Stock Preacher

A unit of US Bancorp and privately-held SolarCity has teamed up to wire homes and businesses in California, Oregon and Arizona, with no upfront costs, while taking advantage of government tax credits. The agreement, for which no value was disclosed, allows US Bancorp Community Development Corp., a unit of US Bancorp, to take advantage of tax breaks including a solar tax credit. In return, the bank pays for the purchase and installation of solar power by SolarCity, which markets and maintains the systems. Homeowners and businesses purchase the electricity generated from their roofs. “We are able to offer a home owner or a business owner a solar financing solution that costs them less than if they bought the same amount of electricity from the utility,” said Lyndon Rive, chief executive of SolarCity, from company headquarters in Foster City, Calif. Homeowners also may choose to pay the cost of the installation, which can run to US$20,000 and has a payback period for eight to 10 years, Rive said. Darren Van’t Hof, vice president of the US Bancorp unit said in a telephone interview from St. Louis that the two companies have created a tax equity fund which finances the solar lease plan. The joint fund reaps the benefits of the tax breaks, sharing the revenue stream between the bank and SolarCity, he said. The company takes care of maintenance for 15 years, after which a homeowner can renew the plan, upgrade, buy the system or have it removed, Rive said. Rive said the company already has a six-month backlog and the agreement, signed a few days ago, will allow it to whittle away that backlog and sell more systems.

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The Signal: a slight wiggle in a long down-ward line. But news that the revered Coppock Indicator* has just flashed a “buy” signal in a number of the world’s biggest stock markets was the talking point in equity markets all last week. As the global stock rally is into the forth month, the tech indicators are flashing a clearer signal, and savvy watchers are looking for clues as to what might happen next in the what keen and seasoned observers have noted the beginnings of the emerging long term Bull Market. The Coppock Indicator, a measure of long-term market sentiment and applicable to any stock index. It signals a buy signal when it turns upwards from a value of less than zero. Traditionally calculated every month, it began hinting at an upturn in May. Followers have are now seeing buy signals in markets ranging from New York to London to Tokyo. The widespread interest in the Indicator, named after its inventor is a sign of just how nervous watchers have become about predicting short-term moves. In normal times, analysts are happy to discuss their expectations for the next six months and become progressively vaguer after that. Currently it is the reverse. There is no doubt there will be a recovery, but analysts, Bulls and Perma-bears vary widely on when they think it will be, and can be very cautious in saying just how well underpinned they feel the recent market moves are. “Momentum investing can be very profitable and perhaps eight times out of 10, these indicators work pretty well. But they’re not foolproof and you can be disappointed,” said Albert Edwards of Société Générale. “If you haven’t got a strong fundamental view as I have, then maybe you should go with the Coppock.”

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The US economy contracted slightly less than initially estimated in the Q-1, while corporate profits rebounded, according to a government report on Friday that hinted the recession was moderating. Gross domestic product, which measures total goods and services output within US. borders, dropped at a 5.7 % annual rate, the Commerce Department said, less than the 6.1% estimated by the government last month. The economy contracted at a 6.3% pace in Q-4. While the drop in economic activity was still steep and slightly worse than market expectations for a 5.5% fall, recent data have indicated that the rate of the slowdown was easing and growth could resume by year-end. Output has declined for three straight quarters for the first time since 1974-1975. “The recession is easing. The second quarter is shaping up to be a smaller decline of about 3.0 to 3.5%. It should be the last of the negative quarters,” said Christopher Low, chief economist at FTN Financial in New York.

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Crude Oil rose to a six-month high above US$66 per barrel on Friday, marking its largest monthly percentage gain in more than a decade, after U.S., Japanese and Indian data suggested the economic downturn may be easing. Crude Oil prices jumped around 30 percent this month, the largest monthly rise since March 1999, buoyed by expectations of a global economic recovery later this year, which helped push stock markets higher. US Crude Oil for July delivery settled up US$1.23 at US$66.31, its highest settlement since November 4, after earlier hitting US$66.47, the highest intraday trade since November 5.London Brent crude settled up US$1.13 at US$65.52, its highest settle since November 4. The US$ hit a five-month low against a basket of other currencies. A weak US$ makes Crude Oil cheaper for holders of other currencies and tends to support prices

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The US$ hit a 5 month low against a basket of major currencies on Friday and the euro rose above US$1.41 for the first time this year as investors bought higher-yielding currencies and assets on hopes of a global economic recovery. Sterling approached US$1.62, almost an 8 month high, and capped its best month since 1985, while data showing the US economy shrank less than expected in the first quarter lifted global stocks and dulled the dollar’s safe-haven allure. Concern about the expanding amount of debt needed to fund a record US$1.8T US budget deficit added to dollar woes this week and put the benchmark 10-year Treasury yield en route to its biggest 2 month spike since 2004. Those worries amplified a report that South Korea’s National Pension Service intends to reduce exposure to US government bonds and equities in its 5 year portfolio. “There’s a visceral concern about the debasement of the US currency because the United States has a lot of debt to finance” and may have to print more money to do it, said Alan Ruskin, chief international strategist at RBS Greenwich Capital in Greenwich, Connecticut

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Gold may target a record $1,250 an ounce as a continuation head-and-shoulders pattern may be forming within a longer-term trend, Standard Bank Group Ltd. said, citing trading patterns. A break and close above $1,050.40 “provides warning that an important breakout” has occurred, Darran Grabham, the bank’s technical analyst, wrote in a note yesterday. A head-and- shoulders pattern is formed when a commodity makes three consecutive peaks, with the middle being the highest. It forms during a series of increases over time. “The positive implications are substantial, with the minimum objective situated at US$1,250,” Grabham wrote. “On the downside, gold weakness through $864 turns the outlook bearish, and the weaker trend could then continue towards US$802.”

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