Market Insider/Tuesday Look Ahead
Monday's mixed market could spill into Tuesday as investors await comments from Fed Chairman Ben Bernanke ahead of the open.
Late day news from Intel could also be a factor Tuesday morning. There is no economic data of note for U.S. markets Tuesday, and traders are already talking about Friday's February jobs report. If it's a bad one, some traders are already speculating the Fed could take swift rate action.
Intel said late Monday its gross margins will be a few points lower than the 56 percent expected in the first quarter but it is sticking with its other forecasts. The technology sector was under pressure during the trading day as some big name tech stocks sold off, including Google, Apple, RIM and Amazon. Intel was slightly higher during the day but fell in after-hours trading after its announcement. Tech investors will also be watching for headlines from Apple's annual meeting at 1 p.m. Tuesday.
Banking On It
Bernanke is participating in a session on mortgages and foreclosures at the Independent Community Bankers convention in Orlando. He speaks at 9 a.m. and will take questions from the audience. Remember, Bernanke warned at a Congressional hearing Thursday that some small banks could go under.
Meanwhile, the Senate Committee on Banking, Housing and Urban Affairs will hold a hearing with banking regulators on the state of the banking industry, and its role in the subprime crisis and economic downturn.
Stocks seesawed Monday and shook off most losses by the end of the day. "At the end, the market rallied beautifully," said Peter Costa, senior managing director at Eckhart and Co. "What I did see is a lot of interest on the sell side cancelled toward the end of the day."
The Nasdaq though still lost 12.88 points or 0.57 percent while the Dow was down just 7.49 points or 0.06 percent. The S&P 500 was in fact higher, gaining 0.71 points, or 0.05 percent. The S&P technology sector lost 0.64 percent, the second worst performer after financials, off 1.23 percent. Materials were the best performer, gaining 1.5 percent.
Red Hot Commodities
Once more, the commodities trade was on with prices of metals and agricultural commodities flying and the dollar wilting. On the road to $1,000, gold rose a full percent to $981.50 per troy ounce.
Technical guru Louise Yamada told "Fast Money" Monday afternoon, that she sees gold going beyond the $1,000 marker. She explained that from 2004 to 2005 there was a 75 percent rise in gold prices, with a very sharp 25 percent decline, a one third retracement. After that, there was an extended reconsolidation, with higher lows.
When gold broke $690 to $700, the conclusion point for the next consolidation came to $1150, she said. From a different perspective, there was a smaller consolidation that showed a 30 percent initial move through $700 and the calculated target on the upside for that move was $1050. "We would argue you have $1050 in the bag, if not $1150," she said.
Yamada said she also has longer term targets of $1240, $1500 and $2000 on gold, but she did not elaborate on the time frame. She added that her oil target is $124 per barrel.
Oil, meanwhile, shot to an all-time high Monday before settling at $102.45 per barrel. In fact, oil broke an old record Monday, temporarily crossing above the inflation adjusted high of $103.76, set in April, 1980.
In other markets, soybeans and soy oil futures soared to new highs Monday. China's Minister of Commerce said that China may increase the importation of agricultural products to meet its food requirements. Corn and wheat were also higher.
The dollar meanwhile continues to weaken, losing 0.2 percent against the euro and 0.7 percent against the yen.
Stocks In The News
House speaker Nancy Pelosi said late Monday that Congress must examine the Air Force aerial tanker contract which was awarded to Northrop Grumman and European Aeronautic Defense and Space , the parent of Airbus. The big loser in that contract award was rival Boeing , which lost nearly 3 percent in Monday's market.
GM's Chairman Richard Wagoner will appear on "Squawk on the Street," live from the Geneva auto show Tuesday. General Motors was in the news Monday, with weak February sales and news it would now have to shut down six plants due to a strike against supplier American Axle and Manufacturing. The company also announced Monday it is elevating its CFO Fritz Henderson to the roles of President and Chief Operating Officer.
Around The World
Markets are keeping a wary eye on the tensions between Venezuela, Ecuador and Colombia. Venezuela and Ecuador cut Diplomatic ties with Colombia after Colombia conducted raids inside Ecuador that killed a leading guerrilla commander. Colombia accused Venezuelan President Hugo Chavez of funding Marxist rebels.
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