Morning Coffee Break - Tuesday April 2

April what is thought of being a strong month historically began the month and second quarter at a slow snail pace. The Dow and the bulls have look to April as the best month of the year as far back as 1950 with an average 2.7% gain for the month.

 

The last 8 session have seen alternating gains and losses as the market rest after a fantastic March and first quarter.

U.S. equity futures overnight turned once again positive despite not so positive economic data posted overnight in Europe such as the Euro Zone’s unemployment rate moving higher to a record 12% for the month of March but saw improving Manufacturing PMI results that ticked higher to 46.8 in March beating expectations of 46.6.  However, the Euro Zone corner stone Germany saw its manufacturing sector reverse and contracted for the month of March and Italy’s and Spain’s Manufacturing PMI results were extremely disappointing weak.

During the overnight Reserve Bank of Australia (RBA) left key interest rates unchanged highlighting inflation was near trend despite growth was trending slightly below trend.  RBA statement left the door open further easing if growth continues to weaken.  

Bank of Japan Governor Kuroda stated that the Bank of Japan (BOJ) will look to buy longer dated bonds as part of its efforts to put the economy back on track.

U.S. Economic Reports On Deck

The big economic release to watch today is U.S. automakers March sales figures.  Edmunds.com is expecting the largest sales month since May 2007  with General Motors putting in the largest year over year gain with a 8.8% increase.

Time	Economic Event	Forecast	Previous
10:00am	Factory Orders m/m	3.1%	-2.0%
10:00am	IBD/TIPP Economic Optimism	46.1	42.2
All Day	Total Vehicle Sales	15.3M	15.4M

 

Morning Coffee Break's Current Benchmarks

S&P 500 futures are higher at 1558.07

EUR/USD ticked slightly higher to 1.2840

U.S.10-year Treasury bond yields are at 1.849%

WTI Crude Oil is higher by $0.09 or  0.09% to $97.16

Gold ticked lower by $-4.50 or -0.28% to $1596.40

 

 

Commodities

Overnight trading once again saw commodities mixed.  Basically economic sanative commodities reverse from yesterday with WTI crude oil ticking higher to $9716 and gold slipping to $1,596.40.  Dr. Copper found its footing after the RBA statement that suggests they will backstop the Aussie economy from slipping any further. Copper is currently trading at 3.37.

Equity only readers can gain exposure to WTI Crude Oil through the United States Oil Fund (USO, quote) ETF that seeks to reflect the performance, less expenses, of the spot price of West Texas Intermediate (WTI) light, sweet crude oil. The USO will invest in futures contracts for WTI light, sweet crude oil, other types of crude oil, heating oil, gasoline, natural gas and other petroleum based-fuels that are traded on exchanges. It may also invest in other oil interests such as cash-settled options on oil futures contracts, forward contracts for oil, and OTC transactions that are based on the price of oil.

Equity only readers gain exposure to the gold through the SPDR Gold Shares Trust (GLD, quote) ETF that seeks to replicate the performance, net of expenses, of the price of gold bullion. The GLD trust holds gold, and is expected to issue baskets in exchange for deposits of gold, and to distribute gold in connection with redemption of baskets. Readers can also access the gold market through the iShares COMEX Gold Trust (IAU, quote) ETF seeks to replicate, net of expenses, the day-to-day movement of the price of gold bullion.

Currencies Markets

With the RBA leaving rates unchanged as widely expected the currency markets remained fairly muted and allowed the Yen to rest and weaken slightly against the majors. With such a muted overnight session look for the U.S. session to move on the headlines. – see currency map below or for a live currency price matrix checkout. ( please note the page loads a little slow due to all of the quote being pulled)

 

 

 

Morning Coffee Break Earnings Watch

Our stock to watch for earnings this morning is spice maker McCormick (MKC, quote).  Earnings today are once again light.

 

 

Morning Coffee Break's Stock Pre-Market Stock Watch

Our screens popped with names with high volume this morning. HEWLETT PACKARD (HPQ, quote) with 735,961, NORDIC AMERICAN TANKERS (NAT, quote) 709,343 and BGC PARTNERS (BGCP, quote) with 537,312

 

Morning Coffee Break' Bottom Line

Watch the automakers to set the tone this morning. We have been trading sideways for more than a week and the markets have not had a significant pullback as of yet so be sure to keep an eye on any possible weakness and the Currency Shares Euro Trust (FXE, quote) ETF.  Many traders use it as U.S. equity directional indicator - FXE moves lower so goes the U.S. equities and if it moves higher the rules of thumb is so will the U.S. market.

.