Morning Call

0 CommentsThursday • September 3, 2009 • by alwaters

“The beginning is the most important part of the work.”

Plato

Morning Call
September 3, 2009

What to Buy

Yesterday’s favorite, PBR, finished higher by close to 3% and is likely to add to that number today. Gold, however, is the star performer right now and the mining stocks should be among the best picks. We have always liked Newmont Mining (NEM) as one of the tried and true picks in the mining sector. Jaguar Mining (JAG) is another that we spoke of recently and those shares jumped by 15% yesterday and will add several points today as well.

Market Outlook

An end of day selloff yesterday left the US equity market in negative territory. This is something we were seeing during the worst part of the market meltdown, where investors simply were not willing to hold positions overnight. It’s interesting to note, then, that futures are climbing this morning and we may see an opening jump of close to 1%. The question is whether those early buyers will stay in the game later today and heading into the weekend. As a whole, Asian stocks were mixed overnight. The Nikkei fell by more than a half percentage point, but equities in China were much stronger. The Hang Seng gained well over 1% and the Shanghai Composite soared by nearly 5%. Although the broader market held up, Asian banks were among the worst performers on the trading day. In Europe this morning, stocks are heading higher and the major indexes are approaching an upside of 1% at mid-day. In a contrast with Asia, European banks are outperforming the market with some of the big names seeing an upside of 3-5% this morning. Taking a look at afterhours trading in the US shows strength among the banks, mining stocks, and to some extent the energy sector.

Commodities are much stronger this morning as investors gain some confidence. Oil is up by a Dollar at $69 and should work its way back to $70 in the next few days. All indications are that OPEC will keep production steady as it meets in Vienna next week. Gold has been the real story as it began to soar yesterday and has added $8 more this morning to reach $986. The technicals look good for gold to continue its climb after running relatively flat for several weeks. The Dollar has made up some ground on the Yen, but is sharply lower on the Pound and Euro.

Another important round of economic news today includes Initial Jobless claims, the Monster Employment Index, and the Non-Manufacturers Survey. Earnings to watch today include Ciena, Del Monte, Movado, and Peregrine Pharmaceuticals.

The federal government will need to hire 270,000 workers for important jobs over the next three years to replace retiring baby boomers, according to a study just released. One has to wonder what effect this will have on an already burdened job market. For now, all eyes will be on today’s Initial Jobless Claims figure. The numbers have fluctuated slightly in the past few weeks and investors place a lot of importance on this indicator.

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

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