After last week’s rally the U.S stock market got stopped in its tracks, retracing during yesterday’s session by over 3%. The massive drop came after the White House mentioned that there is a chance that large caps in the auto industry, including General Motors and Chrysler could go into bankruptcy.
Even though President Obama addressed the public later on during the session stating that he will not let the industry fail, the major stock indices found it hard to retrace into positive territory, as the president rejected long term federal bailout, demanding that companies need to receive more concessions before further funds are authorized. General Motors closed the session dropping by a whopping 26%, after being refused an additional $16.6 billion.
In addition, Timothy Geithner stated during yesterday’s session that the financial system might require further funds, to help banks crawl out of their dire state. The Financial sector dropped during the session, shredding gains of just under 9%.
From a technical point of view the S&P 500 closed the session, finding support on its 50 day moving average.
Over the last couple of trading days, we have stated in our reports that a pullback was overdue. Yesterday’s session triggered off a sell-off but the indices managed to find support around critical trading levels.
Despite all the gloom in the auto industry, a report showed yesterday that during the month of March automobile sales had increased by 12.7% compared to February. Even though the figure was much lower than lasts years one, it added to the recent data showing that the economy could be starting to feel the government’s efforts.
Asian stocks opened mixed despite the plunge in U.S stocks yesterday. Support came as Japan’s government mentioned that a new plan could be used to stabilize their economy. Throughout the session, stocks gave in to the selling pressure forcing the Nikkei down. The major Asian indices are currently trading in negative territory.
Dollar Gains on Market Fear
On the Forex Market the Dollar index, raced higher as money fled back into safe-haven assets. The Dollar index bounced higher but found resistance at its 50 day moving average of 86.22 points. On individual pairs, the GBP/USD dropped during the session as economic growth showed further contraction within the economy, while the EUR/USD followed Friday’s session, dropping to lower levels.
The USD/JPY showed rapid movement yesterday as volatility increased across the board. After dropping to ¥96, this pair retraced above 97 support. Despite the gloomy outlook this pair is now trading around major resistance, as shown on the chart below.
Crude oil dropped during the session by over 7% closing the session at $48.41 per barrel. The overall market momentum and speculation that consumption could continue to decline sent this commodity lower after hitting $54 per barrel.
What Market Data to Watch Out For?
Inflation Data is expected to be released in Europe later today, while Germany is scheduled to release its unemployment result. The two figures could give clues as to how the ECB’s is going to move, at its upcoming rate decision. In addition, Canada is scheduled to release its PPI figure, showing further contraction in the sector. Even though economic data is coming out from the U.S today, eyes will focus on comments from officials, trying to figure out the auto industry’s future.
USD/JPY Daily Chart
Market Pivot Points
Even though President Obama addressed the public later on during the session stating that he will not let the industry fail, the major stock indices found it hard to retrace into positive territory, as the president rejected long term federal bailout, demanding that companies need to receive more concessions before further funds are authorized. General Motors closed the session dropping by a whopping 26%, after being refused an additional $16.6 billion.
In addition, Timothy Geithner stated during yesterday’s session that the financial system might require further funds, to help banks crawl out of their dire state. The Financial sector dropped during the session, shredding gains of just under 9%.
From a technical point of view the S&P 500 closed the session, finding support on its 50 day moving average.
Over the last couple of trading days, we have stated in our reports that a pullback was overdue. Yesterday’s session triggered off a sell-off but the indices managed to find support around critical trading levels.
Despite all the gloom in the auto industry, a report showed yesterday that during the month of March automobile sales had increased by 12.7% compared to February. Even though the figure was much lower than lasts years one, it added to the recent data showing that the economy could be starting to feel the government’s efforts.
Asian stocks opened mixed despite the plunge in U.S stocks yesterday. Support came as Japan’s government mentioned that a new plan could be used to stabilize their economy. Throughout the session, stocks gave in to the selling pressure forcing the Nikkei down. The major Asian indices are currently trading in negative territory.
Dollar Gains on Market Fear
On the Forex Market the Dollar index, raced higher as money fled back into safe-haven assets. The Dollar index bounced higher but found resistance at its 50 day moving average of 86.22 points. On individual pairs, the GBP/USD dropped during the session as economic growth showed further contraction within the economy, while the EUR/USD followed Friday’s session, dropping to lower levels.
The USD/JPY showed rapid movement yesterday as volatility increased across the board. After dropping to ¥96, this pair retraced above 97 support. Despite the gloomy outlook this pair is now trading around major resistance, as shown on the chart below.
Crude oil dropped during the session by over 7% closing the session at $48.41 per barrel. The overall market momentum and speculation that consumption could continue to decline sent this commodity lower after hitting $54 per barrel.
What Market Data to Watch Out For?
Inflation Data is expected to be released in Europe later today, while Germany is scheduled to release its unemployment result. The two figures could give clues as to how the ECB’s is going to move, at its upcoming rate decision. In addition, Canada is scheduled to release its PPI figure, showing further contraction in the sector. Even though economic data is coming out from the U.S today, eyes will focus on comments from officials, trying to figure out the auto industry’s future.
USD/JPY Daily Chart
Market Pivot Points