Expect Some Shaking And Baking In The Markets
Nicholas Santiago | Dec 16, 2012 12:51AM ET
Thursday morning, the S&P 500 Index e-mini futures (ES-Z2) traded unchanged at $1427.25 per contract. The markets moving institutions seem to be on the fence before the opening bell as there is really very little conviction ahead of the opening bell. It seems that traders are still trying to digest Ben Bernanke's lastest economic policy statement.
Wednesday, Chairman Bernanke said that the central bank will buy $45 billion in U.S. Treasurys a month. This buying comes on top of the $40 billion worth of mortgage back securities that is part of the central bank's QE-3 program. At some point, the stock market might not move higher on all of this bond buying by the Federal Reserve and view it as a sign of weakness.
The big news out of Europe today is that in 2014 the ECB will become the sole regulatory power over European Union banks. It seems that the European Central Bank (ECB) is simply morphing into another Federal Reserve of Europe. On Thursday, the leading European markets all traded slightly lower on the session.
Wednesday night, most leading Asian stock indexes declined. The one bright spot in Asia was the Nikkei 225 Index (Japan) which finished higher by 1.69 percent. This tells us that the Japanese ADR's could be strong today if the U.S. markets are strong. On the flip side, if the U.S. markets are weak then traders should not expect much strength in the Japanese ADR's. Some leading Japanese equities that could be in play include Toyota Motor Corp (TM), Honda Motor Co Ltd (ADR) (HMC), Canon Inc (ADR) (CAJ), and the iShares MSCI Japan Index (ETF) (EWJ).
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