Comment by Phil

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Phil
April 19th, 2012 at 9:53 am

Good morning! 

Oil (/CL) kind enough to give us another shot at $103 but don't forget we often get a pump into nat gas inventories (10:30) and then they tend to sell off.

Dollar was knocked back to 79.80 into the bell and that saved us from a really bad open.  Below 79.80 is bullish and that's up to the Euro holding $1.31 (just over now). 

Not much to add to the above post – if we keep testing that floor at 1,384, it's going to break eventually and then we've got 1,372 and 1,360 as the next supports. 

Of course, if those Must Hold lines begin to fail then things could go south very fast.  

I hate not having PCLN puts so let's add back the July $560 puts at $8.50 – 3 in the $25KP and we'll see how that goes.  I'd rather have to roll those up than miss out on a nice dip.  

At the open: Dow +0.06% to 13041. S&P +0.01% to 1385. Nasdaq -0.07% to 3029.
Treasurys: 30-year +0.23%. 10-yr +0.09%. 5-yr +0.04%.
Commodities: Crude -0.07% to $103.05. Gold +0.47% to $1647.35.
Currencies: Euro -0.15% vs. dollar. Yen +0.34%. Pound -0.14%.

Market preview: Stock futures are struggling to stay green and are well down from earlier highs after another disappointing set ofjobless claims, with the S&P benchmark +0.1%. Also pooping the party are yet more rumors of an impending Moody's downgrade for France, which has apparently caused much of Europe to turn tail as well. Following earnings, eBay is +9% and BofA is +3%, while Human Genome is +100% on a GSK takeover offer. Later: Philly Fed Business Outlook, Existing Home Sales, Microsoft earnings. 

Initial Jobless Claims: 386K vs. 365K consensus (prior week revised to 388K from 380K). Continuing claims +26K to 3.27M.

Christine Lagarde opens the IMF's Spring Meetings with a weather forecast: "(A) light recovery is blowing in a spring wind, with dark clouds on the horizon." She calls for a "Washington moment," i.e. more funds for bailouts, then throws it over to Dan for the sports.

Yields again rise as Spain sells €2.54B ($3.33B) in 2- and 10-year bonds, although the Treasury did beat its goal of tendering up to €2.5B. The two-year paper was sold with a rate of 3.46% vs. 2.069% at an auction in March and the 10-year at 5.74% vs. 5.403% in January. A sale of short-term bills on Tuesday also saw yields surge.

Spanish and Italian interest rates are already high enough to make both countries' borrowing costs unsustainable, says Enam Ahmed of Moody's. The longer debt maturity profile of the U.K. though, means 10-year rates could rise to 7.1% before that country faced a sustainability issue.

The source of the French downgrade rumor looks to be a note from Citi's Mike Saunders saying it's likely Moody's will follow S&P and put the country under downgrade review, but not until later in the year (elections are upcoming). France's 10-year OATS +11 bps to $3.12%. Paris -0.5%.

Bank of America (BAC): Q1 EPS of $0.03 may not be comparable wuth consensus of $0.11. Revenue of $22.5B (-10% Y/Y)misses by $500M. Shares +1.5% premarket. (PR)

Freeport-McMoRan Copper & Gold(FCX): Q1 EPS of $0.80 misses by $0.05. Revenue of $4.61B (-19.3% Y/Y) beats by $70M. Shares +0.9% premarket. (PR)

Peabody (BTU): Q1 EPS of $0.67 beats by $0.13. Revenue of $2.04B (+17% Y/Y) in-line. (PR)

Union Pacific (UNP): Q1 EPS of $1.79 beats by $0.15. Revenue of $5.11B (+13.9% Y/Y) beats by $130M. Shares +1.3%premarket. (PR)

eBay (EBAY) +9.1% premarket after reporting Q1 sales and profit that topped estimates, spurred by growth in its PayPal online payments business. Benchmark upgrades shares to Buy from Hold, believing the market opportunity for PayPal is understated given the potential for a meaningful increase in merchant and consumer adoption rates.

Apple (AAPL) -1.3% after Canaccord's Mike Walkley, along-time bull, slashes his FQ3 iPhone sales estimate to 29.34M from 33.58M, and his FQ4 estimate to a mere 26.11M from 33.58M. Walkley, who is nonetheless raising his PT to $740, says recent checks indicate iPhone sales have "modestly declined in certain developed markets," and expects this trend to continue due to new Android launches, Verizon's LTE promos, and iPhone 5 anticipation. FQ2 results are due on Tuesday.

Dollar slammed back to 79.60 – same script all week but if we're getting lower highs on the same Dollar dip – that's not a good sign.