DATA RELEASES 05/05/10
8:15 am ADP Employment Report
10:00 am ISM Non Man Index-56.4
10:30 am EIA Petroleum Report
DATA RESULTS 05/04/10
US Factory Orders (1.3%/-0.1%)
US Pending Home Sales Index (5.3%)
US DEBT REVIEW AND OUTLOOK
Fears of another global credit contagion, this time in sovereign debt-the supposed lender of last resort- prompted traders and investors to move capital into lower yielding, more secure US Treasury Debt. US 30 years powered through a number of technical resistance levels to close at their highest level since the Dubai debt scare in November of 2009. US 30 years closed over a point higher as participants sought out the highest secure yield to ride out the volatility caused by the uncertain outcome of the Greek bailout package and the seemingly inevitable domino effect of other over leveraged countries coming to the bailout table.
Treasuries also gained from the highest percentage gain in the US dollar for over a month. The greenback closed at its best level of the year as risk aversion swelled, causing a move into lower yielding currencies. A rise in the US dollar increases the overall yield return for dollar denominated securities such as Treasuries, especially when they are repatriated back into other currencies.
TECHNICALLY SPEAKING – Technical resistance was broken at 119-15, which should set up as a pullback support level from near overbought conditions. The markets strong close could mean continued upside movement to 120-22. This could represent the top end of the new range and may be a key point to implement longer term short positions.
US EQUITIES REVIEW AND OUTLOOK
Stocks gave back Monday’s gains and more as renewed concerns regarding the outlook for the euro zones sovereign debt and economic growth. Financial, energy, and materials led the tumble Materials stocks came under additional pressure as China implements new banking reserve requirements in order to quell inflation. Risk aversion and profit taking overcame strong readings on US factory orders and pending home sales. It just didn’t matter as the markets perceive the possibility of a new credit contagion, this time led by overtaxes sovereign debt. Market participants looked to sideline into higher yielding secure US Treasury debt as the “Sell in May and Go Away” strategy appears to be attempting to set an early foothold. However the major indices did bounce off some key technical support
TECHNICALLY SPEAKING – June S&P futures recovered off support level at 1168.00. This could lead to establishment of near term lower trading range with pullback to 1178.50. A retest of 1165.00 could lead to continued downside move to new target of 1158.80.
Blood on the street throughout most of the commodity sector as expectations of slowdown from China and strong close in the US dollar hit the market
Prepared by Rich Roscelli & Paul Brittain.
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Whitehall Investment Management Futures Market Summary
DATA RELEASES 05/05/10
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