Bond & Equity Report for April 13

DATA RELEASES 04/13/10

  • 8:30 AM US INTERNATIONAL TRADE (-39 B)
  • MAJOR EARNINGS RELEASES (INTEL/0.38 EPS)

DATA RESULTS 04/12/10

  • TREASURY BUDGET (-$65.4/-$62.0)
  • ALOCA (-0.10 EPS)

US DEBT REVIEW AND OUTLOOK
A sense of uncertainty and value seeking drove US Treasury prices higher on Monday. The 1st quarter earnings season kicked off with earnings from global aluminum producer Alcoa Inc. Expectations had not been set high, as the rise in aluminum prices was unlikely to translate to breakout revenue growth due to overall slackening of demand globally.

As levels of “opening night jitters” arise regarding the sustainability of earnings and the aftermath of the euro zone fiscal bailout plan begins to formulate, buyers sought the value of Treasuries as both a safe haven and a value play as yields on US debt hit levels that appear somewhat attractive, giving corporate debt a run for its money at least in the near term. Bonds also received a boost of support from today’s reading on the Treasury Budget. The new deficit reading of $65 billion from the previous reading of -$222 billion demonstrated one of the largest month to month drops in deficit spending.

Technically, the recent run up in Treasuries may be getting tired. The contract appears to be hitting resistance at current levels and should find 116-16 to 116-19 levels difficult to pierce. This level could be setting up to form the top end of a new trading range which should allow the market to pullback to 115-11 in the near term.

US EQUITIES REVIEW AND OUTLOOK
Stocks closed near unchanged after early gains fueled by an agreement to provide a $60 billion lifeline to support Greece’s fiscal shortfalls eroded. Trader sentiment quickly turned to the uncertainty of the earnings season as Alcoa kicked things off with earnings that came in line with expectations. The perceived value of secure yields became more attractive in the wake of earnings & revenue uncertainty. Stocks pulled back to nearly unchanged levels as Treasuries appeared to provide a worthwhile risk reward allocation.

Financials and tech stocks were among the best performers for the session, while a number of multinationals came under late pressure as the aftermath and grading of the euro zone’s performance regarding the (resolution?) of the Greek fiscal crisis may pressure repatriated earnings going forward. The market will be seeking a potential breakout catalyst on Tuesday as tech bellwether Intel is set to report earnings on Tuesday.

Technically, June S&P futures continue to defy technical overbought indicators, as the market looks for a new breakout catalyst. Support and resistance levels set up at 1183.80 and 1203.50. Look for upside breakouts to be met by selling into strength as sentiment tries to remain positive but looking for areas to take profit on gains as the market may try to take a breather, setting up sideline capital to meet potential changes in the tax terrain going into the second half of the year.

US DEBT FUTURES

OPEN

HIGH

LOW

CLOSE

CHANGE

US M0 (US 30 YRS)

115-17

116-14

115-08

116-08

+19/32nds

SP M0 (S&P 500)

1192.00

1195.60

1190.80

1192.60

0



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.

Comments
comments powered by Disqus
Check out Futures Magazine - Polls on LockerDome on LockerDome