Morning Call

0 CommentsThursday • July 30, 2009 • by alwaters

“Even if you’re on the right track, you’ll get run over if you just sit there.”

Will Rogers

Morning Call
July 30, 2009

Encouraging words from China’s Central Bank had a positive effect on Asian markets and may be trickling through to the global markets as well. The statement said that the Bank will continue to support a loose monetary policy and to “consolidate the recovery momentum of the economy.” The Hang Seng Index added on a modest half point, but the Shanghai Composite, after a steep loss yesterday, gained back over 1.5%. European equities are also up by well over 1% in the middle of the day. Banking stocks in both Asia and Europe have been mixed, while the tech sector continues to trend higher. Futures in the US are up about a half point on the Dow, despite some weakness in the financial sector. Today’s trading promises to be rather selective, but we do expect some positive momentum to build for the dry bulk shippers. Companies such as DryShips (DRYS), Ocean Freight (OCNF), and Diana Shipping (DSX) are likely to make solid gains.

Commodities have also come back strong this morning. Both oil and gold fell off considerably yesterday and both have recovered well this morning. Oil has added close to $1 to reach above the $64 mark. Gold, on the other hand, has moved higher by $5 to just under $933. As we expected, the Dollar has lost its one day momentum and is lower against the Pound and Euro this morning. This should support a nice rally for commodities today.

Also driving the markets today will be the release of the latest Initial Jobless Claims figures. This number always has the potential for causing a flight to the exits, so we will anxiously await the latest news. On the earnings calendar we will hear from Akeena Solar, Apache Corporation, Avery Dennison, Cigna, Colgate Palmolive, Exxon Mobil, Goodyear, MasterCard, Motorola, Walt Disney, Waste Management, Dow Chemical, and several others.

Each day has brought a mixed bag of good and bad news. As a result, we expect that the indexes will trade in a tight range for some time. There is still a lot at stake in terms of unemployment, commercial credit and real estate, and the weekly seizures of small to mid-size banks by the FDIC. We are, however, hearing a lot more discussion about the likelihood of a W shaped recovery, which we have supported for some time now. In that case one can only seek positive short term returns and be prepared for a potentially dramatic pullback.

The assembled information disseminated by A.L. Waters Capital in the Morning Call is for information purposes only, and is neither a solicitation to buy nor an offer to sell securities. All assembled information within the Morning Call is subject to change without notice. The assembled information within the Morning Call is based on information believed to be reliable as of the date of the report but no representation, expressed or implied, is made as to its accuracy, completeness or correctness.
Forward Looking Statements:
Information in the Morning Call will contain “forward looking statements” as defined under Section 27A of the Securities Act of 1933 and Section 21B of the Securities Exchange Act of 1934. All readers are advised to conduct their own independent research into individual stocks before making a purchase decision. In addition, investors are advised that past stock performance or portfolio performance is no guarantee of future price appreciation or performance.

Posted in: Morning Call: Daily Analysis of the Global Markets and Economy

Tagged with: bonds, economy, gold, money management, oil, stocks, wall street