Market Commentary January 31

The Trading Daily Market Commentary features a summary of selected market segments as well as economic matters. Its content of interest is made available to all traders and investors at large

The market experienced another session of earnings along with a steady-as-she-goes ruling by the Federal Reserve to keep interest rates unchanged which in turn fueled an active trading day for American markets.

Boeing and Apple stocks gave the DJI index a bump in reaction to their relatively well-received earnings numbers, although the Federal Reserve’s no-change message carried the day.

The Federal Reserve’s announcement wasn't a surprise. Many believe the Federal Reserve’s conclusion is mostly due to pressure coming from the Trump administration, or in some way centering on the equity market rather than economic data.

This, however, is a never-ending saga, as the know-it-alls love to jump on every word, activity or inaction of the Federal Reserve.

Beside of earnings numbers and the Federal Reserve stuff, there were other economic data delivered as well. The National Association of Realtors proclaimed pending home sales were down 2.2 percent in December of last year.

Automatic Data Processing (ADP) also published a favorable report of 213,000 private sector non-farm jobs being supplemented this month, which was higher than estimated.

The DJI index finished up 436 points or plus 1.77%, closing above the symbolic 25K mark, while Nasdaq 100 jumped plus 2.2%, small-cap Russell 2000 index ended up 1.05%, and the S&P500 closed up with additional 1.55% gain.

Other Market(s)

In the Asia-Pacific market, the core Shanghai and Japan Nikkei indices were amongst the big losers, falling 0.67 percent and minus 0.52 percent respectively. The Korea Composite stock price index KOSPI, on the contrary, had a positive session climbing more than 1 percent on the day. 

The long USA-China trade war linked with slowing Chinese growth is planting ambiguity in the region. The Japan Manufacturing Purchasing Managers Index (PMI) expect at minus 0.5 percent, while the previous posting was minus 1.0 percent. It will be intriguing to hear Bank Of Japan members decisions regarding direction for future interest rate decisions.

The Eurozone market(s) had a very positive trading day, with pretty much all the main indices aside from the German DAX30 index rising. The parliamentary vote for “Plan B” was passed, therefore buoyed the U.K. stock market as it grew to be the best performer in the Eurozone rising 1.51 percent. 

French Gross Domestic Product (GDP) data arose, with the expectations met of economic growth of 0.3 percent for the last year fourth quarter. German Consumer Price Index month over month (MOM) decreased by 0.8 percent yet still better than expectations; this reflected last months decline.

Today we will get the German unemployment data, with expectations to be negative 11,000 jobs, though still a reasonable unemployment rate of 5 percent overall. The future of  Artificial Intelligence (AI) and robotics will unquestionably have an impact on these numbers shortly, never the less we wonder for how long these numbers will represent an accurate landscape of the German economy.

As for the Forex market, both the Euro Dollar and the British Pound weakened versus the US Dollar - meanwhile the crude oil settled higher on Wednesday session and did complete our Oil Rally $54.50 while trading in a tight range since Jan 10, 2019.

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