U.S. Markets Closed For 4th Of July, Friday’s Session To Be Constrained
Richard Rhodes | Jul 03, 2013 12:38AM ET
STOCKS:
The world economy is weakening: the US payroll tax increase and “sequestration” are pressuring the US economy; China is being pressured by Japan, and has “dampened” their housing market. the Eurozone remains mired in “inaction.” For now, although we feel that risk is being mispriced at current levels given recent pressure upon world economic figures and the developing pressure upon corporate margins/ earnings — the consensus is that the world’s central banks will save the day.
STRATEGY: The S&P 500 remains above the 160-wma long-term support level at 1333, and the standard 200-dma support level at 1511. Perhaps more importantly, the distance above the 160-wma has faltered below the +23% “bubble-like” rally threshold. This is a warning sign to be sure; especially given 1600 was violated to the downside.
NOTE: The U.S. stock market will close at 1pm ET today, while the bond market closes at 2pm ET. The U.S. markets will remain closed tomorrow for the 4th of July holiday, while Friday’s session will be volume constrained. The Rhodes Report will return in full on Monday morning. Enjoy the holiday!
The Asian and European bourses both traded to the downside Wednesday morning. The Asian markets were not terribly weak, but they spent very little time in positive territory, with Japan closing down -0.6% and China dropping -0.3%. European markets are a different story - weakness is sharp and palatable.
The northern European markets are lower on average by -1.6%, while the southern markets of Portugal, Spain and Italy are lower by -5.5%, -1.8% and -2.7% respectively. All bond yields are sharply higher as well, so this is a rather sharp rout all-the-way around.
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