Market Comment: April 25

Good morning,

Markets are heading higher this morning following yesterday’s after-hours earnings release from Apple, which is up over 9% in pre-market trading.  Traders will be keeping their eyes peeled on today’s FOMC meeting at 10:30(MT); any mention of further quantitative easing will spike risk appetite and boost the Canadian dollar.

Apple Q2 earnings beat estimates by 22% driven by higher demand for iPhones in China.  The company was also able to add over $12 billion in cash to its war chest, increasing its cash hoard to $110 billion.  As a result of the positive earnings, Apple has helped push NASDAQ futures up over 2%.

The Canadian dollar has risen 60 basis points since Apple released its earnings yesterday after the market close, and is trying to break out of its 3-month trading range; the FOMC statement and projections could continue to add risk today.

GOP frontrunner Mitt Romney is closing in on securing the Republican nomination after sweeping 5 states last night.  Romney swept primaries in Connecticut, Rhode Island, Delaware, Pennsylvania and New York shortly after former candidate Rick Santorum conceded the nomination.

March US durable goods orders posted a big miss this morning, coming to print below even the lowest estimate.  Orders fell 4.2% – the most since January 2009, well below the expected -1.5% and previous release of 1.9%.  Orders were led lower by airplanes and capital equipment while inventories hit another record high; although manufacturing has been gaining, new production is getting put on shelves and not going out the door.

North American equity futures are sitting up 0.4%, excluding the NASDAQ, which is being led much higher thanks to Apple.  Crude oil continues to gain, rising 0.3% to $103.80/bbl.  The Canadian dollar has not only gained against the USD, but is trading 50 basis points higher against the Euro as well.