U.S. EQUITIES OFFER A “HEAD FAKE” FROM YESTERDAY. MARKET STAGES DRAMATIC RALLY ON UPSIDE SURPRISE IN HOUSING STARTS, VALUE FOUND IN TECH STOCKS.
U.S. Equities staged a dramatic rally today as buyers shook off yesterday’s “head fake” with regards to the rally that faded out. The culprit yesterday-the tech sector- turned out to be the sector which led the charge higher today as positive comments regarding Cisco Systems earnings potential and business model pulled buyers back to the cash rich sector.
Financials also led the equity indexes higher as Citigroup and JP Morgan Chase both posted near double digit rises today after a report showing better than expected home starts. Home builders also posted strong gains in the wake of the surprisingly upbeat outlook. A reading of 583,000 new home starts significantly beat expectations of 450,000. Some of the largest gains were in the multiunit markets (Condo Projects) which have the potential for longer term revenue streams as well as more dollar generation per square foot. The retail sector also rallied on positive comments regarding Home Depot and Lowes- both companies saw their stock rise nearly 7%. Energy stocks rallied as crude oil process rose to a two-month high on renewed economic forecasts as well as a sense of confidence instilled by the OPEC meeting where the cartel chose to mange current production cuts rather than piling on new ones that could inspire cheating rather than showing a unified front.
Equities also took positive sentiment from Wednesday’s FOMC meeting. Expectation of continued low rate policies and a reassurance of continued aggressive fiscal and monetary stimulus allowed for a continued sense of cautious optimism regarding the path of economic repair.
Technically, June Dow Futures could see continued higher movement toward an initial resistance level of 7420. This level could signal a overbought level on the daily and 60 minute RSI indicators that could call for a retracement toward a support of 7160. If this level is breeched, a significant level should form 7080.
EQUITY RANGES
OPEN
HIGH
LOW
CLOSE
CHANGE
DJM9 (JUNE DOW)
7165
7360
7120
7354
+171
SPM9 (JUNE S&P)
752.00
777.00
746.20
775.30
+21.30
NDM9 (JUNE NASDAQ)
1153.00
1192.00
1147.50
1190.25
+38.00
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.
