Bond & equity report for Mar. 3

SUMMARY OF UPCOMING DATA 03/02/10

· 8:15 AM ADP EMPLOYMENT REPORT

· 10:00 AM- ISM NON MANUFACTURING SURVEY (51.0)

· 10:30 AM EIA INVENTORY (CRUDE OIL)

NO REPORTS FOR 03/02/10

U.S. DEBT REVIEW AND OUTLOOK

U.S. Treasuries continued to trade in a quiet range on Tuesday. A lack of fresh U.S. data and anticipation of the employment data release later in the week kept most debt traders on the sidelines. The market did appear to gain some stability at least after some progress on the Greek fiscal crisis appears to be on the horizon. The country announced a proposal to cut its deficit spending by nearly $7 billion dollars.

With no auctions to remind the markets of the ongoing supply concerns butting up against an underlying concern regarding deficit balance sheets (Pimco’s interest in Canadian Sovereign Debt is based primarily on its relatively strong balance sheet), it’s small wonder that U.S. Treasuries have been trading near unchanged levels for the early part of this week, though some buying interest has been perking up on the short end of the yield curve as the U.S. two-years continue to mount a slow recovery from the surprise hike by the Fed in the U.S. discount rate-the rate that banks can borrow from the Federal Reserve. Markets also seem to be in a pensive phase as they try to figure out the initial and medium term effects of the Federal Reserve’s ending its asset purchase program, particularly as the entire world appears to be unwinding its emergency liquidity programs at the same time, though using different strategies and levels of intensity.

Technically, June 30-year futures continue to be setting up a head and shoulders formation. There may be some room for question though as a narrowing of the recent trading range also appears to be forming. This could offer some additional upside momentum, pushing the contract to test resistance at 117-27. Support for the contract looks to be setting up at just below today’s low at 116-26.

U.S. EQUITY REVIEW AND OUTLOOK

S&P Futures rallied for a second session, though the major indices closed well below their best levels of the day, as risk tolerance continued to improve globally as the outlook for consumers appears to be stabilizing and the Eurozone fiscal crisis appeared to be subsiding. Reports that Greece is planning to implement significant deficit reduction cuts offer support to equities, while additional information pertaining to how the United States is planning to regulate the financial industry was viewed as a positive by the sector, as some uncertainty fell away, offering support.

Uncertainty regarding execution and/or follow through of the fiscal strategies brought in profit taking from long positions.

US DEBT FUTURES

OPEN

HIGH

LOW

CLOSE

CHANGE

US M0 (US 30 YRS)

117-14

117-16

116-28

117-10

-5/32nds

SP H0 (S&P 500)

1119.00

1123.00

1115.30

1117.40

+2.80

Prepared by Rich Roscelli & Paul Brittain. PLEASE VOICE YOUR MARKET OPINIONS, THOUGHTS, AND QUESTIONS. EMAIL TO RICH@BINVSTGRP.COM Additional Information can be found at WWW.WHITEHALLVEGAS.COM

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. Whitehall Investment Management, 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.

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