Rally Losing Steam

Published by Filipe R. Costa on Fri, 10/08/2012 - 10:48
steam

Daily Market Commentary for August 10: After a few days of uptrend, markets start losing steam after the Chinese point to some cooling. Over the last two days, data coming from China has not been the best and investors are worried.

The Dow ended negative on concerns over the latest rally being unsupported with real data. It is true the latest economic data coming from the US has been decent and earnings continue to beat estimates, but investors are anxious about Europe and China. No one can understand what is the next step to be taken by the ECB since there is a lot of noise behind it, with some arguing in favour of intervention while others just seem to point to a Greek exit and to whatever is needed to keep the Euro tight. Although the wording coming from Mario Draghi was strong when talking about the Euro, it seems investors don’t want to wait forever and are selling the currency. The pair EUR/USD hit the1.24 level but is now around 1.2260 at the time of writing and showing weakness.

In China everyone was surprised with trade data. Exports grew just one percent, the weakest reading since January and below the forecasted 8.6% growth. Imports rose 4.7% also below expectations. Intervention is more likely now and many are expecting it to be rolled out over this weekend. If nothing is done it may be a disappointment and press commodity currencies further down.

Name Last price Close Price % 5-Day % YTD %
IBEX 35 09/08/2012 7110.2 -0.56 11.56 -17
FTSE MIB 09/08/2012 14654 -0.08 10.33 -2.89
Crude oil (Light Sweet) Composite 09/08/2012 93.55 0.3 6.99 -5.51
CAC 40 09/08/2012 3456.71 0.54 6.94 9.4
DAX (Xetra) 09/08/2012 6964.99 -0.02 5.43 18.08
Nikkei 225 09/08/2012 8978.5 1.1 3.76 6.19
Nasdaq 100 Index 09/08/2012 2719.61 0.21 3.58 19.39
FTSE 100 09/08/2012 5851.51 0.1 3.34 5.01
S&P 500 09/08/2012 1402.8 0.04 2.77 11.55
Dow Jones Industrial Average 09/08/2012 13165.2 -0.08 2.22 7.76
Gold (LBM) $ 09/08/2012 1615 0.07 1.48 3.07
EUR/USD - US$ per Euro 09/08/2012 1.2291 -0.65 0.93 -5.12
GBP/USD - US $ per £ 09/08/2012 1.5628 -0.24 0.75 0.63
EUR/GBP - £ per Euro 09/08/2012 0.7862 -0.44 0.17 -5.64