I’ve got to make this brief because something came up and I have 45 minutes to get this post up (what I lack in professionalism I try to make up for in honesty!). This will be an interesting exercise in brevity for me:
Asia: The Yen is dropping against the dollar and the Euro, boosting exporters. Many markets are still closed for the holidays and we are talking very tough about cracking down on Chinese media piracy, which could be a great boost for our entertainment industry (they US’s #1 export). The Nikkei jumped 258 points and India gained 321 points as more US jobs mean more consumers of electronic products and more outsourcing – no ambivalence over there!
Europe: They are closed as Monday is pretty much their holiday. This cuts down on the usual global M&A mania and boy are we going to get a snap there tomorrow if we have a big day today as they kept it very close to the vest on Thursday. Of course this means the US futures are a joke as the trading volume is far below average and anyone with $50K to blow can pump up a fortune 500 company pre-market so be careful about relying on that.
US: Now cotton farmers are planting corn! That’s pretty funny as they didn’t think to ask cotton farmers how much corn they’d be planting this year. Good for ADM and PEIX, which we have. The jobs numbers were great but inflation is here to stay as this latest batch of workers actually wants to be paid enough to be able to afford to drive to work. This is the loose wheel on the economy but I really think oil prices must adjust down at this point (of course I’ve been thinking that since $60).
Up is good, down is a catastrophe in today’s market because if that jobs report is perceived as a negative ahead of earning then there is nothing AA will be able to say tomorrow that can make investors happy.
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Week’s |
Break |
38% |
50 |
Break |
|
Index |
Current |
Move |
Down |
Fib Level |
DMA |
Up |
| Dow | 12,560 | 212 | 12,350 | 12,369 | 12,450 | 12,500 |
| Transports | 2,799 | 49 | 2,736 | 2,830 | 2,812 | 2,983 |
| S&P | 1,443 | 21 | 1,410 | 1,407 | 1,425 | 1,440 |
| NYSE | 9,426 | 147 | 9,100 | 9,073 | 9,220 | 9,400 |
| Nasdaq | 2,458 | 41 | 2,400 | 2,411 | 2,438 | 2,450 |
| SOX | 475 | 11 | 470 | 469 | 469 | 490 |
| Russell | 813 | 15 | 790 | 786 | 798 | 810 |
| Hang Seng | 20,209 | 207 | 19,400 | 19,789 | 19,969 | 19,800 |
| Nikkei | 17,743 | 498 | 17,000 | 17,244 | 17,412 | 17,600 |
| BSE (India) | 13,177 | 558 | 12,900 | 13,253 | 13,557 | 13,600 |
| DAX | 7,099 | 101 | 6,700 | 6,707 | 6,797 | 6,900 |
| CAC 40 | 5,741 | 65 | 5,500 | 5,495 | 5,590 | 5,700 |
| FTSE | 6,397 | 55 | 6,200 | 6,205 | 6,276 | 6,350 |
India picked up a green box on today’s move and the transports should get a huge boost off the news that Warren Buffett has gone big on the rails. This will be bad for our BNI puts and great for our UNP calls so let’s be happy to make what we can on that spread!
Oil will do what it does but Brent is being pumped up on a very slow day in Europe which is supporting prices at the NYMEX and, as Zman says in today’s report, it’s all about the gasoline this week. US demand has gone through the roof in the past 4 weeks and we may suffer greatly for it this summer.
Let’s keep an eye on the dollar, which still needs to get off the mat at 83 and gold, which will give us a very bad inflation sign if it breaks $680 and let’s hope that we can keep this market party going this week but remember, it’s all about the earnings and today is the last day of vacation from reality.
Be careful out there,
– Phil
