U.S. equity index futures are higher again this morning. S&P 500 futures are up 2 points in pre-opening trade. Index futures were helped slightly by weakness in the U.S. Dollar Index and strength in the Euro. Both were impacted by news that Greece plans to introduce an austerity program that will reduce concerns about a possible debt default.
The U.S. Dollar Index is showing early technical signs of reaching an intermediate peak. Short term momentum indicators including MACD, RSI and Stochastics have rolled over from overbought levels.
Conversely, the Euro is showing early technical signs of reaching an intermediate low. Short term momentum indicators including MACD, RSI and Stochastics are recovering from oversold levels.
Weakness in the U.S. Dollar sets the stage for a move by the Canadian Dollar above resistance at 97.79.
Weakness in the U.S. Dollar this morning prompted strength in commodities priced in U.S. Dollars including gold, silver, copper, platinum, crude oil and unleaded gasoline. Unleaded gasoline closed at a 17 month high yesterday.
S&P 500 futures recovered slightly following release of the February ADP private employment report. Consensus was a loss of employment of 90,000. Actual was a loss of 20,000.
RBC Capital Markets is taking a more positive stance on base metal stocks. This morning it upgraded Vale and Freeport McMoran Copper and Gold from Sector to Outperform. Target for Vale was raised from $30 to $36. Target for Freeport McMoran was increased from $92 to $95. ‘Tis the season for the sector to move higher!
RBC Capital Markets also downgraded Cameco from Outperform to Sector Perform. The downgraded was prompted by news released late yesterday that the spot price of uranium oxide slipped last week by $1.25 to $40.50 U.S. per lb.
Goldman Sachs initiated coverage of the Transportation sector. Canadian Pacific was initiated as a Buy. UPS was initiated as a Conviction Buy.
Royal Bank reported fiscal first quarter earnings slightly less than expected. Consensus was $1.04 per share. Actual cash earnings were $1.03 per share.
Costco slipped 3% after reporting fiscal second quarter earnings slightly less than consensus.
Don Vialoux, chartered market technician, is the author of a free
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