Intraday Market Update
Equities are drifting sideways near breakeven in a painfully slow trading session with no economic data to report. The S&P 500 is slightly positive, while the DJIA is slightly negative after mixed earnings reports from Verizon and American Express. The tech heavy NASDAQ and Russell 2000 are faring better with about +0.50% gains. There is not much movement in commodities today with most relatively flat. Natural gas, however, continues to get hammered as the extraordinary supply has caused a -17% slide over the past month and a -40% drop year-to-date. The slide in the US Dollar over the past month may be abating. After hitting a low of 76.335 last Friday, the greenback has broken through its downward channel and reversed course. The dollar surged higher on Tuesday, collapsed on Wednesday, and appears to be putting in a higher swing low. If the strength continues it is likely to pressure stocks and commodities in the comings days/weeks. However, if this is a dead cat bounce and the dollar breaks below $77.11 stocks are likely to make another leg higher.

4 hour chart of the US Dollar:

The rhetoric is beginning to emerge out the G20 meeting of finance ministers in South Korea and the US is leading the charge. In an effort to pressure surplus countries like China, India, and Russia to let their exchange rates rise, Treasury Secretary Tim Geithner outlined a proposal to rebalance global growth by having industrial and developing economies agree on limits for their external imbalances at the main G20 summit in Seoul on November 11th and 12th. Geithner said countries should implement policies to reduce their current account (the broadest measure of trade) imbalances to below 4% of a country's gross domestic product. Mr. Geithner's proposal was met with much criticism and failed to gain support as various country's weighed in. Germany's Economic Minister warned of falling back into "planned economy thinking," while Russia's Deputy Finance Minister said the proposal was "politically correct, but there is nothing sharp in it." And Japan's Finance Minister chimed in saying "we said that we doubt whether rigid numerical targets should be set, but when checking the progress in rectifying imbalances, that might be an idea."

In earnings news, investors are selling shares of Verizon (VZ) after their earnings report with the stock down -2%. Bottom line earnings and revenues were slightly higher than estimates and quarterly metrics for its FiOS service are improving. However, wireless net adds slipped below 1 million and total quarterly and revenues were lower on a y/y basis. American Express (AXP) posted earnings that beat estimates and were up sharply y/y. Executives said their credit has improved at a quicker pace than that of the rest of the industry, but also added that lending volumes remain below pre-recessionary levels as card members continued to manage their finances carefully and pay down outstanding debt. The firm said it remains "cautious" about the economic outlook. AXP is down more than -2%. Honeywell (HON) reported earnings slightly better than estimates and also increased its fiscal year 2010 forecast a bit. On the conference call executives were very positive about prospects for the firm's core aerospace services business.

In tech land, Amazon (AMZN) topped earnings estimates on the top and bottom line with revenues rising +29% y/y. The online retailer said sales at its North American unit jumped 45% y/y, while international segment sales grew 32%. AMZN said its new generation Kindle devices are the fastest selling Kindles of all time and the best selling products on and its website in the UK. However, the company issued Q4 operating earnings guidance that was below analyst expectations. AMZN was down nearly -$10 (-6%) in after hours trading yesterday but has since surged +$14 (+2.7% on the day) and is trading at fresh all time highs. Sandisk (SNDK) crushed consensus estimates in its quarterly numbers, although it also warned that margins would be tighter in Q4 as pricing has begun to soften. The stock gapped +4.7% higher at the open, collapsed to fill the gap, and is now settling in to a +1% gain.

Core Sector List: Overall reading: 11 sectors advancing, 9 sectors declining
Strongest Sectors: Semiconductors, Oil Services, Broker Dealers
Weakest Sectors: Utilities, Pharmaceuticals, Real Estate


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