week there was some dissapointment that Spain may not request bailout soon.
Earnings start this week. Possible that market looks past earnings
to Spain, our election and fiscal cliff. Lets see. But , we are well int a swing high and approaching high in SPY. Due for pullbacks/countertrend trades here.
Light week US data upcoming Fed beige book and ppi (WED,FRI).
AA Tues then JPM.
AAPL effect is a big deal recently.
17 Europe finance ministers meet to discuss Spain.Next day all 27 members meet.
Rajoy to France. Merkel to Greece taken as symbol of no Grexit.
Spain 10 year = 5.69 down 25bp. last week. This delays bailout request so they say.
Elections in Spain this month , austerity not popular, yeilds falling, there is leverage in threat of systemic risk to get less severe austerity measures,
Drahgi has said measures needn't be severe but Germany doesnt agree.
Spain wants conditions on the table before they make a request. I read that some beleive it will be about a month before the request. Time to discount this bullish event. This seems to be the main news event in the market for a time to come.