Quote of the Day
The best way out is always through.
With Europe and most of Asia closed on Monday all of the trading action was primarily centered in the US market. The big event of the day was the much better than expected ISM manufacturing data released mid-morning. The data surprised all especially after the lackluster PMI data out of the US the other day. The risk asset markets moved into a strong rally once the data was released But from mid-day on asset values spent the rest of the session slowly giving back a major portion of the gains from earlier in the day.
At one point in time the rally sent US equity values to year to date highs while propping up just about every risk asset market that was currently open for trading. The market was also getting a boost from the start of a new month that normally results in fund money that was sitting on the sidelines getting placed into the market. The Asian and European markets held onto some of the US gains but equity futures in the US are now pointing toward a lower open on Wall Street. The EMI Global Equity Index gained 0.4% overnight widening the year to data gain to 9.4% (see following table). The US market will now be moving away from manufacturing and into the monthly employment world as the macroeconomic data to be released starting today will give traders and investors another look at the state of the lackluster employment situation in the US.
Oil prices have also been drifting lower overnight after the API data showed a build in crude oil stocks but a larger than expected draw in both gasoline and distillate fuel. The oil market reacted very strongly to the better than expected US manufacturing data. In addition the complex breached an intermediate technical resistance area for crude oil carrying values even higher on the day. That said most of the action was in the WTI market with the Brent/WTI spread continuing to narrow throughout Monday's session and into this morning even after a large build in both Cushing and PADD 2 reported in the API report last night.