Dartline™ First Look - morning directional planner

July 10, 2009, 7:00 am ... The Standard & Poor's 500 index futures down 6.60 to 872.30, as FTSE 100 index of leading British shares was down 11.45 points to 4,147.21, Germany's DAX down 3.23 points to 4,626.8 and the CAC-40 in France down 8.25 points to 3,017.69. Earlier in Asia, markets gyrated throughout the day before edging down. Japan's Nikkei index notched up its eighth straight loss, closing 3.78 points lower to 9,287.28. Cross the board volumes in equities remains below average as investors are reluctance to commit long term capital. Key over the coming days and even weeks could be the second-quarter earnings reporting season in the U.S. as it will provide clues about whether companies have already seen the worst of the recession or whether they are still struggling in the first synchronized global economic downturn since the Second World War. So far, the earnings statements that have been released have been less than upbeat. While aluminum company Alcoa Inc.(AA)-$9.23 - reported a smaller than anticipated second quarter loss as a result of cost-cutting measures. Furthermore, weak sales reports from U.S. retailers and more pain in the country's labor market did little to lift the mood.... Oil prices were down in Asia, with benchmark crude for August delivery falling 35 cents to $60.06 a barrel after earlier trading below $60. The contract rose 27 cents Thursday. While global appetite for crude over the next few months remains unclear, expectations are that it will increase by next year, with the International Energy agency predicting a 1.7 percent rebound in demand by next year. All the focus is on demand, as the second quarter earnings season is going to be very important for crude.... The Paris-based IEA looked further ahead, predicting in its monthly survey that economic recovery in developing countries will help counter a two-year drop in oil usage sparked by the global recession.
It said global oil demand will increase by 1.4 million barrels a day in 2010 to 85.2 million barrels a day -- a "strong rebound" that would be led by growth in developing countries. The IEA left its forecast for 2009 oil demand unchanged, and still expects it to drop 2.9 percent.... Maintain resistance of S&P 500 index resistance at 913.26, while near term support at 875.12 had been challenged. Accordingly, near term direction for the index is down. Change support to 832.39, closeout long positions, except for 'special situations', reduce exposure and consider adding to the short side.

July 10, 2009, 5:00 pm .... Closing Thoughts ... The Standard & Poor's 500 index closed down 3.55 (0.40%) at 879.13, as HOPE lost its glow. FEAR is winning -- over the economy, poor reports on unemployment, consumer confidence and falling commodity prices -- while keeping the 'spin doctors' off balance. Even the financial media cannot spit-out the 'green shoot' noise with the gusto of just a few weeks ago. Now the word "stabilize" lost its meanings and has been replaced by --- What! We need a second stimulus scheme to keep this engineered rally going?... The single fact that cannot be denied -- Job insecurity is crushing confidence in consumer spending, which controls 80 percent of economy. What the consumer decides, dictates where the stock market does.... Indeed, the Street is on edge as the second-quarter earnings season heats up. The pace of reports picks up speed next week with results coming in from heavy hitters such as Johnson & Johnson (JNJ)- last $56.93, JPMorgan Chase & Co.(JPM)- last $32.30, Google Inc.(GOOG)- last $415.26 and General Electric Co.(GE)- last $10.76....... Underreported: China's exports and imports fell again in June, creating more pressure for the world's third-largest economy to perform and bailout the world economies, especially the USA. Exports fell 21.4 percent in June from a year earlier, the government's Xinhua News Agency reported, citing the Chinese customs agency. China's trade collapsed in late 2008 as the global consumer demand plunged, wiping out millions of factory jobs. Analysts say a full-fledged recovery will have to wait until China's key U.S. and European export markets rebound. "Overseas demand still hasn't recovered yet," said Hu Xiaoyue, an economist at Shanghai Securities. "The role of exports in economic growth will continue to weaken." Beijing is trying to shield the economy from the downturn by boosting domestic consumption with a 4 trillion yuan ($586 million) package of spending on public works construction and other initiatives.... June imports also fell, declining 13.2 percent from a year earlier, Xinhua said. That was an improvement over May's 25.2 percent fall and far better than January's record 43.1 percent plunge. China's global trade surplus narrowed to just $8.2 billion, its second-smallest gap in many years after February's $4.8 billion. Last year's trade gap was as high as $40 billion a month.

... What to look for next week: Tuesday, July 14 -- Commerce Department releases the retail sales report for June, 8:30 a.m.; Labor Department releases the Producer Price Index for June, 8:30 a.m.; Commerce Department releases business inventories for May, 10 a.m.; House Financial Services subcommittee hearing on the role of the Securities and Exchange Commission in the president's proposed financial overhaul.; House Agriculture subcommittee hearing on the dairy industry; House Science and Technology subcommittee hearing on wind and solar energy research; Senate Banking, Housing and Urban Affairs Committee hearing on the administration's plan to create a consumer financial protection agency. Wednesday, July 15 -- Labor Department releases Consumer Price Index for June, 8:30 a.m.; Federal Reserve releases industrial production for June, 9:15 a.m.; Federal Reserve releases minutes from June meeting; House Financial Services Committee hearing on the president's proposed financial overhaul; Senate Banking, Housing and Urban Affairs subcommittee hearing on regulating hedge funds and other private investment funds. Thursday, July 16 -- Labor Department releases weekly jobless claims, 8:30 a.m.; National Association of Home Builders releases housing market index for July, 1 p.m.; Freddie Mac, the mortgage finance company, releases weekly mortgage rates; Former Treasury Secretary Henry Paulson - ASSHOLE List member - testifies before the House Oversight and Government Reform Committee on the Bank of America-Merrill Lynch deal; House Financial Services Committee hearing on the president's proposed financial overhaul. Friday, July 17 -- Commerce Department releases housing starts for June, 8:30 a.m.; House Financial Services Committee hearing on the president's proposed financial overhaul.