Daily Analysis – Global Markets Rally, Agricultural Futures Soar

Mar 18, 2010

Asian markets snapped back on Friday, as oil prices stabilized. The Hang Seng led the advance, rallying 1.8%, while the Nikkei closed up 74 points at 10527. Australia’s ASX 200 rose .6%, and the Kospi logged gains of .7%. The Shanghai Composite, which frequently trades independent from other markets, closed flat.

The positive sentiment spread westward, sending European markets higher. The FTSE climbed 1.1% to 6001, and the CAC40 jumped 1.5%. A technical malfunction kept the London Stock Exchange closed until midday, opening at 1215 GMT. The German Dax trailed the broader regional gains, gaining .8%.

US markets bounced back strongly, especially the Nasdaq which surged 1.6%, followed by the S&P which gained 1.1%. The Dow struggled to keep up, rising .5% to 12130.

Auto desk shares leaped 5.7% on impressive earnings. First Solar sank 5.4% on a weak forecast, and JC Penney slumped 6.5%.

Treasuries and Commodities

Bonds advanced, particularly on the longer-term issues. The 10-year bond rose 9/32 to yield 3.41%, and the 30-year note climbed 24/32, yielding 4.50%.

Natural gas soared 3.4%, while oil rose a modest .60 to 97.88. Gold ended down .5% at 1409.30, and silver dropped .8%.

Copper rallied 2.5%, as money moved back into non-defensive commodities.

Copper Extends Gains After Thursday's Reversal

Agricultural futures soared, led by cotton, which galloped 5.5% higher. Sugar jumped 4.3%, while wheat soybeans and corn all gained more than 3%.


The US dollar sank to new multi-year lows against the Canadian Dollar, ending down .5% at .9778. Elsewhere, the dollar was mixed, gaining .4% o the Euro, and .3% on the Swiss Franc, while sinking .8% against the Australian Dollar. The yen continued its advance, ending up .3% at 81.64.

Economic Outlook

Consumer Sentiment rose to a 3-year high and beat analyst estimates. GDP figures came in below expectations (2.8% vs. 3.3%) but investors were apparently pleased nonetheless, as the recovery slowly gains a foothold.

Monday’s reports will include Chicago PMI, pending home sales, and farm prices.
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