Binary Options Analysis – US Stocks Gain, Bonds Fall on Bailout Progress

Sep 8, 2011
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Binary Options Trading analysis written by Bradley Welcher - BinaryOptionStrategy


Equities

Asian markets traded mixed, shrugging off Tuesday’s steep drop in US shares. The Nikkei settled down .2%, the Kospi gained .3%, and Australia’s ASX 200 rose .4%. Modest inflation figures from Australia helped the index reverse from early losses, on hopes of an interest rate cut. The Shanghai Composite rallied .7%, and the Hang Seng rose .5%.

A similar performance was seen in Europe ahead of the European Summit. The FTSE rose .5%, while the DAX fell .5% and the CAC40 slipped .2%. Germany’s parliament approved an expansion of the EFSF bailout fund. Banks swung in a wide range, closing down nearly 1% after rising more than 1% earlier in the day.

US markets rallied with the Dow gaining 162 points to 11869. The S&P 500 climbed 1.1%, and the Nasdaq advanced .5%, as progress from Europe helped lift sentiment.

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Dow Rallies 162 Points

Boeing gained 4.5% after beating earnings forecasts. Meanwhile, Ford shares slumped 4.5% even though it beat analyst forecasts. Sprint dropped 7% after reporting a loss in subscribers that was more than expected. Amazon shares closed down 12.7% on a weak outlook which prompted several brokerages to cut their price targets on the stock.



Treasuries and Commodities

Bond prices fell, erasing Tuesday’s gains. 10-year notes sank 27/32 to yield 2.21%, and 30-year notes fell 1 28/32 to yield 3.22%.

A $35 billion auction of 5-year notes had a bid-to-cover ratio of 2.90 and a high yield of 1.055%.

Energy fell, led by crude oil which dropped 2.6% to 90.74. Natural gas lost 1.7% to 3.596, an gasoline futures shed 1.6% to 2.6561.

Metals continued their recent advance, led by copper, which climbed 2.7% to 3.5135. Gold gained 22.30 to settles at 1722.70, and silver advanced 1% to 33.365.

Agricultural futures fell, with wheat losing 2.6% to 619.50, and corn down 2% to 637.25.



Currencies

The Canadian Dollar rallied 1.2% to 1.0045, reversing Tuesday’s losses. The Euro ended flat at 1.3908, while the Pound and Australian Dollar both slipped 2%. The Yen touched another record high against the dollar, before settling down .2% to at 76.23.



Economic Outlook

Investors are anxiously waiting for a deal regarding Greece’s debt. The market is looking for a 50% haircut on the debt.

Wednesday’s reports were upbeat, as new home sales rose, and durable goods orders jumped.

Thursday’s reports will include GDP, pending home sales, and weekly jobless claims.

Earnings are due for from Bristol-Myers, Aetna, P&G, Time Warner, AMD, Motorola, Baidu, and Electronic Arts.