US Markets Modestly Higher
6:50 a.m. ET - Stocks rose around the world after Alcoa (AA) started the U.S. earnings season with results that beat analysts’ estimates. U.S S&P 500 Futures, look to add to yesterday's gains and may test key structural resistance of 1649 in today's session. Early price action and short-term momentum indicators concur, while the market would not been viewed over-bought below 1654.75. No surprise, Gold jumped off key technical levels that I cited (1168.5 - 1169.2) while the Japanese Yen and Sterling weakened.In other news, the International Monetary Fund (IMF) will release its "World Economic Outlook" on Tuesday at 9:30 a.m. ET. Christine Lagarde, the head of the organization, indicated that the IMF could trim global growth forecasts.
Reports out show that Chinese inflation rose more than forecast in June while producer prices fell for the 16th consecutive month, the longest slump in a decade... a deflationary trend. From the monthly comparison chart above, (wave labels removed) you can see that as China goes, so does Alcoa. While Alcoa maintained its forecast that global demand for aluminum will rise by 7 percent this year, led by 11 percent growth in China, the chart is certainly reflective of our view.
If you are a natural resource investor or have holdings in China, you can read more in my free report on China.
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