15 Nov 2012 AMC

15 Nov 2012

Market Summary 

I was almost right yesterday..  Just that the unemployment claims came a little unexpected, with Sandy driving up the unemployment claims. The volume at the initial part of the day was rather volatile, however, perhaps the market has found some support and ready for a dead cat bounce... And I'm going to go real short on the market...

With the CNBC screaming to everyone about the fiscal cliff, it has been adding a lot of noise in the market. Investors are pulling their money of the capital market in response to the possible coming capital gain tax increase. The financials firms have been planning with their clients on what to do and how to structure their portfolio with the new regulations set out.


The good thing about the fiscal cliff is that the Congress is finally pulling their act together. And Obama seems to be delivering what he promised during the election. He met the union leaders and business leaders of large MNCs to listen to good ideas and opinion. However, Obama is very determined not to extend the bush tax cut for individuals earning more than $250k a year.

As for Israel invasion on Gaza, they are already ready for their ground troops to invade the Gaza Strip. I do not want to comment who's right or wrong, we do not have the correct information to do so. War is definitely not a good thing for the citizens. God bless all the citizens involved the countries' dispute..

CPI showed an increase of 0.2% compared to a expectation of 0.1%.
Unemployment claims came in higher than expected of 439K, above the expectation of 372K
The Empire State Manufacturing Index came in -5.2, better than expected value of -7.2
The Philly Fed came in worse than expected. A whopping -10.7 compared to a expected 1.1.

Market Internals

Yesterday appeared to be a more bearish day with the DVOL and Decliners outpacing their bullish counterpart.With the unemployment claims and philly Fed pointing in a bearish economy, there's isn't much things to be bullish about.

Leaders and Laggards

The largest gainers of the day is the Financials, since they are the most sensitive to the regulation change. Since Obama is going to have a meeting with the Congress today. We'll know the result on Monday. And that will definitely move the market on Monday.


Technical Updates

The Market seems to have it's bearish engine slowed down a little. But little has been shown that it has found a support.


The Tech has been leading the fall for the past 1 month. And Apple, has been dragging NASDAQ down together with it.


Since all the indices are at a technically bearish market, we will be looking at more bearishness in the market.

Commentaries 

Stock Market Update 16:20 ET Dow -28.57 at 12542.38, Nasdaq -9.87 at 2836.94, S&P -2.17 at 1353.32 :[BRIEFING.COM] Equities showed indecision in the early going as trade hovered around the flat line for the first 90 minutes before the S&P 500 slid to a session low near 1350. The level provided some support for the benchmark index which managed to cross into positive territory before sellers retook control and drove it back down to session lows. However, the average received a considerable bid in the final minutes of the session and ended with a loss of 0.2%.  Financial stocks felt the brunt of yesterday's sell-off. As the nation's leaders discuss ways to avoid falling off the fiscal cliff, bank stocks will be especially sensitive to hints of a possible agreement. Today, major financials saw gains. Bank of America (BAC 9.09, +0.10), Citigroup (C 35.21, +0.19), and Morgan Stanley (MS 16.26, +0.17) advanced between 0.5% and 1.1%.  Looking at technology bellwethers, Apple (AAPL 525.62, -11.26) slid 2.1% to extend its recent slide. Since its September highs, the stock has lost over 25% in value as it searches for its next level of support. Meanwhile, Intel (INTC 20.03, +0.07) advanced 0.4% to snap its nine-day losing streak. The stock has lost nearly 10% since the start of November.  Networking companies continued seeing strong earnings. Yesterday, Cisco Systems(CSCO 17.94, +0.28) rallied after its quarterly report. Today, NetApp (NTAP 30.20, +3.07) surged 11.4% after beating on the bottom line. The networking company exceeded earnings expectations by $0.03 and reported in-line revenue. Following the report, Raymond James upgraded shares of NetApp to ‘outperform' from ‘market perform.'  In other earnings news, Wal-Mart (WMT 68.72, -2.59) reported third quarter earnings of $1.08 on $113.93 billion in revenue. The retail giant's bottom line beat the Capital IQ consensus estimate by $0.01, while the revenue missed expectations. The company's guidance was mostly in-line as it expects fourth quarter earnings between $1.53 and $1.58. Wal-Mart lost 3.6% in response to this morning's results while peer, Target (TGT 62.44, +1.06), gained 1.7% after its in-line quarter.  Stocks in the materials space traded largely in-line with the broader market. However, weakness among steel producers weighed on the sector. AK Steel (AKS 3.63, -0.39) fell 9.7% after the company announced the pricing of $500 million in senior notes set to mature in 2018 and 2019. In addition, AK Steel priced 22 million shares of common stock at a public offering price of $4.00 per share. Looking at other steelmakers, Steel Dynamics (STLD 12.29, -0.42) and Reliance Steel (RS 53.71, -0.79) settled lower by 3.3% and 1.5%, respectively.  The Dow Jones Transportation Average traded in-line with the remaining industrials. The bellwether complex shed 0.2% as 12 out of the 20 transportation stocks saw losses. This morning, United Continental (UAL 19.51, -0.47) experienced technical difficulties which resulted in some flight delays. United lost 2.4%, while rivals Alaska Air (ALK 40.88, +0.36), JetBlue Airways (JBLU 5.03, +0.05), and Southwest Airlines (LUV 8.84, +0.08) all gained between 0.9% and 1.1%. Airline stocks displayed relative strength after yesterday's sell-off weighed on the group and caused Delta and JetBlue to lose near 6.0% each.  A number of economic data points were reported today. Most notably, the Philadelphia Fed Survey slipped to -10.7 for November. This follows October's reading of -1.9 while economists polled by Briefing.com had expected that the Survey would improve to a reading of 0.0.  The latest weekly initial jobless claims count totaled 439,000, which was higher than the 388,000 that had been expected by the Briefing.com consensus. The tally was ahead of the revised prior week count of 361,000. As for continuing claims, they rose to 3.334 million from 3.163 million.  October consumer prices increased by 0.1%, which was in-line with the Briefing.com consensus forecast of a 0.1% increase. Today's reading follows prior month's 0.6% increase. In addition, core prices rose by 0.2% which was slightly hotter than the generally expected increase of 0.1%.  Separately, the Empire Manufacturing Survey for November registered a reading of -5.2, which was up from the prior month's reading of -6.2. Economists polled by Briefing.com had expected that the Survey would slip to -8.5.  Tomorrow, September net long-term TIC flows will be reported at 9:00 ET. In addition, October industrial production and capacity utilization will both be announced at 9:15 ET. Also note that November options are set to expire tomorrow. ..NYSE Adv/Dec 998/2092. ..NASDAQ Adv/Dec 951/1507.

After Hours

18:18 ET ARUN +5.3%, HLSS +3.6%, GPS +3.4%, SHLD -7.3%, SINA -6.6% following earnings/guidance :

Equities showed indecision in the early going as trade hovered around the flat line for the first 90 minutes before the S&P 500 slid to a session low near 1350. The level provided some support for the benchmark index which managed to cross into positive territory before sellers retook control and drove it back down to session lows. However, the average received a considerable bid in the final minutes of the session and ended with a loss of 0.2%.

Today after the close the following companies are scheduled to report earnings: VNET, AMAT, ARUN, ATW, ADSK, COSI, DELL, DOLE, GPS, HAYN, INTU, MRVL, MATW, MTSC, SHLD, SINA, WTSLA, WGL

Futures are higher after hours: S&P 500 futures are +0.33 from fair value of 1350.57 and Nasdaq100 futures are +0.52 from fair value of 2522.73.

Tomorrow morning before the open three economic reports are scheduled to be released: 1) Net Long-Term TIC Flows, 2) Industrial Production (Consensus 0.1%), and 3) Capacity Utilization (Consensus 78.3%).

Tomorrow before the open the following companies are scheduled to report earnings: CMRG, CYBX, FL, HIBB, SJM, SIRO

Commodities

Treasuries

Treasuries have not been moving as investors are not sure of where to put their money. But one thing is for sure. Money is flowing out of the capital market.

Not much economic report coming out on Friday except Obama meeting the Congress. We can expect some volatility to come on Monday.

Market Call:FLAT to DOWNSIDE

Date: 16 Nov 2012