Good morning. That was a cheeky little stop killing spike up to 6298, just after the short had taken, to trigger the stops before a 100 point drop. Definitely annoying when that happens. Overnight weakness dropped right back to the 200ema at 6150ish but has seen a little bounce since. The markets are still pretty jittery and will be as we approach the Fed rate decision next Thursday. American stocks failed to add to their second-biggest advance of the year, as early gains following a rally in Asia faded amid jobs data that bolstered the case for higher U.S. interest rates. Losses worsened in late Wednesday trading as Apple Inc. slumped after unveiling new products.
US & Asia Overnight from Bloomberg
Asian stocks dropped, after the regional benchmark index surged by the most in six years on Wednesday, as data on American job openings bolstered the case for higher U.S. interest rates.
Inpex Corp., Japan’s biggest energy explorer, slid 5.4 percent after crude oil futures declined. Murata Manufacturing Co. fell 3 percent in Tokyo, pacing losses among Apple Inc. suppliers after Apple unveiled new products. Mirae Asset Securities Co. plunged 18 percent in Seoul, heading for a record drop, following a report the South Korean brokerage is considering a bid for rival Daewoo Securities Co. as it prepares to sell 1.2 trillion won ($1 billion) of new shares.
The MSCI Asia Pacific Index sank 1.6 percent to 127.37 as of 10:32 a.m. in Hong Kong after jumping 4.2 percent on Wednesday. Japan’s Topix index lost 2.1 percent as the yen halted three days of declines. The Standard & Poor’s 500 Index slid 1.4 percent on Wednesday as investors weighed the implications of the employment data for next week’s Federal Reserve meeting.
“Markets will remain volatile until the Fed meeting next week,” Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd., which oversees about $118 billion said by phone. “Investors are again focusing on the potential U.S. interest-rate increase and how it would impact emerging markets.”
U.S. Jobs
Job openings in the U.S. surged to a record in July, data released on Wednesday showed. Fed officials have to consider whether market turmoil that began last month will offset the labor-market improvement and interrupt plans to raise the benchmark interest rate for the first time since 2006. Futures traders saw a 28 percent chance that the Fed would increase rates in September, down from 32 percent a week earlier, data compiled by Bloomberg show.
China’s Shanghai Composite Index dropped 0.5 percent, paring earlier losses of as much as 2 percent. The nation’s consumer prices rose 2 percent in August from a year earlier as a pork supply crunch drove up the cost of the staple. That’s the fastest pace in a year and compared with the 1.8 percent median estimate in a Bloomberg survey of economists. The Hang Seng China Enterprises Index of mainland stocks traded in Hong Kong fell 2 percent, while the city’s benchmark Hang Seng Index slipped 2.2 percent.
Regional Gauges
Japan’s Nikkei 225 Stock Average plunged 2.9 percent after surging by most since October 2008 on Wednesday. Taiwan’s Taiex index slid 0.3 percent and Singapore’s Straits Times Index dropped 1.6 percent. Australia’s S&P/ASX 200 Index decreased 2.2 percent. New Zealand’s NZX 50 Index was little changed after the central bank cut interest rates and said the currency should fall further. South Korea’s Kospi Index retreated 0.1 percent.
E-mini futures on the S&P 500 lost less than 0.1 percent after the underlying equity gauge failed to add to the second-biggest surge of 2015. Apple, the largest-weighted stock in the S&P 500, slipped 1.9 percent. [Bloomberg]
FTSE Outlook
The ball is in the bulls court today and they have to build on the 6150 overnight support today otherwise we are heading down to 5700. That is probably coming but maybe not quite yet (maybe October?). We have the daily pivot at 6194 initially so there is resistance there for this overnight bounce, with 6245 above that. If the bulls were able to break that then 6297 is the top of the 10 day Raff and yesterday’s high so another key level. Support wise, there is 6165ish initially on the 10min chart, which I think might see some reaction, as there are a few supports in that area across the board. Its a case of deciding if you feel bearish or bullish…. The 2 hour chart has turned bearish for the moment, so I am expecting an initial dip from this 6194 level to start the day.