MARKET WRAP – ANOTHER POSITIVE MONDAY

Stocks traded substantially higher last night on the back of the Greek bailout news, but the highs seen in Sunday’s futures trading were sold into for the next 24 hours.  Chinese stocks closed lower while European stocks closed mostly flat  after selling off from their highs.

Investors were initially encouraged by the news out of Europe, but the Euro sold off from session highs as investors continue to be skeptical of the sovereign debt problems in Europe.  Nonetheless, equities in America managed to eek out another Monday melt-up.  This marks the 26th positive Monday in the previous 32 (81%).  The VIX sank to a new low today at 15.5 – a level not seen since Summer 2007 and an new high in investor complacency in recent months.  The “can’t lose market” has emboldened the bulls.  Many of the powerful trends remain well intact since the February low and some have actually become even more impressive in recent days:

• The SPY has rallied 15.5% in 45 sessions while declining in just 12 of those sessions.
• The Nasdaq 100 has rallied 16.5% in 45 sessions while declining in 12 of the 45 sessions.
• The banks have rallied an incredible 23.5% while declining in just 8 of the 45 sessions.
  

Investors are front-running the current earnings season with the hopes that most others don’t know that this is going to be another very good reporting season.  At this point we have to wonder who doesn’t know this will be a good earnings season?

From Daily Futures:

U.S. Economy
The U.S. Treasury Department said that the federal government posted a budget deficit of $65.4 billion in March, down from a deficit of $191.6 billion a year ago.

Grains and Cotton
Yesterday’s 6 to 10 day forecast from the National Weather Service expects normal to below average precipitation for most of the U.S. That should be helpful for corn and soybean planting. May corn is steady to higher.

The USDA said that last week’s export inspections of:
Corn totaled 32.0 million bushels, down 3% from a year ago.
Soybeans totaled 13.4 million bushels, down 45% from a year ago.
Wheat totaled 17.1 million bushels, down 19% from a year ago.

The USDA said that China bought 120,000 tons of U.S. soybeans for the current marketing season. May soybeans are steady to higher.

Cocoa
May cocoa closed up $63 at $2,919, helped by today’s weaker U.S. dollar and beliefs by some that cocoa production is still too low.

Sugar
May sugar was up .15 at 16.54, supported by bargain-hunting after ten weeks of falling prices.

Lumber
Canada’s Mortgage and Housing Corporation said that housing starts were at an annual rate of 197,300 units in March down 1.5% from February numbers that were revised higher. May lumber is steady to lower.

Energies
June crude oil is steady to lower, in spite of a weaker U.S. dollar and a world economy that seems to be steadily improving.

Currencies
European governments and the International Monetary Fund came together and offered Greece up to 45 billion euros of aid at a low interest rate. The June euro is trading higher.