Bond and equity report for Mar. 9

SUMMARY OF UPCOMING DATA 03/09/10

  • 1:00 PM US 3 YEAR AUCTION ($40B)

DATA RESULTS 03/08/10

NO MAJOR DATA RELEASES

U.S. DEBT REVIEW AND OUTLOOK

  • TREASURIES WEAKER ON POSITIVE AFTERMATH FROM AIG/METLIFE DEAL
  • TRADERS SEEKING DIRECTION FROM THIS WEEKS NON RECORD AUCTION
  • SHORT END OF YEAR CURVE CONTINUES TO STABILZE

U.S. Treasuries traded in a quiet session, with the long end of the yield curve coming under pressure ahead of this week’s U.S. three-, 10-, & 30-year auctions. Expectations are for demand to be restrained as supply concerns continue to overhang the US debt complex, particularly on debt beyond the five-year spectrum. Expectations of a possible near term topping in the US dollar gains may also wane on Treasury demand, as indirect buyers (the category that includes foreign central banks) may stay on the sidelines for this series of auctions in order to not be pressured by future currency risk.

The announcement that MetLife would be purchasing an international division of AIG for $15 billion also pressured the Treasury complex, as the gains from MetLife’s corporate debt holdings were enough to finance the purchase. Begs the question "What have Treasuries done for anyone lately?" with regards to gains & fiscal recovery.

Technically, June 30-year futures are trading near a significant support level at 116-08. The recent strong spike down should initiate a retracement back up to the 116-25 level. Resistance sets up at 117-07. Downward trend in the complex expected to remain in place, with 115-26 setting up as an initial target after short covering rally.

U.S. EQUITY REVIEW AND OUTLOOK

Equities close near unchanged; early gaining sectors- Financials strengthen on AIG/MetLife acquisition deal, continued M&A activity. Technologies higher on anticipation of Cisco announcement, analysts upgrades

Stocks traded mostly flat on Monday, holding onto Friday’s gains. Financials and technologies were among the best performing sectors after the announcement of MetLife’s purchase of a key AIG international operation. The acquisition was one of several ongoing deals among large firms that appear ready to put their large cash reserves to work, as financing terms for deals remains somewhat tight compared to the previous loose financing policies that allowed private equity to thrive and then dive.

Technologies were supported by several of the big name firms today. Research in Motion rallied on tech analyst upgrades, while Cisco moved higher ahead of an announcement on Tuesday that the Network bellwether would be introducing new technologies that would represent a "historic" change in the internet.

Technically, March S&P futures are beginning to look somewhat tired in their upside movement. Resistance appears to be forming at the 1142.20 level. Looking for a pullback that may test the 1128.50 level.

US DEBT FUTURES

OPEN

HIGH

LOW

CLOSE

CHANGE

US M0 (US 30 YRS)

116-20

116-21

116-07

116-13

-9/32nds

SP H0 (S&P 500)

1137.70

1140.50

1136.00

1137.10

+.60

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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