Equity Markets Finish Higher in Choppy Trade.
James Hyerczyk from ForexHound.com at 11/02/09
U.S. stock index futures finished higher today following a choppy, two-sided trading session. This morning’s better than expected U.S. ISM Factory Report helped launch a strong rally, but buyers could not push the market higher. After trading rangebound for a few hours, buyers finally gave in and the market dropped sharply as bids were pulled. The market actually traded lower for the day at one point but quickly turned around before the close.
Thin market conditions had a lot to do with the volatile trade. Big traders were noticeably absent ahead of the Fed’s FOMC meeting on November 4th. In addition, Friday’s U.S. Non-Farm Payrolls Report may be keeping traders on the sidelines. Look for the choppiness to continue tomorrow as day-traders control the action.
U.S. Treasury futures were under pressure throughout the day as the friendly U.S. ISM Report helped boost yields. Expect more sideways to lower trader until Wednesday’s Fed FOMC meeting.
The U.S. Dollar finished mixed today. It traded down against higher yielding currencies but up against the Japanese Yen and British Pound. Tomorrow’s Reserve Bank of Australia meeting could move all markets. The Fed meeting on Wednesday will also be closely watched. On November 5th the Bank of England and the European Central Bank will issue their statements. Today was the first time in a few days that traders were demand higher risk. Last week the Dollar strengthened. Traders are now waiting to see if an uptrend is developing.
December Gold posted a strong gain today. Some of it was triggered by the weaker Dollar. The rest of the support was most likely fueled by investment inflows and oversold conditions. Traders have held this market up nicely since last week’s sell-off failed to take out any major support. Some of the support is coming from traders looking for inflation to pop up soon.
December Crude Oil posted a modest gain today. The release of the better than expected U.S. ISM Factory Report helped crude oil rally today. Traders feel that economic expansion is coming and that means greater demand for oil. Short-term, however, the supply and demand picture remains bleak.
