13 September 2012
Market Summary
As expected... Big Ben launches QE 3 yesterday during the Fed Statement... The market will continue to rally in Fed's name... but without any economical support. For the months to come, the market should be hitting new highs... prolly just shy of the all time high of pre-subprime..
Here's some extracts from marketwatch.
The New York Fed said it will start buying agency mortgage-backed securities on Friday, at a rate that is expected to total $23 billion over the remainder of September. It will then purchase securities at a clip of $40 billion each month. The New York Fed said it will concentrate its purchases in newly-issued agency MBS in the to-be-announced market, although it may purchase other agency MBS if market conditions warrant.
I will be coming with another post on QE 3 tomorrow... Gonna have a Wealth Academy Trader class to attend today..
Market Internals
It's a clear bull day... thanks to Uncle Ben =D
Leaders and laggards
Financials was the strongest leader yesterday... Of coz... it's QE 3
Technical Updates
A clear breakout from resistance for all 3 indices... Gotta project some upside soon...
Commentaries
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| Stock Market Update |
16:20 ET Dow +206.51 at 13545.04, Nasdaq +41.52 at 3155.83, S&P +23.43 at 1459.99 : [BRIEFING.COM] Today's session was highlighted by a risk rally sparked by the Federal Reserve's decision to increase policy accommodations by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month. The program is open-ended by design, which allows the Federal Reserve to terminate it once the employment picture shows substantial improvement. The S&P 500 was the best performing index and it settled higher by 1.6%.
In addition, the Federal Reserve has released its latest economic projections. Among items of note, the 2012 GDP growth expectation has been lowered, while the outlook for 2013 and 2014 was raised. This year's GDP is now expected to increase by a rate between 1.7% to 2.0%, which is lower than the previous forecast of growth between 1.9% and 2.4%. Looking ahead, the 2013 GDP growth is now expected to be between 2.5% and 3.0% while the previous forecast suggested growth expectations between 2.2% and 2.8%. The Federal Reserve extended its forward guidance, suggesting rates will likely remain at exceptionally low levels through at least mid-2015. Lastly, ‘Operation Twist' will conclude at the end of 2012.
Financial stocks made broad advances following the news. Bank of America (BAC 9.40, +0.43) led all majors with an advance of 4.8%. Meanwhile, Citigroup (C 34.45, +1.40),JPMorgan Chase (JPM 41.40, +1.48), Wells Fargo (WFC 35.55, +1.22), andAmerican Express (AXP 59.05, +1.78) all posted gains between 3.0% and 4.2%. TheSPDR Financial Select Sector ETF (XLF 16.15, +0.41) advanced 2.6%.
The materials sector outperformed with a 2.5% gain. The group was paced by steelmakers as AK Steel (AKS 6.44, +0.36), Cliffs Natural Resources (CLF 43.18, +2.56), and Steel Dynamics (STLD 12.40, +0.60), all added between 5.0% and 6.3%. Paper and packaging stocks were lifted as well. Louisiana-Pacific (LPX 14.60, +0.37) and Neenah Paper (NP 30.11, +0.63) both gained near 2.5%. Among chemical producers, OM Group (OMG 20.15, +1.06) and LyondellBasell (LYB 51.92, +2.31) jumped 5.6% and 4.7%, respectively.
Coal stocks within the energy sector made notable advances. Alpha Natural Resources(ANR 8.23, +0.89) surged 12.1% while Arch Coal (ACI 7.39, +0.68) spiked 10.1%. Large energy names Halliburton (HAL 36.44, +0.71) and ConocoPhillips (COP 57.65, +1.11) both closed higher by 2.0%.
The 30-yr yield briefly crossed the 3.00% threshold and closed at 2.967%, its highest yield in four months. Maturities across the rest of the complex reversed their post-FOMC selling to finish the day with fractional gains. The 10-yr yield settled at 1.756% after running to almost 1.840% in reaction to the Federal Reserve launching another round of quantitative easing.
Overall producer prices rose by 1.7% in August, which is hotter than the 1.2% increase that had been widely forecasted. Core producer prices were up 0.2% which is in-line with the 0.2% Briefing.com consensus.
Separately, the latest weekly initial jobless claims count totaled 382,000, which is higher than the 369,000 that had been expected. The tally is above the revised prior week count of 367,000. As for continuing claims, they fell to about 3.283 million from 3.322 million.
The U.S. Treasury has released its August budget which showed a deficit of $191 billion. This was slightly better than the broadly expected deficit of $192 billion.
Tomorrow's economic calendar contains a full slate of releases. Retail sales, retail sales ex-auto, CPI, and core CPI will all be announced at 8:30 ET. Industrial production and capacity utilization will hit the wires at 9:15 ET, while the Michigan Sentiment and business inventories will be released at 9:55 ET and 10:00 ET, respectively. ..NYSE Adv/Dec 2406/647. ..NASDAQ Adv/Dec 1783/676. |
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After Hours
17:14 ET ALOG +10.6%, TSRA +4.4%, WERN -8.1% following earnings/guidance :
Today's session was highlighted by a risk rally sparked by the Federal Reserve's decision to increase policy accommodations by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month. The program is open-ended by design, which allows the Federal Reserve to terminate it once the employment picture shows substantial improvement. The S&P 500 was the best performing index and it settled higher by 1.6%.
Today after the close the following companies reported earnings: ALOG
Futures are lower after hours: S&P 500 futures are -2.52 from fair value of 1452.82 and Nasdaq100 futures are -2.09 from fair value of 2823.59.
Tomorrow morning before the open four economic reports are scheduled to be released: 1) Retail Sales (Consensus 0.7%) and Retail Sales ex-auto (Consensus 0.8%), 2) CPI (Consensus 0.6%) and Core CPI (Consensus 0.2%), 3) Industrial Production (Consensus -0.2%), and 4) Capacity Utilization (Consensus 79.2%).
Tomorrow before the open no companies are scheduled to report earnings.
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Commodities
Crude oil rallied like hell when FOMC statement came out... despite a oversupply of oil inventories on Wednesday... Btw... The dollar index got hammered.... that's probably the reason why...
Treasuries
Surprisingly.... No changes to the T-Bonds....
Nonetheless... The bullishness should carry forward till friday... prolly we might see some slight profit taking on monday...
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