⇒ The Dollar Man has started recording the STM Evening Report. This excellent recap of the day's news, trading, and events are available every trading day after 5:00 PM. This allows you to listen to this information during the late afternoon or evening, when you are not rushed by the day's trading activities.
You can hear the STM Evening report by clicking on the Dollar Man's icon on the STM homepage. Friday's Report will also be available all weekend.
⇒ Notice to FireFox users and FireFox upgrades: If you are having trouble with playing audio or other multi-media files on this (or other) site(s), in many cases you can fix that problem by using a FireFox plug-in. Here's the easy fix: Go here and click the big green "Add to FireFox" button. A small window will open. In that window, click the "Install now" button. It will install, usually in a few seconds. You will then be asked if you want to restart FireFox to make it work. That should do it.
In summary, the trend remains up as the SPX made a higher high and a higher low today. It's my belief that the market is coming into a higher risk profile as the advance has taken on a 'V' shape on this rally and several indicators are now displaying increased complacency. As I've pointed out the market has resistance (several relationships) overhead in the 1150-60 zone. Simply put, respect the prevailing trend but have an exit strategy in place (or a trigger for shorts) should the market elect to reverse.
While everyone else is looking back at the last 12 months, we've got your plays for the twelve months ahead.
What must you know to trade this market?
Strategy Session with the Fast Money traders
I’m keeping an ear open for M&A chatter, says Pete Najarian. Options activity suggests M&A will continue to drive the action.
It seems to me the S&P 500 wants to go above 1150, muses Joe Terranova. I think it’s just a matter of finding the catalyst. And I agree it will probably be M&A.
If you’re bullish on M&A I’d play it with Greenhill, counsels Guy Adami.
I agree that there’s a lot of activity going on, adds Karen Finerman. And there’s ego involved. If one CEO makes an acquisition the next one wants an acquisition. That could keep us going.
2. CITI TO LEAD THE NEXT 12 MONTHS?
If you added up the share price of Citigroup and AIG a year ago, you'd have a grand total of a $1.35.
Fast-forward a year, and the twin faces of government bailout are surging and leading the market higher.
What’s the trade?
I’m bullish on Citi for the long-term, says Joe Terranova. I expect to see the government exit Citi very gently.
I'm seeing a lot of activity in the March 4 and April 4 Citigroup calls, adds Pete Najarian. My interpretation is that the options market is expecting Citi shares to go much higher.
If you’re looking at AIG you should know there’s huge short interest in the name, says Guy Adami. If I were long, I’d take profits.
Elsewhere in the space, I’d keep an eye on Goldman especially if you’re long, adds Terranova. The action in this name is concerning.
3. INNOVATION TO DRIVE TECH?
Tech led us from the bottom and continues to lead now. Shares of Apple hit another all-time-high on Tuesday.
But, the question is, will tech defy gravity going forward?
Some tech will, says Guy Adami. I'd keep an eye on Akamai. Yes valuations are rich but I think it's got room to the upside.
I'd put EMC on the radar, says Pete Najarian, as well as QLogic.
4. WHITNEY TILSON’S OUTLOOK
As you may know, Whitney Tilson of T2 is a widely followed money manager who predicted the mortgage meltdown and made a fortune in the process.
On the one year anniversary of the market lows, it seemed like a good time to get his outlook for the next 12 months.
Will the action in 2010 mirror what happened in 2009?
Probably not, Tilson tells us not to expect the monster gains in the broad market that we saw last year. The action in 2009 was ‘once in a generation,” he says.
Instead Tilson thinks 2010 will be about defense. “Big cap blue chips offer best value now”, Tilson tells the traders.
What’s the trade?
Ahead of the show, Tilson told our producers to look at Wal-Mart, Microsoft, Pfizer and Yahoo.
And if you're looking for a trade from the short side, Tilson tells the desk "we're still short Palm as well as the homebuilders."
5. BOEING HITS 52-WEEK HIGH
Shares of Boeing hit a 52-week high on Tuesday after the Pentagon said on Tuesday it might award a multibillion-dollar aerial tanker contract sooner than planned after Northrop Grumman and Europe's EADS pulled out of the competition, leaving Boeing as the sole bidder.
What's the trade?
For me the trade is downstream, long Rockwell Collins, says Guy Adami.
6. YOUR FIRST MOVE FOR WEDNESDAY
Brian Kelly suggests long Pence.
Guy Adami recommends long Akamai.
Karen Finerman prefers long American Eagle.
Pete Najarian thinks Kansas City Southern is a buy.Joe Terranova says. “I sold the XLY on the close Tuesday.”
Stocks That Move Investment Central aggregates the latest market news and long and short investment ideas from the Internet's top investing sites. Investment Central offers STM visitors a one-stop destination where they can efficiently browse through the Internet's best investing content without wasting time visiting each individual site.
The Dow Jones Industrial Average ended up 11.86 points, or 0.11%, to 10,564.38. The S&P500 finished up 1.95 points, or 0.17%, to 1,140.45. The Nasdaq Composite increased 8.47 points, or 0.36%, to 2,340.68. On the NYSE, advancers outnumbered declining issues by 1.3 to 1 where consolidated volume came to 5.85 billion shares compared with 4.30 billion shares traded Monday. Option expiration was cited for the volatile afternoon. Seven out of ten sectors rose led by financials, industrials and technology. Financials, industrials, basic materials, and consumer cyclicals being strong was suggested by seasonality but telecom has entered the mix this year after a rough January.
Since yesterday's close, Abbott to Buy Facet in $450 Million Transaction. Citigroup Selling TruPS After Repaying Bailout. American Eagle Outfitters closing Martin+Osa. InterMune rose after a favorable FDA ruling. Complaints in China Over Hewlett-Packard Laptops. Apollo Management Is Said to Have Agreed to Buy Citigroup Real Estate Unit. EQT Corp to offer 12.5 mln shares, ups output view. J Crew beats in quarter, posts robust sales. Collective Brands posts narrower-than-expected Q4 loss. AeroVironment Q3 profit up, cuts FY rev outlook. Bidz.com Q4 Misses; Q1 Rev Guidance Also Falls Short Of Ests. CFTC Warns Against Exempting Energy Contracts. NYSE says short interest dips in late February. Nasdaq says short interest little changed in late Feb. U.S. SEC quells short sale prohibition rumor. Economists trim 2011 U.S. growth forecast. US truck fuel purchase index falls in February. (This truck-stop index is new and should be helpful.) The 10-year yield is flat at 3.70%. Gold is +3.00 to $1,125.30/oz. Crude oil is -0.01 to $81.48/brl. API reported a larger than expected oil inventory build but the total is similar to expectations for the govt report.
S&P bollinger band levels are 1147, 1106, 1064. S&P 13-wk ma 1110; 39-wk ma 1044. The S&P and transports made higher highs at the upper band while FedEx made a lower low and high again probably due to union pressure. The VIX edged higher after the up pivot but hasn't really gone anywhere since falling to the January lows. Call buying jumped to 2.3 time puts, so bulls are moving all in and the bullishness appears to be getting frothy. S&P futures contracts are lower for future months down to 1118.20 by June 2011 where the rest of that year flattens out which is similar to Goldman Sachs view since they sold 2011 leveraged futures around 1025 if we remember right. Seasonality shows some weakness for stocks by late March and short-term growth rates normally settle into a +10% to -10% at most range after the recession/expansion expanded range. We're at +10%, so it's a bit uncomfortable. The bullish case arises when you view short-term growth rates versus the previous 2.5 months and 2009 is similar to 1998-99. Late 1999 had an unusual and big push upward before beginning a bear market, so somebody like Bob Prechter could be right on everything and still get forced out of his margined shorts in such a rally. When we view advancers vs decliners, advancers are nearing a similar point where decliners peaked in early February in relative terms and decliners are already below where advancers bottomed and turned back up. It's hard to bet on a 1999 type of rally, because it's so unusual. It's much easier to bet on the March09 rally being big than one at this point in the recovery but obviously a lot of people are. Today is the point where 2004 rallied to before backing off amid several months of showing a general but slow decline.
Futures
(6:00 AM) S&P futures (+0.20 vs Fair Value -0.65). The range is +2 to -2. Japan traded in a 0.4% range with weakness coming after the first hour and a retest of the early high in the last hour. Singapore was mostly in a 0.4% range with highs coming after the first hour, lunch break, last hour but the first and last highs were similar and below mid-day. While Singapore showed higher lows during trading, Hong Kong showed lower highs with the open the highest, two hours in just off the open, and late in the day mid-range, so lows were similar an hour in and in the last hour. India was different in that it rose 0.7% in the first hour and retraced it all for most of the session with a bit of strength the last hour. London hasn't done much and Germany may have made their high at 4:30AM if similar to Hong Kong and India. The 3-day Arms is overbought as is long minus short Arms and even the 10-day is unusually low. The 4 Arms readings are testing a reading of 4 which is a level we haven't spent a whole lot of time below since 2007. Short-term advance/declines are neutral but the bigger picture is more extreme than when stocks previously hit 1050.
US Treasury Market Review
U.S. Treasuries saw the 10-year yield finish down 2 basis points at 3.70%. $40 billion 3 Year closed at 1.437% high yield, 15.66% allotted at high, Bid To Cover 3.13; previous 2.83, average 2.98, Indirect take down: 51.84% versus 53.53% average, Indirect hit ratio: 75.67%. Primary Dealers bid 67.28% of total competitive bids of $124.9 billion. Interest rates holding up better make any dollar/yen weakness like we saw on Tuesday a little odd. Maybe forex traders don't believe it's something to be concerned about for another week or two. The worst case for stocks is if interest rates pick up and oil doesn't back off. Stocks can't handle both very well and this is sometimes a problem heading into summer but seen as maybe a late-April problem.
Commodities Review
Crude Oil settled -$0.38 at $81.49/brl. Expectations: U.S. crude inventories +1.7mb to 343.3mb in the week ended 3/5. Distillates -0.7mb; Gasoline +0.1mb. Refinery utilization rates are seen having risen 0.1 percentage point to 82% of capacity. Tuesday evening, API reported: Crude oil inventories rose by 6.5mb last week to 343.6 million; distillate stocks fell by 2.8 million barrels to 151.8 million; and gasoline inventories declined 3.2 million barrels to 229.7 million. Oil could hold up this week but seasonality looks weak as we normally get a pullback or two before the pre-summer rally. Also, an all-in-one market makes you wonder about silver, stocks, and even grains to a lesser extent since they've already weakened a bit. We didn't expect equities to rally so soon with the grains but that's the kind of market we're in.
GOLD settled -$1.70 to $1,122.30/oz. Gold should act similar to silver and gold when we look at seasonality and that wouldn't seem the best short-term scenario for owning gold the next month or so. Dollar/yen has held up better than expected so far and that's not coincidentally the same picture as interest rates which get seasonally stronger after maybe mid-March and for sure April, so that could be interesting with stocks if oil kicks up. That combination is what makes people want to sell stocks in May and go away.
Reuters/Jefferies CRB Futures Price Index -1.92 to 274.79. To view chart: (http://quotes.ino.com/chart/?s=NYBOT_CR). 8:30AM Monthly crop report on Wednesday. Grains are in an odd period when the seasonal pullback can be very little or similar to the big pullbacks of the offseason when traders are more interested in the Cubs. If silver doesn't pullback in the next 2-3 weeks, the seasonal setup for a rally in grains would be confusing similar to the late summer grain rally. So far, so good at this point as silver is exactly on seasonal expectations. Grains could even rally on the report as they've been a weak a bit early.
ECODATA
Australia Westpac Consumer Confidence (Mar) +0.2% vs Feb -2.6%.
Japan Machinery Orders - January, Actual: -3.7%, Estimate: -3.6%, Prior: +20.1%.
Japan WPI - February, Actual: +0.1%, Estimate: +0.1%, Prior: +0.3%.
Japan Cabinet Mthly - February, Actual: 42.1, Prior: 38.8.
Japan Composite Indexes - January, Actual: +1.8%, Prior: +1.6%, Revised from: +1.3%.
Germany CPI - February, Actual: 0.0%, Prior: -0.1%, Revised from: -0.3%.
UK Ind'l Prod - January, Actual: -0.4%, Estimate: +0.2%, Prior: +0.5%.
France Ind'l Prod - January, Actual: +1.6%, Prior: -0.2%, Revised from: -0.1%.
UK recovery "fragile", data to remain "volatile" - Brown.
Consumer confidence up in Australia despite rate hike.
German trade surplus declines to €8.7B in Jan from €16.6B in Dec.
Economists trim 2011 U.S. growth forecast.
US truck fuel purchase index falls in February. (The index is a new indicator that aims to gauge shifts in economic demand by tracking fuel purchases at more than 7,000 truck stops across the United States.)
Soaring China home prices thwart ordinary buyers.
China's exports see big increase.
Fed `Extended Period' Rate Pledge Criticized as Inflexible by Some on FOMC.
International Review
* Tokyo Nikkei 225 (-3.73 / -0.04%)
* Hong Kong Hang Seng (+0.74 / +0.00%)
* Australia S&P/ASX 200 (-0.10 / -0.00%)
(6:00 AM)
* UK FTSE 100 (-2.85 / -0.05%)
* France CAC 40 (+5.41 / +0.14%)
* Germany DAX (+7.62 / +0.13%)
FOREX
GBP/USD plunges below 1.4900 on weak manufacturing data.
EUR/USD bouncing up from 1.3545 low, back to 1.3580.
USD/JPY recovery from 89.60 meets resistance at 90.15.
AUD/USD rises above .9150 but mostly rangebound.
EUR/AUD falls and trading at 1.4840.
GBP/JPY falls and trades at 134.67.
Strong China trade data point to rise in yuan.
Buy Ringgit Versus Won, Yen on Malaysia's Interest-Rate Outlook, RBS Says .
ICSC-GS Weekly Store Sales Bounce Back to Begin March.
NFIB Small-Business Optimism Remains Off the Lows But Hasn't Done Much Since August.
Job Openings Improve Since November, July was the Low; Quits Remaining in Check Show Low Confidence.
Monster European Online Employment Index Bounces Back After the Sharp January Drop.
Eaton Vance sees eventual real estate rebound but not willing to wait until the early 2030s, so dumps Florida bonds at 30c.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aaDGZWOLYCGI&pos=5
Elizabeth Warren Discusses Economy.
http://www.zerohedge.com/article/elizabeth-warren-discusses-global-enron-wall-street-greece-and-back
"A Vast and Fiendish Plot" is an interesting book out this year on the Confederates targeting NYC. New York City voted against Lincoln in both elections by large margins and wanted to secede from the Union when the south brought up the idea. As much as 2/3 of the NYC business was shipping of southern agriculture and banking transactions for the south with Europe. Relations with Albany have been mostly awful always apparently. The mayor of NY was a vocal supporter of the south and talked in speeches about leaving the union. Also, Cuba had NYC support for joining the United States as a slave state. The original slaves in Virginia were actually contract labor that worked seven years to pay off the voyage. The way slavery became property is that ex-slave Anthony Johnson became very rich and liked to go to court. He got jealous when one of his slaves finished the seven years and went to work for a neighbor. The court sided with Johnson and that ruling opened the door for allowing people to be property. Anyway, NYC began supporting the Union after the firing on Ft. Sumpter as the military shipping turned out to be as profitable as southern agriculture and Europe's wheat problems required shipping of grain over cotton. Obviously, the south was outraged at the reversal. The civil war 170-year cycle is due to repeat in 2030 for the US, so may miss but we should and are seeing the some of the same pressures that leads countries to have war.
Markets (oil price and interest rate growth rates relative to the stock market):
Long term: Neutral 2/8.
Intermediate: Neutral 2/26.
Short-term: Neutral 2/24.
Relative price seasonality already shows stocks outpacing oil and interest rates beginning 3/9 and that's only going to improve if oil shows more seasonal weakness. Long-term growth rates have caught up and this normally happens as we move into a slower growth phase for stocks. When we look at long-term relative price, interest rates don't seem to the be problem they were in 2007-08 or even 2001-02 but that could change in April-May.
Sectors (basic materials and energy growth rates relative to the other sectors):
Long term: Neutral 9/10.
Intermediate: Neutral 11/11.
Short-term: Neutral 1/12.
Commodity sectors' short-term growth rates show basic material relative strength being offset by some weakness among energy shares.
Site News, Breaking Stock News;
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Audio Presentations by the Ice & Dollar Man
Wednesday Morning, March 10
site news
⇒ The Dollar Man has started recording the STM Evening Report. This excellent recap of the day's news, trading, and events are available every trading day after 5:00 PM. This allows you to listen to this information during the late afternoon or evening, when you are not rushed by the day's trading activities.
You can hear the STM Evening report by clicking on the Dollar Man's icon on the STM homepage. Friday's Report will also be available all weekend.
⇒ Notice to FireFox users and FireFox upgrades: If you are having trouble with playing audio or other multi-media files on this (or other) site(s), in many cases you can fix that problem by using a FireFox plug-in. Here's the easy fix: Go here and click the big green "Add to FireFox" button. A small window will open. In that window, click the "Install now" button. It will install, usually in a few seconds. You will then be asked if you want to restart FireFox to make it work. That should do it.
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ice man's stocks
BREAKOUTS:
IHS - 56
MSPD - 8.6
VECO - 38.40
NFX - 54.40
FST - 29
LNCR - 42
TRADES:
CCJ - 20
MDVN - 12.70
SPWRA - 21.40
AGO - 22.80
CRIC - 10.50
OEH - 12
VNDA - 12
ISIS - 10.10-11
LDK - 7
DK - 8.45
DEPRESSED:
CNAM
**PSS - 21
**DVA - 59.60
DOLLAR MAN:
GMET - 1
NR - 5.85
CYCC - 2.65
SHORT:
BC - 17
ETH - 24
For a printable version of the Ice Man's stock picks, click here.
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stocks that move commentators
Swing Man Market Recap and Stock Picks:
Tuesday March 9th Market Recap
Steve Nelson
In summary, the trend remains up as the SPX made a higher high and a higher low today. It's my belief that the market is coming into a higher risk profile as the advance has taken on a 'V' shape on this rally and several indicators are now displaying increased complacency. As I've pointed out the market has resistance (several relationships) overhead in the 1150-60 zone. Simply put, respect the prevailing trend but have an exit strategy in place (or a trigger for shorts) should the market elect to reverse.
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cnbc fast money review
1. THE NEXT 12 MONTHS
While everyone else is looking back at the last 12 months, we've got your plays for the twelve months ahead.
What must you know to trade this market?
Strategy Session with the Fast Money traders
I’m keeping an ear open for M&A chatter, says Pete Najarian. Options activity suggests M&A will continue to drive the action.
It seems to me the S&P 500 wants to go above 1150, muses Joe Terranova. I think it’s just a matter of finding the catalyst. And I agree it will probably be M&A.
If you’re bullish on M&A I’d play it with Greenhill, counsels Guy Adami.
I agree that there’s a lot of activity going on, adds Karen Finerman. And there’s ego involved. If one CEO makes an acquisition the next one wants an acquisition. That could keep us going.
2. CITI TO LEAD THE NEXT 12 MONTHS?
If you added up the share price of Citigroup and AIG a year ago, you'd have a grand total of a $1.35.
Fast-forward a year, and the twin faces of government bailout are surging and leading the market higher.
What’s the trade?
I’m bullish on Citi for the long-term, says Joe Terranova. I expect to see the government exit Citi very gently.
I'm seeing a lot of activity in the March 4 and April 4 Citigroup calls, adds Pete Najarian. My interpretation is that the options market is expecting Citi shares to go much higher.
If you’re looking at AIG you should know there’s huge short interest in the name, says Guy Adami. If I were long, I’d take profits.
Elsewhere in the space, I’d keep an eye on Goldman especially if you’re long, adds Terranova. The action in this name is concerning.
3. INNOVATION TO DRIVE TECH?
Tech led us from the bottom and continues to lead now. Shares of Apple hit another all-time-high on Tuesday.
But, the question is, will tech defy gravity going forward?
Some tech will, says Guy Adami. I'd keep an eye on Akamai. Yes valuations are rich but I think it's got room to the upside.
I'd put EMC on the radar, says Pete Najarian, as well as QLogic.
4. WHITNEY TILSON’S OUTLOOK
As you may know, Whitney Tilson of T2 is a widely followed money manager who predicted the mortgage meltdown and made a fortune in the process.
On the one year anniversary of the market lows, it seemed like a good time to get his outlook for the next 12 months.
Will the action in 2010 mirror what happened in 2009?
Probably not, Tilson tells us not to expect the monster gains in the broad market that we saw last year. The action in 2009 was ‘once in a generation,” he says.
Instead Tilson thinks 2010 will be about defense. “Big cap blue chips offer best value now”, Tilson tells the traders.
What’s the trade?
Ahead of the show, Tilson told our producers to look at Wal-Mart, Microsoft, Pfizer and Yahoo.
And if you're looking for a trade from the short side, Tilson tells the desk "we're still short Palm as well as the homebuilders."
5. BOEING HITS 52-WEEK HIGH
Shares of Boeing hit a 52-week high on Tuesday after the Pentagon said on Tuesday it might award a multibillion-dollar aerial tanker contract sooner than planned after Northrop Grumman and Europe's EADS pulled out of the competition, leaving Boeing as the sole bidder.
What's the trade?
For me the trade is downstream, long Rockwell Collins, says Guy Adami.
6. YOUR FIRST MOVE FOR WEDNESDAY
Brian Kelly suggests long Pence.
Guy Adami recommends long Akamai.
Karen Finerman prefers long American Eagle.
Pete Najarian thinks Kansas City Southern is a buy.Joe Terranova says. “I sold the XLY on the close Tuesday.”
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news @ stm investment central
Stocks That Move Investment Central aggregates the latest market news and long and short investment ideas from the Internet's top investing sites. Investment Central offers STM visitors a one-stop destination where they can efficiently browse through the Internet's best investing content without wasting time visiting each individual site.
Save time now by visiting Investment Central.
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news and events digest
The Dow Jones Industrial Average ended up 11.86 points, or 0.11%, to 10,564.38. The S&P500 finished up 1.95 points, or 0.17%, to 1,140.45. The Nasdaq Composite increased 8.47 points, or 0.36%, to 2,340.68. On the NYSE, advancers outnumbered declining issues by 1.3 to 1 where consolidated volume came to 5.85 billion shares compared with 4.30 billion shares traded Monday. Option expiration was cited for the volatile afternoon. Seven out of ten sectors rose led by financials, industrials and technology. Financials, industrials, basic materials, and consumer cyclicals being strong was suggested by seasonality but telecom has entered the mix this year after a rough January.
Since yesterday's close, Abbott to Buy Facet in $450 Million Transaction. Citigroup Selling TruPS After Repaying Bailout. American Eagle Outfitters closing Martin+Osa. InterMune rose after a favorable FDA ruling. Complaints in China Over Hewlett-Packard Laptops. Apollo Management Is Said to Have Agreed to Buy Citigroup Real Estate Unit. EQT Corp to offer 12.5 mln shares, ups output view. J Crew beats in quarter, posts robust sales. Collective Brands posts narrower-than-expected Q4 loss. AeroVironment Q3 profit up, cuts FY rev outlook. Bidz.com Q4 Misses; Q1 Rev Guidance Also Falls Short Of Ests. CFTC Warns Against Exempting Energy Contracts. NYSE says short interest dips in late February. Nasdaq says short interest little changed in late Feb. U.S. SEC quells short sale prohibition rumor. Economists trim 2011 U.S. growth forecast. US truck fuel purchase index falls in February. (This truck-stop index is new and should be helpful.) The 10-year yield is flat at 3.70%. Gold is +3.00 to $1,125.30/oz. Crude oil is -0.01 to $81.48/brl. API reported a larger than expected oil inventory build but the total is similar to expectations for the govt report.
S&P bollinger band levels are 1147, 1106, 1064. S&P 13-wk ma 1110; 39-wk ma 1044. The S&P and transports made higher highs at the upper band while FedEx made a lower low and high again probably due to union pressure. The VIX edged higher after the up pivot but hasn't really gone anywhere since falling to the January lows. Call buying jumped to 2.3 time puts, so bulls are moving all in and the bullishness appears to be getting frothy. S&P futures contracts are lower for future months down to 1118.20 by June 2011 where the rest of that year flattens out which is similar to Goldman Sachs view since they sold 2011 leveraged futures around 1025 if we remember right. Seasonality shows some weakness for stocks by late March and short-term growth rates normally settle into a +10% to -10% at most range after the recession/expansion expanded range. We're at +10%, so it's a bit uncomfortable. The bullish case arises when you view short-term growth rates versus the previous 2.5 months and 2009 is similar to 1998-99. Late 1999 had an unusual and big push upward before beginning a bear market, so somebody like Bob Prechter could be right on everything and still get forced out of his margined shorts in such a rally. When we view advancers vs decliners, advancers are nearing a similar point where decliners peaked in early February in relative terms and decliners are already below where advancers bottomed and turned back up. It's hard to bet on a 1999 type of rally, because it's so unusual. It's much easier to bet on the March09 rally being big than one at this point in the recovery but obviously a lot of people are. Today is the point where 2004 rallied to before backing off amid several months of showing a general but slow decline.
Futures
(6:00 AM) S&P futures (+0.20 vs Fair Value -0.65). The range is +2 to -2. Japan traded in a 0.4% range with weakness coming after the first hour and a retest of the early high in the last hour. Singapore was mostly in a 0.4% range with highs coming after the first hour, lunch break, last hour but the first and last highs were similar and below mid-day. While Singapore showed higher lows during trading, Hong Kong showed lower highs with the open the highest, two hours in just off the open, and late in the day mid-range, so lows were similar an hour in and in the last hour. India was different in that it rose 0.7% in the first hour and retraced it all for most of the session with a bit of strength the last hour. London hasn't done much and Germany may have made their high at 4:30AM if similar to Hong Kong and India. The 3-day Arms is overbought as is long minus short Arms and even the 10-day is unusually low. The 4 Arms readings are testing a reading of 4 which is a level we haven't spent a whole lot of time below since 2007. Short-term advance/declines are neutral but the bigger picture is more extreme than when stocks previously hit 1050.
US Treasury Market Review
U.S. Treasuries saw the 10-year yield finish down 2 basis points at 3.70%. $40 billion 3 Year closed at 1.437% high yield, 15.66% allotted at high, Bid To Cover 3.13; previous 2.83, average 2.98, Indirect take down: 51.84% versus 53.53% average, Indirect hit ratio: 75.67%. Primary Dealers bid 67.28% of total competitive bids of $124.9 billion. Interest rates holding up better make any dollar/yen weakness like we saw on Tuesday a little odd. Maybe forex traders don't believe it's something to be concerned about for another week or two. The worst case for stocks is if interest rates pick up and oil doesn't back off. Stocks can't handle both very well and this is sometimes a problem heading into summer but seen as maybe a late-April problem.
Commodities Review
Crude Oil settled -$0.38 at $81.49/brl. Expectations: U.S. crude inventories +1.7mb to 343.3mb in the week ended 3/5. Distillates -0.7mb; Gasoline +0.1mb. Refinery utilization rates are seen having risen 0.1 percentage point to 82% of capacity. Tuesday evening, API reported: Crude oil inventories rose by 6.5mb last week to 343.6 million; distillate stocks fell by 2.8 million barrels to 151.8 million; and gasoline inventories declined 3.2 million barrels to 229.7 million. Oil could hold up this week but seasonality looks weak as we normally get a pullback or two before the pre-summer rally. Also, an all-in-one market makes you wonder about silver, stocks, and even grains to a lesser extent since they've already weakened a bit. We didn't expect equities to rally so soon with the grains but that's the kind of market we're in.
GOLD settled -$1.70 to $1,122.30/oz. Gold should act similar to silver and gold when we look at seasonality and that wouldn't seem the best short-term scenario for owning gold the next month or so. Dollar/yen has held up better than expected so far and that's not coincidentally the same picture as interest rates which get seasonally stronger after maybe mid-March and for sure April, so that could be interesting with stocks if oil kicks up. That combination is what makes people want to sell stocks in May and go away.
Reuters/Jefferies CRB Futures Price Index -1.92 to 274.79. To view chart: (http://quotes.ino.com/chart/?s=NYBOT_CR). 8:30AM Monthly crop report on Wednesday. Grains are in an odd period when the seasonal pullback can be very little or similar to the big pullbacks of the offseason when traders are more interested in the Cubs. If silver doesn't pullback in the next 2-3 weeks, the seasonal setup for a rally in grains would be confusing similar to the late summer grain rally. So far, so good at this point as silver is exactly on seasonal expectations. Grains could even rally on the report as they've been a weak a bit early.
ECODATA
Australia Westpac Consumer Confidence (Mar) +0.2% vs Feb -2.6%.
Japan Machinery Orders - January, Actual: -3.7%, Estimate: -3.6%, Prior: +20.1%.
Japan WPI - February, Actual: +0.1%, Estimate: +0.1%, Prior: +0.3%.
Japan Cabinet Mthly - February, Actual: 42.1, Prior: 38.8.
Japan Composite Indexes - January, Actual: +1.8%, Prior: +1.6%, Revised from: +1.3%.
Germany CPI - February, Actual: 0.0%, Prior: -0.1%, Revised from: -0.3%.
UK Ind'l Prod - January, Actual: -0.4%, Estimate: +0.2%, Prior: +0.5%.
France Ind'l Prod - January, Actual: +1.6%, Prior: -0.2%, Revised from: -0.1%.
UK recovery "fragile", data to remain "volatile" - Brown.
Consumer confidence up in Australia despite rate hike.
German trade surplus declines to €8.7B in Jan from €16.6B in Dec.
Economists trim 2011 U.S. growth forecast.
US truck fuel purchase index falls in February. (The index is a new indicator that aims to gauge shifts in economic demand by tracking fuel purchases at more than 7,000 truck stops across the United States.)
Soaring China home prices thwart ordinary buyers.
China's exports see big increase.
Fed `Extended Period' Rate Pledge Criticized as Inflexible by Some on FOMC.
International Review
* Tokyo Nikkei 225 (-3.73 / -0.04%)
* Hong Kong Hang Seng (+0.74 / +0.00%)
* Australia S&P/ASX 200 (-0.10 / -0.00%)
(6:00 AM)
* UK FTSE 100 (-2.85 / -0.05%)
* France CAC 40 (+5.41 / +0.14%)
* Germany DAX (+7.62 / +0.13%)
FOREX
GBP/USD plunges below 1.4900 on weak manufacturing data.
EUR/USD bouncing up from 1.3545 low, back to 1.3580.
USD/JPY recovery from 89.60 meets resistance at 90.15.
AUD/USD rises above .9150 but mostly rangebound.
EUR/AUD falls and trading at 1.4840.
GBP/JPY falls and trades at 134.67.
Strong China trade data point to rise in yuan.
Buy Ringgit Versus Won, Yen on Malaysia's Interest-Rate Outlook, RBS Says .
(6:00 AM) http://www.fxstreet.com/technical/analysis-reports/monthly-technical-outlook/2010-03-01.html
* Dollar / Yen (+0.40 to 90.37)
* Euro / Dollar (-0.0017 to 1.3585)
Looking Ahead...
Wednesday, March 10
Earnings: ABVT 0.87 AEO 0.33 ARNA -0.31 SAM 0.58 CIA 0.04 CWEI 0.16 DHIL 1.11 GYMB 1.10 IPAR 0.19 ODC 0.21 SOL -0.08 RCKB 0.17 RCKB 0.17 SMTC 0.22 SWWC 0.05 STKL 0.03 PLCE 1.03 VIP 0.41 WES 0.29 ZSTN 0.29
Economic Indicator: 7:00AM Weekly Mortgage Applications; 10:30AM Crude Inventories.
Economic Indicator: 10:00AM Wholesale Inventories for January.
Economic Indicator: 2:00PM Treasury Budget for February.
Economic Indicator: Ind'l prod for UK, France, Italy.
Commodities: 7:30AM OPEC monthly report; 8:30AM Monthly crop report.
Thursday, March 11
Earnings: ABII -0.94 ARO 1.42 AIRM 0.27 APP 0.04 AWR 0.4 BLDP -0.09 BBEP 0.27 CSCX -0.19 CECE 0.04 CPC 0.14 CSUN 0.08 CCO -0.05 DAC 0.27 DK -0.28 DIET -0.11 HEV -0.11 FSCI -0.03 FRM 0 GST -0.03 GEOY 0.27 GLP 0.8 GG 0.25 HITK 0.5 IMAX 0.08 SAAS -0.03 JTX 0.48 KOG 0.01 LCUT 0.35 TUC -0.02 MDZ -0.01 MEA 0.05 MLR 0.11 NSM 0.18 NAVI -0.08 NPSP -0.12 OMPI 0.17 OPTR -0.34 VITA -0.01 PSUN -0.3 PLL 0.47 PNY 1.11 POWR 0.04 PKT 0.01 QADI 0.14 ZQK -0.13 RAVN 0.31 DINE 0.22 RAD -0.19 SEAC 0.05 SHFL 0.08 SFD 0.18 FACE -0.09 STEI 0.08 SUI 0.75 SNTA -0.25 BKE 0.84 ULTA 0.3 ZUMZ 0.27
Economic Indicator: 8:30AM Initial Unemployment Claims; 4:30PM Money Supply.
Economic Indicator: 8:30AM Trade Balance for January.
Economic Indicator: NZ Bank Meeting; Aussie Unemployment.
Friday, March 12
Earnings: ATV 0.02 ANN -0.02 ASTI -0.23 CTRN 0.75 CYTX -0.16 E 1.27 GNVC -0.03 HALO -0.16 HIBB 0.30 IRET 0.17 KIRK 0.81 MNTG -0.16 NGPC 0.17 OPTT -0.47 PEI 0.94 RAME 0.01 SWHC 0.01
Economic Indicator: 10:30AM Weekly Leading Index.
Economic Indicator: 8:30AM Retail Sales for February.
Economic Indicator: 9:55AM Univ of Mich Sent-Prel for March.
Economic Indicator: 10:00AM Business Inventories for January.
Economic Indicator: 7:00AM Canada Employment.
Monday, March 15
Earnings: COMS 0.08 AIR 0.35 ABAT 0.1 FEED 0.1 AMIC 0.06 AEZ -0.02 ARDNA 2.35 APPY -0.1 BDSI 2.21 BLTI 0.1 BPAX -0.11 BJGP 0.01 CRE N/A CV 0.04 CNTY -0.01 CRAI 0.27 CFSG 0.12 CEDU 0.03 CTAS 0.3 CWCO 0.15 CYPB -0.12 DSTI -0.17 DFS 0.09 ESC -0.24 ENER -0.77 AGM 0.93 FCZA 0.03 **FLDR.PK** 0.06 FTK -0.26 GSOL 0.1 GKK -2.78 GTN -0.22 GVP 0.03 GTXI -0.35 GES 0.81 HOGS 0.35 HUSA 0.01 HWCC 0.11 HQS 0.31 ICOP -0.09 LTS -0.02 LOOK -0.05 LORL 0.5 MLP -1.26 MDVN -0.59 MEMS -0.05 MGN -0.08 MIPI -0.77 NWY 0.06 OSBC -0.19 ORBC -0.19 ORCH N/A OXBT -0.12 PERY 0.59 PIP -0.21 PLUG -0.08 PNBC 0 RDNT 0.02 RZ -0.11 RMTI -0.07 WNI 0.14 SQNM -0.25 SIHI 0.14 CIGX -0.03 STEM -0.06 STON -0.04 SCMP 0.02 SPPR 0.06 TGC 0.01 MCS 0.05 TSCM N/A TKTM N/A TRGL -0.02 UBS N/A ULTR 0 UWBK -0.09 WWVY 0.28 WSM 0.73 ZAGG 0.04
Economic Indicator: 8:30AM NY Mtfg Survey for March.
Economic Indicator: 9:00AM TICS Capital Flows for January.
Economic Indicator: 9:15AM Ind'l Prod/Cap Util for February.
Economic Indicator: 1:00PM NAHB Sentiment for March.
Economic Indicator: Japan Confidence, BoE Quarterly.
Tuesday, March 16
Earnings: AKRX -0.02 ABK -3.34 AVII -0.05 CPC 0.14 JRJC -0.07 CHLN 0.07 CAST 0.11 EM 0.19 FDS 0.74 FMCN 0.21 RPRX -0.32 SCR 0.08 STRL 0.25 CLUB -0.09
Economic Indicator: 7:45AM Weekly retail sales.
Economic Indicator: 8:30AM: Housing Starts/Permits for February.
Economic Indicator: 8:30AM: Import Prices for February.
Economic Indicator: 2:15PM: FOMC Policy Announcement.
Economic Indicator: 8:30AM Canada Factory Orders, UK Composite Indexes, France CPI, ZEW Confidence.
All Times Eastern
Economics
(3/9)
ICSC-GS Weekly Store Sales Bounce Back to Begin March.
NFIB Small-Business Optimism Remains Off the Lows But Hasn't Done Much Since August.
Job Openings Improve Since November, July was the Low; Quits Remaining in Check Show Low Confidence.
Monster European Online Employment Index Bounces Back After the Sharp January Drop.
Eaton Vance sees eventual real estate rebound but not willing to wait until the early 2030s, so dumps Florida bonds at 30c.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aaDGZWOLYCGI&pos=5
Elizabeth Warren Discusses Economy.
http://www.zerohedge.com/article/elizabeth-warren-discusses-global-enron-wall-street-greece-and-back
"A Vast and Fiendish Plot" is an interesting book out this year on the Confederates targeting NYC. New York City voted against Lincoln in both elections by large margins and wanted to secede from the Union when the south brought up the idea. As much as 2/3 of the NYC business was shipping of southern agriculture and banking transactions for the south with Europe. Relations with Albany have been mostly awful always apparently. The mayor of NY was a vocal supporter of the south and talked in speeches about leaving the union. Also, Cuba had NYC support for joining the United States as a slave state. The original slaves in Virginia were actually contract labor that worked seven years to pay off the voyage. The way slavery became property is that ex-slave Anthony Johnson became very rich and liked to go to court. He got jealous when one of his slaves finished the seven years and went to work for a neighbor. The court sided with Johnson and that ruling opened the door for allowing people to be property. Anyway, NYC began supporting the Union after the firing on Ft. Sumpter as the military shipping turned out to be as profitable as southern agriculture and Europe's wheat problems required shipping of grain over cotton. Obviously, the south was outraged at the reversal. The civil war 170-year cycle is due to repeat in 2030 for the US, so may miss but we should and are seeing the some of the same pressures that leads countries to have war.
Markets (oil price and interest rate growth rates relative to the stock market):
Long term: Neutral 2/8.
Intermediate: Neutral 2/26.
Short-term: Neutral 2/24.
Relative price seasonality already shows stocks outpacing oil and interest rates beginning 3/9 and that's only going to improve if oil shows more seasonal weakness. Long-term growth rates have caught up and this normally happens as we move into a slower growth phase for stocks. When we look at long-term relative price, interest rates don't seem to the be problem they were in 2007-08 or even 2001-02 but that could change in April-May.
Sectors (basic materials and energy growth rates relative to the other sectors):
Long term: Neutral 9/10.
Intermediate: Neutral 11/11.
Short-term: Neutral 1/12.
Commodity sectors' short-term growth rates show basic material relative strength being offset by some weakness among energy shares.
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