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No exciting news came out of the stock markets as Europeans were still shut down for Easter holiday
and that there’s no big names reporting earnings. Commodities however, were quite vibrant as gold
and silver prices soared before shot down after hitting technical resistances. Spot gold finished at
$1,509.60 an ounce, still up 0.4% but way off its intraday peak at $1,518.10. Its June futures
however, ended $5.30 higher at $1,509.10 an ounce after gyrated between $1,502.20 and
$1,519.20. Silver futures for May delivery soared more than 8% to $49.82 an ounce but pushed
back to end at $47.15 an ounce, still up $1.09.
Sharp pullback in gold and silver also dragged oil prices. Brent crude futures for June delivery settled
down 69c at $123.30 a barrel after briefly hitting intraday peak at $124.75. US light crude futures
for June delivery also ended 45c lower at $111.84 after it climbed $113.48 earlier in the session.
Top gainers for the day were INTC (+2.24%), PFE (+1.77%), and BAC (+1.06%). INTC, which
somewhat embarrassed analysts by delivering a strong earnings report last week was still buoyed by
the results. PFE which has been under pressure recently due to the deaths of four patients while or
after consuming PFE’s Tofacitinib, struck back by gaining 1.77%. BAC on the other hand, gained
1.06% on the dismissal of its Countrywide securities suit.
Among top losers were DD (-1.41%) and HPQ (-1.12%). KFT also lost 0.93% by the end of Monday.
DD recently released better-than-expected Q1 results and this prompted Soleil Securities to raise
FY11 and FY12 EPS estimates to $3.90 and $4.65, respectively. DD itself estimates FY11 EPS at
$3.75, up $0.15.
Elsewhere, T’s $39B bid on T-Mobile USA will open a way for the company to reach over 97% of US
users. According to T in its filing with the FCC, a merger would promote innovation and economic
growth.
1 .DJI 12,479.88 (-26.11 ● -0.21%) .SPX 1,335.25 (-2.13 ● -0.16%) .IXIC 2,825.88 (+5.72 ● +0.20%)
April 26th 2011
Day Ahead
Looking ahead, investors seem to be cautiously waiting on the sidelines for hints coming from the
FOMC meeting this week. Continuity of QE2 is definitely a point of interest among investors as well as
the timing of interest rates hike. No changes are expected to come from the meeting, though. So far,
the most likely scenario on US monetary policy is that the Fed will see the QE2 to expire in June and
takes a wait-and-see stance for probably a quarter at the earliest before considering a gradual
increase in interest rates. If Fed’s key economic indicators such as the labor market conditions are
supportive, then we could see the start of tightening cycle in Q4, but should the labor market
conditions are worsening, we may have to wait for another quarter or even two before the Fed raises
rates, depending on how severe the economy will be at that time.
This Tuesday, two Dow components will release their earnings: MMM and KO.
KO’s net profit is seen at $0.87 per share on revenue of $10.54B. KO’s consensus ranges from $10B
to $10.9B and $0.84 to $0.89. Year ago results for KO were $0.80 per share on revenue of $7.53B.
Outlook for the subsequent quarter are $1.18 per share on revenue of $12.27B. Big hurdles for KO
will be the rising commodity prices such as aluminum, plastic and sugar.
MMM is seen posting net profit of $1.44 per share on revenue of $6.95B, while last year the
company recorded revenue of $6.35B with EPS at $1.40 per share. Subsequent quarter consensus lies
at $1.61 per share on revenue of $7.44B.
2 .DJI 12,479.88 (-26.11 ● -0.21%) .SPX 1,335.25 (-2.13 ● -0.16%) .IXIC 2,825.88 (+5.72 ● +0.20%)
April 26th 2011
VZ fell after it announced its earnings last week. The fall has been contained so far at the 50-day
EMA. Currently its outlook is struggling at POSITIVE, but threatened by deeper pullback especially as
its MACD is now at the negative area and has been drifting lower. Current outlook will turn NEUTRAL
once it slips below the 50-day EMA. This could be used as a chance for re-entry though, and the entry
point could be around the $35.50-$33.36 area. Overall, even as it dips lower, the stock seems to be
building its way to return to prior peak at $39.95 which is also a technical resistance level.
3 .DJI 12,479.88 (-26.11 ● -0.21%) .SPX 1,335.25 (-2.13 ● -0.16%) .IXIC 2,825.88 (+5.72 ● +0.20%)
April 26th 2011
4 .DJI 12,479.88 (-26.11 ● -0.21%) .SPX 1,335.25 (-2.13 ● -0.16%) .IXIC 2,825.88 (+5.72 ● +0.20%)
April 26th 2011
Disclaimer: This report is provided for information purposes only. It is not an offer to sell or to buy any securities. This
report has been prepared based on sources believed to be reliable, but there is no assurance or guarantee regarding its
completeness and accuracy. The author accepts no responsibility or liability arising from any use of the report.
5 .DJI 12,479.88 (-26.11 ● -0.21%) .SPX 1,335.25 (-2.13 ● -0.16%) .IXIC 2,825.88 (+5.72 ● +0.20%)