eToro daily market review – 22.4.09
“Banks are Covered”
A bounce in the financial sector helped stocks regain part of Monday’s losses, as investors grabbed the low prices, driving the intraday session higher. Geithner also had an effect on the stock session as he mentioned during yesterday’s meeting that most of the banks have substantial capital and that the sector is slowly recuperating. According to news headlines already six smaller banks are ready to return capital that they recently received from the TARP program.
Earnings continued to surprise investors yesterday as Yahoo, the internet giant, beat analysts’ estimates. Even though the large cap presented a better than expected last quarter, the company notified that it still intends to cut over 5% of its work force. In addition, Texas instrument showed impressive results, whereas Coca Cola hit estimates.
Even though earning are showing a better than expected scenario, economic data and the rate of foreclosures in the U.S are still dragging down confidence. The S&P500 closed the session with gains of 2.13%, while the Nasdaq climbed higher by a mere 1.50%. The leader of the day was the financial sector, closing with a massive gain of 7.4%
Mixed Forex Signals
The Dollar index continued to trade around recent resistance of 87 points, during yesterday’s session. Even though equities increased during the session, most of the individual currency pairs ended the day barely unchanged.
On individual pairs the EUR/USD is now lingering around its recent break-out price, waiting for the next trigger to send it down. As mentioned in previous reports, mixed signals from the ECB regarding its future rate decision is preventing a major trend from developing. To date analysts are expecting a further rate cut by the ECB, but there are those that are stating that the 1% level will be the lowest level in this economic cycle.
On the other side of the globe, Japan released a surprising report showing that their exports had contracted less than expected. The news raised confidence in the region, hoping that the current recession could be coming to an end. One must note that the Japanese economy thrives on its exports; therefore even though the report is a good sign for the economy, the report also indicates that other countries’ demand could also be picking up. Japan released its international trade balance showing a figure of 11.0b, much higher than analysts’ expectations of -5.0b.
From a technical point of view the USD/JPY is now located on major support. In addition this pair is now coming close to its 50 day moving average a level which could hold the price at current levels.
Crude oil continued to linger around recent support, completing a bearish-triangle pattern. Even though the pattern normally indicates to future lower prices, the current price of $48 could act as major support, preventing the commodity from dropping. Gold closed the session mixed after Monday’s large bounce higher. Gold closed yesterday’s session at $882.26 per ounce.
Market Data to Watch Out For
Even though England is expected to release economic data shortly, a wave of important news is scheduled to be released tomorrow, from the European region. Canada is expected to release it leading economic indicators result later during the session, while the U.S will be showing how the housing sector is holding up. To date the housing market in the U.S has failed to find a bottom and according to recent data foreclosure figures are also painting a gloomy picture.
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