News Driver: (8:40am) North American markets set to open lower today with the comments made by BOE Governor Carney to cut the growth forecast:
Global growth has fallen back further over the past three months as emerging economies have generally continued to slow and as the U.S. economy has grown less than expected, – BOE Governor Carney
Futures were up prior to 7am EST and immediately reversed. Oil is lower by -1.2%
*UPDATE: Oil starting to move up. Currently trading at $33.35 (9:25am EST). The Markets have started to move up in tandem. It should be another interesting day.
S&P Futures -0.5%
Nasdaq Futures -0.6%
Dow Futures -0.5%
Today’s action is a WEAK FORM RISK OFF tone to global equities (higher risk assets being sold defensive assets out-perform). Europe (EFA) and Emerging markets (EEM) are holding up better.
MID-LONG TERM (Weeks-To-3Months+): Bearish
(STILL IN FOCUS) Yesterday the S&P dropped to a low of 1872 but the key support floor held and the markets had a strong rally into the end of the day. If the S&P 500 breaks back below 1,880-1,870 (a key support floor), and if the Crude Oil (WTI) reverses back below $30 aggressively. This market has more downside risks than upside potential in the mid-to-longer-term. Look to De-risk long positions with rallies unless you can stomach the volatility. We may very well look back at this time as the start of the Bear market. Be ready for anything.
SHORT TERM (Days-To-Weeks): Bullish
We enter the week with a HOLD on short term Swing and Positions trades. If the S&P 500 breaks 1928-1921 (support- we are currently below that) a move closer to SELL for shorter term positions is a good idea. A break below 1880-1870 for the S&P 500 suggests the “bounce” is in jeopardy and likely over and a move to de-risk is the better option.
S&P 500: -0.6% with a move in tandem from the Nasdaq, however the Russell 2K lags (-0.6%). Another day for defense while we eagerly await the US Non-Farm Payrolls data tomorrow morning!
TSX: under-perform with the indecision in Crude Oil and weak-form risk-off tone to equities, this likely translates to holding in resistance of 12,547-12,497 with better odds of staying under throughout today’s trade.
Bonds/Gold: Gold is strengthening today, but highly overbought and expensive on a relative basis. TLT is basically unchanged.
Oil: $31.87(8:17AM): Levels to watch are $31.50 -$31.00 support and $32.80 resistance. Money flows are moving from commodity laden currencies to the USD today, depicting further challenges for Oil.
Economic Calendar: The Futures and Oil were up nicely early in the morning until Bank of England Governor Carney’s comments on a cut to it’s economic growth caused them to retreat.
In the US the initial jobless claims were released at 8:30am. Slightly better than expected with 285k vs a forecast of 280k but are still at a low level. US productivity dropped 3% in Q4.
For a review of the rest of today’s economic data visit the economic calendar here.
Earnings: Stocks to watch include Clorox $CLX, Conoco Phillips $COP, Level 3 Comm. $LVLT, LinkedIn $LNDK, GoPro $GPRO reported a miss last night and is down pre-market.
For a complete list of today’s earnings visit the earnings page on our site.
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