Monday, January 17, 2011

Stocks ended the week at new multi year highs as financials

!! Indices !!
Stocks ended the week at new multi year highs as financials and
technology stocks advanced in the wake of strong earnings reports from
JPMorgan and Intel and ahead of even more major earnings reports next
week. The *DJIA* rose 112.62 points this week, or 0.96 percent, to
close at 11,787.38, the highest close since June 25, 2008. On Friday,
the blue-chip index gained 55.48 points, or 0.47 percent. The *S&P
500* rose 21.74 points this week, or 1.7 percent, to close at
1,293.24, its highest close since Aug. 28, 2008. On Friday, it rose
9.48 points, or 0.74 percent. The *NADAQ* rose 52.13 points this week,
or 1.93 percent, to close at 2,755.30, its highest close since Nov. 6,
2007. On Friday, the tech-heavy index added 20.01 points, or 0.7
*Dow Jones Industrial Average (January 10-14)*

!! FOREX !!
The US Dollar dove against the EURO on a sudden improvement in
EUROZONE sovereign debt markets, but a sharp late week reversal
suggests US Dollar bulls have not yet given up the fight. I have long
argued that the month of January is often pivotal in setting the stage
for medium term trends, and the fact that the EURO/US Dollar pair was
unable to close above its earlier highs indicates okay for the DOLLAR.
A relatively empty week of economic event risks leaves volatility
expectations lower through the short term. Yet traders should watch
whether the US Dollar is able to hold its lows against the EURO and
set the stage for continued reversal through the coming months.

Little foreseeable event risk leaves the DOLLAR at the play of broader
market flows and developments in ongoing EUROZONE fiscal crises.
Possible exceptions include middle of the week Housing Starts and
Existing Home Sales reports, but it would likely take a substantial
surprise in either direction to force important moves in the US
DOLLAR. One potential market-mover may come from a non-traditional
source: the Chinese government will release initial estimates of Q4,
2010 GDP growth on Wednesday night.
*EUR-USD (January 10-14)*

!! Commodities !!
Despite the gain, U.S. crude lagged well behind Brent crude, which
ended at a 27-month high with its premium to benchmark West Texas
Intermediate at a 23-month peak. U.S. heating oil futures closed at a
27-month high, on improved demand prospects as the key Northeast
heating oil market was forecast to continue having below-normal
temperatures in the next week. Gold took some heavy losses Friday as
central banks in emerging markets took steps to tame inflation and
Federal Reserve Chairman Ben Bernanke raised his U.S. growth forecast.
Gold for February delivery fell $26.50 to $1,360.50 an ounce at the
COMEX division of the New York Mercantile Exchange. The gold price
traded as high as $1,377.80 and as low as $1,354.60 during Friday's

*(Crude Oil January 10- 14)*
US Crude oil prices ended up on Friday with their best percentage gain
in several weeks, as earnings optimism on Wall Street overshadowed oil
demand worries due to China's latest raising of bank reserve

!! Equities !!
Friday's gains were lead by several stocks in play and were the best
performers for the week. On the DJIA, *Exxon Mobil* (1.13 (+1.47%) was
the best performer on the Dow for the week, while *Merck* (0.46
(-1.33%) was the worst. *Apple* (2.80 (+0.81%) was the best performer
on the NASDAQ. *BP* (1.71 (+3.6%) shares climbed on news *the oil
giant may announce a share swap with Rosneft* Russia's state-owned
oil producer. *AIG* [ -3.19 (-5.58%) ] skidded more than 5 percent
after the recapitalization of bailed-out insurer closed, leaving the
government with a 92 percent stake and plans to sell its shares

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