Futures vs FV: SP -11.10; DJ -81.37; NADSAQ -23.79
It will be all about the central banks. Fed later this week, BOJ after that. BOE has already started with the stimulus by adjusting rates lower for internal borrowing, etc. The central banks will do what they can to hold things up post-Brexit vote as the UK sees two funds closing because of redemptions/outflows.
Italian Banks: War of words with Draghi, claiming ECB could have and can do more. Italian banks have non-performing loans of at least 17%. Yikes.
Data around the world is more of the same, but the shock is bonds. Swiss 50 year is yielding negative.
China services PMI: 52.7 vs 51.2 prior
India: 50.3 vs 51.0 prior
EU: 52.8 vs 52.4 prior
Germany: 52.8 vs 52.4 prior
UK: 52.3 vs 53.5 prior
Franc: 49.9 vs 49.9 prior
British pound at a 31 year low.
OTHER MARKETS
Bonds: 1.29% vs 1.44% 10 year. Amazing bond rally continues to higher all-time highs.
EUR/USD: 1.1164. EUR off a bit vs dollar
USD/JPY: 101.64, -0.89. Dollar off to start the week as the modest bounce off the lows struggles.
Oil: 47.43, -1.56.
Gold: 1349.70, +10.70
Stocks are in a lower range that started when futures opened. Italy, Brexit, China worries, lower oil. All is spooking investors on the second day of the new quarter. Will new money use this to enter? We will see how the buyers respond to a lower open.
Certainly there is enough gloom out there. Reading the headlines this morning it was enough to daunt the most valiant. Still, where there are central banks . . . Again, we will see if the lower open leads to some new bids.
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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