EQUITY FUTURES COLLAPSE AS US TREASURIES OUTLINE OF STIMULUS PLAN FAILS TO LIVE UP TO EXPECTATION. FINANCIALS LEAD INDICES LOWER
U.S. Equities staged their worst drop of the month after the much anticipated outline of financial sector rescue proposals by U.S. Treasury Secretary Geithner failed to instill confidence and a “light at the end of the tunnel” belief regarding the current global recession & credit concerns. The financially rich S& P index fell over 2% in the period leading up the outline by the Secretary which was perceived as being long on rhetoric & short on substance. The markets gave back nearly all of its gains from last week as “Buy the Rumor, Sell the Fact” sentiment led equity investors to exit positions and move into the long end of the government fixed income market.
Financials, as to be expected, were the biggest losers in the session as hopeful expectations of an aggressive, direct outline of a plan that offered concrete direction out of credit quagmire were dashed this session. The largest financial institutions were some of the biggest losers today. JP Morgan, Wells Fargo, Bank of America, and Citigroup all posted double digit percentage losses. A series of downgrades by the same collapsing financial institutions also served to pressure a number of market sectors. Alcoa fell nearly 10% as falling aluminum demand placed the company is such a precarious financial position that S&P cut its credit rating to the lowest investment grade. Food retailers came under pressure on the expectation that competition from broad based retailers such as Wal Mart and Costco would pressure earnings and margins as economic conditions deteriorate.
Technically, March Dow futures are at the low end of the ongoing channel, which it has been trading in since mid January. The inability to hold or close above 8260 or below 7860 will keep the market trapped within its existing channel.
EQUITY RANGES
OPEN
HIGH
LOW
CLOSE
CHANGE
DJH9 (MARCH DOW)
8175
8220
7815
7878
-340
SPH9 (MARCH S&P)
858.00
865.20
819.70
826.90
-36.20
NDH9 (MAR NASDAQ)
1270.00
1287.00
1221.00
1232.50
-43.25
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.
