IIFT Daily Note with Peter Brown

Good news is bad for stocks

Posted by:  |  Time: 7:48 am  |  Topic:
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As we continue towards year end and expect some fund managers to take some profit off the table, any news that hints at tapering will cause a sell off. Yesterday was such an event. manufacturing data was extremely good and despite stocks initially trying to rally the market sold off heavily into close. There is a mood about for a Christmas rally but as yet that is looking unlikely. The market looks more like correcting to me. Today we have PPI in Europe, this will be important as inflation is the key to prompt stimulus. If the figures are low watch Euro to the downside. Euro should stay soft ahead of ECB on Thursday.

We are at good support levels in stocks 1800 on the S&P and 16000 on the Dow. Market may try to rally first thing but I suspect some more downside.

Levels today are Euro 1.3560  1.3510  S&P (DEC) 1805  1797  DOW (DFB) 16045  15970

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