Futures Trading levels and Economic reports for May 1st
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Dear Trader,
Have a great trading month in May!!
By Brian Blackstone and Henry J. Pulizzi
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)--The U.S. Federal Reserve on Wednesday lowered its key interest rate but also signaled the seven-month easing cycle may be coming to an end by highlighting its "substantial" action to date and dropping a longstanding reference to downside growth risks.
The cut, the seventh since September, was modest by recent standards, reflecting upward pressure on inflation from higher food and energy prices and the weak dollar. Those trends suggest further rate cuts might do more harm than good in the months ahead.
The Federal Open Market Committee voted 8-2 to lower its target for the federal-funds rate at which banks lend money to each other by 0.25 percentage point to 2%, its lowest since November 2004.
It lowered the discount rate charged to banks and brokers that borrow directly from the Fed by 0.25 percentage point to 2.25%, responding to requests by Fed banks in New York, Cleveland, Atlanta and San Francisco.
The moves were widely expected, according to a Dow Jones Newswires survey.
Dallas Fed President Richard Fisher and Philadelphia Fed President Charles Plosser dissented for a second-straight meeting, this time favoring no change in rates. It is the sixth-straight dissent Fed Chairman Ben Bernanke has faced on a fed-funds decision.
"Economic activity remains weak," the Fed said, citing "subdued" consumer and business spending and a "further" softening in labor markets. Markets "remain under considerable stress," the Fed said, while housing should continue to weigh on the economy. Those statements largely reiterated March's policy statement.
Barring an unforeseen collapse in the economy or financial markets, rates will probably stay where they are for several months at least, though the Fed left the door open to more cuts if needed.
"The substantial easing of monetary policy to date, combined with ongoing measures to foster market liquidity, should help to promote moderate growth over time," the Fed said - a nod to the 3.25 percentage points in fed-funds cuts since September, including two percentage points between mid-January and mid-March.
Prior policy statements hadn't described past cuts as "substantial." Fed watchers usually interpret reference to cumulative actions as a sign that officials are wary to lower rates further.
"The Fed effectively told us (Wednesday) to take the summer off," said Chris Rupkey, economist at Bank of Tokyo-Mitsubishi.
Notably, officials dropped their previous references to downside growth risks in Wednesday's statement. They said they would act as needed to promote growth, but eliminated the longstanding reference to "timely" action.
"I think they're asking markets not to expect a rate cut at their next meeting," said Arun Raha, senior economist at Swiss Re. Futures markets priced in a pause at the June and August FOMC meetings following the release of the statement.
The Fed tried to send similar signals in the past and failed, most notably in October when it said - prematurely - that growth and inflation risks were roughly balanced.
Repeats Inflation Expectations Worry
The Fed in its statement Wednesday repeated past assertions that inflation should moderate, and reiterated that it expects energy and commodity prices to flatten out. However, officials warned that those commodity prices have increased recently and that inflation uncertainty "remains high." Officials nodded for a second-straight time to rising inflation expectations.
The Fed's repeated projection for a leveling-out of commodity prices was a bit of a surprise given how many times officials have been burned by that forecast. Raha of Swiss Re said officials are "reminding people that weak economic activity eventually leads to lower inflation."
At its previous meeting on March 18, the FOMC cut the fed funds rate 0.75 percentage point. Officials stressed their concerns about the economy in the minutes of that meeting. Some officials even worried that "falling house prices and stresses in financial markets could lead to a more severe and protracted downturn in activity than currently anticipated," according to the minutes.
During the January-March period, the Fed also created new credit lending facilities, expanded use of the discount window to include investment banks and helped engineer the rescue and proposed takeover of Bear Stearns Cos. (BSC) by JPMorgan Chase & Co. (JPM) - drawing on powers it hadn't used in decades to channel hundreds of billions of dollars into strained markets.
"Expect the Fed to continue to actively add liquidity (through its credit lending facilities) as its main weapon of defense against ongoing stresses in credit and financial markets," said Wells Fargo economist Scott Anderson in a research note.
The mix of rate cuts and credit initiatives appears to have at least averted what officials have referred to as a negative "feedback loop" when a weak economy causes big disturbances in financial markets which then make the economic downturn even worse.
And the economy, while clearly very weak, appears to have escaped the "severe" scenario outlined in the March Fed minutes. Gross domestic product grew 0.6% during the first quarter, the Commerce Department said Wednesday. And many forecasters see some lift in the second quarter from tax rebate checks. By midyear, the housing sector should at least stop subtracting as much as it has from growth in recent quarters.
Against that backdrop, some observers said the Fed could have even justified holding rates steady Wednesday.
But the economy still faces many headwinds, and any recovery looks more like a slow 'U' than a rapid 'V' shape. Housing is unlikely to rebound before 2009 at the earliest, and employment declines - along with soaring food and gasoline prices - have weighed on consumer confidence and spending. That leaves exports, aided by the weak dollar, as one of the sole sources of support for the economy.
So even if the Fed stops lowering rates, it's unlikely to start raising them anytime soon.
-By Brian Blackstone and Henry J. Pulizzi; Dow Jones Newswires; 202-828-3397; brian.blackstone@dowjones.com and henry.pulizzi@dowjones.com
(Maya Jackson-Randall and Jeff Bater contributed to this article)
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)--The U.S. Federal Reserve on Wednesday lowered its key interest rate but also signaled the seven-month easing cycle may be coming to an end by highlighting its "substantial" action to date and dropping a longstanding reference to downside growth risks.
The cut, the seventh since September, was modest by recent standards, reflecting upward pressure on inflation from higher food and energy prices and the weak dollar. Those trends suggest further rate cuts might do more harm than good in the months ahead.
The Federal Open Market Committee voted 8-2 to lower its target for the federal-funds rate at which banks lend money to each other by 0.25 percentage point to 2%, its lowest since November 2004.
It lowered the discount rate charged to banks and brokers that borrow directly from the Fed by 0.25 percentage point to 2.25%, responding to requests by Fed banks in New York, Cleveland, Atlanta and San Francisco.
The moves were widely expected, according to a Dow Jones Newswires survey.
Dallas Fed President Richard Fisher and Philadelphia Fed President Charles Plosser dissented for a second-straight meeting, this time favoring no change in rates. It is the sixth-straight dissent Fed Chairman Ben Bernanke has faced on a fed-funds decision.
"Economic activity remains weak," the Fed said, citing "subdued" consumer and business spending and a "further" softening in labor markets. Markets "remain under considerable stress," the Fed said, while housing should continue to weigh on the economy. Those statements largely reiterated March's policy statement.
Barring an unforeseen collapse in the economy or financial markets, rates will probably stay where they are for several months at least, though the Fed left the door open to more cuts if needed.
"The substantial easing of monetary policy to date, combined with ongoing measures to foster market liquidity, should help to promote moderate growth over time," the Fed said - a nod to the 3.25 percentage points in fed-funds cuts since September, including two percentage points between mid-January and mid-March.
Prior policy statements hadn't described past cuts as "substantial." Fed watchers usually interpret reference to cumulative actions as a sign that officials are wary to lower rates further.
"The Fed effectively told us (Wednesday) to take the summer off," said Chris Rupkey, economist at Bank of Tokyo-Mitsubishi.
Notably, officials dropped their previous references to downside growth risks in Wednesday's statement. They said they would act as needed to promote growth, but eliminated the longstanding reference to "timely" action.
"I think they're asking markets not to expect a rate cut at their next meeting," said Arun Raha, senior economist at Swiss Re. Futures markets priced in a pause at the June and August FOMC meetings following the release of the statement.
The Fed tried to send similar signals in the past and failed, most notably in October when it said - prematurely - that growth and inflation risks were roughly balanced.
Repeats Inflation Expectations Worry
The Fed in its statement Wednesday repeated past assertions that inflation should moderate, and reiterated that it expects energy and commodity prices to flatten out. However, officials warned that those commodity prices have increased recently and that inflation uncertainty "remains high." Officials nodded for a second-straight time to rising inflation expectations.
The Fed's repeated projection for a leveling-out of commodity prices was a bit of a surprise given how many times officials have been burned by that forecast. Raha of Swiss Re said officials are "reminding people that weak economic activity eventually leads to lower inflation."
At its previous meeting on March 18, the FOMC cut the fed funds rate 0.75 percentage point. Officials stressed their concerns about the economy in the minutes of that meeting. Some officials even worried that "falling house prices and stresses in financial markets could lead to a more severe and protracted downturn in activity than currently anticipated," according to the minutes.
During the January-March period, the Fed also created new credit lending facilities, expanded use of the discount window to include investment banks and helped engineer the rescue and proposed takeover of Bear Stearns Cos. (BSC) by JPMorgan Chase & Co. (JPM) - drawing on powers it hadn't used in decades to channel hundreds of billions of dollars into strained markets.
"Expect the Fed to continue to actively add liquidity (through its credit lending facilities) as its main weapon of defense against ongoing stresses in credit and financial markets," said Wells Fargo economist Scott Anderson in a research note.
The mix of rate cuts and credit initiatives appears to have at least averted what officials have referred to as a negative "feedback loop" when a weak economy causes big disturbances in financial markets which then make the economic downturn even worse.
And the economy, while clearly very weak, appears to have escaped the "severe" scenario outlined in the March Fed minutes. Gross domestic product grew 0.6% during the first quarter, the Commerce Department said Wednesday. And many forecasters see some lift in the second quarter from tax rebate checks. By midyear, the housing sector should at least stop subtracting as much as it has from growth in recent quarters.
Against that backdrop, some observers said the Fed could have even justified holding rates steady Wednesday.
But the economy still faces many headwinds, and any recovery looks more like a slow 'U' than a rapid 'V' shape. Housing is unlikely to rebound before 2009 at the earliest, and employment declines - along with soaring food and gasoline prices - have weighed on consumer confidence and spending. That leaves exports, aided by the weak dollar, as one of the sole sources of support for the economy.
So even if the Fed stops lowering rates, it's unlikely to start raising them anytime soon.
-By Brian Blackstone and Henry J. Pulizzi; Dow Jones Newswires; 202-828-3397; brian.blackstone@dowjones.com and henry.pulizzi@dowjones.com
(Maya Jackson-Randall and Jeff Bater contributed to this article)
LEVELS:
| Contract (June 2008) | SP500 (big & Mini) | Nasdaq100 (big & Mini) | Dow Jones (big & Mini) | Mini Russell |
| Resistance 3 | 1423.53 | 1989.00 | 13140 | 741.00 |
| Resistance 2 | 1415.27 | 1973.50 | 13069 | 734.60 |
| Resistance 1 | 1400.03 | 1947.50 | 12937 | 725.30 |
| Pivot | 1391.77 | 1932.00 | 12866 | 718.90 |
| Support 1 | 1376.53 | 1906.00 | 12734 | 709.60 |
| Support 2 | 1368.27 | 1890.50 | 12663 | 703.20 |
| Support 3 | 1353.03 | 1864.50 | 12531 | 693.90 |
| Contract | June Gold | June Euro | June Crude Oil | June Bonds |
| Resistance 3 | 886.30 | 1.5775 | 120.02 | 118 15/32 |
| Resistance 2 | 881.90 | 1.5696 | 118.36 | 117 22/32 |
| Resistance 1 | 873.50 | 1.5644 | 116.62 | 117 9/32 |
| Pivot | 869.10 | 1.5565 | 114.96 | 116 16/32 |
| Support 1 | 860.70 | 1.5513 | 113.22 | 116 3/32 |
| Support 2 | 856.30 | 1.5434 | 111.56 | 115 10/32 |
| Support 3 | 847.90 | 1.5382 | 109.82 | 114 29/32 |
REPORTS (EST): Provided by www.tradethenews.com audio news and interactive research directly from the pits
Thursday, May 01, 2008
Economic
7:30am April Challenger Job Cuts y/y (last 9.4%)
8:30am March PCE Deflator y/y (last 3.4%), March PCE Core (last m/m 0.1%, y/y 2.0%), March Personal Income (last 0.5%), March Personal Spending (last 0.1%), Initial Jobless Claims (last 342K), Continuing Claims (last 2.934M)
10:00am April ISM Manufacturing (last 48.6), April ISM Prices Paid (last 83.5), March Construction Spending m/m (last –0.3%)
10:30am Natural Gas Inventories
2:00pm Fed's TSLF Auction
Events
8:30am FDA Blood Products Advisory Committee. April Total & Domestic Vehicle Sales. BMO Government Finance Conference. Trades Ex-dividend: C $0.32, LEN $0.16, SO $0.42.
Earnings
Before the Open: ASF, ADLR, EYE, AMRI, LNT, AMCS, ANSS, APA, AHG, ARQL, AIZ, ADP, BKRS, BNT, BBI, BXC, BRKR, BKC, CVC, CALP, CAM, CPLA, CSE, CAPA, CAH, CBZ, CTIC, CETV, CTL, CKP, CSK, CI, CLX, CMCSA, CITP, CFC, COWN, CUB, CVS, DWSN, DNR, DSCO, DTG, D, DRQ, EK, EMS, ELMG, EPL, NPO, ENZN, EQT, EXPE, XOM, FRP, FAF, FE, FRPT, RAIL, GET, GEL, GTIV, GNA, GIL, GTI, GMCR, GHL, HAE, HTV, HPY, HP, HERO, HOS, HWCC, ICTG, IFLO, IART, IFF, ITG, IWA, IRM, JRC, KNDL, KIM, KNOL, LB, LANC, LPNT, LKQX, LOJN, CLI, MGA, MRO, HZO, MFA, MDS, MLNM, MSA, MINI, MWIV, NNN, NRP, BABY, NNDS, GAS, NBL, NRG, NUS, NMX, OMG, ORCH, OFIX, OSK, OSIS, PTIE, PMTI, PRX, PKE, PCAP, PTEN, PCCC, PDGI, POZN, PDE, PEG, QCCO, PWR, KWK, RDN, RVSN, RRI, RSTO, REV, RDC, SGK, SI, SNN, SRT, SHOO, SSYS, SXCI, TTEC, TWTI, TOC, THOR, THI, TBL, TYC, TEL, ULBI, UNT, UTHR, VCI, VNDA, VICL, WPI, WST, WNR, WLK, WMB, WPZ, WPL, WYN, XEL, XMSR. During Trading Hours: EPEX, FNET. After the Close: ABAX, ACS, ARE, AMX, ACLI, ACAP, ARII, ARP, AMSF, ASCA, AOC, AMCC, ARTE, ATO, AVNX, RATE, BKUNA, BARE, BE, BEBE, BGFV, BBND, BPHX, BVN, CAB, CAMD, ELY, CPT, CBEY, CTLM, CEPH, CEM, CHK, CQB, CRUS, CCU, CCO, CSTR, FIX, SCOR, CRAY, DCT, DRIV, DLB, HILL, DNB, DXPE, BOOM, DIET, EHTH, RDEN, ENH, EVC, EOG, ERES, EXAR, EXEL, FMD, FCN, GMST, GYI, GFIG, HNSN, HL, HIFN, HIW, HMN, HYC, IMMR, INSP, IUSA, IDTI, IN, ITMN, SWIM, IOM, DMX, JSDA, KCP, KFN, LQDT, LPSN, LAVA, MXWL, MEDX, MELI, MET, MIDD, MWY, MNST, MORN, NABI, NCMI, NFG, NATL, NTCT, N, NR, NXG, NOVA, NVTL, ORH, OPLK, OSIP, PDLI, PEET, PSPT, PGTI, PHTN, PROS, PSA, QLGC, RMKR, RMD, SONE, SGMS, SCUR, SGTL, SMSI, SNCI, FIRE, SRSL, SM, SPF, JAVA, SPN, SPSX, TWLL, TSRA, THRM, TMA, CLUB, TGI, TMWD, GROW, UPL, USTR, CHIP, PAY, VVUS, WLT, WWIN, WBSN, WRI, WLL, WYNN.
Note all time are EST. ANY AND ALL TIMES AND DATES ARE SUBJECT TO CHANGE WITHOUT NOTICE. INFORMATION HAS BEEN TAKEN FROM SOURCES DEEMED TO BE RELIABLE, BUT NO ASSURANCES CAN BE MADE TO THE ACCURACY OF ANY OF THIS INFORMATION.
This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts herein contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgment in trading!
Sincerely,
Ilan Levy-Mayer, M.B.A
Vice President / commodity broker
Cannon Trading Co Inc. - home of online futures trading
http://www.cannontrading.com
http://www.E-Futures.com
ilan@cannontrading.com
Yahoo IM ilanlevy1970
310-859-9572
800-454-9572
Fax 310-859-0547
9301 Wilshire Blvd. Suite #515
Beverly Hills, Ca 90210
* Important Please Note:
IMPORTANT PLEASE NOTE: TRADING COMMODITY FUTURES AND OPTIONS INVOLVE SUBSTANTIAL RISK OF LOSS. THE RECOMMENDATIONS CONTAINED IN THE LETTER IS OF OPINION AND DOES NOT GUARANTEE ANY PROFITS. THERE IS NOT AN ACTUAL ACCOUNT TRADING THESE RECOMMENDATIONS. THESE ARE RISKY MARKETS AND ONLY RISK CAPITAL SHOULD BE USED. PAST PERFORMANCES ARE NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
posted by Cannon Trading at 1:24 PM
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