MARKET WRAP – BEARS SLAUGHTERED AGAIN

The market has become a relentless bear killing machine.  The S&P rallied for the 9th time in 10 sessions as the bull market has become truly unstoppable.  Stocks opened lower but the weakness was very brief as investors immediately jumped in to buy the dip. It was another low volume day and breadth was neutral, but this has mattered little in recent months.  The volume has been weak throughout the move higher, but that hasn’t stopped stocks from moving higher and avoiding any even remote corrections.

The S&P 500 is now up 16.5% in just 8 weeks and if this pace is maintained the market will finish the year just shy of an all-time high.  Investors have cheered the recent economic news which has shown clear evidence that the recovery is here.  In addition, “better than expected” earnings have given investors more confidence that corporations will begin hiring again and better times lie ahead.  The trend is so firmly entrenched that it’s difficult to envision what can stop it at this point.

From Daily Futures:

U.S. Economy
The U.S. Labor Department said that jobless claims were up 24,000 last week to 484,000, much more than expected. The June 2011 eurodollars were up .03 at 98.515.

The Federal Reserve said that industrial production was up .1% in March and up 4.0% from a year ago. Capacity utilization was up 73.2% in March, up from 72.0% a year ago.

The Philadelphia Federal Reserve’s regional index of manufacturing increased from 18.9 to 20.2 in April, roughly as expected.

The New York Federal Reserve’s regional index of manufacturing increased from 22.86 to 31.86 in March, stronger than expected.

Grains and Cotton
The USDA said that, compared to the four-week average, last week’s net sales of:
Corn were down 26%.
Soybeans were down 28%.
Wheat were down 72%.
Cotton were up 51%.
July cotton finished up 1.03 at 82.12.

Livestock
After yesterday’s close, the U.S. Meat Export Federation said that total beef exports were up 8.6% in February from a year ago. Total pork exports were up nearly 1% in February from a year ago. June hogs closed up 1.12 at a new contract high of 86.07.

The USDA said that net sales of beef totaled 6,700 tons last week, down from 13,000 tons the previous week. June cattle jumped up 1.35 to 94.30.

Lumber
The National Association of Home Builders said that its index of builder sentiment increased from 15 to 19 in April, the highest in seven months, but still a sign of pessimism. July lumber closed up $7.40 at a new contract high of $315.60 ahead of tomorrow’s U.S. housing starts report.

Coffee
July coffee traded lower early in spite of reports of reduced production in Colombia, but closed down just .0010 at $1.3340.

Metals
China’s National Bureau of Statistics said that real GDP was up 11.9% in the first quarter from a year ago, the strongest growth in nearly three years. That puts more pressure on China to raise the value of its currency. May copper fell a penny to $3.6005.

Energies
The U.S. Department of Energy said that underground supplies of natural gas were up 87 billion cubic feet last week to 1.756 trillion cubic feet. Supplies are now up 4% from a year ago. June natural gas fell 22.1 cents to $4.074.

June crude oil ended up .02 at $86.75 after yesterday’s U.S. inventory report showed that gasoline supplies had dropped 1.1 million barrels last week.

Currencies
The problem with Greece is not going away easily. The June euro closed down .0080 at 1.3576 with concerns that Europe’s recent offer of 45 billion euros of aid will not be enough to fund the government.

Japan’s government said that industrial production was down .6% in February, down from an initial report of being unchanged. The June yen ended up .0003 at 1.0745.

Authorities in the U.K. and northern parts of Europe cancelled flights today due to the spread of volcanic ash from Iceland.