3 Oct 2012 AMC

3 Oct 2012

Market Summary 

Bingo, Got it right...as expected from a few days before the non farm payrolls. To make things a little more exciting, FOMC meeting minutes, ECB press conference and Japan's rate announcement is today... This week is definitely a very heavy data week. With Ben Bernanke opening the week with his speech.. that leads to the NFP. This pattern has been repeating... Ben Bernanke likes to speak after or before non farm payroll. 

However, since the ADP report and the ISM report came out dovish, we're likely to expect the non farm payrolls to dovish as well. With the UK, and the ECB having their conferences, I reckon they will be justifying their bond purchase program. Let's see what they are going to talk about today.. 

Moving the Market

Weekly MBA Mortgage Index: +16.6% actual. +2.8% previous.

September ADP National Employment Change: +162k actual versus +133k expected.

September ISM Services: 55.1 actual versus 53.0 expected.

Market Internals

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Judging by the internals... the up day is not exactly up... just flat... dead flat before major data... Volumes is just 650million shares traded in the NYSE.

Leaders and Laggards

Surprisingly... the telco are doing very well... leading the market yesterday... Likely to be influenced the released of Iphone 5. It has been said that the released of Iphone 5 is likely to increase the GDP by 1-2%. That's how much the biggest company in the world can do.

Nonetheless.. just a little trivial, Asus came out with a new Padfone! It's awesome and man... it's mind-blowing... it's even better Samsung Galaxy Note... Go check it out guys!

Technical Updates

What a volatile week... all caused by the major reports coming out this week. We should have a clearer direction after this week =D

Commentaries 

Stock Market Update 16:20 ET Dow +12.25 at 13499.86, Nasdaq +15.19 at 3135.23, S&P +5.24 at 1450.99 : [BRIEFING.COM] Equities got off to a slow start as the major averages showed indecision in the early going. After chopping around the flat line during the first hour of trade, the key indices reached their session highs at the midway point. Unable to hold those levels, stocks returned to the middle of the day's range before buyers re-emerged in the final hour. As a result, the S&P 500 added 0.4%. The consumer discretionary sector led the way as a handful of names outperformed.Family Dollar (FDO 68.56, +2.56) gained 3.9% after reporting in-line earnings and revenues. The management also issued mixed guidance as it sees weaker first quarter results and full-year earnings which are expected to be in-line with estimates. Online video rental service Netflix (NFLX 62.58, +6.12) jumped 10.8% after Citigroup pointed to a survey which showed an improvement in customer satisfaction. Elsewhere, DineEquity (DIN 58.40, +1.87) rose by 3.3% after Janney Montgomery Scott upgraded the shares of the restaurant operator from ‘neutral' to ‘buy.' Homebuilder stocks showed broad strength as the SPDR S&P Homebuilders ETF(XHB 25.38, +0.55) settled higher by 2.2%. Within the group, Standard Pacific (SPF 7.17, +0.60) was the top performer as shares of the homebuilder spiked 9.1%. The Dow Jones Transportation Average added 1.2% as the vast majority of its components displayed strength. Railroads, CSX (CSX 21.18, +0.48) and Norfolk Southern (NSC 65.60, +0.58) advanced 2.3% and 0.9% respectively after Lazard upgraded the two stocks from ‘underperform' to ‘market perform.' Airline stocks were broadly higher after a handful of carriers reported positive monthly metrics. In addition, significant weakness in crude oil may have contributed to airline strength. United Continental (UAL 21.14, +1.20) jumped 6.0%, while Delta Airlines(DAL 10.16, +0.39) and Southwest Airlines (LUV 9.14, +0.16) gained 4.0% and 1.8%, respectively. The financial sector outperformed the broader market, and the SPDR Financial Select Sector ETF (XLF 15.83, +0.14) settled higher by 0.9%. Bank of America (BAC 9.11, +0.18), Citigroup (C 34.06, +0.80), and Wells Fargo (WFC 35.44, +0.62) were the top performing majors as they registered gains between 1.8% and 2.4%. Elsewhere, Ocwen Financial (OCN 34.88, +5.92) spiked 20.4% after the company announced the acquisition of Homeward Residential from WL Ross & Company for $588 million in cash and $162 million in convertible preferred stock. MetroPCS (PCS 12.24, -1.33) fell 9.8% after the company confirmed its merger with T-Mobile USA. In addition, PCS announced the plans for a 1-for-2 reverse stock split. Prior to the reverse split, the company will make a cash payment of $1.5 billion—or $4.09 per share—to its shareholders. Sarepta Therapeutics (SRPT 44.93, +29.94) soared 199.7% after announcing its eteplirsen met the primary endpoints of a trial while achieving significant clinical benefit on a 6-minute walk test. The positive results came after 48 weeks of treatment in phase IIb study focused on patients with duchenne muscular dystrophy. Crude oil extended yesterday's losses despite inventory data that showed a draw of 0.482 million barrels when a build of 1.5 million was anticipated. Although there wasn't any one item to point to for the weakness, contributing factors included a stronger dollar, reports about the highest crude output levels since December of 1996, and weak economic reports out of Europe and China which signaled demand concerns. The energy component fell off its session high of $90.67 per barrel, and brushed a session low of $87.96 moments before it settled with a 4.0% loss at $88.20. The September ISM Non-manufacturing Index was reported at 55.1, which was above the 53.0 Briefing.com consensus, and up from August's 53.7 reading. According to today's ADP National Employment Report, employment in the nonfarm private business sector rose by 162K in September. This was above the 133K increase expected by Briefing.com consensus. In addition, the prior month's increase was revised down by 17k, to reflect an addition of 156k jobs. In tomorrow's economic releases, Challenger Job Cuts will be reported at 7:30 ET. Initial and continuing claims will hit the wires at 8:30 ET, while factory orders will be released at 10:00 ET. In addition, the Federal Reserve will release the minutes from its September 12 Federal Open Market Committee meeting. Also of note, retailers will release their monthly comparable store sales reports. Overseas, the Bank of England and the European Central Bank will hold policy meetings. ..NYSE Adv/Dec 1499/1512. ..NASDAQ Adv/Dec 1131/1315. After Hours 16:50 ET MAR +2.6%, NUVA -23.1% following earnings/guidance : Equities got off to a slow start as the major averages showed indecision in the early going. After chopping around the flat line during the first hour of trade, the key indices reached their session highs at the midway point. Unable to hold those levels, stocks returned to the middle of the day's range before buyers re-emerged in the final hour. As a result, the S&P 500 added 0.4%. Today after the close the following companies reported earnings: MAR Futures are mixed after hours: S&P 500 futures are +0.50 from fair value of 1444.9 and Nasdaq100 futures are -1.53 from fair value of 2812.28. Tomorrow morning before the open two economic reports are scheduled to be released: 1) Challenger Job Cuts, and 2) Initial Claims (Consensus 365k) and Continuing Claims (Consensus 3273k). Tomorrow before the open the following companies are scheduled to report earnings: ISCA

Commodities

Crude oil finally drops below $90 per barrel. And Nat Gas managed to chunk up quite a bit of gains since yesterday! Now coffee made a retracement of 1.4%.. Man coffee is really volatile..

Treasuries

Not much movement in the treasuries...



Major reports.... ECB press conference, MPC rate statement, FOMC minutes, and JPY monetary policy statement...

I think this is definitely a coordinated movement by the central banks... Gonna stay out of the market today...

Market Call: ABSTAIN

Date: 4 Oct 2012