Daily State of the Markets
Monday Morning - April 25, 2011
Publishing Note: Dave has an early commitment this morning, but we've got you covered on the important news, happenings, and market-drivers.
Stocks managed to advance for a third straight day on Thursday on the back of another batch of better-than-expected earnings from the tech sector and another decline in the dollar. Although not all the news was positive on the day, the DJIA finished at a fresh new high for the current bull market cycle while the S&P 500, NASDAQ, Midcaps and Smallcaps are closing in on new highs as well.
While the day finished in a bullish mode, it should be noted that the economic calendar was not a contributing factor. First, the Weekly Jobless Claims came in above 400K for a second straight week. Next, the Philly Fed Index which is designed to indicate the state of the economy in the Philadelphia Fed district, took a surprising tumble. The general activity index came in at a reading of just 18.5, which was well below March's reading of 43.4. And finally, while no one expects to see strong data out of the housing market, the FHFA House Price Index also was short of expectations.
However, with the dollar breaking to new multi-year lows and high profile tech companies continuing to beat expectations, traders were able to keep implementing the "risk trade" on Thursday. As we've detailed recently, a falling dollar means the selling of the greenback and the buying of stocks, commodities and emerging markets.
On a chart basis, it is important to note that the S&P 500 and NASDAQ have not (yet?) followed the DJIA to new highs. From a technical perspective, this means that there continues to be overhead resistance visible on the charts. However, if the indices are able to close above the resistance zone, it is a safe bet that short-covering and additional technical buying will likely come in.
In closing, traders and investors will want to watch the dollar (because the greenback is rapidly becoming oversold), the 1343 level on the S&P 500, and continue to listen for the "message" out of the earnings parade. And with the Fed Meeting, which will include Ben Bernanke's first post-FOMC meeting conference call, on tap, it should be an interesting week.
Turning to this morning... Things are fairly quiet in the early going. European markets as well as some of the major Asian markets are closed in observance of the Easter holiday.
On the Economic front... There are no economic reports to review before the opening bell. However, we will get the data on New Home Sales at 10:00 am eastern time.
Here are the Pre-Market indicators we review each morning before the opening bell...
Major Foreign Markets:
- Australia: Closed
- Shanghai: -1.51%
- Hong Kong: Closed
- Japan: -0.11%
- France: Closed
- Germany: Closed
- London: Closed
Crude Oil Futures: +$0.48 to $112.77
Gold: +$8.80 to $1512.60
Dollar: lower against the Yen and Euro, higher vs. Pound
10-Year Bond Yield: Currently trading at 3.379%
Stocks Futures Ahead of Open in U.S. (relative to fair value):
- S&P 500: -0.53
- Dow Jones Industrial Average: +2
- NASDAQ Composite: +4.20
Wall Street Research Summary
- Covanta (NYSE:CVA) - BAC/ML
- Travelzoo (NASDAQ:TZOO) - Benchmark
- Polycom (NASDAQ:PLCM) - BMO Capital
- Eaton (NYSE:ETN) - Estimates and target increased at Citi
- VF Corp (NYSE:VFC) - Cowen
- Marriott (NYSE:MAR) - FBR Capital
- BB&T Corp (NYSE:BBT) - Goldman Sachs
- SunTrust Banks (NYSE:STI) - Oppenheimer
- Brocade (NASDAQ:BRCD) - RW Baird
- General Electric (NYSE:GE) - Sterne, Agee
- Johnson & Johnson (NYSE:JNJ) - Wells Fargo
- First Horizon (NYSE:FHN) - BAC/ML
- Nucor (NYSE:NUE) - CIBC World Markets
- Weatherford (NYSE:WFT) - Estimates cut at Citi
- Warner Music Group (NYSE:WMG) - Citi
- Valero (NYSE:VLO) - Citi
- BB&T Banks (BBT) - Oppenheimer
Long positions in stocks mentioned: none
|Earnings Before The Bell |
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