DIA -.04%, SPY +.14%, QQQQ -.44%
10-Year Treasury +1/4, yielding 4.44%
The markets tread some water today. Traders are waiting for earnings season releases to see how companies are coping with rising energy prices. Ford announced a drop in its earnings, hurting the auto sector. Further preventing action, some very important numbers (the trade deficit, retail sales and foreign funds flows) are coming out later this week. Finally, oil rebounded from $53/bbl.
The 10-year Treasury rose 1/4 to yield 4.44%. Treasury's benefitted from a classic safe haven trade, where traders park their funds in safer investments to ride out possible market gyrations. Traders also moved funds from Ford bonds (which fell on Ford's earnings warning) into Treasuries. There was also a large amount of short covering. However, the market is approaching important downside support levels, which may prevent further downside moves.
Oil rebounded about 1% today, closing above 53/bbl. Traders started to worry gasoline supplies for the upcoming summer driving season would be insufficient to meet demand. Kuwait announced OPEC would increase production another 500,000 bbl/day to stem off the possibility of a late year supply crunch. Finally, the market dropped 5-days ini a row last week, so some technical rebound was in order.
The dollar lost .5% versus the Euro and Yen today. The dollar has rallied versus both currencies for the last month, leading to a technical extension of both markets. Also of extreme imortance is tomorrow's trade deficit number. Some traders have speculated the number will be worse than expected due to a strong US GDP growth and China's announcement it's exports increased last month. Remember, this is just talk at this point.