StockTwits Market Preview 6/11/09

• kileyay
• June 11th, 2009

Overseas

Futures are leaning higher after mixed to flat results overseas.

Japan’s Nikkei 225 breached the 10000 barrier for the first time since early October of last year before closing down 0.1%. The Shanghai Composite shed 0.7%, while Singapore’s Straits Times was down 0.4%. Among gainers, South Korea’s Kospi Composite was up 0.3%.

European stocks are edging higher, bolstered by drug company stocks. London’s FTSE 100 Index is up 0.3%, Frankfurt’s DAX up 0.5%, and Paris’ CAC-40 index up 0.1%.

Rates

Some fear that rapidly rising interest rates could dim prospects for housing and choke the economic recovery.

The higher levels could dampen consumer incentives to buy homes and refinance. Rates on 30-year fixed-rate mortgages climbed to 5.79% Wednesday, up from 5% two weeks ago.

Yesterday, a weak Treasury auction of 10-year government bonds sent stocks south. Yields climbed to 4%, the highest level in more than seven months.

The U.S. is due to auction off $11 billion worth of 30-year notes today. Sentiment on StockTwits was not cheery: @aiki14 commented, “The 10yr gets toasted, the 30yr is gonna get bloodied. Who’s buying them? Nobody. Bloody.”

Commodities

Oil continues its rise. Crude oil staggered briefly as equities fell yesterday, but prices are advancing again this morning. WTI Crude oil is hovering around $72 per barrel, a high for this year.

The International Energy Agency raised its 2009 global crude-demand forecast in response to signs that an uptick in economic activity might breathe some life back into oil consumption.

Look for the oil uptrend to lift energy stocks such as Exxon Mobil ($XOM) but clip the wings of airliners like Southwest ($LUV).

In early trading, natural gas and heating oil edged higher, while precious metals largely retreated.

Technicals

The technicals are mixed. There’s a bullish continuation pattern in place.

But the indices have failed to break through the 200 day moving average resistance, turn it into support, and leave it behind.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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