Stock Market Update -Apr 26th

The six week rally finally slowed down a bit this week as we got a slew of earning reports. Sector performance was mixed (see chart below). Ford shares rallied on their earnings announcement, while GM continues to struggle with a potential bankruptcy filing. American Express shares also rallied. The Materials sector got a boost as the US Dollar sank further -we could expect a further decline in the Dollar. Next week also have over $150 billion in Bonds being brought to market.

New Unemployment claims for the week came in over 600,000 again, and this time four more banks were shut down by regulators (list), along with one Credit Union.

Commodities: Oil prices dipped, then closed back up around $51 per barrel. Gold prices rose to $913 as the US Dollar fell, and as China reported a huge rise in gold reserves. Bonds also fell further this week (resulting in higher interest rates).

Next week the earnings reports continue to roll in, including that of the major oil companies. We get the 1st quarter GDP report on Wednesday, and we also have a Fed meeting. We could also get news on the GM or Chrysler bankruptcy.

Market outlook: The market is poised to break thru the 875 level on the S&P500. So far the reaction to earnings has been mostly positive, so I expect the rally will continue up to the Jan 6th top of around 903, though it could be a bumpy ride getting there.

Six-Week Winning Streak Runs Out of Steam
Microsoft Q3 profit falls 32%
GM To Get Another $2 Billion, Lets Pontiac Brand Die
GM won’t make debt payment, bankruptcy ‘probable’
Freddie Mac CFO found dead
For Freddie And Fannie, Trouble At The Top
Shareholders Be Damned!
Bank Profits Appear Out of Thin Air
Did The Government Force Bank of America To Buy Merrill?

Recession, Far From Over, Already Setting Records
Dire straits for state budgets
A profitable commodity play
China reveals big rise in gold reserves. Holdings soar above 1,000 tons
Why I Fired My Broker