Summary
The oversold conditions in the equity markets created a late day rally, which created a settlement on the S&P 500 at 1027 down 3 points on the day, after being down as much as 20 points hitting the 1010 level. The 50-day moving average in the S&P 500 is poised to cross below the 200-day moving average, which does not bode well for stocks.
Tomorrow's Events
GBP
8:30
UK PMI Construction
June
58.5
EMU
9:00
EMU PPI
May
.3%
.9%
EMU Employment Rate
10.1%
USD
12:30
US Non-farm Payrolls
-110K
431K
14:00
US Factory Orders
-.5%
1.2%
Trading Opportunities
EUR/USD
The Euro has begun to perform well as the expence of the dollar give the poor recent US data. The weekly initial jobless claim increase has ben followed by a weaker than expected ISM manufacturing report. The ISM fell to 56.2 from 59.7. The consensus had anticipated a smaller decline to 59. Weakness was especially pronounced in new orders, which fell to 58.5 from 65.7 Employment eased to 57.8 from 59.8. Prices paid fell dramatically to 57.0 from 77.5. On the other hand, construction spending was not as soft as expected. The 0.2% decline contrasts with expected for a 0.8% fall after the 2.3% jump in April, the biggest increase since 2000. Residential outlays fell 0.4% and non-residential construction slipped 0.1%. Public works rose 0.4% after 1.6% gain in April. The National Association of Realtors' index for pending sales of existing homes dropped to 77.6 from 110.9 in April, the industry group said Thursday. While expected, the drop is steeper than the 13% economists surveyed had forecast. Pending home sales in May are down 15.9% from May 2009. The EUR/USD broke through trend line support and is poised to test the 1.2690 level.
Gold
As the Euro moved higher, Gold prices where lambasted loosing $44 dollar per ounce in one of the worst days gold has seen in a while. Gold broke through the 20-day moving average, and the 50-day moving average, as well as short-term trend line support. The next support level for gold is 1180.