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The Current Market Sentiment
The
doubts about the consuming pace in US could temper the market
sentiment yesterday again by a new dovish US Conference Board's
Consumer Confidence of July which was waiting to be to come down
to 52 after a massive falling in June to 52.9 to but it declined
further to 50.4 in July. God Willing, We are to wait today for
the Fed's Beige book for having a look at its current assessment
by its next meeting which expected to have the interest rate
unchanged again nearly 0% for extended period of time again next
month as Ben Bernenke has highlighted in his testimony the Fed's
worries about the current growth downside risks and the
struggling pace performance of the labor market and our eyes
will be focusing by the end of the week on the US consuming pace
again with the release of July University of Michigan consuming
sentiment revision which is expected to be 67.5 after the
falling of the preliminary reading to 66.5 from 76.0 in June
while the market was waiting for declining by just 2 figures to
74 and also June US retail sales which have declined by .5% and
even on the business spending direction, we have seen US July
Empire State Manufacturing which was forecasted to be 18.95 from
19.57 in June collapse to 5.08 and US July Philadelphia Fed
Business Survey which was waited to be 11.5 from 8.0 in June and
dropped to 5.1 and yesterday July Richmond Fed Manufacturing
Index coming down to 16 from 23 in June after June US ISM
manufacturing index which was expected to be 59 from 59.7 in May
and came down to 56.2 which will make next week releases of the
numbers of July very important to the investors and next Friday
release of Chicago PMI of July which is widely used as a clue of
it and waited to be down to 56 from 59.1 in June.
The single currency is still
struggling to have footing above 1.30 versus the greenback
cheered by the stress test results of 91 European Banks which
told the market that only 7 of them failed in these test. The
EUR could touch 1.3045 but it could not keep its progress
falling to 1.296 again. 1.30 is expected to keep forming an
obstacle in the EURUSD ascending way and crossing this level
should lead to a harder test of this pair to cross the area
between 1.3096 whereas the pair has fallen making another lower
high on 10th of last may after breaking it as a
support and tested it back as a resistance and 1.3114 which is
the 38.2% Fibonacci retracement level of the falling from 1.5142
to 1.1874 while the next major support is at 1.2735, 1.255,
1.2452, 1.2165, 1.2044 and 1.1954 and 1.1875 which has become
the pair main defending line before 1.16 whereas the pair has
started its rally to 1.604 before falling again to 1.233 amid
the credit crisis and rising back forming a lower high at 1.515
in the beginning of last December.
The US equities market could
keep these gains again yesterday and Dow could add another 12
points to close at 10537 opening its way up technically to this
year high at 11258 with a great probability of having a lower
high before it as the worries about the US growth slow down is
still increasing and the dovish data are expected to continue.
The US Stocks could get over the weaker than expected earning
reports of its banking sector earning reports owes after the
disappointing earning of Goldman Sacks which shrank by 82% in
the second quarter because of the fraud settlements after
accusing it of hiding the real financial position of some
sub-prime mortgage securities from the investors who have been
exposed to defaulting later because of this misleading position
of it subtracting 550$m from its earning beside 600$m from
Britain new imposed taxes on its bounces getting just 78 cents a
share from $4.93 a share a year earlier earning of Goldman Sacks
in the last quarter could not help the market to forget the weak
earning of Bank of America and Citigroup but joined them to add
more doubts about the credit market earning ability.
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Frannor Trading 102 (Pty) Ltd. 2002
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