Ford Motor Co. (NYSE:F) and General Motors Co. reported declines in January auto sales that were greater than analysts had estimated. Factory activity in the U.S. expanded in January at the weakest pace in eight months as orders slumped. The Institute for Supply Management’s factory index decreased to 51.3 from 56.5 the prior month. In China, a manufacturing gauge showed output slowed in January to its lowest level in six months.
Equities: The MAR14 E-mini S&P 500 (CME:ESH14) is down 14 points to 1762.50 after multiple reports this morning (ISM, Ford and GM sales reports, China PMI) have caused more short term bearishness in the market. 1777 is our key resistance level at this point. The market, now that the tapering sequence has begun, seems to really rely much more on the incoming economic data to suggest its next move, and today the data was not so exceptional. We believe if the market may break 1750 shortly. We do not detect any key bullish signs yet at this point from a technical standpoint.
Bonds: The MAR14 U.S. 30-year (CBOT:ZBH14) bonds are up 21 ticks to 134’08, with today’s data seeming to further support bond bullishness. The bonds have had a great start to this year, showing a steady uptrend ever since failing to stay below 128. Even with the taper, we don’t have a key reason to suggest the bonds are headed for a big down move from here, especially with the underwhelming U.S. and Chinese economic data this morning. Our key support level is 133’23.
Currencies: The MAR14 U.S. Dollar Index (NYBOT:DXH14) is reversing some recent bullishness on the lower than expected ISM report, trading down 18 ticks to 81.23. The MAR14 Euro (CME:E6H14) on the other hand, is rallying slightly, up 18 ticks to 135.02. We still believe the Euro could be headed lower over the next couple of months. The next big event for the Euro should occur this week, when the ECB meets and announces their next interest rate move and outlook. We are seeing buying in the MAR14 Yen (CME:J6H14), MAR14 Aussie (CME:A6H14), and MAR14 Canadian dollar (CME:D6H14). The Yen is up 86 ticks to 98.61, while the Canadian is up 60 ticks to 90.38, after showing a key technical bullish reversal on Friday, with a bullish engulfing candlestick pattern.
Commodities: APR14 gold (COMEX:GCJ14) shot up this morning on weak economic data, trading as high as $1,264.70, but is now down to $1,259. Our technical levels on gold are clear – If gold can stay above $1,262, we believe it is headed to first $1,284 then $1,292. $1,262 is our key barrier for gold at this point. MAR14 WTI crude oil (NYMEX:CLH14) is back below our key line in the sand of $97.40, trading down $.70 to $96.80, perhaps more bearish today on the weak U.S. and China data. MAR14 coffee (NYBOT:KCH14) is on fire today, roasting the bears in the process. Unfavorable growing weather in Brazil seems to be the reason for today’s huge $.08 move, with MAR14 coffee up to $1.3355. MAR14 natural gas (NYMEX:NGH14) continues its decline from last week’s huge move higher.