Market Overview
The last week the U.S. stock market has brought new highs this year (code SP500 got to 1073 points), but closer to the completion of the optimism of players pretty diminished, beginning the long-awaited correction of the September, which today received its more active development . Nevertheless, sales in the U.S. stock market is not yet beyond the normal profit-taking after reaching the next local maximum and therefore the thesis of the need to close all long positions and play short now seems, in our opinion, very doubtful. However, objective assessment of this idea will only be up to the closing of the week.
key event which began five days will be a regular meeting of the U.S. Federal Reserve, which will be announced on Wednesday (23/09). The focus of investors, of course, will focus on the final communique, as raising the discount rate in the face of continued difficult situation on the labor market and the extremely low level of loading capacity seems almost incredible. Accordingly, if the Fed suddenly shift the emphasis in risk assessment of economic growth and inflation in the direction of the latter and will report on the decommissioning program buy UST, and the gradual completion of other programs to support liquidity, market risk assets (stocks of developed countries, raw materials, the whole spectrum of instruments in emerging markets) is waiting for a very energetic sale of capital flight to quality (the U.S. dollar, UST). On the other hand, if investors will gain confidence that the Federal Reserve in the foreseeable future is not going to tighten the screws (lack of clear guidance on the completion of the incipient super-soft stance because of the inherent optimism, most people are likely to be interpreted that way) the game to increase in risky instruments can flare up with renewed vigor. The main driving force in this case are those investors who missed most of the growth in 2009 and is now being forced to invest in more volatile assets in order to catch up with market profitability.
In addition to meeting the next meeting of the Fed's major event this week and will be a G-20 summit in Pittsburgh, which also will be largely devoted to finding a compromise between the further promotion of economic growth and the need to normalization of public finances in many countries as a consequence of this very Incentive earlier. Accordingly, the predominance of rhetoric in favor of continuing the active anti-crisis policy will be very welcomed by the stock and commodities markets, while focusing attention on the problems of inflation and soaring fiscal deficits, by contrast, results in the withdrawal of investors from the risk in the quality. Also, do not forget and macroeconomic data, of whom this week is not so much. Nevertheless, going into Friday in August orders for durable goods and sales of homes in the primary market, in our estimation, may well bring positive surprises.
Thus, we do not expect changes in the uptrend in the U.S. stock market this week, although it may be reduced SP 500 index on Tuesday or Wednesday before 1030-135 points that we believe, rather, will a good opportunity to buy rather than a last chance to sell expensive. In that case, if the Fed meeting and the G-20 will not bring confidence to the market in the near completion of enabling monetary and fiscal policy (we believe it is in it), the positive expectations of corporate accountability for the III quarter will ensure continued growth of SP 500 index, which in the next 2-3 weeks will be able to reach the psychologically significant milestone of 1100 points.
Industry and corporate news
Recently oil market is consolidated in a fairly narrow range, the result of which could be a very drastic move. The answer to the question which side we might get this week.
The main objective for the bulls to gold market now is to preserve the quotation above $ 985-990 for the week. If they fail, the probability of further decline in prices for precious metals will increase.
Oil and gas
Last week, oil prices rose along with the stock market and weak dollar, but earlier this week the situation changed. Yet more plausible is the view that the price of oil fall back to level at $ 60 per barrel in the near future. This confirms the statement by Bank of America about the high price of options on oil-based decline in the value of oil stock, against the desire of traders to reduce risks to the probable collapse. Recently, crude oil is traded in a range of fairly hard, and maybe this week will be scheduled towards the exit from it. Strong level of support is about $ 65 a barrel. In the absence of new positive attitude with regard to the end of the recession and the weakening U.S. dollar's next target is already at $ 60 per barrel.
expected price of gas jumped to the upper boundary of the incident channel. Drawdown to $ 2.5 per thousand cubic meters. feet really looks unreasonable. But the potential for growth in the current price of the gas market a bit. Therefore more likely is a gradual decline to $ 3.4 per thousand cubic meters. feet to the close of the October contract. In the market, despite the continued application of the new testing lows, more and more the impression of the price support at $ 3 per thousand cubic meters. feet prior to the reduction of stocks. It should be borne in mind that the November contract is trading at almost a dollar more expensive. Therefore, in the new month you will see the current price is already above $ 4 per thousand cubic meters. feet.
Metal Market
Last week, the dynamics of quotations of gold was determined mainly by changes in the currency market. Together with the weakening of local minima to the U.S. dollar gold has reached a new 18-month high ($ 1024) on Thursday, after which, accompanied by decline in pair euro /dollar, followed by profit-taking, and the gold market. As a result, one week the price of yellow metal has not changed its value, closing on Friday at about $ 1,008 (0.2%).
indicator of investment demand (the volume of investments in the ETF) has not demonstrated a substantial increase in activity. Although the volume of investment in SPDR Gold Trust rose last week to 1,086 tons (9 tons), this change is not as significant as, for example, in the beginning of this year. During the wave of growth in investment demand in January-March increase investment an average of 120 tons per month. Without support from this segment demand the gold market will be largely dependent on changes in quotations of the American currency. If the trend towards the strengthening of the dollar will be developed in the short term we will see further decline in gold quotations. Such developments challenge for the bulls - to keep quotes above $ 985-990 for the week. If they fail, the probability of further decline in prices for precious metals will increase.
As an additional negative factor market players called confirmation IMF plans to sell 403 tons of gold from its reserves, dubbed by last Friday. However, we do not think that this could be the reason for the reduction of quotations of precious metals. Information on sales of the fund had been known for quite a long time and, in our opinion, has already been included in the quotes. Moreover, the IMF plans to sell the metal is directly interested in the purchase of central banks (primarily Chinese). In particular, according to Bloomberg, the representatives of the Chinese Central Bank today confirmed an interest in buying part of a designated volume. However, as discussed earlier, the implementation of the plans can be stretched in time by several years. Most likely, the cumulative sales from the reserves of the IMF and European Central Bank in the coming years will not exceed the limitations that are addressed in the CBGA II (500 tons per year). The agreement was signed five years ago and this month cease to have effect, so in the near future may be declared the new conditions.
By analogy with the gold, silver, on Thursday reached a local maximum ($ 17.67), but the ensuing profit-taking quotes lowered to $ 17 at the close on Friday (1.5%). If we see continued movement on correctional-related markets, silver has traditionally may show a more serious decline. The immediate goal may be noted the level of $ 16. The longer term will depend largely on whether they could remain bullish sentiment in the gold market.
continuing positive sentiment in the stock markets and a weakening U.S. dollar allowed the copper to the middle of the week again get close to the upper boundary side views ($ 6500). Subsequently, however, as the market of precious metals, there were observed the negative sentiment. As a result of active sales in the last two trading days after the copper quotes of the week were in the negative zone (-1.2%), closing at $ 6175.
While the price of copper is retained in the consolidation range, but if the risk appetite will continue to decline (as measured by the dynamics of the U.S. dollar), which will contribute to the development of rehabilitative sentiment in equity markets, it is possible that quotes fall below $ 6000 per ton.
MTS had the opportunity to direct connection to the networks of more than 350 operators worldwide
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Overview of the oil market for 21.09.09
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