23 August 2012 AMC

23 August 2012

Market Summary

I was under the impression that the market would have go out as the street's expectation of QE3 is almost fulfilled. However, it was ruin by the Unemployment claims yesterday 372K over expected 365K. Seems that the market is not very convinced about the minutes...

Market Internals

Volume were almost at the same level as the day of FOMC minutes... DVOL outpaced UVOL, DECN outpaced ADVN, however, New Highs outweight New Lows...

Not exactly a down day, possibly on a profit taking... 

Leaders and laggards

Materials, Energy, Utilities and financial led the fall yesterday... Industrial is also one of the half-screwed leader... Maybe we can expect some reversal going on next week....

Technical Updates

Seems that the broader market is taking a retracement huh? SPX held above 1400 while DOW held about 13000. I think that the Indices will make a short term correction before making a run past the previous high. Afterall, the expectation of QE3 and presidential election is high... and i rather not trade again tradition for the presidential election...

Commentaries

Stock Market Update 16:20 ET Dow -115.30 at 13062.57, Nasdaq -20.27 at 3053.4, S&P -11.41 at 1402.08 :[BRIEFING.COM] After opening slightly lower, equities spent the rest of the session in negative territory. July home sales were reported at an annualized rate of 372,000, which was higher than the 365,000 that had been expected. However, initial unemployment claims data before the open came in a little worse than expected, as the reading increased to 372,000 from the 368,000 observed in the prior week. In addition, continuing claims rose to about 3.317 million from 3.305 million. Homebuilder stocks seemed poised for their second day of gains as the group got an initial boost from the better-than-expected new home sales. However, after showing early strength, shares within the space succumbed to the pressure exerted by the broader market. As a result Standard Pacific (SPF 6.39, -0.11), MDC Holdings (MDC 33.24, -0.64), and Toll Brothers (TOL 32.63, -0.38) were all down between 1.0% and 2.0%. Healthcare stocks showed slightly slimmer losses than the broader market. The outperformance can be attributed to a handful of components which made significant advances. Luminex (LMNX 19.42, +1.01) was higher by 5.5% after UBS upgraded the stock from ‘neutral' to ‘buy.' Meanwhile, Rosetta Genomics (ROSG 6.36, +1.63) soared 34.5% after analysts at Aegis initiated coverage with a ‘buy' rating and a $16.00 price target. Stocks within the Dow Jones Transportation average were lower today with railroad stocks showing the most weakness. Norfolk Southern (NSC 73.58, -1.09) slipped 1.5% after the company's Vice President sold 7.4k shares. Meanwhile, Kansas City Southern(KSU 76.78, -1.40) and Union Pacific (UNP 123.79, -0.90) shed 1.8% and 0.7%, respectively. The materials sector was under pressure after Dahlman Rose & Co. issued a downgrade of steel producers. The investment bank believes that steel prices are near a cyclical peak, thus warranting a downgrade. The news pushed steelmakers sharply lower withUnited States Steel (X 21.19, -1.58), Steel Dynamics (STLD 12.33, -0.73), AM Castle & Co. (CAS 12.30, -0.73) all down between 5.5% and 7.0%. Guess? (GES 25.95, -7.59) slumped 22.6% after its earnings missed estimates and the company issued downside guidance. Today's selling has put an end to a month-long rally as shares of the apparel retailer are back near their July levels. Chinese search engine provider Baidu (BIDU 115.09, -7.71) slid 6.3% after Deutsche Bank downgraded the shares from ‘buy' to ‘hold.' The stock has been slumping all week and is now down nearly 15.0% since Monday. The company has recently been locked in a battle with Qihoo 360 Technology (QIHU 23.35, -1.23) after Qihoo stopped featuring Baidu as the main search provider in their browsers. Krispy Kreme Doughnuts (KKD 7.31, +0.36) advanced 5.2% after reporting mixed earnings. KKD beat on earnings but missed revenue expectations and issued downside guidance. The management said that net income fell due to a higher income tax rate. Company executives also discussed five-year expansion plans which call for the opening of 80 stores in southern and western India. The first store is expected to open by the end of this year. Rivals Dunkin Brands (DNKN 28.16, -0.55) and Starbucks (SBUX 47.90, -0.22) ended lower by 1.9% and 0.5%, respectively. Tomorrow's economic releases are limited to durable orders and durable orders ex-transportation at 8:30 AM ET. ..NYSE Adv/Dec 909/2080. ..NASDAQ Adv/Dec 800/1660.

After Hours

16:35 ET ARUN +15.0%, ADSK -21.6%, CRM -4.9% following earnings/guidance :

After opening slightly lower, equities spent the rest of the session in negative territory. 

Today after the close the following companies reported earnings: ARUN, ADSK, BEBE, MENT, MCRS, UEPS, RUE, CRM, SCVL, SLH

Futures are mixed after hours: S&P 500 futures are -0.16 from fair value of 1399.86 and Nasdaq100 futures are +0.52 from fair value of 2761.23.

Tomorrow morning before the open one economic reports is scheduled to be released: 1) Durable Orders (Consensus 2.5%) and Durable Orders ex- Transportation (Consensus 0.6%).

Tomorrow before the open look for the following companies to report: MSG, SOL

Commodities

Lean Hogs is making another fall of 0.82% again... Sugar fell a 1.76% as well.... while Wheat rose 1.23%. 

Treasuries 

Judging the way it is now, market is not exceptionally into the QE3 hopes, or likely, the players are letting the market to go into a retracement before pushing the market into the new high.

Market Call: 23 Aug

Date: DOWN

Accuracy: 9/18