Thursday, January 14, 2010

Markets gain ahead of Intel earnings

Dow rose 29 to yet another 15 month high, advancers ahead of decliners 3-2 & NAZ climbed 8 on hopes for a good report from Intel (INTC) after hours. Bank stocks ignored the proposals for added fee/taxes on the top 20 banks. The Financial Index posted a nice advance as it heads for the higher end of its 5 month trading range.


% Change

The Alerian MLP Index recovered from yesterday's down draft, up 1+ to the 292s & off only 4 from its recent high. But REITs were weak, the index was down a ½ while still clinging near the 181 high back in Sep. Junk bond funds were mixed remaining near their recent highs. The yield on the 10-year Treasury bond was off 2 basis points to 3.76%.

Alerian MLP Index --- 2 months

Dow Jones REIT Index --- 2 months

Oil & gold are flattish. Warm weather in the northern latitudes is holding oil back. But gold may be starting another leg up. It's not too far from the recent high of 1200+. An economist was talking about the need to have gold back Treasury debt, making it stronger with a lower interest cost to taxpayers. This new line of thinking is getting more attention & is part of the fundamentals for gold in the 21st century.

CLG10.NYM..Crude Oil Feb 10..79.49 ..Down 0.16

GCF10.CMX..Gold Jan 10..1,145.90 ..Up 9.50

GLD (ETF) --- 2 months

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According to the Congressional Budget Office (CBO), the unemployment rate is unlikely to drop below 8% before 2012 without further gov help. The Dems, under pressure, may want to pass another stimulus package to create jobs before facing voters in Nov. The House of Representatives already passed a $155B jobs bill in Dec & the Senate is expected to act shortly. CBO's estimate shows the unemployment is likely to remain high for several years. The unemployment rate stood at 4.9% before the recession took hold in Dec 2007. The effects of the $787B stimulus bill (passed 11 months ago) will peak in the first half of this year. Any stimulus efforts probably will not to add to inflation but would worsen the budget deficit, which was a record $1.4T in FY09.

Alcoa (AA), Dow stock, started earnings season on Mon. The 2 week chart shows the before & after effect of the announcement. Alcoa supplies basic ingredients for a lot of manufactured goods & AA didn't get a high grade on its report card. This may be an early signal of what to expect for earnings from other companies (like its clients).

Alcoa --- 2 weeks

Markets are awaiting earnings from 2 Dow stocks. Intel reports after hours & JP Morgan/Chase (JPM) reports tomorrow before the markets open. Tomorrow will also be an options expiration day, adding to the excitement of trading.

Dow Jones Industrials --- 2 months

Nasdaq --- 2 months

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