MARKET WRAP – THE CORRECTION IS OVER

This truly is a new paradigm.  The recent market “correction” amounted to a grand total of just 1.5% before equities found their footing and reversed.  The relentless bear killing machine is now on autopilot as equities have risen in 11 of the past 13 sessions.  Stocks powered higher today for gains of 0.9%.  Volume was light, but that hasn’t mattered.  Breadth was very positive at 5:1.  High beta names were strong outperformers during the session.  The beat goes on.  The trend is your friend even when it bends…..

From Daily Futures:

U.S. Economy
Goldman Sachs said that it earned $3.46 billion in the first quarter, up from $1.8 billion a year ago and more than expected.

Grains and Cotton
The USDA said that China bought 232,000 tons of U.S. soybeans for 2010-2011. July soybeans were up 7.5 cents at $9.94.

After yesterday’s close, the USDA said that:
19% of the corn crop is planted.
11% of the cotton crop is planted.
20% of the spring wheat is planted.
69% of the winter wheat crop is rated good to excellent, up from 65% a week ago.

Was yesterday’s sell-off over-done? July wheat closed up 19 cents at $4.985.

India stopped exporting cotton yesterday in an effort to protect domestic supplies. It is not yet known how long the ban will last. July cotton finished up its 3-cent daily limit at 84.60, the highest close in over eighteen months.

Yesterday’s 6 to 10 day forecast from the National Weather Service is expecting below to normal precipitation and below average temperatures in the central U.S.

Cocoa
July cocoa jumped up $94 to 3,044, still supported by last week’s favorable grindings reports from North America and Europe.

Orange juice
After dropping 24 cents in four weeks, orange juice is trying to regain some ground. July orange juice closed up 2.55 cents at $1.3805.

Currencies
The Bank of Canada increased its estimate of real GDP growth for 2010 from 2.9% to 3.7% and opened the door for a possible rate increase as early as June. The June Canadian dollar jumped up 1.66 cents to a new contract high of $1.0017.

The U.K.’s Office for National Statistics said that the consumer price index was up 3.4% in March from a year ago, much more than the government’s 2% target level. The June British pound closed up .0053 at $1.5361.

The June Japanese yen fell .0091 to 1.0734 with concerns that the Bank of Japan will not be able to keep up with other central banks that may raise rates this year.

The Reserve Bank of India raised its (repo) interest rate from 5.00% to 5.25%. The Bank also raised the reserve requirement from 5.75% to 6.00%.