Bond and equity report for Mar. 10

SUMMARY OF UPCOMING DATA 03/10/10

  • 10:00 AM US WHOLESALE TRADE
  • 10:30 AM EIA INVENTORY FIGURES (CRUDE, CAP UTILIZATION)
  • 1:00 PM US 10 YEAR NOTE AUCTION
  • 2:00 PM US TREASURY BUDGET (-223 M)

DATA RESULTS 03/09/10

  • U.S. THREE-YEAR NOTE AUCTION (BID TO COVER 3.13, YIELD 1.437%)

U.S. DEBT REVIEW AND OUTLOOK

  • TREASURIES QUIET, LACK OF INTEREST AS RISK TOLERENCE INCREASES
  • SHORT END OF YIELD CURVE BUOYED BY WELL RECEIVED U.S. THREE-YEAR NOTE AUCTION
  • MARKETS LACK CATALYST, CONTINUE TO RANGE TRADE.

Treasuries traded in a quiet range on Tuesday. The only signs of life in the complex presented themselves in the short end of the yield curve. Life support was courtesy of a well received U.S. three-year note auction. Bids for $40 billion of three-year notes were strong on an increasing sense of uncertainty regarding the course of the economy. Aside from the auction, there were few surprises as little movement was generated due to the standing gains in equities and Fed testimony supporting a continued low interest rate environment in necessary to support economic recovery.

Technically June 30-year futures should continue to drift into a narrowing range, with 117-06 setting up as resistance. Support sets up at 116-03, with a break of this level setting up a downside target of 115-20.

U.S. EQUITY REVIEW AND OUTLOOK

  • Equities maintain positive tone, supported by transportation stocks & technologies
  • Rally stalls as major indices pull back from resistance, one year rally hype fades.

This will be the only mention that this is the one year anniversary of the rebound from lows in equities (move on, with this much stimulus outstanding, it should be the least the market could do.)

That being said, the major indices posted gains on Tuesday, as technologies and transportation stocks posted the best performances. Airline stocks gained on reports that passenger traffic had picked up strongly in February, particularly in the coveted business travel sector. Technologies rallied after Cisco announced details of its new network routing systems, designed to increase speed and data carry ability tremendously. Texas Instruments raised its first quarter sales estimate and EPS (earnings per share) outlook as well. After failing to breech key resistance levels, the major indices came under some profit taking pressure which brought them back to close near unchanged for the session.

Technically, March S&P futures are skirting near overbought territory. The failure to hold above 1142.00 suggests that the market is due for a profit taking pullback. Expectations are for a pullback to initial support at 1128.00, with a break of this level setting up a test of 1121.50.

US DEBT FUTURES

OPEN

HIGH

LOW

CLOSE

CHANGE

US M0 (US 30 YRS)

116-09

116-27

116-05

116-14

+1/32NDS

SP H0 (S&P 500)

1134.20

1144.90

1134.10

1140.50

+3.40

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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