Thursday’s bullet points:
- The European Central Bank kept interest rates unchanged this morning.
- Twitter (TWTR) Inc. plunged 21% after reporting a wider-than-projected loss and slowing user growth.
- Jobless claims dropped for the first time in three weeks, falling 20,000 to 331,000.
- Expectations for tomorrow’s employment situation report are that businesses added 188,000 employees in January after an 87,000 increase in December.
Equities: The March E-mini SP 500(CME:ESH14) is up 16.25 points to 1760.25, bumping up against a key level at 1760 this morning. Key support is now at 1747 and could be a floor going forward. We were curious as to whether or not the market would take one more dive below 1735 before finding strong buying, but it looks as though the market may have found a short-term bottom at just below a key level of 1735. The monthly jobs report is tomorrow, and it could be an interesting day for stocks. We could actually retrace a lot of today’s gains if we see a smaller than expected number.
Bonds: The March U.S. 30-year bond(CBOT:US.C) contract is down nine ticks to 133’04. There appears solid resistance an135’00 as the market awaits tomorrow’s key report to determine where it might go. Overall, with 2014 being the year of the taper, we think all it takes is the stock market to resume its rally for bonds to start heading lower again. If the bonds break 130, we believe they may pick up downside momentum very quickly.
Currencies: The euro(CME:E6)has rallied this morning on the ECB not cutting rates. It is up 76 ticks to 136.11. Conversely, yen futures(CME:J6H14) are down 54 ticks to 98.19, as today looks to be a ‘risk-on’ day. The March Aussie(CME:A6H14) is up 63 ticks today, after taking a small breather yesterday from its monster rally the day before. We suspect the Aussie might be headed back above 90 soon. Overall, the dollar index is in a bearish position below its key moving average resistance at 81.30. Tomorrow’s jobs report may influence the FX markets significantly.
Commodities: March coffee futures(NYBOT:KCH14) continued its bull run yesterday and today is slowing down. It is down $.075 to $1.4235. Resistance should be felt at $1.52, our next upside target. April gold is down slightly to $1,256, again trading down on the ‘risk-on’ theme this morning. We still suspect gold could head higher over coming months, especially when the Chinese start trading again next week. Grains are strong today with March corn up $.015 to $4.4475. We are watching the JUL14/NOV14 soybean spread head higher to $1.73 today; $1.87 is key resistance.