[MM_Member_Data name=’firstName’],

U.S. markets continue to trade in a tight range and ahead of the financial companies reporting later in the week. Today’s action was mostly bullish as the Dow, S&P 500 and the Nasdaq reached fresh intraday record highs while closing in positive territory.
The Russell 2000 also finished higher but failed its lifetime high by 3 points. Sector leaders included Utilities and Consumer Staples, both rising 1% and 0.9%, respectively. Consumer Discretionary was the only sector laggard, falling 0.1%.
 
 
Global Economy – European markets were mixed as tensions between Catalonia and Madrid continued. Catalan President Carles Puigdemont said he would accept the mandate of referendum on Catalonia’s secession from Spain but would suspend the prospect of declaring independence in favor of dialogue with the central government in Madrid. UK’s FTSE 100 gained 0.4% while the Belgium20 added a point, or 0.02%. Germany’s DAX 30 slipped 0.2% and France’s CAC 40 dipped 2 points, or 0.04%. The Stoxx Europe 600 was down less than a point, or 0.01%.
The German August trade balance widened to a surplus of 20.0 billion euros, larger than expectations of 19.5 billion euros. August exports rose 3.1% month-over-month, stronger than expectations for a gain of 1.1%. August imports rose 1.2% month-over-month, stronger than expectations for a rise of +0.5%.
ECB Executive Board member Lautenschlaeger said the ECB should exit QE as soon as possible because financial stability risks increase and the benefits decrease.
Asian markets traded mostly to the upside with Japan’s market reopening following Monday’s holiday. South Korea’s Kospi surged 1.6% and China’s Shanghai index rallied 0.8%. Hong Kong’s Hang Seng Index and Japan’s Nikkei jumped 0.6% while Australia’s S&P/ASX 200 slid 0.02%.
Japan September eco watchers survey outlook expectations fell 0.1 to 51.0, stronger than expectations of a decline of 0.6 to 50.5. The Sep eco watchers survey current conditions rose 1.6 to 51.3, stronger than expectations for a gain of 0.5 to 50.1 and the highest in 9-months.
There were no major economic reports today.
 
Market Sentiment – Fed funds futures are recovery slightly from the big pullback late last week. Implied rates are now suggesting about a 77% risk for a tightening in December and projects about two more moves in 2018. The futures market is likely to hold relatively steady near term, awaiting CPI and retail sales on Friday, as well as future rhetoric on the Fed chair pick.
The iShares 20+ Year Treasury Bond ETF (TLT) tested a high of $124.87 to clear upper resistance at $124.50-$124.75 but levels that failed to hold into the close. Support is trying to move up to $124-$123.50 with RSI back in an uptrend.
Market Analysis- The Spider S&P 500 ETF (SPY) traded to a fresh all-time high of $255.05 despite being in a mini four-session trading range. Fresh resistance is at $255-$255.50 with a move above the latter getting $256.50-$257.50 in play.
Rising support is at $254-$253.50 with a move below $252 signaling a short-term top. RSI is back in a slight uptrend above the 70 level with recent resistance at 80 and February highs.
The Spider Gold Shares (GLD) is trying to rebound following last Friday’s backtest to the $120 level with early August support holding. Monday’s rebound above $122 was followed by today’s push to $122.97 with fresh resistance at $122.50-$123 and the 50-day moving average holding.
Continued closes above the latter would be a bullish development. Support is at $122-$121.50 with a move back below $120 signaling a false breakout. RSI held support just below the 40 level and is back in a strong uptrend.
All the best,
Roger Scott