NEW YORK (MarketWatch) -- Treasury prices rose on Thursday, pushing yields down, as renewed uncertainty about policy actions in Europe and the impact on global economic growth weighed on the euro and U.S. stock futures, increasing the relative attractiveness of U.S. debt.
Bonds extended gains after an unexpectedly weak reading on initial unemployment claims in the U.S
Yields on 10-year notes(UST10Y 3.27, -0.10, -2.10%), which move inversely to prices, fell 10 basis points to 3.3%.
A basis point is 0.01%.
Yields on 2-year notes declined 6 basis points to 0.7%.
Longer-term yields falling more than shorter-term ones reduces the gap between the securities, flattening the so-called "yield curve" that charts the spread between them.
"We start this day with very little new to add to the story as we watch the euro, stocks, and take a bullish flattening cue from that," said strategist at CRT Capital Group.
The euro(CUR_EURUSD 1.2360, -0.0066, -0.5311%)slipped to $1.2322 from $1.2429 in late North American trading Wednesday.
It fell to a fresh four-year low earlier this week. Read about dollar, euro.
The Labor Department said 471,000 Americans filed first-time claims for jobless benefits, unexpectedly jumping 25,000.Read about jobless claims.
Still to come is the Philadelphia Federal Reserve's index on manufacturing for May and the leading indicators index for April, both at 10 a.m. Eastern time.
At 11 a.m., the Treasury Department will say how much in debt it will sell next week. Analysts expect auction sizes to shrink.
The government will sell $2 billion less than last month in 2-year and 5-year notes, and $1 billion less in 7-year debt next week, according to Nomura Securities.
The size cuts, focused in shorter-maturity debt, should help the Treasury meet two goals: extend the average maturity of the government's debt and reduce the risks associated with refinancing the debt in upcoming years, said George Goncalves, a bond strategist at Nomura.
On Wednesday, Treasury prices fell and the euro recouped some steep loses as currency traders reversed bets that the shared currency would fall further.
StockSource.us
ABOUT US:
Stock Source is a full service investor relations firm dedicated to growth stocks. We seek out innovative, emerging companies poised for growth and tell their stories to qualified, aggressive investors looking for ground floor opportunities. We connect investors with investment prospects—cutting through the noise and churn of Wall Street to shine the spotlight on companies on their way up. These companies trade on the Nasdaq, Amex, OTCBB, and Pinksheets.
Showing posts with label Euro. Show all posts
Showing posts with label Euro. Show all posts
Thursday, 20 May 2010
Futures Drop As Euro Continues Slide
Futures pointed toward another day of declines for U.S. stocks as Wall Street waits data on jobless claims and economic activity along with another wave of corporate earnings.
Traders also continue to watch the decline of the euro, which fell 0.6% overnight to $1.2340 after partially recovering on Wednesday.
As of 7 a.m. in New York, the Dow Jones Industrial Average futures fell 65 points, or 0.63%, to 10340, the S&P 500 futures fell 7.5 points to 1102.40 and the Nasdaq 100 futures lost 16 points to 1852.25.
Once again, the decline of the euro was putting pressure on European markets and commodities in Thursday trading. The continent's major averages were down 0.3% - 0.9%, with Germany leading losses.
Oil was down 1.5% to $68.85 a barrel and gold was lower by 0.7% to $1,184.50 a troy ounce.
Today's earnings schedule consists of mostly retailers, including results from Williams-Sonoma (WSM: 28.41,0, 0%), Gap Inc. (GPS: 22.21, 0, 0%), Staples (SPLS: 21.54, 0, 0%) among others. After the closing bell PC maker Dell (DELL: 14.98, 0, 0%) and video game retailer GameStop (GPS: 22.21, 0, 0%) are scheduled to report earnings.
Wall Street will get weekly jobless claims at 8:30 a.m. ET followed by the Philadelphia Fed's activity index at 10 a.m. Economists surveyed by Thomson Reuters expect initial claims fell by 5,000 to 439,000 while the Philly Fed index climbed to a reading of 20.7.
On Wednesday, the Dow fell 66.58 points, or 0.63%, to 10444.37, the Standard & Poor's 500 lost 5.75 points, or 0.51%, to 1115.05 and the Nasdaq Composite dropped 18.89 points, or 0.82%, to 2298.37. The FOX 50 slid 3.27 points, or 0.40%, to 819.74.
Traders also continue to watch the decline of the euro, which fell 0.6% overnight to $1.2340 after partially recovering on Wednesday.
As of 7 a.m. in New York, the Dow Jones Industrial Average futures fell 65 points, or 0.63%, to 10340, the S&P 500 futures fell 7.5 points to 1102.40 and the Nasdaq 100 futures lost 16 points to 1852.25.
Once again, the decline of the euro was putting pressure on European markets and commodities in Thursday trading. The continent's major averages were down 0.3% - 0.9%, with Germany leading losses.
Oil was down 1.5% to $68.85 a barrel and gold was lower by 0.7% to $1,184.50 a troy ounce.
Today's earnings schedule consists of mostly retailers, including results from Williams-Sonoma (WSM: 28.41,0, 0%), Gap Inc. (GPS: 22.21, 0, 0%), Staples (SPLS: 21.54, 0, 0%) among others. After the closing bell PC maker Dell (DELL: 14.98, 0, 0%) and video game retailer GameStop (GPS: 22.21, 0, 0%) are scheduled to report earnings.
Wall Street will get weekly jobless claims at 8:30 a.m. ET followed by the Philadelphia Fed's activity index at 10 a.m. Economists surveyed by Thomson Reuters expect initial claims fell by 5,000 to 439,000 while the Philly Fed index climbed to a reading of 20.7.
On Wednesday, the Dow fell 66.58 points, or 0.63%, to 10444.37, the Standard & Poor's 500 lost 5.75 points, or 0.51%, to 1115.05 and the Nasdaq Composite dropped 18.89 points, or 0.82%, to 2298.37. The FOX 50 slid 3.27 points, or 0.40%, to 819.74.
Wednesday, 19 May 2010
Stocks tumble as euro slumps
NEW YORK (CNNMoney.com) -- Stocks slumped Tuesday as the euro touched a fresh four-year low versus the dollar, keeping Europe's woes front and center and overshadowing better-than-expected earnings from big U.S. retailers.
The Dow Jones industrial average (INDU) lost 115 points, or 1.1%. The S&P 500 (SPX) index lost 16 points, or 1.4%. The Nasdaq composite (SPX) lost 37 points, or 1.6%.
Stocks had managed some early gains as investors focused on Home Depot and Wal-Mart Stores' earnings and an improved report on home construction. But the broader malaise that has afflicted the stock market soon returned.
The stock sell-off picked up steam in the afternoon as the euro flirted with and then fell below a four-year lowhit on Monday.
"I think the euro issue has everyone unnerved now because they are worried it's the start of something bigger," said Tommy Williams, founder and president of Williams Financial Advisors. "But I think it's the tail-end of or aftermath of what we saw in 2008 rather than something new."
Williams said fears that European debt issues could spark a second recession are overblown as U.S. economic fundamentals remain positive.
Technology and financial shares led the declines Tuesday. Intel (INTC,Fortune 500), Cisco Systems (CSCO, Fortune 500), Hewlett-Packard (HPQ, Fortune 500) and Advanced Micro Devices (AMD,Fortune 500) were among the big losers. Bank of America (BAC, Fortune 500), Wells Fargo (WFC, Fortune 500) and a number of regional banks all declined, dragging down the KBW Bank (BKX) index by 3.7%.
The CBOE Volatility index, or the VIX (VIX), the market's fear gauge, spiked 7% to $33.24, its highest point in over a week.
Stocks ended with slight gains Monday after digging out of heavy losses accrued earlier in the day. Markets have been under pressure for several weeks amid worries about the European debt crisis, the deteriorating euro and the impact they may have on the global recovery.
PC sales spike drives HP profit growth
World markets: Markets across the Atlantic rallied Tuesday, although the euro remained volatile.
The British FTSE 100 gained 0.9%, the German DAX gained 1.5% and the French CAC 40 gained 2.1%.
The dollar fell 0.2% versus the yen.
Asian markets ended higher, with the Hong Kong Hang Seng rising 1.2%, the Japanese Nikkei ending just above breakeven and the Shanghai Composite adding 1.4%.
Why Europe may kill the U.S. recovery
Economy: A report on the housing market offered a mixed take on the health of the industry.
Housing starts rose 5.8% to a seasonally adjusted annualized rate of 672,000 in April from 635,000 in March. Economists surveyed by Briefing.com expected 655,000.
But building permits, a measure of builder confidence, fell 11.5% in April to a seasonally adjusted rate of 606,000 from 685,000 in March. Economists expected a rate of 680,000.
Another report showed that the Producer Price index (PPI), a key measure of wholesale inflation, fell 0.1% in April after rising 0.7% in March. The so-called Core PPI, which strips out volatile food and energy prices, rose 0.2% after rising 0.1% in March. Economists thought Core PPI would rise 0.1%.
Corporate profits: Dow retailers Home Depot (HD, Fortune 500) and Wal-Mart Stores (WMT, Fortune 500) both reported better-than-expected quarterly results.
Home Depot reported a 41% jump in fiscal first-quarter earnings thanks to strength in seasonal items and better profitability. The home improvement retailer also boosted its full-year earnings outlook. Shares lost 2.4%.
Wal-Mart Stores reported improved earnings from a year ago that beat estimates, but issued a second-quarter earnings forecast that was short of expectations. Separately, the company said it was cutting prices on a number of food and household products. Shares gained 1.9%.
Wal-Mart was the Dow's only gainer, with 29 of 30 Dow issues falling, led by tech and financial names.
Commodities: U.S. light crude oil for June delivery fell 67 cents to settle at $69.41 a barrel on the New York Mercantile Exchange.
COMEX gold for June delivery fell $13.50 to settle at $1,216.80 an ounce.
Bonds: Treasury prices rose, lowering the yield on the 10-year note to 3.39% from 3.47% late Monday. Treasury prices and yields move in opposite directions.
Market breadth was negative. On the New York Stock Exchange, losers beat winners by over three to one on volume of 1.53 billion shares. On the Nasdaq, decliners beat advancers nearly three to one on volume of 2.43 billion shares.
StockSource.us
ABOUT US:
Stock Source is a full service investor relations firm dedicated to growth stocks. We seek out innovative, emerging companies poised for growth and tell their stories to qualified, aggressive investors looking for ground floor opportunities. We connect investors with investment prospects—cutting through the noise and churn of Wall Street to shine the spotlight on companies on their way up. These companies trade on the Nasdaq, Amex, OTCBB, and Pinksheets.
The Dow Jones industrial average (INDU) lost 115 points, or 1.1%. The S&P 500 (SPX) index lost 16 points, or 1.4%. The Nasdaq composite (SPX) lost 37 points, or 1.6%.
Stocks had managed some early gains as investors focused on Home Depot and Wal-Mart Stores' earnings and an improved report on home construction. But the broader malaise that has afflicted the stock market soon returned.
The stock sell-off picked up steam in the afternoon as the euro flirted with and then fell below a four-year lowhit on Monday.
"I think the euro issue has everyone unnerved now because they are worried it's the start of something bigger," said Tommy Williams, founder and president of Williams Financial Advisors. "But I think it's the tail-end of or aftermath of what we saw in 2008 rather than something new."
Williams said fears that European debt issues could spark a second recession are overblown as U.S. economic fundamentals remain positive.
Technology and financial shares led the declines Tuesday. Intel (INTC,Fortune 500), Cisco Systems (CSCO, Fortune 500), Hewlett-Packard (HPQ, Fortune 500) and Advanced Micro Devices (AMD,Fortune 500) were among the big losers. Bank of America (BAC, Fortune 500), Wells Fargo (WFC, Fortune 500) and a number of regional banks all declined, dragging down the KBW Bank (BKX) index by 3.7%.
The CBOE Volatility index, or the VIX (VIX), the market's fear gauge, spiked 7% to $33.24, its highest point in over a week.
Stocks ended with slight gains Monday after digging out of heavy losses accrued earlier in the day. Markets have been under pressure for several weeks amid worries about the European debt crisis, the deteriorating euro and the impact they may have on the global recovery.
PC sales spike drives HP profit growth
World markets: Markets across the Atlantic rallied Tuesday, although the euro remained volatile.
The British FTSE 100 gained 0.9%, the German DAX gained 1.5% and the French CAC 40 gained 2.1%.
The dollar fell 0.2% versus the yen.
Asian markets ended higher, with the Hong Kong Hang Seng rising 1.2%, the Japanese Nikkei ending just above breakeven and the Shanghai Composite adding 1.4%.
Why Europe may kill the U.S. recovery
Economy: A report on the housing market offered a mixed take on the health of the industry.
Housing starts rose 5.8% to a seasonally adjusted annualized rate of 672,000 in April from 635,000 in March. Economists surveyed by Briefing.com expected 655,000.
But building permits, a measure of builder confidence, fell 11.5% in April to a seasonally adjusted rate of 606,000 from 685,000 in March. Economists expected a rate of 680,000.
Another report showed that the Producer Price index (PPI), a key measure of wholesale inflation, fell 0.1% in April after rising 0.7% in March. The so-called Core PPI, which strips out volatile food and energy prices, rose 0.2% after rising 0.1% in March. Economists thought Core PPI would rise 0.1%.
Corporate profits: Dow retailers Home Depot (HD, Fortune 500) and Wal-Mart Stores (WMT, Fortune 500) both reported better-than-expected quarterly results.
Home Depot reported a 41% jump in fiscal first-quarter earnings thanks to strength in seasonal items and better profitability. The home improvement retailer also boosted its full-year earnings outlook. Shares lost 2.4%.
Wal-Mart Stores reported improved earnings from a year ago that beat estimates, but issued a second-quarter earnings forecast that was short of expectations. Separately, the company said it was cutting prices on a number of food and household products. Shares gained 1.9%.
Wal-Mart was the Dow's only gainer, with 29 of 30 Dow issues falling, led by tech and financial names.
Commodities: U.S. light crude oil for June delivery fell 67 cents to settle at $69.41 a barrel on the New York Mercantile Exchange.
COMEX gold for June delivery fell $13.50 to settle at $1,216.80 an ounce.
Bonds: Treasury prices rose, lowering the yield on the 10-year note to 3.39% from 3.47% late Monday. Treasury prices and yields move in opposite directions.
Market breadth was negative. On the New York Stock Exchange, losers beat winners by over three to one on volume of 1.53 billion shares. On the Nasdaq, decliners beat advancers nearly three to one on volume of 2.43 billion shares.
StockSource.us
ABOUT US:
Stock Source is a full service investor relations firm dedicated to growth stocks. We seek out innovative, emerging companies poised for growth and tell their stories to qualified, aggressive investors looking for ground floor opportunities. We connect investors with investment prospects—cutting through the noise and churn of Wall Street to shine the spotlight on companies on their way up. These companies trade on the Nasdaq, Amex, OTCBB, and Pinksheets.
Tuesday, 18 May 2010
EURO, STOCKS RECOVER BUT DEBT SHADOW HANGS
European stock markets shot higher and the euro recovered further from four-year low marks against the dollar on Tuesday but market concerns about plans to tackle a mountain of EU debt lingered, traders said.
“A resurgence in US trading after yesterday’s European close has locked in a positive start for the trading session today, with the heavyweight miners, banks and energy firms all making gains to lead indices higher,” said City Index analyst Joshua Raymond.
“However, trading continues to be choppy and this means that there remains a question mark over whether index gains can garner momentum.”
Raymond added: “In truth, the market remains focused on the impact of EU austerity measures on growth.”
London’s benchmark FTSE 100 index rose 0.52 percent in late morning trading. Frankfurt jumped 0.93 percent, Paris advanced 1.02 percent and Madrid surged 1.98 percent.
Earlier in Asia, Tokyo closed flat, Hong Kong jumped 1.17 percent and Shanghai won 1.36 percent after sharp losses on Monday.
Eurozone finance ministers met in Brussels on Monday, battling to defend the euro but with no obvious agreement on tactics to slash spending.
Sentiment remained fragile despite an EU-IMF rescue package worth almost one trillion dollars designed to prevent the Greek crisis from spreading.
Concerns linger that a default would hit the financial system in the same way the collapse of Lehman Brothers did in 2008, while necessary austerity measures could crush European growth.
Credit Suisse strategist Satoru Ogasawara noted the market now tended to react to negative news rather than positive news — and said that the euro could resume its plunge.
“The market simply doesn’t want to buy the euro. Confidence on the euro will not be restored” until the fiscal crisis in Greece and other countries is resolved.
The euro rose to 1.2403 dollars in London on Tuesday, up from 1.2394 dollars late in New York on Monday when it also struck a four-year low of 1.2234.
France’s minister for economic recovery on Tuesday played down worries over the plunging euro and argued that a weaker currency would help boost European exports.
“The fact that the euro today is not as strong is a real advantage for exports,” said Patrick Devedjian in an interview to French radio.
“The euro has gone down, the rates are varying, this is not a tragedy,” he said.
Devedjian noted that a strong euro also had its critics.
“If my memory serves me well, most of the exporters and importers were whining because they found the euro too strong and complained that it penalised them,” said the minister.
His comments appeared to be played out in data published Tuesday.
The 16-nation eurozone’s trade surplus with the rest of the world soared to 4.5 billion euros (5.5 billion dollars) in March, boosted by the weakness of the euro, official figures showed.
The new figure, an initial estimate, almost doubled the 2.4 billion euro trade surplus which the countries sharing the euro totted up in February when the eurozone dragged itself out of deficit.
StockSource.us ABOUT US: Stock Source is a full service investor relations firm dedicated to growth stocks. We seek out innovative, emerging companies poised for growth and tell their stories to qualified, aggressive investors looking for ground floor opportunities. We connect investors with investment prospects—cutting through the noise and churn of Wall Street to shine the spotlight on companies on their way up. These companies trade on the Nasdaq, Amex, OTCBB, and Pinksheets.
Wednesday, 31 March 2010
FOREX, COMMODITIES, STOCKS OUTLOOK March 31st: Analysis, Key Events, Trends, Trade Ideas
Stocks: Today: Asia mixed, Europe up. Stocks chop around due to both light holiday volume, as well as caution stemming from a weak Greek bond sale thus far and the usual uncertainty ahead of US Non-farms Payrolls
.- FX: Slight bias against safety currencies [JPY, USD, CHF in order of safety appeal] vs. risk currencies [AUD, NZD, CAD, EUR, GBP in order of risk appetite appeal], as stocks essentially flat, USD gains against fellow safeties and the Euro, but mixed vs. commodity dollars (and the GBP on better than expected Q4 UK GDP).
- Main events: TUES: GBP Final GDP q/q+, USD CB Consumer Confidence+, WED AUD Building Approvals-, Retail Sales-, NZD NBNZ Bus. Confidence-, CHF KOF Econ Barometer USD ADP Non-Farm Payrolls, CAD GDP m/m, JPY Tankan Mfg Index AUD Trade Balance CNY Mfg PMI GBP Mfg PMI USD Unemployment Claims, Challenger Job Cuts, USM Mfg PMI, FRI: USD NFP & Unemployment Rate
- Big Theme: Risk assets mostly continue to trade in ranges of the past weeks due to light holiday volume and caution ahead of both US Job Reports and this week’s Greek 12 year bond sale which will quickly test whether last week’s EU Contingency Plan succeeded in restoring confidence enough to lower Greek borrowing costs. Results thus far are not encouraging.
STOCKS:
US: The overall market finished flat after interest in a better-than-expected consumer confidence report dissipated. We believe the normal caution ahead of the US monthly jobs reports and concerns over Greece’s current inability to sell bonds also weighed on stocks.
A stronger-than-expected improvement in the May Consumer Confidence Index to 52.5 further improved what was already a generally positive tone in the early going. Though gains were modest, the morning advance was broad based.
Still, credit analysts at S&P remain concerned about Britain’s fiscal deficit. Such concern offers another reminder that even historically stable global economies face sovereign debt challenges. To its credit, though, France’s AAA rating was affirmed by Fitch analysts, who also said the outlook for France’s grade is stable.
Strength in the dollar dragged down the broader market, but tech stocks showed resilience. That gave the sector a 0.5% gain and helped the Nasdaq edge out its counterparts.
Financials were part of the reason that the broader market struggled to post a gain. The sector, which is second to tech by market weight, finished with a 0.7% loss. That made it the worst performing sector in the S&P 500. Diversified financial services stocks (-1.3%) were the weakest performers in the sector; they were also among the most actively traded names by volume in the entire market.
Overall trading volume was light once again, under 1 billion shares traded hands on the NYSE. The low-volume trade has been consistent in recent weeks as participants continue to take a cautious stance, wary of jumping in or out of the market for fear of a correction or missing further gains.
Asia Stock Outlook: Down: At the close early Wednesday GMT: Japan’s Nikkei average hit an 18-month intraday high before paring gains on Wednesday, the final day of the financial year, but further gains were expected in the new quarter as a global economic recovery picks up strength.
European Stock Outlook Up At the open early Wednesday GMT: European stocks pared early losses and turned slightly positive in the first few minutes of trading on Wednesday, as steady oil prices boosted energy stocks, eclipsing a dip in heavyweight mining shares.
At 0719 GMT, the FTSEurofirst 300 .FTEU3 index of top European shares was up 0.06 percent at 1,080.05 points. The benchmark index had a roller-coaster session on Tuesday, hitting an 18-month high before surrendering gains and ending the day flat.
ASIA-MIXED N225I % HS % SSEC % FTSTI % AORD %
EUROPE FLAT FTSE % DAX CAC %
US- UP S&P +0.00% DJIA +0.11% NASDAQ +0.11%
THIS MORNING DOWN N225I -0.06% HS -0.46% SSEC -0.62% FTSTI -0.84% AORD -0.68%
UP FTSE +0.24% DAX +0.10% CAC +0.10%
Commodities Outlook: Flat: In Tuesday and early Wednesday trade GMT: continuing to tight range trading
Crude Oil Daily Outlook: Up: In Tuesday and early Wednesday trade GMT, futures continuing higher following overall risk appetite, rising as stocks continue higher and the USD pulled back over the past days.
Gold Daily Outlook own: In Tuesday and early Wednesday trade GMT again diverging from stocks, overall risk appetite, beginning to form another leg in its downtrend. Note that gold’s pullback in late November was the earliest leading indicator of the last major risk asset pullback, which did not occur until nearly a month later for oil and stocks.
FOREX Daily Outlook: In Tuesday and early Wednesday trade GMT: Continuing bias to risk currencies as risk assets hang on at or near new highs amid ongoing uncertainty about Greece and this Friday’s US jobs reports. Tuesday USD gained vs. fellow safeties and the Euro, but mixed vs. commodity dollars (and the GBP on better than expected Q4 UK GDP).
This week ends with two significant market moving events for the USD and thus the entire forex markets: the attempted Greek 12 year bond sale and the US monthly jobs reports Friday. The Greek bond sale has been weak thus far, which should hurt the Euro (and thus help the USD) because it undermines the EZ confidence and the credibility of the new EU contingency plan’s effectiveness at calming markets to allow Greece ( and its fellow PIIGS block) lower borrowing costs.
However expectations for Friday’s US jobs reports are high, leaving markets vulnerable to disappointment, which would hurt the USD
US Dollar Daily Outlook: In Tuesday and early Wednesday trade GMT: Up vs. the JPY, AUD, NZD, EUR, steady vs. the CHF, down vs. the CAD, GBP. Key data today is the ADP figure, Chicago Mfg PMI
In NY trade yesterday the dollar made a move up from negative territory to finish with a 0.3% gain against competing currencies. The greenback’s gain was somewhat restricted by strength in the British pound, which garnered support amid news that Britain’s fourth quarter GDP was upwardly revised to reflect a 0.4% increase.
Euro Daily Outlook: In Tuesday and early Wednesday trade GMT: Up vs. the JPY, down vs. the CHF, USD flat vs. the AUD, down vs. the GBP, CAD – Pressured by anemic demand for Greek bonds, and a possibly very good US monthly jobs report that could boost the USD. However, bouncing back in early European trade as German unemployment figures showed the largest drop since August 2008.
Regarding the impact of the Greek bond sale, key points include:
The euro fell victim to fresh concerns about Greece’s ability to borrow. After EU leaders announced a financial aid mechanism for Greece last week, they stressed that aid is not needed at this time.
Prime Minister Papandreou concurred by saying that the country would first try its luck with the markets by raising money through bond auctions. Unfortunately weak demand has triggered many questions about the country’s ability to borrow. Greece’s surprise auction of bonds that mature in 2022 this morning raised only EUR 390 million, less than half of their EUR 1 billion upper limit.
Greece needs to raise EUR 10.5 billion by the end of May to avoid tapping the bailout plan put into place and resurrecting concerns about a fiscal crisis within the Euro zone. What the results of the bond auction tell us is that just because the Germans and French have agreed to provide support to Greece with the help of the IMF, it is still up to Greece to move forward with their austerity package and reduce their deficit. Unfortunately, austerity spending takes time to show results, and are unlikely to show results within the coming months
While it is good that a mechanism for aid is in place, needing to use it would still be an embarrassment for the Euro zone. As noted in our most recent post The EU Contingency Plan: Doomed By Its Main Strength, it’s unclear how smoothly the EU could actually get the cash to Greece should sudden need arise, assuming Angie Merkel is really willing to face her voters after having just tossed a chunk of their taxes at a very unpopular cause.
Meanwhile, even though Iceland is not a member of the Euro zone, S&P’s decision to downgrade their debt raises contagion fears because they borrow from banks within the region and it reminds everyone that many problems still exist in Europe..
Yen Daily Outlook: In Tuesday and early Wednesday trade GMT: Down vs. the USD, CHF, GBP, AUD, EUR
British Pound Daily Outlook: In Tuesday and early Wednesday trade GMT: Up vs. everything on better than expected Q4 GDP which, given its oversold nature, left it ripe for a bounce on any kind of positive news. Over the past weeks attempting to carve out a bottom for now.
Australian Dollar Daily Outlook: In Tuesday and early Wednesday trade GMT: Down or flat vs. most fx except for the JPY as poor retail and building data pressure it
New Zealand Dollar Daily Outlook: In Tuesday and early Wednesday trade GMT: Up vs. the USD, JPY, down vs. the GBP
Canadian Dollar Daily Outlook: In Tuesday and early Wednesday trade GMT: Up vs. most fx except for the GBP
Swiss Franc Daily Outlook In Tuesday and early Wednesday trade GMT: down vs. the AUD, EUR, up vs. the JPY, steady but fading vs. the USD
CONCLUSIONS & Big Picture: Short term bias for risk assets, The S&P 500, our key risk asset barometer, like other major stocks, holding on at/near 52 week highs Also, fx and commodities continuing their range trading. Long Term Bias Down:, especially in July, when 2 major events hit: Spain needs to sell about 30 bln euros in bonds AND a massive wave of US mortgage rate resets not seen since 2007 begins. The last time we saw this magnitude of rising mortgage rates markets stalled out and ultimately crashed. NB: Never fight the trend, no matter how irrational, as markets can stay irrational longer than you can stay solvent (Keynes). Therefore, as anyone who follows our trade recommendations knows, we always wait for some breach of key support/resistance as a signal to enter a position as odds appear to be in our favor, and even then only when the likely target is more than 2x as far away as out stop loss (which we ALWAYS USE, RIGHT?) so that our winning trade profits exceed out losses by at least 2:1.
Trade Ideas: We favor the dollar given the likely ongoing problems with the Greek bond sale and the likely good US jobs figures, but no recommendations until key support resistance levels breached
Disclosure: No positions
http://www.stocksource.us
ABOUT US:
Stock Source is a full service investor relations firm dedicated to growth stocks. We seek out innovative, emerging companies poised for growth and tell their stories to qualified, aggressive investors looking for ground floor opportunities.
We connect investors with investment prospects—cutting through the noise and churn of Wall Street to shine the spotlight on companies on their way up. These companies trade on the Nasdaq, Amex, OTCBB, and Pinksheets.
.- FX: Slight bias against safety currencies [JPY, USD, CHF in order of safety appeal] vs. risk currencies [AUD, NZD, CAD, EUR, GBP in order of risk appetite appeal], as stocks essentially flat, USD gains against fellow safeties and the Euro, but mixed vs. commodity dollars (and the GBP on better than expected Q4 UK GDP).
- Main events: TUES: GBP Final GDP q/q+, USD CB Consumer Confidence+, WED AUD Building Approvals-, Retail Sales-, NZD NBNZ Bus. Confidence-, CHF KOF Econ Barometer USD ADP Non-Farm Payrolls, CAD GDP m/m, JPY Tankan Mfg Index AUD Trade Balance CNY Mfg PMI GBP Mfg PMI USD Unemployment Claims, Challenger Job Cuts, USM Mfg PMI, FRI: USD NFP & Unemployment Rate
- Big Theme: Risk assets mostly continue to trade in ranges of the past weeks due to light holiday volume and caution ahead of both US Job Reports and this week’s Greek 12 year bond sale which will quickly test whether last week’s EU Contingency Plan succeeded in restoring confidence enough to lower Greek borrowing costs. Results thus far are not encouraging.
STOCKS:
US: The overall market finished flat after interest in a better-than-expected consumer confidence report dissipated. We believe the normal caution ahead of the US monthly jobs reports and concerns over Greece’s current inability to sell bonds also weighed on stocks.
A stronger-than-expected improvement in the May Consumer Confidence Index to 52.5 further improved what was already a generally positive tone in the early going. Though gains were modest, the morning advance was broad based.
Still, credit analysts at S&P remain concerned about Britain’s fiscal deficit. Such concern offers another reminder that even historically stable global economies face sovereign debt challenges. To its credit, though, France’s AAA rating was affirmed by Fitch analysts, who also said the outlook for France’s grade is stable.
Strength in the dollar dragged down the broader market, but tech stocks showed resilience. That gave the sector a 0.5% gain and helped the Nasdaq edge out its counterparts.
Financials were part of the reason that the broader market struggled to post a gain. The sector, which is second to tech by market weight, finished with a 0.7% loss. That made it the worst performing sector in the S&P 500. Diversified financial services stocks (-1.3%) were the weakest performers in the sector; they were also among the most actively traded names by volume in the entire market.
Overall trading volume was light once again, under 1 billion shares traded hands on the NYSE. The low-volume trade has been consistent in recent weeks as participants continue to take a cautious stance, wary of jumping in or out of the market for fear of a correction or missing further gains.
Asia Stock Outlook: Down: At the close early Wednesday GMT: Japan’s Nikkei average hit an 18-month intraday high before paring gains on Wednesday, the final day of the financial year, but further gains were expected in the new quarter as a global economic recovery picks up strength.
European Stock Outlook Up At the open early Wednesday GMT: European stocks pared early losses and turned slightly positive in the first few minutes of trading on Wednesday, as steady oil prices boosted energy stocks, eclipsing a dip in heavyweight mining shares.
At 0719 GMT, the FTSEurofirst 300 .FTEU3 index of top European shares was up 0.06 percent at 1,080.05 points. The benchmark index had a roller-coaster session on Tuesday, hitting an 18-month high before surrendering gains and ending the day flat.
ASIA-MIXED N225I % HS % SSEC % FTSTI % AORD %
EUROPE FLAT FTSE % DAX CAC %
US- UP S&P +0.00% DJIA +0.11% NASDAQ +0.11%
THIS MORNING DOWN N225I -0.06% HS -0.46% SSEC -0.62% FTSTI -0.84% AORD -0.68%
UP FTSE +0.24% DAX +0.10% CAC +0.10%
Commodities Outlook: Flat: In Tuesday and early Wednesday trade GMT: continuing to tight range trading
Crude Oil Daily Outlook: Up: In Tuesday and early Wednesday trade GMT, futures continuing higher following overall risk appetite, rising as stocks continue higher and the USD pulled back over the past days.
Gold Daily Outlook own: In Tuesday and early Wednesday trade GMT again diverging from stocks, overall risk appetite, beginning to form another leg in its downtrend. Note that gold’s pullback in late November was the earliest leading indicator of the last major risk asset pullback, which did not occur until nearly a month later for oil and stocks.
FOREX Daily Outlook: In Tuesday and early Wednesday trade GMT: Continuing bias to risk currencies as risk assets hang on at or near new highs amid ongoing uncertainty about Greece and this Friday’s US jobs reports. Tuesday USD gained vs. fellow safeties and the Euro, but mixed vs. commodity dollars (and the GBP on better than expected Q4 UK GDP).
This week ends with two significant market moving events for the USD and thus the entire forex markets: the attempted Greek 12 year bond sale and the US monthly jobs reports Friday. The Greek bond sale has been weak thus far, which should hurt the Euro (and thus help the USD) because it undermines the EZ confidence and the credibility of the new EU contingency plan’s effectiveness at calming markets to allow Greece ( and its fellow PIIGS block) lower borrowing costs.
However expectations for Friday’s US jobs reports are high, leaving markets vulnerable to disappointment, which would hurt the USD
US Dollar Daily Outlook: In Tuesday and early Wednesday trade GMT: Up vs. the JPY, AUD, NZD, EUR, steady vs. the CHF, down vs. the CAD, GBP. Key data today is the ADP figure, Chicago Mfg PMI
In NY trade yesterday the dollar made a move up from negative territory to finish with a 0.3% gain against competing currencies. The greenback’s gain was somewhat restricted by strength in the British pound, which garnered support amid news that Britain’s fourth quarter GDP was upwardly revised to reflect a 0.4% increase.
Euro Daily Outlook: In Tuesday and early Wednesday trade GMT: Up vs. the JPY, down vs. the CHF, USD flat vs. the AUD, down vs. the GBP, CAD – Pressured by anemic demand for Greek bonds, and a possibly very good US monthly jobs report that could boost the USD. However, bouncing back in early European trade as German unemployment figures showed the largest drop since August 2008.
Regarding the impact of the Greek bond sale, key points include:
The euro fell victim to fresh concerns about Greece’s ability to borrow. After EU leaders announced a financial aid mechanism for Greece last week, they stressed that aid is not needed at this time.
Prime Minister Papandreou concurred by saying that the country would first try its luck with the markets by raising money through bond auctions. Unfortunately weak demand has triggered many questions about the country’s ability to borrow. Greece’s surprise auction of bonds that mature in 2022 this morning raised only EUR 390 million, less than half of their EUR 1 billion upper limit.
Greece needs to raise EUR 10.5 billion by the end of May to avoid tapping the bailout plan put into place and resurrecting concerns about a fiscal crisis within the Euro zone. What the results of the bond auction tell us is that just because the Germans and French have agreed to provide support to Greece with the help of the IMF, it is still up to Greece to move forward with their austerity package and reduce their deficit. Unfortunately, austerity spending takes time to show results, and are unlikely to show results within the coming months
While it is good that a mechanism for aid is in place, needing to use it would still be an embarrassment for the Euro zone. As noted in our most recent post The EU Contingency Plan: Doomed By Its Main Strength, it’s unclear how smoothly the EU could actually get the cash to Greece should sudden need arise, assuming Angie Merkel is really willing to face her voters after having just tossed a chunk of their taxes at a very unpopular cause.
Meanwhile, even though Iceland is not a member of the Euro zone, S&P’s decision to downgrade their debt raises contagion fears because they borrow from banks within the region and it reminds everyone that many problems still exist in Europe..
Yen Daily Outlook: In Tuesday and early Wednesday trade GMT: Down vs. the USD, CHF, GBP, AUD, EUR
British Pound Daily Outlook: In Tuesday and early Wednesday trade GMT: Up vs. everything on better than expected Q4 GDP which, given its oversold nature, left it ripe for a bounce on any kind of positive news. Over the past weeks attempting to carve out a bottom for now.
Australian Dollar Daily Outlook: In Tuesday and early Wednesday trade GMT: Down or flat vs. most fx except for the JPY as poor retail and building data pressure it
New Zealand Dollar Daily Outlook: In Tuesday and early Wednesday trade GMT: Up vs. the USD, JPY, down vs. the GBP
Canadian Dollar Daily Outlook: In Tuesday and early Wednesday trade GMT: Up vs. most fx except for the GBP
Swiss Franc Daily Outlook In Tuesday and early Wednesday trade GMT: down vs. the AUD, EUR, up vs. the JPY, steady but fading vs. the USD
CONCLUSIONS & Big Picture: Short term bias for risk assets, The S&P 500, our key risk asset barometer, like other major stocks, holding on at/near 52 week highs Also, fx and commodities continuing their range trading. Long Term Bias Down:, especially in July, when 2 major events hit: Spain needs to sell about 30 bln euros in bonds AND a massive wave of US mortgage rate resets not seen since 2007 begins. The last time we saw this magnitude of rising mortgage rates markets stalled out and ultimately crashed. NB: Never fight the trend, no matter how irrational, as markets can stay irrational longer than you can stay solvent (Keynes). Therefore, as anyone who follows our trade recommendations knows, we always wait for some breach of key support/resistance as a signal to enter a position as odds appear to be in our favor, and even then only when the likely target is more than 2x as far away as out stop loss (which we ALWAYS USE, RIGHT?) so that our winning trade profits exceed out losses by at least 2:1.
Trade Ideas: We favor the dollar given the likely ongoing problems with the Greek bond sale and the likely good US jobs figures, but no recommendations until key support resistance levels breached
Disclosure: No positions
http://www.stocksource.us
ABOUT US:
Stock Source is a full service investor relations firm dedicated to growth stocks. We seek out innovative, emerging companies poised for growth and tell their stories to qualified, aggressive investors looking for ground floor opportunities.
We connect investors with investment prospects—cutting through the noise and churn of Wall Street to shine the spotlight on companies on their way up. These companies trade on the Nasdaq, Amex, OTCBB, and Pinksheets.
Subscribe to:
Posts (Atom)