U.S. EQUITIES REBOUND AS MARKET SIDELINES FINANCIALS INFLUENCE TO SEEK VALUE IN ENERGY AND TECHNOLOGY STOCKS.
U.S. Equities staged a rebound, following along in the wake of a rally which began in the Asian markets as China and Japan both announced a stepping up of their stimulus programs. This announcement reignited the notion of global coordination to deal with the credit crisis. The momentum from the Asian region also promoted buying of commodities across the board, with gains in energies, materials and gains spilling over into the corresponding equity sectors. Gains in these stocks, fueled by short covering from multiyear lows and the market’s willingness to seek value in companies with real potential for revenue growth, managed to overcome another dismal day for the financial sector. Metal producers and heavy equipment companies such as Caterpillar posted double digit returns on anticipation of ramped up infrastructure projects to stimulate the Chinese economy, which should provide a major boost to commodity prices as well as the need for technical and building services. Equities did close off of highs as the markets contended with Day 1 of employment watch. The ADP private employment report showed a greater than expected loss of jobs for the month of February.
General Electric fell to its lowest level since the recession of the early 1990’s as worries regarding the damage from its financial arm may force the company to seek additional outside capital. Wells Fargo, Citigroup, and Bank of America followed GE lower as mounting concerns regarding further dividend cuts continued to erode investor value in the albatross sector that is “Banks Too Big to Fail”.
Technically, March Dow Futures retraced the gap left from 6860 before settling slightly below this level. Downward momentum has been checked for the time being. The market is lining up at a cross road level with near term ranges setting up between 7020 and 6720. Expect that the market will likely trade in a relatively tight range on Thursday. A break to the downside could result in a test of the psychological 6500 level. A break and hold above 7020 will find a number of staggered resistance levels between 7050 to 7160.
EQUITY RANGES
OPEN
HIGH
LOW
CLOSE
CHANGE
DJH9 (MARCH DOW)
6815
6970
6752
6830
+161
SPH9 (MARCH S&P)
707.10
723.50
699.20
708.40
18.90
NDH9 (MAR NASDAQ)
1095.00
1126.00
1092.00
1101.00
+29.00
Prepared by Rich Roscelli & 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.
