[MM_Member_Data name=’firstName’],
U.S. markets caught a bid to start the week with the Dow tapping a new all-time intraday and closing higher for the 9th-straight session along with its 10th-straight win.
The Nasdaq was the strongest of the major indexes with the Russell 2000 trying to work its way off a bottoming level. The S&P 500 remained in a tight trading range but did manage a fresh all-time closing high.
Oil prices pulled back as representatives from OPEC and non-member nations gathered in Abu Dhabi but managed to hold the $49 level.
Global Economy –Asian markets began the week higher following better-than-expected economic news out of Taiwan and China. Australia’s S&P/ASX 200 paced the leaders after jumping 0.9%.
Japan’s Nikkei Stock Average gained 0.5% to reclaim the 20,000 level while China’s Shanghai index also added 0.5%. South Korea’s Kospi index climbed 0.1% and Hong Kong’s Hang Seng Index advanced 0.5%.
Taiwan’s exports increased 12.5% from a year earlier to $27.11 billion versus expectations for an 8.9% gain. Imports grew by 6.5% to $21.74 billion, rising faster than the forecast for a 4.5% increase.
Taiwan’s trade surplus for the month was $5.37 billion, compared to a forecast for $5 billion.
China’s foreign-exchange reserves rose $23.93 billion from the previous month to $3.081 trillion and the highest level in nine months. July’s increase topped the forecast for a $15 billion gain.
European markets were mixed after Europe’s largest economy missed industrial output numbers. Mining stocks helped stem the losses. Germany’s DAX 30 fell 0.3% while the Stoxx Europe 600 slipped 0.1%.
The Belgium20 index gave back 0.3%. Meanwhile, France’s CAC 40 index gained 0.1% and the FTSE 100 index added 0.3%.
Germany’s industrial output declined by 1.1% in June versus expectations for a slight gain of 0.1%. It was the index’s first monthly decline since last December.
U.S. Economy-The July Gallup US Consumer Spending Measure level came in at $109.
June Consumer Credit at $12.4 billion versus expectations of $16 billion for the month.
The Fed Labor Market Conditions Index has been discontinued as of August 3rd. A Fed note from late last week claimed that it no longer provided a good summary of changes in U.S. labor market conditions.
Market Sentiment-St. Louis Fed’s James Bullard believes current rates are about appropriate for the near term. Bullard said he doesn’t believe that the unemployment rate will be enough to push inflation toward the central bank’s 2% target and the level of short-term interest rates is fine where it is for now.
Minneapolis Fed’s Neel Kashkari said he hasn’t seen wages growing very quickly but that the economy is doing pretty well. He also mentioned the largest U.S. banks are still too big to fail.
The iShares 20+ Year Treasury Bond ETF (TLT) tested a low of $124.61 with support at $124.50 and the 50-day moving average holding. There is additional risk to $124-$123.50 on a close below the latter. Resistance remains at $125.50-$125.75.
Market Analysis-The iShares Russell 2000 ETF (IWM) recovered its 50-day moving average following the pullback from the $144 level to roughly $139 in seven trading sessions.
There is risk to $138.50-$138 and the 100-day moving average on a close back below $139-$138.75. Resistance is at $141-$141.50 with a move above $142 getting fresh all-time highs north of $144 in play.
The Industrials Select Sector Spider (XLI) has made a nice rebound off the 50-day moving average after trading higher for the fourth-straight session.
Current resistance is at $69.25-$69.50. A move above the latter and the 52-week high at $69.58 could lead to a double-top breakout into the low $70’s. A move back below $68.50-$68 would stall momentum and be a slightly bearish development.
All the best,
Roger Scott