2016/03/02 TrendView VIDEO: Global View (early)
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TrendView VIDEO ANALYSIS & OUTLOOK: Wednesday, March 2, 2016 (early)
Global View: All Markets
What has changed to some degree is the overall soft global economic data remains while the US data has improved to a goodly degree ever since last Thursday morning’s strong US Durable Goods Orders. The same was true for Tuesday morning’s weak global Manufacturing PMI’s and other data into above-estimate US ISM Manufacturing and Construction spending. This morning also saw the ADP Employment number come in at almost 30,000 above estimate. That will have some analysts revising their Friday US Employment report Non-farm Payrolls number up from the initial 185,000 (the exact same estimate out there for the ADP number prior to this morning’s release.)
The point of all this is the degree to which the March S&P 500 future has shifted from the threat of a very negative bear extension three weeks ago into 1,805. It is now into a sustained rally that is almost in a ‘Goldilocks’ matrix: weak offshore data restrains the Fed right into the improved US economic indications. While this has been true since last week, the reason we note it now is the Federal Reserve Beige Book release at 13:00 CST today. It should be very interesting to see what the districts have to say.
With March S&P 500 future out above the interim 1,958-62 area on Tuesday morning it is important to note the next major resistances are 1,970-75 and 2,010-20. That said, there are interim levels at 1,986 (top of gap up to Wednesday January 6th Close) and the 1,995 bottom of another early January gap. We suspect that it can pull back to 1,962-58 or even somewhat lower in the near term. Yet with another relatively upbeat US Employment report expected Friday, it will likely be hard for it to remain down selloffs in front of it.
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Video Timeline: It begins with macro (i.e. fundamental influences) mention of some aspects noted above, and the degree to which international data remains weak even as some US data has improved quite a bit. That was especially so for still weak global Manufacturing PMI’s Tuesday even as US ISM Manufacturing and Construction Spending were stronger. The release of the Beige Book today will be interesting, even if the overall market decisions will not be clear until after Friday’s US Employment report.
It moves on to S&P 500 FUTURE short-term at 03:15 and intermediate term view at 05:45, with OTHER equities from 07:30, GOVVIES beginning at 12:00 (with the BUND FUTURE at 14:45 including mention of the expiration rollover implications into next Tuesday) and SHORT MONEY FORWARDS from 18:00. FOREIGN EXCHANGE covers the US DOLLAR INDEX at 21:15 EUROPE at 22:45 and ASIA at 26:45, followed by the CROSS RATES at 29:45 and a return to S&P 500 FUTURE short term view at 32:45. We suggest using the timeline cursor to access analysis most relevant for you.
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Authorized Gold and Platinum Subscribers click ‘Read more…’ (below) to access the balance of the opening discussion and TrendView Video Analysis and General Update. Silver and Sterling Subscribers click ‘Read more…’ (below) to access the balance of the opening discussion.
NOTE: Back on the evening of December 8th we posted our major Extended Perspective Commentary. That reviews a broad array of factors to consider Will 2016 be 2007 Redux? For many who believe that the US economy is really strengthening and can once again lead the rest of the world to more extensive recoveries, this may seem a bit odd.
Yet there are combined factors from many areas we have been focused on since the early part of last year which are less than constructive for the global economy and equity markets. We suggest a read if you have not done so already.
We pointed out in December that in the face of another likely Santa Claus Rally this was not an actionable view during the year-end equities rally. Yet it was (and remains) important background to utilize in 2016. This is much like our major late 2006 perspective on Smooth Rebalancing? …or… The Crash of ‘07? (even though the actual crash was deferred into 2008.)
▪ The reason we began with that market discussion instead of our typical background is the extensive macro-fundamental views we have already provided over the past several days. There is last Friday’s Commentary: Equities-Energy Emancipation? that noted the relative strength of equities versus energy since last Thursday morning. That is another very important indication that equities are no longer taking energy market weakness as such a major stressor, and has proved to be the case since then.
There is also Tuesday morning’s Brief Update: Abysmal News Still ‘Good’ that highlights the degree to which weak economic indications are retraining the Fed’s more hawkish instincts at present, as mentioned above. In addition to the recent comments from key Fed minions, it also notes the weakness in the Organization for Economic Cooperation and Development’s Quarterly G20 Trade Statistics. That is just the latest in a series of global economic performance warnings from them, and highlights how a weak 2015 is likely heading into more of the same (and possibly worse) in 2016.
Those are worth a look along with their Economic Outlook Interim Report that also is linked in yesterday’s post. It was the follow up a couple of weeks ago to the major (and also downbeat) semi-annual Economic Outlook Report last November. All the rest of the fundamental back ground remains the same as our previous analysis, especially in the Commentaries. The relevant concise technical trend views can also be found in the lower section of yesterday’s Brief Update (reserved for Gold and Platinum subscribers.)
The TrendView VIDEO ANALYSIS & OUTLOOK is accessible below.
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