Morning Call: Friday, June 19, 2009
Good morning.
The S&P closed up 7.66 at 918. The DOW closed at 8555 but what a quiet day. There was an enormous program wash through Toronto (5mm Manulife, 2.5mm Power Financial, 3mm Great West, and 1.5mm Investors Group) but in reality markets marked time. The TSX had lost 700 points in 3 days and enough is enough. The initial jobless claims were up only 3K to 608K and Manufacturing Index from the Philly Fed was -2.2 against -22.6 in May.
So we wait and watch. The FED has done a masterful job of narrowing the spreads between mortgage rates and 10 year Treasuries and we've had the desired gush of re-financing that bailed out both the banks and the home owners. The back up in rates has slowed this to a crawl. We believe that if required, the FED would re-enter the markets and buy bonds. Maybe they only have to say that on Wednesday.
So we wait and watch. The FED has done a masterful job of narrowing the spreads between mortgage rates and 10 year Treasuries and we've had the desired gush of re-financing that bailed out both the banks and the home owners. The back up in rates has slowed this to a crawl. We believe that if required, the FED would re-enter the markets and buy bonds. Maybe they only have to say that on Wednesday.
The chart on the DOW shows that the Index is 200 points above its 50 DMA and 25 points below its 200 day. A break out would take it to 9500 on the low end and 12000 at the top. Stay Tuned.
The US$ has rallied and stopped its decline. However with the 50 DMA crossing down through 200 DMA it is highly likely that the US$ re-commences its downtrend. Against this background OSISKO traded almost 12mm shares yesterday and is moving against the trend. We've attached the chart for your review.
Given what may happen today (no one really knows).
We will………………… be on the sidelines.
The US$ has rallied and stopped its decline. However with the 50 DMA crossing down through 200 DMA it is highly likely that the US$ re-commences its downtrend. Against this background OSISKO traded almost 12mm shares yesterday and is moving against the trend. We've attached the chart for your review.
Given what may happen today (no one really knows).
We will………………… be on the sidelines.
CRB CMDT INDEX (Bloomberg): The Spot Market Price Index is a measure of price movements of 22 sensitive basic commodities whose markets are presumed to be among the first to be influenced by changes in economic conditions. As such, it serves as one early indication of impending changes in business activity. The commodities used are in most cases either raw materials or products close to the initial production stage which, as a result of daily trading in fairly large volume of standardization qualities, are particularly sensitive to factors affecting current and future economic forces and conditions.
Quote of the Day:
Once a new technology rolls over you, if you're not part of the steamroller, you're part of the road. --Stewart Brand
Ed Pennock, CFA, Managing Director
416-369-6921, epennock@dominick.ca
Graham Farrell, Institutional Equity Trading
416-369-4208, gfarrell@dominick.ca
The above note is prepared by an Institutional Salesperson based on morning meeting comments and general Institutional desk discussion and should not be construed as a research report or a solicitation. For information purposes only. D&D Securities, its clients, and principals may have positions in these securities.
