U.S. equity markets managed to close higher after a tentative trading session. At times traders seemed nervous committing to the long side ahead of the start of earnings season. At the close the December E-mini S&P 500 finished better than 50% of its current 1075.75 to 1015.00 range. After the close, Alcoa reported better than expected earnings. This news could set the tone for a higher market tonight. Investors will be looking for improved earnings along with an increase in revenues.
December Treasury Bonds and Notes surprisingly closed better on Wednesday. Technical indicators showed that the T-Bonds were poised to test 121-00 before seeing any significant interest however buyers stepped in yesterday to help drive prices higher today. T-Bonds have retraced 50% of their break from Friday so it is still possible they will be forming a secondary lower top for a drive to lower prices. With Treasuries, equities and gold showing gains today, one has to wonder which one doesn’t belong.
The U.S. Dollar was up most of the day before settling mixed. By the close of the day, the British Pound, New Zealand Dollar and Japanese Yen all managed to post modest gains versus the Dollar. Weak crude oil prices kept downside pressure on the December Canadian Dollar. Tomorrow the Bank of England and the European Central Bank meet. Both are expected to announce that interest rates will remain at historically low levels. Traders are more interested in the comments about their respective stimulus plans. The BoE just recently increased funding of its plan while the ECB’s Trichet is on record calling for its plan to remain intact until the economy stabilizes.
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