This mornings final first quarter GDP shows the economy group at a more robust 6.1% annual rate than the previously released 5.6% and that has stock futures seeking out their best levels of the morning. In dollar amounts, the U.S. GDP was estimated at $10.45 trillion annually, up from the $10.2 trillion in all of 2001. Consumers spent $7.26 trillion at an annual rate in the quarter, while businesses invested at a $1.16 trillion rate.
S&P futures are jumping higher by 1.2%, or 11.8 points at 986.50, while NASDAQ futures are up 24 points at 1,053.50 and Dow futures are gaining 95 points to 9,210.
Fair value for the S&P 500 today is $1.52. That price will not change during the session. HL Camp & Company has their computers set for program buying at $2.80 and set for selling at $-0.76. Fair value for the NASDAQ-100 today is $5.00.
The U.S. Dollar is also responding to some of this morning's early bullishness in stocks as the U.S. Dollar Index (dx00y) 107.00 +0.41 rises marginally, helping lift some of the weight the weaker dollar has had on stocks.
After a strong round of buying yesterday, Treasuries are seeing some profit taking this morning as YIELDS rise across the major maturities. The benchmark 10-year YILED ($TNX.X) fell its lowest level of the year (2002) yesterday to 4.617% and currently trades with a 4.774% YIELD.
Gold, which has been a benefactor of the weaker U.S. dollar and declining broader-market stock averages is showing weakness this morning as the August Gold futures (gc02q) 317.50 -1.02% sees selling. Yesterday, gold futures along with stock opened hot, but as the session progressed faded into the close as stocks rallied.
Current action coupled with yesterday's late rally looks like bulls might get a decent rally day today.
For the rally to take hold, look for gold to continue to show weakness, but the real catalyst for a continued stock rally will most likely have to come from a strengthening U.S. dollar, which looks very oversold on it bar chart.
US Dollar Index Chart - Daily Interval
Traders may want to monitor the U.S. dollar for resistance on a rally attempt at the January 2001 low near 108. The Dollar looks oversold near-term and bullish and bearish traders may want to try and correlate some resistance levels in stocks with the U.S. Dollar Index (dx00y) chart above. For any type of prolonged rally in stocks, it would most likely take a break back above the 108.50 level.
A correlation point on the S&P 500 (SPX.X) 973.50 might be the 1,000 level.