The S&P 500 (CME:SPU14) rallied 1% on July 18, rebounding from its biggest loss since April 10, but today is down 0.5%. A total of 10 S&P 500 companies are reporting earnings today. The index has not had a drop of more than 10 percent since 2011. The U.S. and Europe threatened tougher sanctions on Russia over its suspected role in the shooting down of flight MH17 in Ukrainian airspace.
Earnings at Amazon.com Inc and Visa Inc. missed estimates, as they are likely culprits causing some weakness in the SP500 today. Amazon plunged 11 percent after trailing analysts’ predictions for the second successive quarter. Russia’s central bank unexpectedly increased borrowing costs for a third time this year. Eleven companies on the S&P 500 report earnings today. Pandora lost 13 percent for the steepest drop in three months.
Commodities: Natural gas (NYMEX:NGU14) rallied yesterday upon release of the weekly storage data, but came back down today. It is down around 2% to $3.775. WTI crude oil (NYMEX:CLU14) is down around $1 to $101.09, after failing to hold above $103. Since mid-June, the price action has been bearish, and we would not be surprised to see crude head below $100. Grains continue their bearish to neutral trading, with soybeans down to $10.73. Gold is up $3 to $1293. Gold has been your classic whipsaw market as of late, with no real clear directional trend.
Equities: The E-mini S&P 500 (CME:ESU14) is down 5.5 points to 1975.25, after failing to hold above 1985 yesterday. It will be interesting to see if this market can trade and hold below 1960, which is our key level. The next key level is the 1945 area. It looks like the Amazon, Visa, and Pandora’s results are detracting from recent bullish enthusiasm today. Technically speaking, we look at the highs in June as the major pivot point for this market. These highs are at the 1946 level.
Bonds: U.S. bonds are in rally mode today, up 20 ticks to 138’16. We would not be surprised to see the bonds try to get above 139, especially if the stock market continues to sell off. Our next major level above here on the chart is a Fibonacci level at 141’15. With major companies reporting disappointing earnings recently, as well as the conflict in Gaza occuring, we could continue to see a safe-haven bid for bonds.
Currencies: The Euro continues its slide, trading down 27 ticks today to 134.28, getting closer to our major target of 133.76. We believe the Euro will hit 133.76 very soon. It is a major Fibonacci retracement from a multi-month rally. The USD is up 11 ticks to 81.07 today, while the Canadian is down 25 ticks to 92.68. Our next major chart support level for the Canadian is at the 92.40 level. The Swiss Franc is down 22 ticks to 110.60. Our next Fibonacci target comes in at 109.86. We believe the Franc is headed there.