NobleTrading Weekly Stock Market Letter, April 22, 2008

Tuesday, April 22, 2008

NobleTrading Weekly Stock Market Letter, April 22

The Week Ahead: A number of mixed earnings reports didn't stop the DOW from rising over 500 points despite oil prices reaching there highest levels ever. If the market has further to go it will have to digest many more earnings reports plus the existing home sales and oil and gas inventory reports on Wednesday, and the new home sales and durable goods numbers on Thursday. The consumer sentiment reading for April is due on Friday.

Stocks to Watch: Recent strong earnings in Caterpillar and Honeywell have bolstered expectations in Cummins Inc. (CMI) which reports on April 30. Revenue growth targets for Intuitive Surgical (ISRG) are still shy of expectations even though earnings were higher as the stock dropped 60 points. Carpet maker, Mohawk Industries (MHK) beat earnings estimates by a nickel as its stock pushes up towards its 200 day moving average.

Special Note: The recent market strength has been led by the energy sector climbing 7.68% followed by technology up 6.32%, and financials up 5.20%. The average yield on S&P 500 stocks has now reached 6.78% compared to the 10 year bond yield of 3.82% making stocks appear more attractive even though earnings may be in question for many companies. The Dow Industrials having held the January lows is now officially in a 3 month up trend exceeding the February high.

Commentary provided by Barry Ward, Registered Principal, NobleTrading.com, Inc.

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