Bond & Equity report for April 16

DATA RELEASES 04/16/10

  • 8:30 am US Housing Starts (606 K)
  • 9:55 am US Consumer Confidence (75)

DATA RESULTS 04/15/10

  • Empire State Mfg Survey (31.86/25.0)
  • US weekly jobless claims (484 K/440 K)
  • US Industrial Production (0.1%/0.8%)
  • Phil Fed Survey (20.2/20.0)
  • EIA Inventory Report (Nat Gas) Build 87 BCF
  • Google Earnings (EPS $6.06/$4.49) Whisper # $6.74

US DEBT REVIEW AND OUTLOOK
US Bonds brought a little vigor back to the notion of volatility. The 30 year futures posted close to a full point swing today as market sentiment flip flopped along with whatever data release hit the tape. Treasuries came under pressure after reports showing better than expected growth in manufacturing and earnings, while rallies to the upper end of today’s trading range were fueled by concerns regarding the higher than expected new jobless claims and low yielding government debt’s consistent patron-the Greek fiscal crisis. With a lack of new supply coming to auction, definable technical ranges should remain the norm until the early part of next week.

Technically, June 30 year futures look like they may be setting up for some further upside to retest 116-18. Initial resistance sets up at 116-26. If this level fails, the contract should test 117-05. A break of 115-12 represents a significant breakdown and could set up a retest to 114-27.

US EQUITIES REVIEW AND OUTLOOK
Stocks worked their way to post another record high close for the year, though gains appear tentative as technical indicators suggest strongly overbought conditions and the market appears to be taking a cautious tone ahead of next week’s ramp up of earnings releases. Overall the data picture was mixed today as stocks appeared to be struggling to inject some volatility (after so many reports focused on the low levels of the VIX). Reports showing another higher than expected increase in new unemployment claims were offset by better than expected readings on manufacturing and strong earnings from UPS.

The markets continue to focus on near term positive data, as the environment for lost cost capital is likely to remain in place. Eventually the markets will have their fill of “appetizers” and will look toward the results of new jobs creation. A key window of opportunity for strong market gains will result from significant, sustainable employment creation that takes place before the initial wave of concern regarding increased taxes comes into effect.

Google report earnings after the market closed. While revenues significantly beat year on year from 2009, the company fell short of the Street’s “whisper number”. The company’s 1st Quarter earnings jumped 37% on strong advertising revenue. The first disappointing revenue number of the tech sector could inject some additional volatility into the markets over the next several sessions.

Technically, June S&P futures continue to trail along a key RSI level of 80, suggesting a significantly overbought position. Support for the contract appears to have shifted to additional levels at 1194.50 and 1188.00. Resistance sets up at 1212.00 and 1218.25.

US DEBT FUTURES

OPEN

HIGH

LOW

CLOSE

CHANGE

US M0 (US 30 YRS)

115-27

116-12

115-15

116-01

+3/32nds

SP M0 (S&P 500)

1205.00

1210.40

1204.70

1208.50

+1.90

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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