A.L. Waters Capital, LLC

Morning Call

0 CommentsFriday • March 5, 2010 • by alwaters

“It is your business when the wall next door catches fire.”
Horace

Morning Call
March 5, 2010

Gold Update

Ahead of the latest unemployment figures, gold has been fluctuating slightly. The general trend remains positive as we see a short round of profit taking after a positive week for gold. In addition, gold traders will be watching the Dollar and other commodities, both of which have fluctuated lately. Fiscal concerns in Europe have investors who will be next, who will be worse, and what it all means for paper currencies.
Hot Stocks

The solar sector has become increasingly attractive. Adding to our support of Canadian Solar (CSIQ), it is also worth taking a look at Suntech Power Holdings (STP). Suntech gained more than 5% yesterday and is heading higher still in pre-market today. It would be advisable to look for dip, and shares could see a 20% upside by the end of the year.

Public Finance Update

The House has approved its revised version of a jobs bill, which will allow issuers selling four types of tax-credit bonds to receive a direct Build America Bond-style subsidy payment from the federal government. The rate is also said to be much higher than was proposed in the Senate version of the bill. The bill would also provide more funding for surface transportation programs until the end of the year, until Congress can develop a longer term program.
After a week-long delay, California is ready to go to market with a $2 Billion general obligation bond deal sometime next week.

Market Outlook

US stocks began to build a little momentum in the late afternoon yesterday and futures are pointing to a modestly positive start to the day. The Dow finished with a gain of just under 0.5%, with financial and technology stocks among the leaders. Energy shares were the weakest of the group yesterday, despite steady prices for crude. US Jobless Claims fell which helped offset broader concerns regarding sovereign debt in Europe.

Asian equities moved higher despite some mixed signals around the continent. China’s Premier Wen Jiabao warned of “latent risk” in the nations banks and pledged to crack down on property speculation. Speaking before the National People’s Congress, Wen added “the domestic economy still faces some prominent problems.” In Japan, the yen dropped on speculation the Bank of Japan will discuss ways to lower short-term rates at its two-day meeting starting March 16th.

Stocks have moved slightly higher in Europe this morning, with an average upside of almost a half percent. In Asia, financial stocks kept pace with the broader market, but are leading the pack in Europe today. Greece remains in the headlines as a bit of political jockeying continues between Greece, the European Union, and the International Monetary Fund. Leaders in Athens say that a lack of European support could lead Greece into the arms of the IMF, but Central Bank President Jean-Claude Trichet is pressing for a European solution.

Commodities are relatively strong this morning. Oil is higher by a half Dollar; staying comfortably above the $80 mark. Gold is also steady this morning with a $2 upside at $1135. The Dollar is somewhat mixed once again: higher on the Pound and Yen, but moving lower against the Euro.

Today’s economic data includes Average Hourly Earnings and Average Weekly Hours, the Unemployment Rate, Total bankruptcy filings, Non-Farm Payroll, and Consumer Credit. On the earnings side, we will hear from Eagle Rock Partners, Santander, Marshalls, and a few others.

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

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