Halftime Report for 4.11.2012

 Bonds yields are higher today, with the 30-year bond and 10-year note trading lower by 0.5% and 0.25%, respectively. EUR/USD was trading higher on the session, though it surrendered some early gains. Halfway through the U.S. session, prices were hovering near the 1.31 figure.

Other News and Numbers:
– The Department of Justice is suing Apple (AAPL) and publishers (CBSA, NWSA, and PSO among them) for colluding on the price of e-books. AAPL is trading flat on the day following the news

– VMWare (VMW) announced that its CFO would be leaving. VMW is down 2.3% to $107.80

– Nokia (NOK) warned on earnings earlier saying that their smartphone might lose connectivity. NOK is lower by 13.4% on the news

Morning Rage 4.11.2012

Alcoa’s (AA) earnings last night certainly helped set the stage. Many, including us at KOTM, were expecting a disappointing number from the aluminum-producer. AA posted a profit of $0.10 per share, compared with expectations for a loss of $0.04. AA is indicated 5.7% higher at $9.86 in the pre-market.

In currencies, we are not surprised to see EUR/USD higher this morning – as we wrote yesterday. EUR/USD prices showed surprising resiliency over the past two sessions to the sell off in risk. The pair gained 0.5% this morning to 1.3130. USD/JPY is toward the top of its tight range, holding just below the 81 figure. 

Crude futures are higher this morning, though with inventory data out at 10:30 a.m. ET, prices may be reluctant to rebound further. Futures are up $0.30 to $101.32 at the moment. Bears continue to point to the $100 figure as a key level to the downside. We would not be surprised to see that level tested following the data this morning. Natural gas prices are also higher, by 0.2%.

Bond yields are slightly higher overnight as the 30-year bond prices are lower by 0.4%. 10-year note futures are down 0.2%.

At 2 p.m. ET, today, the Federal Reserve releases its Beige Book.  

Meadows on the Markets 4.10.2012

Gold also saw a modest increase as front-month futures gained 1.1% to $1,662 per ounce. Silver saw similar gains, while Platinum dropped 1.15% to below $1,600 per ounce. This widens the Gold-Platinum spread that has historically seen Platinum prices at a premium to Gold. That relationship changed near November 2011.

Oil prices fell in tandem today as well. Tomorrow’s inventory figures could be the impetus to push oil below $100 per barrel – if we see another “risk off” (we hate that term) day. Last week’s inventory figures showed that output was at a 13-year high. Further output gains or inventory builds could have oil testing year-low levels near the $95 level.

The one question we have about today’s price action, though, is: Why didn’t recent correlations with EUR hold? The currency has not participated in this two-day sell off that has engulfed equity markets. Something has to give – either this is a fake-out on the equity front; or the EUR is in store for a decline below the 1.30 level. Every time it looked like EUR/USD was going to drop today, new buyers came in, leaving the pair at 1.3085. We would not be surprised to see this move higher tomorrow barring negative news on the equity front.

Oh, one last thing, Alcoa (AA) earnings are released after the bell today. Try not to draw too much from that… the stock is not indicative of earnings season.

Halftime Report for 4.10.2012

Despite this sharp decline in equity markets, EUR/USD has been fairly resilient this morning. It is trading flat for the week – compared to a 2% declines in oil and equity markets. Gold prices are up 1.6% over the same period.

Today, oil prices briefly fell below $101 per barrel, hitting a low of $100.75. Support is expected at the $100 figure. Natural gas, which was higher early in the session, has fallen to fresh lows, down 2% to 2.061. Guess you can’t disguise a dog with lipstick.

More News and Numbers:

– Best Buy’s (BBY) CEO resigned today, while Yahoo (YHOO) announced a new structure (Forbes). BBY is trading down 4% after an initial spike; YHOO is down nearly 1%

– Gartner estimates that demand for Apple’s (AAPL) iPad 2 will cause worldwide tablet sales to soar. Tablet sales should be 119 million units in 2012. AAPL is trading down 0.6% to $632

–  Alcoa (AA) is down nearly 2% ahead of earnings report tonight, which expects $0.04 loss on the quarter

What's Coming Up On the Economic Calendar

– 8:30 a.m. ET: Import/Export Prices
– 10:30 a.m. ET: EIA Petroleum Report
– 1 p.m. ET: 10-year Note Auction
– 2 p.m. ET: Federal Reserve Beige Book

– 8:30 a.m. ET: Weekly Jobless Claims
– 8:30 a.m. ET: Producer Price Index
– 8:30 a.m. ET: International Trade
– 10:30 a.m. ET: EIA Natural Gas Report
– 11 a.m. ET: 3-month, 6-month, and 5-year TIPS Announcement

– 8:30 a.m. ET: Consumer Price Index
– 9:55 a.m. ET: University of Michigan Consumer Sentiment 

Morning Rage 4.10.2012

Even still, we remain near very key levels on the S&P futures, and a break below 1,368-70 might see additional selling pressure. Commodity markets are also flat this morning, with Oil futures trading just above $102 per barrel and Gold futures in near $1,650 per ouce. Yields on the 10- and 30-year Treasury futures are relatively unchanged.

Alcoa (AA) reports earnings after the bell today, with analysts expecting a quarterly loss in the area of $0.03 per share. Tomorrow morning, Progressive (PGR) reports with earnings expected at $0.39 per share. These are just the warm-up acts to giants like Google (GOOG), JPMorgan (JPM), and Wells Fargo (WFC), which report starting Thursday.