IBM slid 4.6% as revenue declined for a seventh consecutive quarter. Motorola lost 2.9%. Emerging-market stocks rose for the first time in five days. The Bank of Canada did not alter interest rates this morning at their meeting.
Equities: The MAR14 E-mini S&P 500 (CME:ESH14) is down 1.50 points to 1837. This market has not shown a real significant down-move yet, but we do believe that a move toward 1800 is coming. Key companies such as IBM and Motorola are down today, and we believe with the potential taper announcement coming up next week, we could start to see more and more impetus for the stocks to sell off. We believe that housing numbers will play a highly pivotal role in 2014′s performance of the S&P 500. Thus, we believe the monthly importance of the housing numbers will constantly increase.
Bonds: The MAR14 U.S. 30-year bonds (CBOT:ZBH14) are down 3 ticks to 131’10, on another quiet day before next week’s FOMC meeting. We reiterate that we believe that the overall sell-off of bonds is not necessarily over, and we would not be surprised to see a retest of 128 before the summer. The bonds are interesting, because on one hand you could say they should sell off this year because of the tapering, but on the other hand one could say they might rally because a tapering program might inflict harm on the economy, thus causing stocks to waffle sideways or head lower, thus perhaps causing a bond rally.
Currencies: The MAR14 Canadian dollar (CME:D6H14) has slid to new recent lows today, down 50 ticks to 90.44. The Bank of Canada kept interest rates unchanged at 1%, but discussed an enhanced view of the U.S. economy, as well as providing verbiage indicating they are starting to get concerned over deflation. This may imply they are very ready to lower rates soon. The Canadian broke our key target of 90.55. The MAR14 Pound (CME:B6H14) is doing the opposite of the Canadian; after an impressive jobs report out of the U.K., the Pound is up 98 ticks to 165.70. The Pound seems to be in a strong uptrend. The MAR14 Yen (CME:J6H14) is down 14 ticks, while the MAR14 USD is down 4 ticks to 81.19. The MAR14 Aussie (CME:A6H14) might be in bullish mode after the big rally yesterday.
Commodities: MAR14 sugar (NYBOT:SBH14) continues to show weakness, today down 14 ticks to $.1508. It has not broken 15 cents yet this year, but is now obviously extremely close. MAR14 WTI crude oil (NYMEX:CLH14) is up $1.23 today to $96.20, rallying hard off the $94 level. We have key resistance at the $97.30 level. It may very well approach that level soon. We believe it will come down from there. MAR14 soybeans (CBOT:SH14) are down slightly today after a significant sell-off yesterday. We believe this contract has further downside potential. FEB14 gold (COMEX:GCG14) is down $3 to $1,238, below the key $1,250 level. It is resting at a key support level no.