24 Oct 2012 AMC
Market Summary
It has really been a really busy week for me. Luckily Hurricane Sandy bought me some time to complete my market analysis.
Just some info. The stock market will be officially closed on Monday and Tuesday. Wednesday will depends on weather condition. You might wanna check out what happened during Hurricane Rita and Katrina. This might be some interesting money making opportunity. =D
Back to my Friday market analysis.
It was really a volatile day on last Friday. At the start of the day, it was a clear sell down then reverses during lunch time. I reckon traders are closing out their trades before the weekend. Perhaps... They already know that Sandy is coming? Maybe... From what I see, Friday wasn't bullish at all.
Market Internals
Even the internals are showing bearish sign. But yet market closed flat to the upside... Oh well... I'm on shorts anyway =D
Leaders and Laggards
The majority of the sectors ended up flat on Friday except the Financials, posted a -0.59% loss.
Technical Updates
On the DOW and SPX, it really looked like it's going to complete a triple top kind of pattern and the NASDAQ is going on a downtrend. Either way, it's aint looking good for the bulls... And to make things worse... Hurricane Sandy is here to wreck some trouble!
Commentaries
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Commodities
The commodities chart was taking on 29 Oct, 12pm SG time. The commodities chart is going to look flat as the major market in US is not going to open till Wednesday...
Treasuries
Whoa... that's quite a bit of rally in the Treasuries..... I'm definitely not bullish on the near term after presidential election man...
Weekly Analysis
Week 38
With the earnings season halfway through, and came Hurricane Sandy. Things aren't looking exactly good. However there's some silver-lining to this bearishness.
On the technical updates, it appears that all 3 indices are making retracements possibly breaking into the higher highs. However, it also very much depends on the macroeconomic condition. If the fiscal cliff is not solved. We're going to see another big recession in the already weak market in US soon.
Technical Updates
Commentaries
Weekly Wrap
Next Week In View
The market was set to prepare for the arrival of the jobs report. And with the election nearing, i believe the job report will be skewed towards the 'good' side to promote Obama's efficiency. However, Hurricane Sandy will be another major uncertainty in the already uncertain market.
Week 38
With the earnings season halfway through, and came Hurricane Sandy. Things aren't looking exactly good. However there's some silver-lining to this bearishness.
On the technical updates, it appears that all 3 indices are making retracements possibly breaking into the higher highs. However, it also very much depends on the macroeconomic condition. If the fiscal cliff is not solved. We're going to see another big recession in the already weak market in US soon.
Technical Updates
Commentaries
Weekly Wrap
Dow +3.53 at 13107.26, Nasdaq +1.83 at 2987.95, S&P -1.03 at 1411.93
Equities showed indecision in the early going after Apple (AAPL 604.00, -5.54) andAmazon (AMZN 238.24, +15.32) delivered disappointing results, while the first reading of the third quarter GDP was reported ahead of expectations. The S&P 500 followed the early choppiness with a late-morning slide into the red. After reaching session lows near 1,403, the index reversed and headed for fresh highs. However, the benchmark average could not hold its best level of the day and settled lower by 0.1%.
The advance GDP reading for the third quarter suggested the economy grew at a 2.0% rate in the second quarter when an increase of 1.9% had been expected among economists polled by Briefing.com. The slight beat comes as government spending contributed 0.7% to the number. The third quarter chain deflator reportedly increased by 2.8%, which was ahead of the 2.0% increase that had been broadly anticipated.
Technology stocks were in the spotlight as the market reacted to earnings from major sector components. Apple shed 0.9% after reporting mixed results. During the fourth quarter, the tech giant earned $8.67 which was $0.08 worse than the Capital IQ consensus estimate. Meanwhile, the company's revenue of $35.97 billion was in-line with expectations. The gross margin guidance, however, was a point of concern as the company expects the number to be near 36.0% in the first quarter, versus the 40.0% expected by analysts. Also note that the company lowered its earnings and revenue guidance below consensus.
Amazon gained 6.9% after reporting its earnings. The online retailer lost $0.23 per share. However, the number may not be comparable to the Capital IQ consensus estimate which forecast a loss of $0.10. The company's revenue of $13.81 billion was largely in-line with expectations, but management issued downside fourth quarter guidance.
Comcast (CMCSA 37.56, +1.20) advanced 3.3% after beating on earnings and revenues. The management commented on the reporting period by saying, "The third quarter continues our momentum. Cable's results show real strength in every part of the business, producing sustainable and profitable growth while we expand our product offerings, deliver more innovation and continue to transform the customer experience."
NetSuite (N 65.40, +8.49) surged 14.9% after the maker of ERP software reported earnings of $0.08 on $79.8 million in revenue. Both numbers came in ahead of the Capital IQ consensus estimates.
Coal stocks were broadly higher after Arch Coal (ACI 8.09, +0.78) and Cloud Peak Energy (CLD 21.20, +2.21) beat on earnings and revenues. During the third quarter, Arch Coal earned $0.20, which was $0.35 ahead of the Capital IQ consensus estimate. In addition, the company's revenue of $1.09 billion was also ahead of expectations. ACI settled higher by 10.7% in reaction to earnings.
Meanwhile, Cloud Peak Energy reported earnings of $0.80, which was $0.32 ahead of the Capital IQ consensus estimate. The company's revenue of $425.9 million was well ahead of the $393.57 million expected by the Capital IQ consensus. Cloud Peak stock surged 11.6%.
Arch Coal and Cloud Peak posted notable gains, and other coal stocks moved higher as well. Alpha Natural Resources (ANR 8.71, +0.28) and James River Coal (JRCC 5.09, +0.29) saw respective gains of 3.3% and 6.0%.
The Dow Jones Transportation Average outperformed the broader market, and added 0.3%. Expeditors International of Washington (EXPD 36.43, +0.65) was the top performer among transportation stocks. The delivery service provider advanced 1.8% after Goldman upgraded the stock to ‘conviction buy' from ‘sell' with a $42 price target.
Railroads also outperformed. Kansas City Southern (KSU 81.25, +1.22) rose by 1.5%, while Norfolk Southern (NSC 62.77, +0.20) and Union Pacific (UNP 123.61, +1.97) gained 0.3% and 1.6%, respectively.
Meanwhile, Overseas Shipholding Group (OSG 1.23, -0.09) was the biggest laggard. The oil tanker shipper dipped 6.8% to continue its recent weakness.
Homebuilder stocks saw general weakness and the SPDR S&P Homebuilders ETF(XHB 25.52, -0.10) settled lower by 0.4%. Among individual builders, Standard Pacific(SPF 6.90, -0.85) slid 11.0% after announcing disappointing quarterly results. During the third quarter, Standard Pacific earned $0.05, which was $0.03 worse than the Capital IQ consensus estimates. The company's revenue of $318.5 million also fell short of the $385.02 million expected by analysts. Peers DR Horton (DHI 20.76, -0.35), Lennar (LEN 37.02, -0.49), and Ryland Group (RYL 33.76, -0.30) all lost between 0.9% and 1.7% in sympathy.
The University of Michigan's final Consumer Sentiment Survey for October rose to 82.6 from the 83.1 that was posted in the preliminary Survey. Many had expected the reading to go unrevised.
Weekly Recap: Stocks Stumble Amid Disappointing Earnings
On Monday, stocks got off to a quiet start as mixed quarterly reports continued to pour in. Indecision was apparent in the early going as the major averages traded near their respective unchanged levels. As the day progressed, the S&P 500 and Dow headed lower. However, the final hour brought out bargain-hunters who lifted the major averages near their respective session highs. As a result, the S&P 500 ended unchanged. Meanwhile, the Nasdaq outperformed and settled higher by 0.4%. Caterpillar (CAT 84.25, +0.72) advanced 1.5% after reporting mixed earnings.
Tuesday's session started with an opening sell-off as disappointing earnings combined with Moody's downgrade of five Spanish regions fueled the bearish sentiment. Stocks reached session lows during the first hour before attempting to rebound. The tech-heavy Nasdaq showed intraday resilience, but the attempt to reclaim its early losses was cut short when late-day selling sent the index back near the middle of its range. As a result the Nasdaq ended lower by 0.9% while S&P 500 lost 1.4%. Stocks in the materials space saw the biggest weakness. Among steel producers, AK Steel (AKS 5.19, -0.02) fell 5.8% despite beating on earnings and reporting revenues in-line with the Capital IQ consensus.
On Wednesday, stocks began the session on an upbeat note, but the bullish sentiment was dispelled in the opening minutes. The S&P 500 and Nasdaq marked their respective highs minutes into the trading day, before sliding back towards the unchanged level. The Dow, however, held its gains a bit longer before recoupling with the other two indices. This afternoon's statement from the Federal Open Market Committee was met with mostly muted reaction, and the S&P 500 finished lower by 0.3%. Buffalo Wild Wings (BWLD 75.87, +1.05) fell 10.5% after missing on both earnings and revenues.
Thursday's session began with a bullish bias which failed to hold past the opening minutes. After opening near session highs, the S&P 500 spent the first hour in a steady decline towards the flat line. Once that level was reached, the index spent the remainder of the day trapped in a narrow range before ending with a slim gain of 0.3%. Casino stocks saw broad strength after Wynn Resorts (WYNN 118.97, -1.46) delivered strong third quarter results and surged 7.3%.
Next Week In View
The market was set to prepare for the arrival of the jobs report. And with the election nearing, i believe the job report will be skewed towards the 'good' side to promote Obama's efficiency. However, Hurricane Sandy will be another major uncertainty in the already uncertain market.
Market Call(Week 43):Flat to upside
Market Call(31 Oct):Flat to downside
Market Call(31 Oct):Flat to downside
Date: 31 Oct(if market opens)
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