RSS
Home
Market week ahead: Shanghai Composite and jobs report on tap
Print
Email
RSS
Subscribe
.jpg)
The month of August ends with a second negative day in a row for the Dow Industrials after 8 consecutive up days, this week could be volatile with important economic data releases, namely the jobs report on Friday, despite the upcoming holiday on Monday and many traders still being on vacation. Doug Kass made a much hyped prediction last week that 9600 would be the peak in the Dow for the remainder of the year, and since then stocks are showing signs of exhaustion. The short term trend is still up, or "buy the dips", unless Dow 9400 is taken out. China's Shanghai Composite has been the market to watch lately, since peaking some weeks ago, another reason that some are expecting the U.S. market to follow. Monday saw Shanghai's Composite drop nearly 7%, officially entering a bear market, but so far the U.S. market is not raging along with the Asia contagion.
Economic News. Economic data reporting this week that will likely move the markets include ISM manufacturing and pending home sales on Tuesday, European Central Bank rate decision and ISM non-manufacturing on Thursday, and the monthly jobs report on Friday.
Talking Heads. No heads are due to speak this week.
Technicals
Dow. The Dow Jones Industrials index gained 35 points last week in sideways, low volatility action. We may be seeing the beginnings of a medium term correction that could reach 15%-20% lower, according to the Wall Street Journal. China's Shanghai Composite has peaked, bringing oil prices down with it. Only much better than expected econ data this week could keep the bulls in charge, otherwise the overdue correction looks to be gearing up.
US Dollar. The dollar index closed the week sitting at 78.00 again, there is no break out with this low summer volatility. But the British pound continues to lose ground against all majors including the dollar, reaching $1.6200 last week vs. the dollar. Also hot is Japanese yen strength, pushing to $92.70 vs the dollar. The euro remains well supported at $1.4300 vs. the dollar, for now. In the medium to long term, dollar weakness is still expected.
Oil. The price of light crude has showed signs of weakness below the $75 level, closing August just below $70/barrel. Monday crude fell nearly $3 following the Shanghai index. But with the dollar's expected weakening to continue there is not much hope in a sustained oil prices fall. Dollar strength would need to come back in a big way in order for crude to drop much further, and that is very unlikely, unless serious risk aversion returns.
| Market week ahead: Bulls are turning bearish |
| What economic data moves markets the most? |
| US dollar skids, expect it to continue |
Related Articles:
Add a Comment
.jpg)
