What to expect this week and down the line...
This week there is lots of economic data during this 4 day
week preceding Easter. This is historically a light trade week
and this week should be no exception.
There are a lot of earnings report and we are in a bounce,
should be an interesting 4 days action, as the market has held at
its 50 day EMA support mark.
That being the case, the market may drift North toward the
March and April highs. That would be a good result and when it
taps at those highs I expect some profit taking, as the February
high will be a test for the S&P 500. It will either show us a
Double Top pattern (Bearish) or a reverse Head and Shoulders
pattern (Bullish). It will take a bit more time before we know,
since many players are away this week and next.
This is a wait to see time and one has to be ready for a break
out or a move back down if the earnings are not strong and what
the Street wants.
My bias is for a renewal of strength, and a breakout, the
trend is up now. The US debt ceiling will be raised a couple of
T's, a double dip recession will be avoided, and the US Congress
will move on to other issues.
US stocks rose Friday on encouraging economic indicators.
A US government report showed underlying inflation pressures were
contained in March, and a survey showed April consumer sentiment
rose more than expected.
Are you watching the VIX? The CBOE Volatility Index or VIX
fell 5.8% to close at 15.82, its lowest level since July
On the Week: the DJIA dipped 0.3%, the S&P 500 and the NAS
each declined 0.6%.
On the Day: The DJIA rose .DJI closed + 58.78 pts, or 0.46%,
at 12,342.00, the S&P 500 .SPX closed + 5.01 pts, or 0.38%,
at 1,319.53, and the NAS Composite .IXIC closed + 3.47 pts, or
0.14%, at 2,763.96.
Investors placed their bets on defensive stocks, which usually
outperform in times of slowing growth.
Utilities .GSPU and Healthcare .GSPA were the Top-performing
sectors in the S&P 500, both + more than 1 % on the day.
Bank of America Corp (
) reported a steeper-than-expected decline of 37.5% in profit,
and named a new CFO. The stock fell 1.6% to 12.92 and was the
DJIA bigger percentage loser on the day.
Google Inc (
) Thursday reported large rise in Q-1 spending. The Internet
company also reported an adjusted profit slightly under
expectations. The stock fell 7.1% to 537.38.
Information technology .GSPT was the only S&P sector to
fall in Friday afternoon trading.
Charles Schwab Corp (
) reported Q-1 earnings that beat expectations by a 0.01. The
broker also said clients had reduced the percentage of their cash
assets held in Schwab to pre-crisis levels. The stock rose 3.1%
Bond insurer Assured Guaranty Ltd (
) rose 25.1% to 17.73 on heavy volume after the company announced
an agreement with Bank of America on mortgage repurchase
Among other companies in the sector, MBIA Inc (
) rose 21.6% to 10.86 and PMI Group (PMI) rose 2.8% to 2.24, on
Industrial production for March rose 0.8%, better than the
0.6% increase that had been broadly expected. Capacity
utilization came in at 77.4%, as anticipated.
Although stocks were unable to extend their run as the S&P
500 encountered resistance near the 1321-1322 Zone, but their
inability to move North was not met with any negative response,
as stocks generally drifted during afternoon trade.
Share volume climbed some as a result of options expirations.
Still, the 1B shares that exchanged hands on the NYSE today
hardly is Strong trade.
Advancing Sectors: Utilities (+1.1%), Health Care (+0.9),
Energy (+0.9%), Telecom (+0.7%), Consumer Discretionary (+0.6%),
Materials (+0.6%), Consumer Staples (+0.5%), Industrials (+0.4%),
Declining Sectors: Tech (-0.4%)
Volume and Breadth: About 7.1B/shrs traded on the NYSE AMEX
and NAS, below last year's estimated daily average of 8.47b/shrs.
Advancers beat decliners on the NYSE by more than 2 to 1, and on
the NAS, more than 9 stocks rose for each 5 that fell.
This was a volatile week for May Crude Oil, as it finished +
1.4% to 109.66. Crude Oil started with 2 large sell offs, and
rebounded from mid-week forward gaining in three consecutive
May Nat Gas had a quiet session around the flat line for most
of the day, and closing near flat at 4.20 per MMBtu.
Inflation fears sent the precious metals complex higher for a
2nd day running.
Gold rallied for 0.9% to finish at 1486.00 oz, and has
extended that move in electronic trade to mark a new all-time
high at 1489.10 oz.
Silver rose 2.2% to finish at 42.59 oz, bringing its 2 day
rise to over 5.5%, as it rallied to a session, and fresh 31 yr
high at 42.87 oz.
The coming week brings quarterly results from a bevy of widely
held names. The major banks will report, including Citigroup (C),
Goldman Sachs (GS) and Morgan Stanley (MS). More than 10 DJIA
components are scheduled to report, including IBM (IBM), Intel
(INTC), and General Electric (GE).