Yesterday saw an initial rise in the Nikkei index, early in the morning of the 6th and this led us to believe that we would see more increases in the European and US markets. This was in fact what occurred as the US markets saw a very dramatic rise in prices. The Us stock indices all headed higher by more than 2% each as the Dow finished up 2.37% to 12414, the S&P closed 2.3% higher to 1315, and the Nasdaq flew up to 2844 after rising 2.4%.
Binary options traders should take serious control of their trading here as markets are showing signs of creating a trend. The S&P actually marked its largest single day gain since December and after the index finished 6% down in the month of May, this rise was a welcome sign. However, we are wondering whether we can really call this a fresh new trend and are considering a number of factors. The fact that the Asian markets are seemingly leading the charge here is not really entirely true. It’s not a chicken or the egg story here either though. The facts are broken down into 3 categories of economic events:
- The European debt crisis is still the major player as the Greeks and Spanish are in the forefront of the entire process here
- The Chinese manufacturing weakness seems to still be a major force, but focus has turned away to other matters. Still, any bad news from China will pull down Asian and Australian markets which will pull down all the rest.
- The US jobs market is still very important but after a positive review of the economy by the US Federal Reserve in the “Beige Book” the pressure seems to be off the US to “prove” itself and focus will likely return to the other 2 issues in this list
As such, the focus seems to be entirely on the Europeans and they are shifting from good guys to bad guys from day to day. Yesterday they were surely the good guys as the markets were happy to see positive headway into averting a Spanish collapse. A bailout seems inevitable, but if done on the right terms and in the right way, it won’t be a repeat of the Greek debacle.
On the other hand, the Spaniards have a rough day ahead of them which could mean serious trouble to the markets. They are aligning a debt sale of a couple billion euros worth of 3 bonds. If this goes according to plan, we expect markets to remain stable with an inclination to a rise. Especially as the Nikkei just finished its trading day up over 1%. It look like the ground work for an uptrend is in pace. Let’s just hope those pesky bond buyers don’t muck it up for the rest of us.