The markets are hovering slightly higher on the day, somewhat of a usual sight as the Federal Reserve continues their propping techniques. The SPDR S&P 500 ETF (NYSE:SPY) is trading at $118.09, +0.39 (+0.33%) as the Dollar has fallen off the highs of the day. The weak Dollar policy is the main way the Federal Reserve is able to keep the markets afloat. Print money, pump it into the system, the Dollar drops, lifting the markets higher. This creates a fabricated wealth effect as equities and commodities increase in price to maintain their real value. The average American gets excited to see their 401k moving higher even though in real terms, with a weaker Dollar, it has not gained anything. The average American spends, hopefully stimulating the economy more. That is the thought process of the Federal Reserve. The PowerShares DB US Dollar Index Bullish (NYSE:UUP) is trading at $22.35, +0.01 (+0.04%).
The volume is light today as it is Monday and Wall Street is waiting to hear from some of the largest, big impact companies on earnings. Apple Inc. (NASDAQ:AAPL) and International Business Machines Corp. (NYSE:IBM) are both reporting after the markets close. The whisper numbers on Apple are for earnings of $4.75 per share. The Apple stock has jumped higher in the last two months by 35%. They better report monster numbers to justify that price increase. The whisper numbers on IBM are coming in around $2.78 per share. IBM has also shot higher recently, running up from $122.00 to a high today at $142.67. IBM will also need to report stellar results to maintain the price it has now reached.
Tuesday morning before the bell, Goldman Sachs Group, Inc. (NYSE:GS) and Bank of America Corporation (NYSE:BAC) report earnings. This will give the markets more insight into how bad this foreclosure mess really is. This makes for a wild Tuesday in technology and in financial stocks. It will most likely be a high volume trading session and will shape the rest of the week.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.cmo
