The Thomson Reuters/University of Michigan final index of consumer sentiment fell to 76.4 in April from 78.6 in March, and the first GDP estimate for the US economy came out below expectations at +2.5%. Amazon dropped almost 5% on a downbeat guidance report.
Equities: On a double-hit to the bullish tone of the S&P 500, both data releases this morning were below consensus. The JUN13 emini S&p 500 is trading down 6 points to 1,575. The daily key pivot level is 1,580. We believe the market will stay below this key level for the short term as it digests a double negative of data today. We would not be surprised to see this market head back down to 1,560.
Bonds: US bond futures rallied slightly on lower consumer confidence data coupled with a lower print on GDP. The JUN13 30-yr bond is up 24 ticks to 148’22. We believe this market is still popular with large institution seeking quality yield, but this market is still very dependent on US economic data. The Fed has indicated a strong reliance on the monthly unemployment % figures, so the next big # for the bond market will be the first Friday of May when the jobs report is issued.
Commodities: Gold continues to surprise many with its upside movement, today trading up another 1%. Gold’s key resistance today is $1,482 and then $1,486. We believe these levels will hold as ceilings on price. Natural gas is down 2% today after a blistering Q1 run up. Natural gas is now trading at $4.085, down from a recent high of over $4.40. We still believe in a bullish natural gas trend, and believe that a buying opportunity exists in the $3.90′s.
Currencies: We focus on the Japanese Yen today. After a historical fall from the high 1.20′s all the way down to 100, the yen has found some buying interest after not being able to go lower than 100. We now see the Yen rallying 1.4% today to 102.10. We could see the yen continue its rally to the 1.06 area, as that is our first very key level of resistance. We believe investors are starting to look farther into the future and prepare for possible inflation coming back to Japan.