By Chris Becker
Risk is going pear shaped with big US tech stock earnings surprising to the downside, a trend ridden from European bourses which are also recording bad earnings for the quarter. Stocks fell on both sides of the Atlantic, not helped by a falling oil price as the DOE inventory report printed a mix picture of demand in the US economy. Bond markets were very active overnight, particularly the short end of the curve in Treasuries but also Euro issues as concern mounts over the ECB’s QE program. In currencies, the USD was relatively stable overnight with a false breakout in Euro and a slump in Aussie dollar and gold.
Looking at Asian stocks first, where the Shanghai Composite is retracing slightly from its recent breakout, falling half a percent yesterday to 3116 points. This is still above the closely watched 200 day moving average but resistance and my target at the former high at 3140 needs to be breached for this move to turn into a proper rally:
