Whitehall Investment Management Futures Market Summary

8:30 am-Empire State Mfg Survey (25.0)
8:30 am- US weekly jobless claims (440 K)
9:15 am US Industrial Production (0.8%)
10:00 am Phil Fed Survey (20.0)
10:30 am EIA Inventory Report (Nat Gas)
US Retail Sales (1.6%/1.2%)
US CPI (0.1%/0.1%)
US Business Inventories (0.5%/0.4%)
EIA Inventories (Crude) Draw down in CL -2.2m, Draw in RBOB, Build in distillates
Beige Book-Fed comments that economy expanded in consumer spending & manufacturing, services continued to lag.
(Earnings-JP Morgan Chase (.74 eps vs. .64 eps)
US Bonds closed weaker after an early seesaw session. Initial resistance levels held in most of the futures on the long end of the yield curve as risk tolerance jumped with a vengeance. Fixed income was buffeted by a series of data that proved highly bearish. Earnings from JP Morgan Chase, Intel, and CSX railroad freight services were all significantly better than expected; while reports on retail sales and consumer prices joined in support of positive sentiment for economic recovery. The positive momentum supporting recovery led Treasuries to their worst levels by the close of the cash session in equities. Even cautious testimony by Federal Chairman Bernanke and a return to uncomfortably high yields in Greece’s debt market (on the long end of its yield curve) failed to offer a lift to the Treasury complex. Data on US weekly employment claims and manufacturing will contribute to Treasuries possibly continuing to range trade or break to a new support level.
Technically, June 30 year futures hit target level of support at 115-26. A break of 115-23 could set market up to test 115-09. Resistance sets up at 116-07.
Stocks closed at their best levels since September of 2008, as a wave of better than expected earnings, strong consumer sales, and a lack of fresh inflation worries boosted confidence in equities. Technology stocks led the broad based rally, which posted the best advance/decline ratio in years. Intel, JP Morgan Chase, and CSX Rail shipping services all posted better than expected earnings. US Retail Sales posted an even better bounce than had been expected, given the strong guidance from recent reports on chain store sales during the Easter holiday season. The US Consumer Price Index came in line with expectations. These figures managed to offset the relatively subdued forecast by Federal Reserve Chairman Bernanke, The Chairman’s testimony suggested an attempt to reign in a sense of unsustainable euphoria, as the commentary from the Fed’s Beige Book was significantly more upbeat regarding its review of economic growth within the Federal Reserve banking regions.
Thursday will offer further insight into economic prospects on the manufacturing level in New York and Philadelphia; in addition to weekly jobless claims, the sector that continues to weigh on the longer term prospects for sustained economic recovery.
Technically, June S&P futures are bumping up against a key RSI level of 80, suggesting a significantly overbought position. Support for the contract remains in place at 1183.00, while upside resistance sets up at 1208.00 and 1212.00.
Prepared by Rich Roscelli & Paul Brittain.
Please voice your market opinions, thoughts and questions to: rich@binvstgrp.com
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