The Commerce Department report today showed bookings for goods meant to last at least three years decreased 7.3%, the most since August 2012. Highly watched electric car company TSLA is up 4.5% to $169. A key upcoming data release occurs this Thursday with the preliminary GDP number for the U.S.
Equities: The SEP13 E-mini S&P 500 (CME:ESU13) is up 3.5 points today to 1665. We believe this area could serve as a short term resistance, however one of our indicators tells us the market might not quite be exhausted on the upside just yet. We have a key resistance level at 1671, and if the market does get here, we would not be surprised at all to see a quick reversal down from this resistance area. The markets are in an interesting position at this point because we are starting to see some softer economic data come out, which on one hand could be bullish for the stock market as the Fed might NOT taper stimulus in September, but on the other hand is not really good for the market at all because of the pure fundamentals of a slowing economy. We believe that the recent high level of about 1705 will stay as the high throughout September.
Bonds: The SEP13 U.S. 30-year bond market (CBOT:ZBU13) is higher by 12 ticks to 132’06. The short term technicals on this market look strong to us, and we have our next target higher at 132’15, and the next key resistance level at 132’24. The bonds are likely rallying for a few reasons: 1) Concern over escalating tensions regarding Syria, and 2) A weak economic report this morning. We have 131’15 as a key support level. We would not be surprised to see the bonds rally more, potentially higher than the level of 132’24.
Currencies: The currencies are actually very quiet today. The SEP13 Euro is down 7 ticks, the SEP13 Yen is up 12 ticks, and the SEP13 USD is up 4.5 ticks. There were no major international data releases last night to drive big moves in these markets. The Euro seems like it could move higher to us, as it seems to be consolidating right below 1.34. Our next target higher for the Euro is 135.25. This could especially occur if the data coming from the US continues to be a bit weaker than the predictions, thus potentially shifting thoughts about a Fed tapering in September.
Commodities: The story in the commodities markets are the grains, and specifically the soybeans market. There is a major weather concern for soybean crops, and thus the NOV13 soybean futures (CBOT:SX13) are almost “limit-up” at this time, trading up $.60 to $13.88. The contract high stands at around $14.10, and we would not be surprised to see this contract make a run towards that level. We have seen this market have sharp sell-offs each of the past two years starting in September, so it will be very interesting to see if this rally can continue after labor day. If rain does not hit the midwest soon, it very well could. DEC13 gold futures (COMEX:GCZ13) are at about unchanged levels from Friday’s close, trading at $1,396. We don’t think a huge rally in gold will occur, but wouldn’t be surprised to see gold break about $1,400 and try for $1,420.