Daily Market Analysis

Sector Leaders/Laggards for Wednesday 23 March, 2011 AMC

Leading Sectors: Materials (+1.4%), Consumer Discretionary (+0.8%), Tech (+0.6%), Industrials (+0.4%), Consumer Staples (+0.3%), Telecom (+0.2%), Energy (+0.2%)

Leading Industries/ETFs : Gold Miners-GDX +3.63%; Copper-JJC +2.74%; Silver-SLV +2.6%; Indonesia-IDX +2.36%; Russia-RSX +1.85%; Natural Gas-UNG +1.85%

Other Market Moving Factors:
• Financials lag, but materials plays provide leadership
• Latest round of earnings comes in somewhat mixed
• Oil prices trade above $105/bbl despite greater-than-expected build in weekly oil inventories
• New home sales for February drop to record low rate

• Asian Markets Close;

Nikkei -1.7%, Hang Seng -0.1%, Shanghai +1.0%

Asian stocks closed mostly higher despite a sharp selloff in Japan. Drinking water in Tokyo is under inspection for unsafe levels of radiation as parents have been advised to not give the water to children. The U.S. Food and Drug Administration announced it was stopping imports of milk, vegetables, and fruit from the areas in the vicinity of the nuclear plant. Singapore's CPI came in at a cooler-than expected 5.0% YoY (5.4% expected) while Taiwan's industrial production slowed to 13.3% YoY (16.3% expected/17.4% prior). Looking at the currencies...the yuan settled weaker at 6.5585 while dollar/yen is little changed at 80.95.

In Japan, the Nikkei closed -1.7% as industrials and energy both lost close to 2.5%. Tokyo Electric Power Co fell 4.1% as the co continues to deal with the fallout from the nuclear crisis.

In Hong Kong, the Hang Seng finished -0.1% as coal producer China Coal tumbled 7.6% following earnings that were well below expectations. The co announced net income rose to CNY 7.47 bln which was well short of the CNY 10 bln expected by analysts.

In China, the Shanghai Composite settled +1.0% to finish higher for the fourth consecutive session. Coal miners saw strong gains after reports that Beijing announced an emergency stockpiling program for coal that aimed to reach 5 million metric tons. Yanzhou Mining gained 4.7% on the news and coal based energy co China Shenhua Energy gained 2.0%.

In India, the Sensex closed +1.2% as strength in financials led the way. Financials added 2.3% with ICICI Bank leading the way with a 3.7% gain. Automaker Mahindra & Mahindra fell 1.0% after the Dehli government announced a hike in the registration fee for diesel vehicles.

• European Markets Closing Prices

UK's FTSE: +0.6%
Germany's DAX: +0.4%
France's CAC: +0.5%
Spain's IBEX: +0.6%
Portugal's PSI: -1.0%


Market Internals for Wednesday 23 March, 2011 AMC

NYSE : Lower than avg volume @ 877 mln, vs. 1033 mln
Advancers outpaced Decliners (adv/dec): 1635/1325
New highs outpaced new lows (hi/lo): New lows outpaced new highs (hi/lo):

NASDAQ : Lower than avg volume @ 1772 mln, vs. 1810 mln
Advancers outpaced Decliners (adv/dec): 1386/1216
New highs outpaced new lows (hi/lo): New lows outpaced new highs (hi/lo):

Commodities AMC on Wednesday 23 March, 2011:
Light Crude (NYM) May 11 ($US per bbl.) : 105.75 +0.78 (+0.74%)
Gold (CMX ) April 11 ($US per Troy oz.) : 1,438.00 +10.40 (+0.73%)

Treasury Yields AMC on Wednesday 23 March, 2011:
• 2 Year Note 0.69% +0.01
• 5 Year Note 2.07% unch
• 10 Year Note 3.36% +0.02
• 30 Year Bond 4.44% unch 2/30 Spread : 375bps (-1) ... 2/10 Spread : 267bps (+1)

This rally is strange.