S&P posts intraday record high on renewed optimisim

Tuesday, February 25, 2014

US stocks pushed higher yesterday as the S&P 500 pushed to a record intraday high at 1,858.71 before ending the day 0.62% higher at 1,847.61. Gains were led by the oil & gas subsector with financials and healthcare stock also rallying higher while the DJIA also managed to close up 0.62% on improving investor sentiment. After a constant barrage of weaker than expected economic data since the start of the year which prompted investors to retreat from risk assets it seems market participants are starting to dismiss further negative releases, choosing to blame the recent harsh weather conditions for the dip in momentum. With encouraging comments concerning continued stimulus cuts coming from Janet Yellen earlier this month US stock indices may experience further inflows which will encourage risk assets globally as demand appetite improves and VIX drops back towards 14.00.

Japanese equity indices were encouraged higher by the improving sentiment on Wall Street, as the Nikkei and TOPIX closed 1.44% and 1.2% higher respectively. Mainland Chinese stocks struggled to hold on to previous support levels with both the CSI 300 and Shanghai Composite closing lower for the fourth consecutive session, losing 2.56% and 2.04% respectively as concerns regarding the real estate sector prompted a significant selloff. Stocks were trimmed back by a significant drop in CNY which hit 6.1209 against the dollar, an almost 0.4% one day move which is of considerable significance for the highly controlled currency.

Arabica coffee futures continued to extend gains yesterday after pausing around 170 towards the end of last week as drought in Brazil supported second month coffee contracts above $1.75/lb for the first time since October 2012. After prices entered a brief period of consolidation around 140 earlier this month, momentum has been increasing steadily with the MACD and stochasics confirming the recent rally. However, buying appetite seems to be waning as volumes drop and both the MACD and stochastics turn lower in divergence hinting at a possible reversal in the coming sessions.

S&P 500 rallies to an intraday record high while VIX drops towards 14.00

SPX Index SP 500 Index SPVIX 2014 02 25 07 40 45

CNY rises above 6.1200 for the first time in 5 months

CNY Curncy China Renminbi Spot 2014 02 25 07 48 58

Second month cofffee futures test levels towards 180 as drought in Brazil threatens yield

KC2 Comdty Generic 2Nd KC Fut 2014 02 25 07 54 49

 

Events for today

0700

DE

Q4

GDP

1400

US

Dec

Home Prices

1500

US

Feb

Richmond Fed

1530

US

Feb

Dallas Fed

 Economic Market Calendar

Topics: Equities, Coffee, CNY
More from: Kash Kamal