Market Update

{+++}US Market Update

Dow +45 S&P +6.2 NASDAQ +27
– The absence of any US economic data has cleared the way for an overall subdued trading environment considering it is a quadruple witching Friday. Equity indices are posting modest gains while commodities generally tick higher and the greenback languishes. US Treasury prices opened lower as yesterday’s selling pressure carried through to this morning’s open in Chicago, but prices have since recovered today’s losses. Yields still remain a good margin away from last week’s multi-month highs and are trying to recover from yesterday’s mortgage back induced selling. Soothing commentary from Treasury Secretary Geithner as well as the EU after its recent summit are undergirding optimism. In addition, GM is likely to emerge from bankruptcy a month ahead of schedule, by mid July, according to press reports. Front-month NYMEX crude is up a bit, trading just under $72.

– Rochdale’s Dick Bove made positive comments on Citigroup this morning, noting that he belives the bank’s shares could rally as much as 28% in the near future, to $4.00/share. Shares of Citi remain in positive territory as the rest of the major banks sink into the red. The New York Times writes that private equity firm Kohlberg Kravis Roberts may cancel its plans to list on the NYSE. It was planning to merge its operation with KKR Private Equity Investors, but now it may pursue the merger without the complicated process of listing in New York.

– Research in Motion’s Q1 results and Q2 forecast were more or less in line with estimates yesterday afternoon. Analysts have reacted tepidly this morning, with BoA/Merrill Lynch reiterating its prior price target of $100 and lowering its 2010 earnings estimates on the firm, while Thomas Weisel raised their PT ever so slightly. Apple is launching its 3GS iPhone today; AT&T noted that it has sold “hundreds of thousands” of the new model in preorders. Shares of Apple have held steady all week, while PALM has jumped 10% in the early going this morning. Shares of RIMM are down 2%. Carmax zoomed ahead of estimates in its Q1 report today, sending its shares up as much as 15% in early trading. A Carmax executive said that the used car market continues to be less bad than market for new cars. Smith & Wesson reloaded its Q4 revenue guidance thanks to its acquisition of Universal Safety Response, Inc, putting it well above the consensus estimates.

– UBS shined some light on the solar industry in a sector report, raising its 2010 global demand estimates thanks to the emerging recovery in China and the US. However, it lowered its solar module price estimates to near marginal cost. UBS’s top global industry picks included First Solar, Wacker Chemie, Yingli & OCI Company. It rated Yingli and SunTech Power at Buy based on favorable cost structures and strong distribution. In addition, it sees SunPower as best positioned to win in the US commercial and residential markets. UBS downgraded SolarWorld, citing lower estimates for gross margin based on ASP pressure

– In currencies, the greenback maintained a tone of consolidation tone during the New York session despite firmer equities, with EUR/USD unable to capitalize on higher gold or oil prices. CAD retraced its earlier strength and moved above the 1.13 level following the weaker than expected Canadian retail sales data. The Mexican Central Bank said its easing cycle was almost over and stated that the second half of 2009 should see improvement in its economic activity. The bank cut its overnight rate by 50bps to 4.75% this morning, as expected.Trade The News Market Update System

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