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Forex Blog - US Market Update
US Market Update
DJIA -163 Nasdaq -35 S&P 500 -18
- Investors are punishing US equity indices on the heels of the ADP jobs reading, which marked its 12th consecutive monthly decline and the largest fall on record since the series began in 2003. All three leading indices are trading well below -2% mid morning, with INTC and AA forecast cuts accentuating the downtrend. With today's ADP data underscoring the accelerating pace of job losses, commentators are noting that the non-farms payroll data due on Friday is looming even larger in investors minds. ADP commented that it had adjusted its methodology to more closely mirror the Bureau of Labor statistics, causing additional concern. Energy and metals are around session lows mid morning, with front-month crude off nearly $3.70 around below the $45 handle and spot gold off $24 at $840/oz
- Monsanto is having a fruitful morning, after reporting robust Q1 revenue and earnings, raising its 2009 outlook and announcing that it has submitted its anticipated new drought-tolerant corn seed to the FDA for regulatory clearance. MON is up nearly 15% in early trading. Discounter Family Dollar met analyst estimates in its Q1 report and offered solid guidance for the coming quarter and year, sending shares of FDO up 14% in early action before they traded off somewhat mid morning. Consumer products name Jarden reaffirmed its Q4 revenue guidance and offered a 2008 forecast in line with expectations before the open, driving up its shares around 10% in the premarket; JAH swiftly returned to unchanged and then fell into negative territory after the open. Spirits manufacturer Constellation Brands met analysts' estimates and reaffirmed its 2009 guidance, although cautious comments in the press release and the overall grim economic outlook helped the stock fall more than 12% in early trading, before trading back to around -6%.
- Yesterday after the close Alcoa said it was cutting aluminum production significantly and laying off 13% of its workforce, as well as divesting certain units. The tech sector is in for more turbulence in Q1 after Intel cut its Q4 guidance this morning. The chip giant noted that its gross margins will fall to the low end of estimates, and that certain of its equity investments are souring. While the reductions were much less than the approximately 10% reduction in guidance back in mid November, the implications for a broad selection of other semi names are grim. INTC is down 6% or so mid morning. Gaming stocks are broadly lower after multiple analysts offered negative comments on Las Vegas Sands and MGM Mirage said it was postponing the condo component of its new CityCenter project in Las Vegas. MGM fell 8% by mid morning, while LVS was down more than 10%.
- Currency dealers have been commenting that the market is trying unsuccessfully to latch on to a theme, an effort that has been undercut by calls for a "significantâ€ť economic stimulus package as the global economic outlook continues to deteriorate. Oil and gold have managed to correlate, helping the USD crawl off its worst levels as a result. EUR/USD is off its best levels and trading around the 1.3650 area. Energy-related pairs garnered additional downward momentum on weekly inventory data showing larger than expected inventory builds. In regards to the ADP data, dealers were noting that the ADP said it was using a "new methodology" in its calculations and speculating whether or not the data would immunize markets from a â€śhorrendousâ€ť non-farm payroll number on Friday.
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