(As of 7:15 am PST)
It’s
been a back and forth week for US equities. Stocks opened Thursday’s session on
a mixed note following a late day rally Wednesday which saw the broad indexes
reverse sharp losses earlier in the day. Oil prices turned higher late in the
session after an inventory report came in weaker than expected, carrying stocks
higher into the close. So far today, markets are struggling to find direction
bouncing around the unchanged line as investors sifted through mixed economic
data while waking up to a very disappointing day in China. Let’s start with the
data. Durable goods orders came in stronger than expected showing orders jumped
in January by the largest amount in 10 months. Shipments of non-defense capital
goods ex-aircrafts were down however, which is the only data point that feeds
into the GDP from the durable goods report. This is likely why the market has
mostly shrugged off the strong headline number today. In other economic news,
jobless claims rose in the prior week from 262,000 to 272,000, slightly worse
than expected. Overseas, Asian markets finished the day mostly lower following
a sharp selloff in China’s Shangai composite index which caught most investors
by surprise. The Shanghai composite fell 6.4% Thursday – its worst single
session in two months – over concerns of liquidity. The selling in Asia had little
to no effect on the European trade, which is seeing gains over 2% across the
board today. In commodity land, gold and precious metals prices are down
slightly today, while oil appears pressured to the downside with 2% losses upon
this writing. Interest rates are down while the US dollar is up slightly. It’s
another bizarre start to a trading day, with little evidence to suggest whether
we end up higher or lower today.
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