SubscribeDaily Futures Commentary April 9, 2009
Thursday, April 9, 2009
This morning Wells Fargo issued a bullish guidance statement saying it would earn about twice as much as earlier forecast. This ignited a huge short-covering rally in equities that sent the Treasury markets lower. This current rally in equities erased all of the losses from earlier in the week and is even attracting new buying. Bullish equity traders seem to be discounting the bad news in the economy and looking forward to a huge recovery later in the year.
Investors are selling bonds and notes that were bought earlier this week when it seemed like the entire banking system was at risk based on negative comments by analyst Mayo and billionaire investor Soros.
The U.S. Dollar is giving back some of its gains earned earlier this week as a flight-to-quality haven. The news from Wells Fargo is clearly increasing demand for riskier assets.
Although most commodity markets are gaining because of the weaker Dollar this morning, gold continues to feel downside pressure. This is reflecting just how much of a premium was built into this metal in anticipation of a banking system meltdown.
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