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April 21, 2011 – Comments (0)

The holiday rally continues again this morning after strong corporate earnings reports by Apple Inc.(NASDAQ:AAPL), and Qualcomm Inc.(NASDAQ:QCOM). The S&P 500 Index e-mini futures(ES-M1) are trading higher by 5.00 points to 1333.00 per contract. Often, before a long holiday weekend the major stock indexes will rally higher. After all, if QE-2 is going to work for a while it will require the U.S. consumer to spend money. Consumer spending accounts for 70.0 percent of the gross domestic product(GDP) in the United States.

WTI oil is trading higher by 0.32 cents to $111.68 a barrel this morning. There are several reasons for continued higher oil prices. First, the Middle East and Northern Africa remain in turmoil. Libya, and Nigeria, are the two countries that produce oil and are in focus today. However, there are uprisings in many other non-oil producing nations such as Yemen, Bahrain, and the Ivory Coast, that receive very little attention. Second, the U.S. Dollar Index(DXY) has been in free fall mode. The U.S. Dollar Is now trading below its November 2009 lows. The U.S. Dollar Index has declined by 17.0 percent since June 7, 2010. The retirees and those that are on fixed incomes cannot be happy about there loss of purchasing power. In any case, oil is purchased in U.S. Dollars, therefore, when the dollar declines oil prices move higher. Gold and silver are also surging to new highs on the back of the declining U.S. Dollar Index.

Initial jobless claims were reported at 8:30 am EST this morning. The claims number reported was 403,000. The expectation by analysts was for 390,000 initial claims. The number is still pretty high and this gives the Federal Reserve an excuse to keep doing their QE-2 program. Does anyone really believe these reports anymore?

Asian markets were all higher last night as they seemed to benefit from the U.S..stock market rally yesterday. The Shanghai Index which seems to be the most important of all the Asian stock indexes was higher by 0.65 percent. This increase will not have much effect on the U.S. markets this morning.

Corporate earnings are coming out in droves this week. Some stocks that are trading higher in the pre-market are EI DuPont de Nemours & Co.(NYSE:DD), The Travelers Companies, Inc.(NYSE:TRV), and Biogen Idec Inc.(NASDAQ:BIIB).

Stocks that are trading lower this morning include Verizon Com Inc.(NYSE:VZ), and Teva Pharmaceutical LTD.(NASDAQ:TEVA). Traders must always use caution during earnings season as it is very difficult to know how the market will react to each earnings report. Markets are closed in the U.S. tomorrow for Good Friday.



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