SUMMARY OF UPCOMING DATA 11/04/09
8:15 AM ADP EMPLOYMENT REPORT
10:00 AM: ISM NON-MFG INDEX (51.6)
10:30 AM EIA INVENTORY (PETROLEUM)
11:00 AM US 3, 10, 30 YEAR NOTE ANNOUNCEMENTS
2:15 PM FOMC MEETING ANNOUNCEMENT (NO RATE CHANGE)
DATA RESULTS 11/03/09
FOMC MEETING BEGINS
US FACTORY ORDERS (0.9% VS. 1.0%)
US DEBT REVIEW AND OUTLOOK
US TREASURIES traded lower on Tuesday. The markets came under some pressure ahead of announcements for next week’s 3, 10, and 30 year Treasury auctions. In addition, expectations that the Federal Reserve will keep its current near zero interest rate policy in place well into 2010 weighed on Treasury prices as well. The sentiment appears to be that continued low rates will allow for increased risk tolerance, offering a better prospect for growth in equity and more risk tolerant instruments.
Technically, Dec 30 year futures continue to range trade. The break of 118-31 sets the market up for a possible test of 118-16. Expect this range to have a hard time violating at first attempt, resulting in pullback of market to 119-16, with 119-25 as resistance within narrowing range channel. Downside target in 30 year Treasuries should set up at 118-06.
US EQUITY REVIEW AND OUTLOOK
US EQUITIES traded for a second session in a relatively tight range. Early downside pressure from weakness in the technology and financial sectors was alleviated by strong gains in commodity and transportation stocks.
Today’s report that Warren Buffet bought out controlling interest in Burlington Northern railroad, betting his largest cash buyout ($23 Billion) of a company on the US economic recovery placed a floor under initial uncertainty regarding the global recovery after the UK announced that it would be extending an additional bailout of $53 Billion to RBS (Royal Bank of Scotland) and Lloyds Bank to cover continued pressure on their balance sheets from toxic assets. Commodity stocks received a boost after gold shot up to close at a record high. Precious metals prices moved higher after India’s Central Bank purchased nearly half of the IMF”S reserves being offered for sale. The strong buying interest prompted speculation that other countries may be going on the hunt for hard assets as fiscal policies and economic relief efforts going forward remain uncertain.
Technically, S&P futures changed very little in their outlook, with 1022.50 setting up as a significant level of support. A break of this level should increase downward momentum to test initial downside target of 1007.00. Resistance sets up at 1052.00 and 1055.00. 1080.10 in Dec S&P could be a possible breakout level that could test upside target of 1103.00.
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US DEBT FUTURES |
OPEN |
HIGH |
LOW |
CLOSE |
CHANGE |
|
US Z9 (US 30 YRS) |
119-26 |
120-15 |
118-27 |
119-02 |
-24/32nds |
|
SP Z9 (S&P 500) |
1032.20 |
1043.00 |
1030.80 |
1041.70 |
+2.60 |
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Prepared by Rich Roscelli & Paul Brittain.
PLEASE EMAIL QUESTIONS OR COMMENTS TO RICH@BINVSTGRP.COM
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