Bond & Equity Outlook for April 21

DATA RELEASES 04/21/10

  • EIA INVENTORY NUMBERS (CRUDE)
  • EARNINGS
  • WELLS FARGO, MCDONALDS, ABBOTT LABS, MORGAN STANLEY, ALTRIA

DATA RESULTS 04/20/10

  • EARNINGS RELEASES
  • GOLDMAN SACHS ($5.59 EPS)
  • COCA COLA (0.69 EPS)
  • JOHNSON & JOHNSON ($1.62 PER SHARE/$1.27 PER SHARE)
  • APPLE ($3.37 EPS)

US DEBT REVIEW AND OUTLOOK
US Treasuries traded without a lack of direction on Tuesday. Lack of fresh economic data or updates on fiscal crisis from Europe turned the markets focus toward corporate earnings. Better than expected readings from Goldman Sachs and Johnson & Johnson, as well as upbeat expectations for Apple’s earnings releases boosted risk confidence across the board. Only US 30 year futures closed in the green today, as market participants choose to go on a hunt for yield. Gains in the 30 year were also supported by a relatively stable US dollar, as the Japanese Yen took the brunt of the flight to yield. The potential for interest rate hikes heading higher in the wake of sustainable earnings growth may fuel the expected pullback in Treasury prices. US FOMC meeting statements will be closely watched for the next several months for signs of further strategies to “take the training wheels off.”

TECHNICALLY SPEAKING
Resistance for US 30 years held at the 117-06 range. Monday’s 60 minute chart show a possible head and shoulders pattern forming. This suggests that a further test to the downside may be possible. Support for the contract sets up at 116-03 while an expansion of the recent trading range sets up resistance near the 117-10 level. Longer term outlook remains bearish, with downward momentum expected to test 115-04.

US EQUITIES REVIEW AND OUTLOOK
US stocks continued its volatile rebound from Monday’s recovery. Energy and Technology stocks lead the markets higher as commodity prices rebounded on perceived strong global growth and demand and anticipation of earnings from Apple. A global rebound in stock prices carried the major indices to close at their best levels of the day. Apple shares in the aftermarket rallied nearly 7 percent after is earnings and guidance trounced expectations. The growth was led by higher demand and margins for the company’s I Phone. Market participants may be wary on Wednesday to see if the stock triggers a pattern of profit taking within the tech sector.

TECHNICALLY SPEAKING
June S&P futures continues its increase in volatility, topping out near the high end of resistance at 1205.50. Market may have momentum to test further upside at 1214.00. Initial support sets up at 1192.00, with downside target remaining in place at 1171.00.

COMMODITY HIGHLIGHTS
NY Cotton closed limited up today. The price gain was fueled by reports that India will be halting exports in order to support its domestic demand and real in price gains. This may send commercial buyers scrambling for perceived limited supply.

US DEBT FUTURES

OPEN

HIGH

LOW

CLOSE

CHANGE

US M0 (US 30 YRS)

116-18

116-26

116-10

116-24

+8/32nds

SP M0 (S&P 500)

1200.80

1205.60

1197.00

1205.40

+9.80

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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