US Futures And European Markets Taking Breather While PMI Data In Focus

The relentless gains continue on Wall Street when the S&P 500 posted it’s another record high on Friday, and it certainly seems like that this train of gain is on its full steam and there is nothing stopping this train.

The reason which is making this argument stronger is that during the 2013, we only had two months of losses, and the gains which the indices have posted so far this year, is ceased to exist for any longer, in the equity trading world.

If you think you can make money by buying into this market still, then you should think once gain behind this rational, because the law of trading will suggest that the equity market is due a correction, and this most hated rally of all time, could be coming to end.

But the sad fact is, the market catalyst is supporting the idea that bad news is good news for the market, and the ingredients of waking the bears are still weak.

Having said that, the economic docket for this month is completely full, as we head towards the final month of this year. Unarguably, the latest jobs number in the US, could be the main ingredient for Fed, which could influence their tapering decision. The odds may start stacking more in favour of early tapering, if we are able to post this number near the 250k mark. However , before we get to such scenario, the latest ADP number which is due on Wednesday, and the ISM manufacturing report for the month of November, which is also due today will be the immediate focus for traders. The expectation for the ISM Manufacturing PMI is to fall to 55.2, while previous reading was 56,4. Moreover, the US Q3 GDP figure is also expected to be raised today to 3.1% from 2.8%.

Back in the Europe, the PMI data will be the main focus among traders, while the ECB meeting grabbing the headlines on Thursday. The PMI data for the euro region which is due today could confirm the divergence between the French and German economies and highlight the nature of this fragile recovery in the euro zone. For instance, last week’s retail data for Germany fell to 0.8%, while we were hoping for better number, because of an increase in the consumer confidence in the country. But, clearly consumer confidence and actually spending by the shoppers of the biggest economy in the eurozone, clearly stamped, that they are two different things for the time being.

The economic calendar for the UK is also full for this week, and the November manufacturing PMI data is expected to come in at 56.5 while the previous reading was 56.0. If the final number does beat the expectations, then this will further confirm that Q4 will continue to be another strong quarter.

Disclosure & Disclaimer:The above is for informational purposes only and NOT to be construed as specific trading advice. responsibility for trade decisions is solely with the reader.

by Naeem Aslam