US Market Update – 3/16/10
Tuesday, March 16th, 2010US Market Update
Dow +7.4 S&P +4 NASDAQ +7
***Economic Data***
- (US) ICSC/GS weekly chain store sales w/w March 13th: -0.4% w/w, +3.2% y/y
- (CA) Canada Jan Manufacturing Sales M/M: 2.4% v 0.6%e
- (CA) Q4 Labor Productivity Q/Q: 1.4% v 0.8%e
- (US) Feb Import Price Index M/M: -0.3% v -0.2%e; Y/Y: 11.2% v 11.3%e
- (US) Feb Housing Starts: 575K v 570Ke; Building Permits: 612K v 601Ke
- (US) Redbook Retail Sales for the week ending Mar 13th: +3.2% y/y; MTD +0.8% v Feb
- (PD) Poland Feb Avg Gross Wage M/M: 1.8% v 1.5%e; Y/Y: 2.9% v 3.1%e
- (PD) Poland Feb Employment M/M: -0.2% v -0.1%e; Y/Y: 1.1% v -1.0%e
- Equity trading is choppy in New York ahead of the FOMC meeting this afternoon. This morning’s February housing data met expectations, although the data indicated the industry was affected by poor weather. Early in the premarket, Meredith Whitney insisted that US housing would surely double dip, and that the housing sector would dictate whether there would be a US double dip recession or not. GOP Senator Corker predictably criticized the Dodd financial overhaul bill, but affirmed the measure would probably pass this year. Note that Citi and AIG are heading higher again as the momentum that built last week seems to be taking a hold. Front month crude is up $1.30 or so to trade above the $81 handle after various OPEC officials stated the cartel would keep production quotas unchanged. Treasury prices have rallied since the open with the long end performing nicely ahead of this afternoon’s FOMC meeting. The benchmark 10-year is moving below 3.7% narrowing the spread between the 2-year yield back into the mid to low 270 basis points area. Fed fund futures continue to price in a 25 basis point hike at the end of this year, and another 75 basis points by the middle of 2011.
- US steel name Nucor offered a mixed view of its Q1 expectations this morning. The firm’s guidance was well ahead of the consensus view, after a sizable one-time charge. Executives said that the firm’s scrap business is seeing significant improvements, while construction oriented businesses continue to show little strength. NUE and competitors X and STLD were up 2-3% immediately after the open, although all three firms are giving up those early gains. Semi name Mirochip Technology goosed small cap chip names higher after offering strong guidance for its Q1, with top- and bottom line views beating expectations on strong margin growth. Luxury watch maker Movado is down more than 15% after warning its Q4 loss would be bigger than expected thanks to the continuing challenging sales environment. Fine footware retailer DSW is off 8% despite a mixed Q4 earnings report, which included strong SSS and top-line performance. And takeover chatter is rife yet again, with rumors of private equity offers for Harley Davidson and Beazer Homes making the rounds. BZH is up 2%, while HOG is up more than 6%.
- The USD was on the defensive ahead of the FOMC rate decision aginst the European currencies. The EU Finance Ministers provided a strategy for emergency loans in case Greece’s €4.8B austerity measures failed to improve the projected statistics back within the Maastrict Stability Pact criteria. The Chinese currency issue and the implied reserve currency debate continued to simmer as yet another US Congressional Aide commented that the US Senate to introduce bill today that threatens penalties on China if it does not alter valuation for Yuan. The US economic released provided little catalyst at this time for the Fed to reword its exit strategy with import price weaker than expected and US Housing prices falling almost 6% m/m. EUR/USD probing the mid 1.37 area ahead of the Fed rate outcome. The JPY mild ysofter against most pairs ahead of the BOJ rate decision on Wednesday.
***Looking Ahead****
- 11:45 ECB’s Stark
- 14:00 (US) FOMC Interest Rate Decision: Analyst expectations for the interest rate to remain unchanged at 0.25%
- 15:00 (UK) BOE’s Bean
Written by Trade the News
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