Friday’s U.S stock session closed in green as the major indices continued higher, making the month of May the third month in a row of gains. “The recent rally has been unbelievable, something not witnessed in over 10 years”, mentioned certain traders who have been enjoying the ride. Even though GM rattled the markets last week, nothing stopped buyers from driving the indices higher on the last day of the month. The S&P500 presented a monthly gain of 1.36%, while the Nasdaq climbed by a monthly 1.07%
A New Month Means New Problems?
General Motors is expected to file for bankruptcy, increasing the government’s stake in the company to 60%. Overall the auto industry should receive $30.1 billion in bankruptcy financing and an additional amount from the Canadian government, which is also taking a part in the rehabilitation of the company. While many are sure that the restructuring will provide long term relief, sending the company back onto a healthy path, short term pressure could still be experienced as the healing process will demand further job cuts and the closing of further factories.
Asian Markets opened on a positive note Monday morning as China presented impressive results showing that their economy is slowly starting to increase their manufacturing of finished goods. According to statistics the Purchasing Managers Index decreased in the month of April but still showed a figure above 50 points, which points to economic expansion.
From a technical point of view the major stock indices are stuck between a rock and a hard place, trading between two major levels. Even though the recent wedge pattern broke during Friday’s session, the 200 day moving average could still cause problems along the way up.
Check out our ‘charts analysis’ page, for technical charts.
Dollar presented another leg down.
On the Forex market the Dollar index dropped, coming close to December’s lows. A combination of a higher equity and commodity market had a massive impact on the green back during Friday’s session, esspecially as news headlines published that crude oil and Gold had both jumped.
Gold jumped by 2.04% during Friday’s session, while Crude Oil finished the month above $65 per barrel. Even though the extreme rise is startling some equity traders, especially as the current commodity moves are not normally characterized during the start of an economic cycle, some are relieved that the recent increase in prices isn’t yet having much of an effect on inflation. Recent data is still showing that inflationary numbers are decreasing in certain regions. According to last week’s data the Euro-zone showed that their numbers had dropped during the month of April.
On individual pairs, the Dollar continued to lose strength during early morning hours against counterparts. While the Forex market hasn’t presented any major moves volatility should start to pick up, especially as a vast amount of economic data is scheduled to be released.
Economic Data to Watch Out For
Starting with European data, Germany, the U.K and the Euro zone are all scheduled to release their Manufacturing PMI for the month of May. Despite a deteriorating global economy all the regions are expected to show an improvement.
Towards the afternoon GDP results will be released from Canada. According to analyst’s expectation the economy should show further contraction during the first quarter. Over the last two years Canada has presented a declining GDP rate adjusted for inflation, coming down from a high of 3.88%, to a negative -0.71%, adjusted for inflation. Even though the economy is showing a gloomy picture, recent CAD strength can be attributed to Dollar weakness and a rise in commodity prices.
In addition the U.S is scheduled to release three important movers:
• Personal Consumption
• Construction Spending
• Manufacturing PMI
Enjot dodjit
A New Month Means New Problems?
General Motors is expected to file for bankruptcy, increasing the government’s stake in the company to 60%. Overall the auto industry should receive $30.1 billion in bankruptcy financing and an additional amount from the Canadian government, which is also taking a part in the rehabilitation of the company. While many are sure that the restructuring will provide long term relief, sending the company back onto a healthy path, short term pressure could still be experienced as the healing process will demand further job cuts and the closing of further factories.
Asian Markets opened on a positive note Monday morning as China presented impressive results showing that their economy is slowly starting to increase their manufacturing of finished goods. According to statistics the Purchasing Managers Index decreased in the month of April but still showed a figure above 50 points, which points to economic expansion.
From a technical point of view the major stock indices are stuck between a rock and a hard place, trading between two major levels. Even though the recent wedge pattern broke during Friday’s session, the 200 day moving average could still cause problems along the way up.
Check out our ‘charts analysis’ page, for technical charts.
Dollar presented another leg down.
On the Forex market the Dollar index dropped, coming close to December’s lows. A combination of a higher equity and commodity market had a massive impact on the green back during Friday’s session, esspecially as news headlines published that crude oil and Gold had both jumped.
Gold jumped by 2.04% during Friday’s session, while Crude Oil finished the month above $65 per barrel. Even though the extreme rise is startling some equity traders, especially as the current commodity moves are not normally characterized during the start of an economic cycle, some are relieved that the recent increase in prices isn’t yet having much of an effect on inflation. Recent data is still showing that inflationary numbers are decreasing in certain regions. According to last week’s data the Euro-zone showed that their numbers had dropped during the month of April.
On individual pairs, the Dollar continued to lose strength during early morning hours against counterparts. While the Forex market hasn’t presented any major moves volatility should start to pick up, especially as a vast amount of economic data is scheduled to be released.
Economic Data to Watch Out For
Starting with European data, Germany, the U.K and the Euro zone are all scheduled to release their Manufacturing PMI for the month of May. Despite a deteriorating global economy all the regions are expected to show an improvement.
Towards the afternoon GDP results will be released from Canada. According to analyst’s expectation the economy should show further contraction during the first quarter. Over the last two years Canada has presented a declining GDP rate adjusted for inflation, coming down from a high of 3.88%, to a negative -0.71%, adjusted for inflation. Even though the economy is showing a gloomy picture, recent CAD strength can be attributed to Dollar weakness and a rise in commodity prices.
In addition the U.S is scheduled to release three important movers:
• Personal Consumption
• Construction Spending
• Manufacturing PMI
Enjot dodjit