US & World Daily Markets Financial Briefing 22-04-2009

Get our Daily Trade Signals and Grain Newsletter along with a copy of the CBOT Introduction to Agricultural Futures and Options Book for Free! The grain trading professionals at MF Global can guide you in the right direction with your trading. Click here to Get your Free Grain Trading Kit Today

Insipid Earnings May Dampen Rally’s Momentum

Currently, the Dow is up 46.20 at 8,015.76, the Nasdaq is up 19.73 at 1,663.58, and the S&P 500 is up 5.14 at 855.22.

The major U.S. index futures are pointing to a lower opening on Wednesday. After the financials-induced rally of yesterday, stocks may take a breather, as they digest predominantly negative earnings news. With little economic news to digest, there will be little incentive for buying stocks. The oil space may keenly await the release of the oil inventory report, which would impact the price of oil.

U.S. stocks, which opened Tuesday’s session lower and saw some weakness in early trading due to some insipid earnings numbers, recovered in late morning trading on soothing comments from U.S. Treasury Secretary Timothy Geithner over the capital adequacy of several banks. Thereafter, the major averages made a steady advance to close with notable gains.

The Dow Industrials ended up 127.83 points or 1.63% at 7,970 and the S&P 500 Index moved up 17.69 points or 2.13% to 850, while the Nasdaq Composite Index moved up 35.64 points or 2.22% to 1,644.

Twenty-five of the thirty Dow components advanced in the session, Citigroup (C) (up 10.20%), Bank of America (BAC) (up 9.23%) and United Technologies (UTX) (up 4.76%) leading the gains. On the other hand, Merck (MRK) declined over 6.66%.

The Amex Securities Broker/Dealer Index and the KBW Bank Index rebounded strongly, posting gains of 7.01% and 8.13%, respectively. The Philadelphia Housing Sector Index climbed 5.44%, while the S&P Retail Index was up about 3%. While the Amex Airline Index jumped over 10%, the Dow Jones Transportation Average ended up more than 3%.

A rebound in oil priceS helped the Philadelphia Oil Service Index advance over 5%, while the Amex Gold Bugs Index receded about 2%. Networking stocks were on a roll, resulting in the Amex Networking Index gaining over 5.5%. Disk Drive, software and internet stocks also advanced.

You can now manage your positions directly from your web browser, whether you use PC or Mac.  Test-drive VT Trader™ Web with your free practice account! Click Here

Early signals negative for Canadian stocks Wednesday morning

Canadian stocks may struggle to maintain positive momentum from late in the previous session Wednesday morning as investors continued to weigh a slew of earnings results the Bank of Canada's surprise interest rate cut.

The S&P/TSX Composite Index rose 121.02 points or 1.32% to end at 9,247.17, led by a strong performance from the mining sector. Heavily-weighted financial and energy stocks also boosted the market higher.

Banks were bolstered by comments from US Treasury Secretary Tim Geithner, but dismal results from US credit card issuer Capital One could stoke concerns about the health of the financial sector.

Geithner assured the Congressional Oversight Panel that there is enough money left in the government's $700 billion financial rescue program to stabilize the financial system. Geithner said there is at least $134.4 billion in funds left.

The Treasury Secretary also said that the "vast majority" of U.S. banks have enough capital and hinted that the credit markets may be thawing following their deep freeze.

In earnings news from the oil patch, Precision Drilling Trust reported first quarter net earnings of C$57.42 million or C$0.30 per diluted unit, a decrease of C$49 million or 46%, compared to C$106.27 million or C$0.84 per diluted unit in the prior year quarter.
 
Revenue for the quarter grew to C$448.45 million from C$342.69 million in the prior-year quarter.

EnCana Corp. announced that its first quarter net earnings increased to US$962 million or US$1.28 per share, from US$93 million or US$0.12 per share in the year ago quarter.

Operating earnings for the quarter was US$948 million or US$1.26 per share, compared to US$1.05 billion or US$1.39 per share in the year ago quarter.

Aastra Technologies Ltd. reported Tuesday first quarter earnings that improved significantly to $14.1 million or $1.02 per share, compared to $5.3 million or $0.33 per share in the same period in last year.

On the economic front, Canada's composite leading index fell 1.3% in March following a 1.4% drop in February, according to data released Wednesday morning. The data comes on the heels of Tuesday's surprise interest rate cut by the Bank of Canada.

The contraction in the manufacturing sector intensified as widespread cutbacks were implemented in the auto industry early in the new year. This was offset by a marked slowdown in the fall of the housing and stock markets.

Click Here

The major European markets are trading lower on Wednesday. While the French CAC Index and the German DAX Index is receding 0.66% and 0.81%, respectively, the U.K.’s FTSE 100 Index is moving down 0.77%.

On the economic front, the minutes of the Monetary Policy Committee meeting of the Bank of England held on April 8 and 9 showed that policymakers voted unanimously to hold the Bank Rate at a historically low of 0.5%. The minutes also revealed that all the nine members of the MPC stood united while deciding to continue with initial asset purchase plan worth GBP 75 billion.

The central bank said the Committee had agreed to review the scale and timing of the asset purchase programme each month. "In principle, if the evidence warranted it, the
Committee could decide either to increase or reduce the programme of purchases", the minutes showed.

Meanwhile, the jobless rate in the U.K. was 6.7% for the three months to February 2009, up from a revised 6.1% in the previous quarter, the Office for National Statistics said today. That was in line with economists' expectations. The claimant count was 1.46 million in March 2009, up 73,700 over the previous month and up 672,100 over the year. The claimant count rate was 4.5%.

U.S. Economic Reports

The Energy Information Administration is scheduled to release its weekly petroleum inventory report at 10:30 AM ET on Wednesday.

The crude oil inventories report for the week ended April 10th showed that crude oil stockpiles rose by 5.6 million barrels to 366.7 million barrels. However, gasoline and distillate fuel inventories declined by 0.9 million barrels and 1.2 million barrels, respectively.

Refinery capacity utilization averaged 81.5% over the four weeks ended April 10th compared to 81.9% in the previous week. Notwithstanding the declines, inventory levels of both classes of fuels were above the upper limit of the average range. The demand side of the equation showed that gasoline demand over the four weeks ended April 10th declined 0.4% from the same period last year. Meanwhile, average distillate fuel demand over the four weeks ended April 10th was down 6.9% year-over-year.

Kansas Federal Reserve Bank President Thomas Hoenig, who is a non-voting member, is due to speak at 10 AM ET on Wednesday.

Earnings

AT&T (T) reported first quarter earnings of 53 cents per share, down from 57 cents per share from last year. The recent first quarter earnings included one-time expenses of 5 cents per share. Consolidated revenues eased to $30.6 billion from $30.7 billion last year. Analysts estimated earnings of 48 cents per share on revenues of $31.08 billion.

Wells Fargo (WFC) said its first quarter net income applicable to shareholders were 56 cents per share, after restructuring expense of 3 cents per share and a 19 cents per share common share. Total revenues, including contribution from Wachovia, were $21.02 billion. The consensus estimates had called for revenues of $10.56 billion.

McDonald’s (MCD) first quarter earnings rose to 87 cents per share from 81 cents per share last year. Sales were down 10% to $5.08 billion. Analysts estimated earnings of 82 cents per share on revenues of $5.19 billion.

Morgan Stanley (MS) reported a net loss of 57 cents per share compared to bet income of $1.26 per share in the year-ago period. Net revenues fell 62% to $3 billion. Boeing’s (BA) first quarter earnings fell to 86 cents per share from $1.62 per share, even as revenues rose 3% to $16.50 billion.

Come Into the LIVE Online Trading Session and Watch Us Make at Least 1 Point ($500 - $2000 a Day). The LIVE Trading Session is Completely FREE! - Sign Up Now here!

Wednesday, the Asia-Pacific markets opened on a bright note but could not sustain their initial gains. The major markets across the Asia-Pacific region closed mixed as a cautious undertone prevailed despite positive comments from the U.S. Treasury Secretary Timothy Geithner about the health of the U.S. financial system. Investors also expressed caution after the IMF said losses tied to distressed loans and securitized assets could reach $4.1 trillion worldwide by the end of 2010.

The Japanese market closed mixed ahead of earnings announcements from top blue-chip companies later in the week. While the Nikkei 225 index rose 16 points or 0.18% to 8,727, the broader Topix index of all First Section issues on the Tokyo Stock Exchange closed at 830, down 1 point or 0.09%. Securities, sea transport and electrical machinery stocks led the gainers, but stocks in the consumer finance, warehouse and construction sectors ended in the red.

Honda Motor shed 0.55% amid reports that its operating profit will decline 84 percent to 150 billion yen ($1.5 billion) for the year ended March. However, Suzuki Motor rose 2.16%, Toyota gained 1.08% and Nissan added 1.60%. Hino Motors tumbled 4.80% after reporting a wider-than-expected 61.8 billion yen loss for the year ended March.

Household products maker Kao Corp. fell 3.76% after Goldman Sachs Group reduced its rating on the stock to "neutral" from "buy". Mitsui Chemicals tumbled 4.80% after it widened its net loss estimate for the past financial year ended March to 95 billion yen, worse than its 13 billion yen loss forecast.

Toshiba Corp. soared 9.57% after its joint venture partner SanDisk Corp. (SNDK), the biggest maker of flash-memory cards, reported revenue that topped analysts' estimates in the first quarter. Pioneer Corp. climbed 17.19% on reports that the government is considering investing into the ailing electronics maker.

In economic news, Japan saw a merchandise trade surplus of 11 billion yen in March, the Ministry of Finance said on Wednesday - beating analyst expectations for a 10 billion yen surplus following the revised 82.1 billion yen surplus in February.

The Australian market showed a modest loss, as losses among gold miners and mining giant BHP Billiton more than offset gains in the financial sector. The benchmark S&P/ASX200 closed at 3,668, down 9 points or 0.25% and the All Ordinaries index fell 6 points or 0.16% to 3,627.

Commonwealth Bank of Australia rose 1.70% after it signed a 10-year contract worth A$100 million a year with Telstra Corp. Telstra also gained 1.88%.

Westpac Banking rose 1.27% and Macquarie Group added 2.12%, but National Australia Bank moved down 0.28% and ANZ slipped 0.12%,

Woodside Petroleum gained 0.35% after crude oil price rose on Tuesday. However, Oil Serach fell 1.16% and Santos moved down 1.98%. Among retailers, Woolworths fell 1.53%, but Harvey Norman Holding rose 1.78% and David Jones advanced 2.72%.

The South Korean market rose for the third straight day, as improving corporate earnings encouraged foreign and retail investors to pick up stocks amid attractive valuations. The benchmark KOSPI rose 19 points or 1.4% to 1,356, the highest closing since Oct. 14. Volume was at 717.59 million shares worth 8.43 trillion won (US$6.3 billion) and advancers outnumbered decliners by 613 to 257.

Chipmaker Hynix Semiconductor surged up 14.83% on reports that Japanese chip maker Elpida will raise memory chip prices by as much as 50 percent. LG Electronics added 3.77% after it forecast sales in the second quarter would rise 10 percent from the first quarter.

Among auto stocks, Ssangyong Motor closed flat, but Hyundai Motor gained 2.33% and Kia Motors rallied 5.84% ahead of its earnings announcement later this week. Shipbuilders retreated on profit taking. While Daewoo Shipbuilding lost 2.07%, Samsung Heavy Industries declined 1.73% and Hyundai Heavy slipped 0.24%

Among the other markets in the region, China's Shanghai Composite index fell 2.94%, Hong Kong's Hang Seng index moved down 2.67% and Singapore's STI Straits Times index closed down 2.32%, but Taiwan's TWII Weighed index moved up 0.08%

After opening higher, the Indian market pared its early gains and was trading in negative terrain, with oil & gas, metals and capital goods stocks shedding the most amid mixed global cues. The benchmark BSE Sensex was last trading at 10,801, down 97 points or 0.89% compared to the previous close.

Here are 10 simple Dos and Don’ts any investor can follow which may contribute to potential for success in trading futures. This FREE guide can provide some of the basic principles that traders inherently live by.

Click Here to Request Your Free Guide!

Our informative 24”x36” wall chart explores 40 years of historical market data on Crude Oil, Gold and S&P500 markets, and includes historical event call-outs. It’s a great trading and analytic tool for professional and beginner traders.

Sign up here to receive your chart today!

Investors Hub Services