MARKET WRAP – ANOTHER MONDAY RALLY

In a world of uncertainties we’ve come to realize three things are in fact certain – death, taxes and a Monday rally.  Stocks didn’t disappoint as another Monday passed and another 1% rally ensued.   There was no real catalyst for the rally as the futures market ramped 0.3% higher in the short 15 minute after-hours market on Friday and then tacked on gains throughout the Monday night session as Asian stocks rallied.   Mixed data this morning was largely ignored and risk takers felt comfortable adding to positions.  The large bank strategists appear to be increasingly comfortable with taking on more risk as the fears in Greece and China’s tightening subside.

Volume was very low again, but breadth was robust at 4:1.  The market’s strength came in the face of a stronger dollar and lower oil prices.  Financials underperformed on the day as tech and retail led the way higher.  The VIX traded lower for the 14th time in 15 days.  Today’s performance brought the market back to the flat-line for the year.

From Daily Futures:

U.S. Economy
The U.S. Commerce Department said that personal incomes were up .1% in January, weaker than expected, while consumer spending was up .5%.

The Institute of Supply Management said that its index of U.S. manufacturing fell from 58.4 to 56.5 in February, weaker than expected, but still a sign of expansion.

The U.S. Census Bureau said that construction spending was at an annual rate of $884.1 billion in January, down .6% from the previous month. May lumber dropped $8.10 to $265.60, the lowest close in four weeks.

Grains and Cotton
The USDA said that last week’s export inspections of:
Corn totaled 38.9 million bushels, up 12% from a year ago.
Soybeans totaled 40.1 million bushels, up 41% from a year ago.
Wheat totaled 17.7 million bushels, up 62% from a year ago.
May soybeans ended up 2 cents at $9.63.

July wheat closed down 14.5 cents at $5.167, pressured by today’s stronger U.S. dollar.

Livestock
April hogs ended up .15 at 72.95 with ongoing support from expectations for fewer hog numbers in 2010 and higher prices lately for wholesale pork.

May feeder cattle finished up 1.05 cents at $1.0450, helped by better beef demand and today’s lower corn price.

Cocoa
May cocoa dropped $55 to $2,862, the lowest close in six months, in spite of predictions by some for a world production deficit in 2009-2010. So far in 2009-2010, cocoa arrivals at Ivory Coast ports are up 3% from a year ago.

Orange juice
May orange juice closed up 4.35 cents at $1.4795, the highest close in four weeks.

Sugar
Everyone knows that world supplies of sugar are tight, but May sugar fell 1.34 cents to 22.26, the lowest close in eleven weeks. Is it some kind of speculator-shakeout?

Metals
May copper closed up 6.60 cents at $3.3500 after Friday’s 8.8 earthquake in Chile. According to Dow Jones Newswires, one analyst said that the earthquake temporarily disrupted 5% of the world’s copper production.

An index of purchasing managers in China fell from 55.8 to 52.0 in February, weaker than expected, but still a sign of expansion in the manufacturing sector.

Energies
May natural gas closed down 13.3 cents at $4.746 with warmer temperatures on the way for most of the U.S. later this week.

Currencies
The March British pound is trading sharply lower with concerns that a weaker government may be coming (see article).

Statistics Canada said that real GDP was up .6% in December and unchanged from a year ago. For all of 2009, GDP was down 2.6% from a year ago. The March Canadian dollar is steady to higher.

Eurostat said that the unemployment rate in the EU-27 was unchanged in January at 9.5%. Also, an index of manufacturing in the Euro zone from Markit Economics increased from 52.4 to 54.2 in February, better than expected.

Australia’s Statistics Bureau said that gross operating profits were up 2.2% in the fourth quarter of 2009, the first gain in over a year. Some are expecting the Reserve Bank to increase rates by a quarter of a percent tomorrow.