The futures market summary
WHITEHALL LV INVESTMENT MANAGEMENT FUTURES MARKET SUMMARY 02/01/10
SUMMARY OF UPCOMING DATA 02/02/10
10:00 AM PENDING HOME SALES INDEX
DATA RESULTS 02/01/10
ISM MANU INDEX (58.4 VS. 55.5)
US CONSTRUCTION SPENDING (-1.2% VS -0.5 %)
US PERSONAL SPENDING (0.2% VS. 0.3%)
US DEBT REVIEW AND OUTLOOK
US TREASURIES began the week with a negative bias after equities managed to stage a rebound of technical support levels. The ISM (Institute for Supply Management) posted its best reading since August of 1994 and set the tone for the recovery in equities and risk tolerance. In addition, the President sent Congress a proposed $3.8 Trillion budget. Of course this planned budget comes with the fiscally pleasant news of a $1.6 Trillion budget deficit. With the focus of the budget on employment creation rather that fiscal/monetary recovery, the record supply of US debt and the potential for inflation resurfaced. This helped to drive Treasuries down to the lower end of their recent trading ranges. Many traders feel the markets will continue to range trade as some support for the complex comes in due to events such as repayment of borrowed funds by banks and the assumed non resumption of asset purchases by the Federal Reserve. The program for asset repurchase is supposed to cease in late March (Be aware though what often happens when one assumes something, particularly when it pertains to the government managing fiscal and monetary responsibility).
Technically, March 30 year futures are likely to continue to range trade, with a narrowing channel occurring. This could lead to an eventual breakout which is expected to have an initial downside bias. In the near term, expect the contract to find a solid support level at 117-26, with 119-08 setting up as a significant resistance level.
US EQUITY REVIEW AND OUTLOOK
Stocks rebounded on the first day of trading in February. Technical support levels in the markets held and a better than expected reading on US manufacturing spurred traders to initiate short covering positions and seek out value within a number of sectors which took a hit last week.
The ISM index on manufacturing jumped to its highest level since 2004, acting as a catalyst for a broad based rebound in most of the major equity indices.
Energy stocks were one of the best performing sectors after crude prices rebounded nearly 3 percent and Exxon reported earnings that exceeded expectations (despite a 23% fall). Automaker Toyota reported that it has developed a solution for its accelerator sticking problem and would begin repairing the problem this week. The perceived end to a potential PR nightmare for the automaker helped to rally the share price nearly 4%.
Many analysts are watching the gains with caution, as a rebound was likely from the near term oversold conditions. A lack of uncertainty and a perceived increase with regards to the unfriendly business environment in the United States may cap gains, forcing the equity market into a range with opportunities for lower lows for the remainder of the 1st quarter.
Technically, March S&P futures rebounded off initial support at 1068.00 to close near an initial resistance level at 1086.40. Range trading is likely to continue, with 1093.00 setting up as a initial resistance level and 1096.50 providing a significant challenge to upside momentum. Looking for the market for find some support at 1077.00 with a break of this level setting up for a retest of the 1071.50 support level.
|
US DEBT FUTURES |
OPEN |
HIGH |
LOW |
CLOSE |
CHANGE |
|
US H0 (US 30 YRS) |
119-04 |
119-04 |
118-00 |
118-05 |
-21/32nds |
|
SP H0 (S&P 500) |
1077.00 |
1086.70 |
1076.00 |
1086.30 |
+15.90 |
|
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Prepared by Rich Roscelli & Paul Brittain.
PLEASE VOICE YOUR MARKET OPINIONS, THOUGHTS, AND QUESTIONS. EMAIL TO RICH@BINVSTGRP.COM
Additional Information can be found at WWW.WHITEHALLVEGAS.COM
Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Whitehall Investment Management, its officers and directors may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.
