Netflix jumped 21% after the market close yesterday as earnings beat estimates. Of the 131 S&P 500 companies that have reported their quarterly results so far, 73% have exceeded analysts’ predictions for earnings, data compiled by Bloomberg show. Furthermore, sales of single-family properties climbed 1.5% last month to a 417,000 annual pace.
Equities: The JUN13 E-mini S&P 500 futures are up almost 15 points to 1570. This market has shown to be very resilient, trading well above its key 1540-50 pivot area. We would not be surprised to see this market continue its bullish tone, and approach the recent swing high of 1593. Especially considering the continued positive trend in the US housing sector, we believe this market is strong and may continue to rally.
Bonds: The U.S. 30-year JUN13 bond futures are interestingly close to recent highs, even with the stock market showing strength on strong corporate earnings and strong housing numbers. We believe the market is too complacent that the U.S. interest rate policy may be more dovish than what actually might occur. We think now is an interesting time to start to be more bearish in the bond market. With yields close to all-time lows, and the stock market close to all-time highs, we would not be surprised to see the US yields start to travel higher.
Commodities: Gold and silver are back down today, after seeing gold up around $30 yesterday. Gold is down $10 to $1,410, and silver is down over 2% to $22.84. We believe the U.S. dollar may continue to show strength, and that commodities may show weakness. We would not be surprised at all to see silver approach its recent low of $22.05.
Currencies: On weak Chinese and European economic data, the euro currency is down 31 ticks to 130.32. The British pound spiked low to the 152 level, but buyers found value there and have bought the Pound up to the current level of 152.75. We believe the upcoming U.K. GDP data (later this week) will be important to this market. The yen has tried to establish rallies above the key 100 level, but still looks to be in a bearish environment. We would not be surprised to see the yen test the waters below 100.
Click to enlarge.