Fears that the European Central Bank might decide to debase the euro at Thursday’s ECB meeting decreased the enthusiasm of American investors.
The American stock indices made a slight retreat on Wednesday ahead of Thursday’s ECB meeting in Brussels. There has been some concern that French President François Hollande could succeed in his efforts to convince the European Union to control the euro’s exchange rate (i.e. to debase the euro). A weaker euro would strengthen the dollar, making American exports less competitively-priced in foreign markets. The ongoing debasing of the Japanese yen has facilitated undercutting prices of American products by Japan’s exports (NYSEARCA:FXY).
As of 2:24 EST, the Dow Jones Industrial Average declined 21 points (0.15 percent) to 13,958. The S&P 500 Index declined 0.20 percent to 1,508 (NYSEARCA:SPY). As the chart (at left) indicates, the S&P 500 remains above its previous resistance level of 1,470. Its next resistance level is in the 1,550 – 1,570 range. Its Relative Strength Index is 63.35 (Chart courtesy of Stockcharts.com). The Nasdaq Composite fell 0.36 percent to 3,160 (NASDAQ:QQQ). The Russell 2000 Index declined 0.22 percent to 906 (NYSEARCA:IWM). Market Valuation, Inflation and Treasury Yields
The “Dollar Bull” Index ETF (NYSEARCA:UUP) advanced 8 cents (0.37 percent) to 21.78 as of 2:04 EST.
As of 1:52 EST, the S&P 500 Volatility Index – or VIX – advanced 2.19 percent to 14.02 and the VIX Short-Term Futures ETN rose 1.43 percent to 24.01 (NYSEARCA:VXX).
The Euro STOXX 50 Index finished Wednesday’s trading session with a 1.28 percent drop to 2,617 – staying above its 50-day moving average of 2,538. After breaking above its resistance level of 2,700 on January 21, the STOXX 50 is once again experiencing resistance at that level, which has been a barrier since the beginning of the year. Its Relative Strength Index is 41.85 (NYSEARCA:FEZ). The FTSE 100 Index advanced 0.20 percent to 6,295 (NYSEARCA:EWU). The German DAX Index fell 1.09 percent to 7,581 (NYSEARCA:EWG). France’s CAC 40 Index sank 1.40 percent to 3,642 (NYSEARCA:EWQ). Spain’s IBEX 35 Index dipped 0.26 percent to 8,072 (NYSEARCA:EWP). Italy’s FTSE MIB Index declined 0.42 percent to 16,641. (NYSEARCA:EWI). Three Things the Bears Need to See
As of 2:14 EST, the euro advanced 0.50 percent against the dollar, trading at $1.3516 (NYSEARCA:FXE).
On London’s ICE Futures Europe Exchange, March futures for Brent crude oil advanced by 2 cents (0.02 percent) to $115.59/bbl. (NYSEARCA:BNO, NYSEARCA:USO).
April Gold Futures advanced by $3.90 (0.23 percent) to $1,677.40 per ounce (NYSEARCA:GLD).