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Pre-Market News and Views



April 25, 2011 – Comments (0)

The long holiday weekend is over and today is still expected to be a light volume trading session. The S&P 500 e-mini futures are trading higher by 2.00 points to 1333.00 per contract. Often after a long weekend the market will have what we call a holiday hangover.  This is when traders and investors extend their weekend by an extra day. Monday's are notoriously light volume trading sessions, therefore, traders must realize this and take today's action in stride.

Last night the Asian markets were mixed. The highly followed Shanghai Index (China) traded lower by 1.50 percent. This decline could put early pressure on the leading commodity stocks after the opening bell rings at the New York Stock Exchange. Traders should watch stocks such as Freeport McMoRran Copper and Gold Inc.(NYSE:FCX), and Cliffs Natural Resources Inc(NYSE:CLF) early in the morning as these leading commodity stocks could be effected by the decline in China last night.

Silver and gold are trading slightly higher this morning, as the U.S. Dollar Index declines lower again. Last week, the U.S. Dollar Index made a fresh new two year low closing below the November 2009 low pivot. The U.S. Dollar Index still remains very weak at this time, however, it is important to note that the U.S. Dollar Index is very oversold and often bounces can occur from oversold conditions. The Federal Reserve is holding a press conference on Wednesday after they announce their interest rate policy. It will be interesting to see if they comment on the U.S. Dollar Index nosedive. As long as central banks continue to devalue their currencies in order to inflate asset prices, gold and silver could trade higher.

WTI oil is trading higher this morning by 0.89 cents to $113.18 a barrel. Normally, we would think that oil at these high prices would effect the stock market, however, the stock market and oil have traded in tandem with each other as of late. It seems that the stock market declines sharply when oil pulls back. This tells us that the U.S. Dollar Index movement is the dominating force behind the stock market, gold, silver and oil.

Earnings will be reported in droves this week. Netflix Inc.(NASDAQ:NFLX) is the leading stock that is scheduled to report after the close today. Traders can also watch for the New Homes Sales report to be released at 10:00 am EST. Most economic reports have had very little effect on the stock market recently.

Nicholas Santiago

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