EQUITY FUTURES TRADE IN QUIET MONDAY SESSION AHEAD OF STIMULUS PACKAGE RE VAMP ANNOUNCEMENT.
U.S. equities traded in a narrow range for a Monday session, as financial and industrial stocks overcame slumps in consumer based companies. The markets await the details of the proposed Obama administration plan to shore up the embattled banking and financial sectors as they continue to struggle with reduced opportunities of revenue generation, as the outlook for tapping consumer and business led growth remains murky at best. Few traders and investors will be willing to place large scale bets on the direction of equities, as many expect that any initial relief rally from the perception that SOMETHING concrete is on the table will be met with negative sentiment once the market has time to digest any plans and determine once again that “the Devil is in the Details” leading to a possible return to the low end of the recent ranges for equities. The near term fate of equities may rest specifically on whether the new administration can convince traders to considered returning to the notion of being investors again, looking beyond short term gains and losses and putting long time sidelined capital to work in order the shore up the outlook for equities as a whole. This remains a tall order after the investor burn out of 2008. It will take time and patience to rebuild from the ashes of last year’s debacle of misinformation and surprises coming out from weekend revelations that could not be foreseen or hedged against.
Financials and regional banks were among the top gainers of the session, supported by beliefs that the sector will gain from any form of bailout plan. Gains were challenged on equal footing by slides in consumer stocks such as Coca Cola, which was downgraded due to perceived slowing of sales within many of its international emerging markets. Dow Chemical fell after market analysts called for the company will likely cut its dividend and take a significant cut to its credit rating due to its tie in to a debt financed deal to buy rival chemical maker Rohm and Haas. However, a report stating that the Kuwait government, which backed out of a joint venture with Dow to purchase R&H, may be reinitiating talks to rework the deal with Dow could result in a reversal of the stocks fall during Tuesday’s session and relieve some of the pressure, which has plagued the overall sector.
Technically, very little has changed from Friday’s reading as the markets traded in and closed within such a tight range. March Dow Futures remain within a tight channel, as the inability for the market to hold above the 8260 level still places it in a precarious position where no clear sign of a break to the upside exists. This could result in the market returning to the downside to retest support levels at 8060, with a break of this level creating momentum to revisit 7960. A break and hold above 8260 should allow for an attempt of 8315.
EQUITY RANGES
OPEN
HIGH
LOW
CLOSE
CHANGE
DJH9 (MARCH DOW)
8230
8275
8165
8218
-36
SPH9 (MARCH S&P)
865.00
872.80
859.00
865.10
-2.60
NDH9 (MAR NASDAQ)
1274.00
1286.00
1266.00
1275.75
0
Rich Roscelli and Paul Brittain
Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Alaron Trading Corp. its officers and directors may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.
