As the equity markets have been consolidating since April 21st, today may be the potential for the next leg up in the market. This may have happened earlier in the week, but the Swine Flu scare caused many financial and commodity markets to fall. However, the flu scare is the one component that could come back to haunt us if the situation gets worse.
Today the Q1 2009 GDP will be released at 8:30 am and the Fed will conclude their meeting at 2:15 pm today. The market is expecting the GDP to be -4.7% as more consumers were shopping than many had initially anticipated.
Stay tuned folks as the news is released.
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Below is the recent USDA's grain planting progress report. Since our last writing of grains on 4/19/09, we saw the markets find support and begin to rally or at least come off the lows. As we have been viewing the May contracts, will will now be focusing on the July contracts. However the word of the week is Swine Flu. This seems to be on the mind of all markets as it may cause the global economy to take longer to recover and have an impact on travel related and commodity related industries. As noted previously, equities were overbought and did consolidate last week. In both the S&P500 and DJ index futures contract (basis June) , the markets were close to reaching their recent highs, but then sold off in the last minutes of trading on Friday. There is more talk that a few of the major economies may have already experienced the worst of the recession. However, it still could be several months before this point is confirmed. After the markets dropped sharply on Monday (as we noted on 4/19/09 may happen this week), the markets triggered a sell signal early Tuesday morning. As we noted on 4/4/09, the equity indices may be a bit choppy during the current earnings season and they are proving to be just that as today the markets were making new highs and then selling off in the last hour to make new lows. The grain markets have had an interesting run lately. With the release of the USDA report on March 31st, it appeared initially to have a bullish result on corn, wheat and soybeans. However only the soybean market really moved. And moved it did!! Since out last writing on April 4th, the equity markets did fall to our support levels and then rallied to new highs. Basis the June futures contract we stated the S&P 500 would find support at the 805 area. On April 8th it did find support in that area and then rallied into the 870 area. As many commodity and equity futures markets bottomed in late February and early March, many of these markets also consolidated and gave sell signals over the past week. By the later half of the week, most of these markets returned to their upward movement. The equity futures markets were no exception to these quick signal shifts. As we discussed earlier this week of receiving short signals over the past week in wheat, soybeans and on Monday in the corn market. Tuesday may have caused at least a short term bottom to form in the grain markets as the USDA released their planting and stock report. The report proved to be very bullish for soybeans and some what bullish for corn and wheat. But in recent weeks it seems to be a common story for many commodities including crude and copper to rally. As many commodities are quoted in dollars, the dollar index peaked on March 4th and had a recent leg down since March 30th. |
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