US stock futures point to a slightly higher open Monday morning despite another 6.6 magnitude earthquake only about 50 miles from the troubled Fukushima Daiichi nuclear plant. The market was bent but not broken on Thursday after a 7.1 earthquake hit Northeast Japan, but the breakdown from the ascending channel came on Friday. With the up open, it will be key to see whether the market can add to pre-market gains.
Today also marks the start of earnings season with aluminum giant Alcoa Inc. (AA). Strong corporate earnings during the recovery have buoyed stocks over the past two years, and analysts expect another strong season. Alcoa is expected to earn 27 cents per share on $6.14 billion in revenues. One thing that will be interesting to see is whether some companies trim 2011 guidance due to hightening fears of inflation. Also over the weekend, NYSE Euronext (NYX) rejected a $11.3B takeover bid from Nasdaq OMX Group Inc. (NDAQ).
For more market and stock commentary, watch the T3Live.com Morning Call with Scott Redler and Alix Steel (below).
The big story in the market continues to be commodities, which have rallied in the face of rising inflation fears. Gold is actually pulling off a bit this morning, but silver is set to open higher and continue its dizzying climb. Oil is also pulling off a bit after extending to above $110/barrel on Friday, and remains volatile with unrest continuing in the Middle East.
While oil prices have been on the rise, oil service stocks have not performed as well. The Oil Service HOLDRs ETF (OIH) had been in attractive consolidation for several days, looking poised for a potential blast off, but the resolution to the range has come to the downside. The oil servicers for the most part are still hanging above the moving averages, and could still make their move.
Fine China
A piece of big news came from China over the weekend that search engine Baidu.com, Inc. (BIDU) will team with Facebook to create a social network in China. BIDU is taking off this morning after closing Friday just below highs after pulling off a bit late last week. Scott Redler will be focusing on another hot Chinese Internet stock for a potential momentum trade this morning, though, with Sohu.com, Inc. (SOHU). After breaking out SOHU has held higher and looks like it has regained its footing for another move through highs.
Apple Remains Weak
Although perhaps not in an actionable area at this stage, it is also important to watch a market leader like Apple Inc. (AAPL). Apple often holds the key to larger market moves, and recently its inability to hold higher has weighed on the indices. The stock has made a series of lower highs, troubled by uncertainty of Steve Jobs, supply chain disruptions in Japan, and most recently rebalancing of the indices that created selling pressure on AAPL. From a strictly technical perspective, Apple looks like it has room to get down to support around $326, so watch the leader this week for clues.
*DISCLOSURE: Long GLD, RBY, AUY
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