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Stock futures in the red, so are bond yields

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This morning's stock futures are lower as recent economic data shows that many Americans are plowing their cash in savings accounts. Currently, S&P futures are trading lower by 5 points to 1,147, NASDAQ futures are off 28 points to 1,481 and Dow futures are down 51 points to 10,060. Today's fair value for the S&P 500 is $1.82. HL Camp & Company has their computers set for program buying at $2.72 and set for program selling at $0.42. Fair value for the NASDAQ-100 today is $3.37.

Sun set to open at new 52-week low

Last nights mid-quarter update from Sun Microsystems (NASDAQ:SUNW) has analysts working down their revenue and earnings numbers this morning. The market looks to be working down Sun Micro's stock price. Yesterday, shares of SUNW finished the session at $13.43, but current trading in the pre-market at $11.53 would be a new 52-week low for the stock.

First downside alert of the morning

My first downside alert set on my trade station comes from the 30-year Treasury YIELD ($TYX.X) with a YIELD trade at 5.35%. In essence, there are buyers in Treasuries that continue to drive yields lower. I had set an alert at the 5.35% YIELD level on the 30-year as we have seen two significant reverses from these levels in the past 9 months. After this YIELD alert was triggered, buyers continued to buy this bond and at the end of this write-up, the YIELD continues to fall to a session low of 5.339%.

Yesterday, the 5-year YIELD ($FVX.X) closed at a 52-week low of 4.349% and this YIELD is also falling this morning. Current YIELD on this bond has fallen to as low as 4.29% this morning and current YIELD is right at 4.32%. It continues to be my view that the lower YIELDS caused by buying in these bonds is a defensive move by the market. The money put into the bond market is money that is not finding its way into stocks. Most likely this is due to the MARKET'S perception that Treasuries continue to offer the best risk/reward between many stocks and that of bonds.

Continuous Claims Rise

Initial jobless claims fell 1,000 to 399,000. The four -week moving average, which smoothes out weekly fluctuations, rose 12,500 to 393,000. Those Americans without jobs are having a hard time finding employment as continuous claims rose to 3.17 million, the highest level since September of 1992. Jobless claims are expected to climb for the remainder of 2001, and fall in 2002.

Jeff Bailey
Senior Market Technician

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