– The Dow and S&P 500 both hit two historic levels, trading above 16,000 and 1800 respectively for the first time. The Nasdaq fell a little short of the 4000 level which would have given us a trifecta, but fell just shy of this level, printing 3995 overnight. As it stands at the close of trade the Dow is back at 15,976 for a gain of 0.09%. The Nasdaq is down 0.93% at 3949 and the S&P 500 is down 0.534 to 1792.
– The taper watch continued and the slightly weaker-than-expected US home builders index (54 v 55 expected) fitted the narrative that there will be no taper any time soon. However Bill Dudley, the head of the New York Fed and permanent voter on the FOMC, said overnight that: “I have to admit that I am getting more hopeful… Not only do we have some better data in hand, but also the fiscal drag, which has been holding the economy back, is likely to abate considerably over the next few years at the same time that the fundamental underpinnings of the economy are improving.”
– In Europe, the better tone out of Shanghai after the reforms were announced Friday buoyed markets and the FTSE was up 0.44%, the DAX rose 0.61% while the CAC rose 0.67%. In Milan, stocks blew through the roof, rising 2.24% and above the 19,000 level for the first time ever on a bank-driven rally. In Spain, stocks rose 0.90%.
– Closer to home on the Sydney Futures exchange, the rally offshore continues to pass us by with the SPI 200 down 16 points at 5381 bid. The local market has been crashing into a wall of resistance above 5400 in recent weeks. On the bond boards the 3’s rallied 1 point and the 10’s rallied 2 points, while in the US, the 10’s fell 3 points to 2.68%.
– On Forex markets, the slight moves on the day belies the little bit of volatility that occurred over the past 24 hours. Euro is up 0.1% to 1.3513 and GBP down 0.8% to 1.6107. USDJPY is still struggling to break up through resistance and kick on, finding itself this morning at 100.09. The Aussie dollar on the other hand has benefited from the better China tone and is up 0.23% at 0.9389 but down from the high of 0.9418.
– On Commodities, Copper is an interesting one and it is down 2 cents to $3.16 lb. Technically, Copper looks weak and it’s an important bellwether for the global economy, so it is worth keeping an eye on. Technical target remains $3.02. Nymex crude is also down falling 0.95% to $92.95 Bbl. Gold fell again down 1.17% to $1272 oz. Corn tanked 2.25% but Wheat fell just 0.35% and Soybeans rose 0.66%.
Today the RBA Minutes will be released at 11.30am, which is partly why the Aussie is still higher. Later in the day we get Chinese FDI, Japanese Leading Indicators, Industrial data from Italy and then the important German ZEW economic survey in Germany and the related one for the EU. Tonight in the US we get the Redbook index, and Treasury Secretary Lew speaks as well as Chicago Fed President Charles Evans.