Stocks Find Temporary Support, AUD/USD Could see Higher Ground

The U.S stock market decided to come up for a breather yesterday, after experiencing selling pressure last week. Even though the financials continued to weigh on the market with CIT Group falling by over 65%, the indices managed to stay afloat throughout the session, due to better than expected results from Ford and positive fundamental data.

According to Bloomberg news, CIT, a 101-year-old commercial lender, filed for bankruptcy Nov. 1 to cut $10 billion in debt after the credit crunch dried up its funding and a U.S. bailout and debt exchange offer failed. CIT said it plans to exit bankruptcy next month after bondholders voted in favor of a so-called prepackaged plan.

On the data front, a wave of economic results showed that the U.S economy is slowly improving. ISM manufacturing Index and Prices both came out better than expected at 55.70 and 65.00, respectively. Pending home sales shocked analysts beating expectations by 5.70%. The figure showed a 6.1% increase.

Despite the good news, one must note that the current situation isn’t being backed by a drop in unemployment. Over the weekend President Barack Obama gave his comments regarding the economic outlook. Even thought the president was optimistic about the overall outlook, he stressed on the employment situation, mentioning that further job losses could be experienced. As mentioned in numerous reports, some analysts are now concerned that once the stimulus programs run their course the economy could fall due to rising unemployment and low consumer spending.

From a technical point of view the major indices traded in green yesterday and closed with an average gain of 0.6%. For a full technical analysis, see yesterday’s video briefing .

Read the full article at Dodjit.com .