The manufacturing PMI in October was 46.7%, down 2.3 percentage points from 49% in September. The broader economy is back in contraction after a month of weak expansion, followed by nine months of contraction and the previous 30 months of expansion. U.S. Treasuries rallied sharply, with #TLT up 1.41% and the 10-period note yield ( #TNX ) falling sharply to 4.808%.
A sharp drop in U.S. Treasury yields pushed U.S. stocks higher, with major market indexes rising an average of 0.50%. The S&P 500 Index (#SPX) is currently trading at 4,218 points and has recovered above the resistance level of 4,200 points. The next resistance level is the 200-day moving average of 4,243 points. If the S&P 500 cannot recover above 4243, it will still be in a downward trend. Two other key hurdles for the market to overcome are today's Fed rate policy decision and tomorrow's Apple (#AAPL) earnings report. If the market can weather these two events, there is hope for a year-end bull run. Now it depends on the market's reaction to two things. I feel that the Fed's interest rate decision should not have a big impact on the market, but Apple's financial report will be a problem.
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