US markets rally on corporate earnings

Wednesday, April 30, 2014

US markets extended gains yesterday, as investor optimism flowed over from the European session and on better than expected corporate earnings. After a strong session for European stock indices yesterday, both the S&P 500 and DJIA rallied higher on stronger Q1 corporate results, sending investors back into growth stocks. Market activity was cautious however, as investors hold out for details from the FOMC meeting due later today.

The encouraging economic outlook saw spot gold prices hold below $1,300/oz yesterday in a session which saw intraday price moves test resistance around the 200 day MA before pulling back to close just above $1,295/oz. Mixed US data in recent weeks have prevented gold prices from breaking out of the current range, with resistance towards $1,305 in place since the middle of April. With market participants expecting the Fed to trim asset purchases by a further $10bn this month, downward pressure on gold prices could grow in the coming sessions. Support may be eroded further on absentee Asian buyers due to holidays in Japan and China in the coming days which could see prices pull back towards the 100 day MA, currently around $1,282/oz.

Asian market performance was mixed yesterday after the BOJ decided to hold off from further stimulus. Both the Nikkei and TOPIX managed to close marginally higher after economic data showed industrial production expanded 0.3% m/m in March from -2.3% the previous month. Market activity was somewhat subdued ahead of the FOMC meeting while investors in the wider region also anticipate the official Chinese manufacturing PMI reading for April, which is expected to show a slight expansion m/m.

A busy day for macro data today as participants eagerly anticipate the German unemployment rate due out shortly as well as US ADP employment data, US Q1 GDP, the Chicago PMI and details from the FOMC meeting all due later this afternoon.

Spot gold prices struggle to lift above $1,300/oz

XAU Curncy Gold Spot Oz D 2014 04 30 08 04 21

Japanese industrial production rises 0.3% m/m in March from -2.3% the previous month

JNIPMOM Index Japan Indices Of 2014 04 30 08 06 37


Events for today

0700

DE

May

GfK Consumer Sentiment

0855

DE

Apr

Unemploymemt Rate

1330

US

Q1

GDP

1330

US

Q1

Employment

1445

US

Apr

Chicago PMI

1530

US

w/e

EIA Energy Stocks

1900

US

Apr

Fed Rate

FN:

May    Copper, Gold, Silver (COMEX) 

All times UK Local Time

Topics: GDP, Equities, Gold, PMI
More from: Kash Kamal