Why Tomorrow Will Be Big Day For Treasuries
The markets ignored the better-than-expected consumer confidence number today and are instead awaiting the more
important Chicago Purchasing Managers Index–for some indication of the outlook
for business spending.
Equities
Although the equity markets finished off their
highs for the day (and seem somewhat overbought on a short-term basis), they,
nevertheless closed in positive territory–continuing their steady climb. On the
day, volume was better on positive moves than in pullbacks. The
semiconductor stocks led the Nasdaq higher for a second day. As a result,
the Nasdaq futures contract
(
NDM3 |
Quote |
Chart |
News |
PowerRating) was up, by 9.50 to close at 1116.50.
Meanwhile, the chemical companies were helped by lower energy prices and
improving demand. The S&P contract
(
SPM3 |
Quote |
Chart |
News |
PowerRating) was up 2.90 to finish at 916.50,
and the Dow
(
DJM3 |
Quote |
Chart |
News |
PowerRating) was up by 35 to
finish at 8477.
Fixed Income
The Treasury markets were slightly lower again
today on light trading, as the market awaits tomorrow’s refunding announcement
by the Treasury (which is expected to hit record levels on the back of
lower tax receipts, Iraq war and tax cuts). The market is also awaiting Mr.
Greenspan’s testimony before Congress tomorrow. And although his speech is
likely to be optimistic, the Q&A session will likely be dominated by tax-cut
related discussion. The 10 year futures contract
(
TYM3 |
Quote |
Chart |
News |
PowerRating) was down 070
to close at 114-170; the 30 year
(
USM3 |
Quote |
Chart |
News |
PowerRating) finished at 113-03–down 0-10; and the five year note
(
FVM3 |
Quote |
Chart |
News |
PowerRating) finished
down 0-045 to close at 113-090.
Metals
Positive geopolitical developments, such as the
opening of dialogue between Syria and Israel, India and Pakistan, and North
Korea’s apparent conditional willingness to cease its nuclear program, have
pushed gold
(
GCJ3 |
Quote |
Chart |
News |
PowerRating) lower today. The precious metal was down .8, to finish at 334.0. Silver
(
SIK3 |
Quote |
Chart |
News |
PowerRating) was lower in sympathy, as its price was down 3.2
to finish at 4.548. Industrial metals, on the other hand, were pushed higher
today on the back of higher equities and indications that the spread of SARS in
Asia may be slowing down. Copper
(
HGK03 |
Quote |
Chart |
News |
PowerRating) was up .95 at 72.35 and aluminum
(
ALJ03 |
Quote |
Chart |
News |
PowerRating) was up .0060 at .6400.
Energy
Crude oil fell again today, totaling -16% for the
past 6 trading sessions, on more second-guessing by the market about OPEC’s
ability to curb the looming over-supply. Near- term prices may be somewhat
over-sold; however, the longer term down trend should continue in the months
ahead. June crude
(
CL03M |
Quote |
Chart |
News |
PowerRating) was down .25 cents at 25.04. Natural
gas
(
NG03K |
Quote |
Chart |
News |
PowerRating) was also lower by a slight .354 to close at 5.123 .
Currencies
The US dollar was lower today as short-term
speculative traders attempted to push the greenback through some key support
levels–which have so far held up. The USD index
(
DX03H |
Quote |
Chart |
News |
PowerRating) was up
.30 and
finished at 98.92 on the day.