global index jitters plus non-farm payroll data
DESCRIPTION
Invast's Peter Esho revealed how large key index constituents reported their earnings, with pressure on high growth US names and all global indices. He also noted the non-farm payroll numbers that serves as key focus for currency traders.TRANSCRIPT
Sell in May and Go Away,
Global Index Jitters Plus Non-
Farm Payroll Data
with Peter Esho April 27, 2014
This week sees a ramp up in US corporate reporting season. What we
saw last week is really key names on the indices starting to come out and
put out their earnings, and articulate their case for very hefty valuations
and also the future for earnings.
On Friday, we actually saw some disappointment in the market particularly
around the consumer discretionary names. They really did weigh on the
markets and that's what many traders will be looking forward to this week,
particularly Asian traders very early on Monday.
This week is very important for US corporate earnings because we see
very large key index constituents coming out and reporting their earnings.
The pressure is absolutely on for these key US names and all global
indices will be watching for leads from the DOW and the S&P 500 very,
very closely.
We have so far seen a lot more volatility on the NASDAQ which is skewed
towards high-growth names, but the DOW and S&P have held up
relatively well, and the pressure will definitely be on this week. We remain
cautious. We still think that the DOW, in particular, can continue to fall. It’s
a stance that we've held on to very, very strongly over the past few weeks
on. We think that the market should not be surprised if we see the DOW
come back in the order of about 5 to 10 percent in the month of May.
What will also be driving the markets this week is the non-farm payroll
number. It's the first Firday of the month and that means US jobs will be
out. The market is looking for a jobs number at about 200,000, and that
will really be the key focus for currency traders going into the week.
Last week, we saw the ECB coming out. Draghi again talking the talk, but
not necessarily walking the walk, and that's why we've seen the Euro
stabilizing at about 1.38 - 1.3850. We think that the Euro's gains have
capped out around here and we maintain our view, but eventually Draghi
will have to act. We might see some action sometime in mid May. There is
an ECB meeting around the exchange and trade situation on the 5th of
May so we look for a little bit of guidance there, but Draghi has continued
to leave the door open without any action, so it will be very interesting to
see how the Euro trades this week.
It’s also an interesting week for the commodities. We have seen the gold
price tick up about 1300 an ounce. We've seen copper price bounce very
convincingly above three dollars a pound and traders will be watching that
very closely.
Just on gold, remember to download our gold special report if you haven't
already, and that will really put you into a very good position for our live
market analysis on the 7th of May which will be focusing on gold. Plenty of
opportunities. We hope you have a very successful week.