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Thursday, July 30, 2009

Morning Market Report

Yesterday, the major indices were changed only marginally again for the second day in a row. Today, however, all three look up nearly a full percentage point at the open. The Dow will likely open above 9100 and the NASDAQ might test 2000 before the end of the day. There's going to be a lot of earnings released today. Cigna, Kodak, Walt Disney and Exxon Mobil all report earnings today.

At the same time, Treasury bonds are starting to have their rates inch toward critical levels again. The ten year is pushing 3.7% this morning. The yield spread is 2.52% as the two year has shown much quicker rise in its rate than the ten year over the last week or so. The two year is now trading at 1.17%. That's after a lukewarm auction a couple days back started the weakness.

All major indices in both Europe and the Far East were up. The Hang Seng in China was up .49%, the NIKKEI in Japan was up .51%, while the Straits Time Index in Singapore was up 1.23%. In Europe, the FTSE in London was up 1.53%, the DAX in Germany was up .78% and the Spanish Index was up 1.23%.

After a few days of losses, oil is trading up this morning currently at $64.64. The Dollar looks to be trading down against most major currencies this morning. Against the Euro, the Dollar is down .06%, it's down .65% against the British Pound, and it's down .68% against the Yen.

There's two pieces of breaking news. The weekly jobless claims came out. They rose a bit more than expected however they have stayed below 600,000 people every week of July.

The number of Americans filing claims for jobless benefits last week held below levels seen in late June, before auto-related distortions set in, indicating firings are slowing as the economy stabilizes.

Applications rose by 25,000 to 584,000 in the week ended July 25, higher than forecast, figures from the Labor Department showed today in Washington. More than 600,000 claims were filed every week last month. The number of people collecting unemployment insurance decreased for a third week.

Meanwhile, Exxon Mobil came out with its quarterly earnings and they missed the mark.

Exxon Mobil Corp., the largest U.S. oil company, reported a third straight drop in profit after shrinking demand for diesel, gasoline and natural gas pulled down energy

Second-quarter net income fell 66 percent to $3.95 billion, or 81 cents a share, from $11.7 billion, or $2.22, a year earlier, Irving, Texas-based Exxon Mobil said today in a statement. Per-share profit excluding legal costs related to the 1989 Valdez oil spill was 84 cents, 15 cents below the average of 16 analyst estimates compiled by Bloomberg.

My analysis:

It looks to be another wild day on Wall Street. I believe that the couple days of mild changes are over.

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