The markets were under pressure Thursday, largely attributed to the China trade data. Global slowdown and uncertainty weigh on the odds for a Fed rate hike, while jobless claims strengthen the case. None of these items by themselves really add up to anything significant, but the guessing game goes on. The odds are still about 65% for a December hike.
Perhaps the more immediate news is the announcement that Wells Fargo CEO John Stumpf is stepping down immediately. This news comes in the wake of the cross-selling scandal that has rocked the stock and also on the eve of the quarterly earnings reports that comes out tomorrow morning. WFC may retest the 52-week low at 43.55. JP Morgan (JPM) and Citigroup (C) are also set to report tomorrow before the bell. It should be an eventful morning for financials.
Bonds pulled back a little Thursday and the dollar fell about 0.3%. Gold was up a bit Thursday on the weaker dollar and the selloff in stocks.
Oil is back and forth across the $50 mark. Government inventory data was released Thursday and a build in crude stockpiles was offset by a dip in refined product. Crude stockpiles showed their first increase in six weeks rising 4.9 million barrels. However, gasoline stockpiles fell below 1.9 million barrels countering the effect of the crude build.
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The Dow is at the crucial 18,000 support level and the S&P 500 is very close to support at 2,100. These are big numbers and a big test of support. Financials were the weak sector Thursday leading the way lower, off 1.87%. The VIX (S&P Volatility Index) spiked - up 7%, but the short term chart looks extended and seems likely to settle down. Overhead resistance for the VIX is at 20.00.
Dow Chart
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