In addition to the usual focus on oil, traders have input from the ECB's Draghi and Chinese economic data to consider on this final day of trading in 2014.
In China, the HSBC Manufacturing PMI came in with a reading of 49.6, which (a) represents the first decline in the final PMI reading in the last seven months and (b) signals the sector is in contraction mode. However, the news was largely in line with expectations and provides backing for stimulus programs as well as calls for outright rate cuts in China.
Across the pond, the ECB's chief economist warned that lower oil prices are increasing the risk of de-anchoring inflation expectations, which the ECB cannot simply ignore. And ECB President Draghi said today that the Eurozone countries should complete a true monetary union by integrating economic policies further and work towards a capital markets union. Draghi also warned that a lack of reforms increases the threat of countries exiting the Eurozone.
On the oil front, crude futures are flirting with new lows and have traded below $53 during the early session.
Here at home, U.S. futures are pointing to a higher open on Wall Street.
Current Market Environment
This market continues to provide ample opportunities to complain. For example, while prices are one day off of all-time highs, there are complaints that the current move is not as strong as expected at this stage of the game. This can be seen in our market environment models, which have only recently moved into the positive zone. The problem is that there continues to be a fair amount of internal weakness in the market indicators. But, the bottom line is that the models are flashing a green light and the historical cycles project a strong start to 2015.
