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U.S Market Update

Fri, Aug 28 2009, 16:01 GMT

TradeTheNews.com

- Investors pushed the leading US indices out toward weekly highs before the open this morning, led by the Nasdaq on impressive earnings and guidance numbers from Dell and Intel. Things headed straight downwards after the bell, however, despite the slightly better-than-expected final August University of Michigan Confidence reading, with the S&P500 and DJIA briefly dipping into negative territory mid morning. Front-month NYMEX crude is more or less unchanged around $73.

- Dell beat top- and bottom-line expectations in its Q2 earnings report yesterday after the close, and while the company offered no concrete forward-looking numbers, it did say revenue in the second half of 2009 would be higher than first-half results. CEO Michael Dell sees a "powerful" corporate restocking cycle that should last well into 2010, although pricing remains difficult. Intel hiked its revenue guidance for the current quarter by approx 10% before the open today, although it also warned that margins in the quarter would be somewhat lower than estimates provided back in mid July. The company said stronger-than-expected demand for microprocessors and chipsets is driving higher revenue. DELL surged to +9% in the early going, before trading down to +5%. INTC is steady at nearly +5%.

- The last of the big second quarter retail earnings included Tiffany & Co. and J. Crew Group, both of which did notably better than expected. Tiffany beat earnings and revenue targets, and hiked its earnings range for the year on very modest sales growth in certain quarters. On the conference call, executives said the declines in y/y comps have bottomed out. J. Crew crushed bottom-line estimates, earning multiple analyst upgrades overnight. TIF is around +9%. JCG surged to +9% before the open, but has traded down to +6% in early trading. In other equity news, the fallout from Boeing's latest 787 Dreamliner delays got started this morning, as All Nippon, which would have been the launch carrier for the model, said it would seek some aspect of compensation from Boeing due to delays.

- In currency trading, earnings guidance from Intel sharpened risk appetite, which aided the USD price action. Note that equity market correlation continues to drive inverse price action among the USD-related pairs. On the macro front, the greenback is maintaining a broad trading range but probing its extreme deviation points. EUR/USD was probing the 1.4400 area as metals maintained a strong bid, while USD/CHF continued to probe the key daily pivot point of 1.0570. JPY failed to respond as usual to the risk appetite theme and firmed against the major pairs ahead of the Japanese election this weekend. USD/JPY is around 93.50.

Published on  Fri, Aug 28 2009, 16:01 GMT