Tuesday, December 22, 2009
U.S. stock indices are trading better overnight. Last night’s rally took out the recent top in the March E-mini S&P 500, reaching 1114.75. The next upside targets are 1119.00 to
1122.00. Optimism over a U.S. economic recovery is encouraging investors to seek higher yielding stocks at the expense of Treasuries and Gold.
March Treasury Bonds and Treasury Notes continue to feel downside pressure. Japanese investors are moving money into the Treasuries. Investors are asking for higher yields because of
concerns over the abundance of U.S. debt and the Treasury’s ability to pay it back. Asset allocators are pulling money out of fixed income instruments while seeking higher yields in the stock
market.
The March Euro is trading flat after Moody’s became the last of three major credit rating services to downgrade Greece’s debt. Traders had been waiting for this downgrade and were not
surprised by the news. Although this last downgrade is out of the way, traders are not optimistic about the Euro. Many feel that further downgrades of other sovereign debt are likely. Spain and
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