28 Nov 2012 AMC

28 Nov 2012

Market Summary 

It's really a very very volatile day yesterday. Stopped out my position and went all the way up.

And one of the moving factor is both the Senator and Mr Obama mentioning positive things about the fiscal cliff...

Other than that, home sales were below expectation that drove the market down in the initial part of day..

Market Internals

Needless to say... it's definitely a bullish day... Although bears dominated in the first half of the day.. But the bulls turned the tide after lunch. 



Leaders and Laggards

Technical Updates

Having finding support on the 20MA, we might be looking at some nice uptrend from here...

Commentaries 

Stock Market Update
16:15 ET Dow +106.98 at 12985.11, Nasdaq +23.99 at 2991.78, S&P +10.99 at 1409.93 : [BRIEFING.COM] Equities opened lower, but staged a reversal when top lawmakers reiterated their desire to reach a budget agreement. After marking a session low near its 200-day moving average, the S&P 500 reversed 25 handles to session highs. The reversal was aided by comments from House Speaker Boehner who said he is optimistic a deal can be reached in order to avoid going over the fiscal cliff. In addition, the President held a press conference where he reiterated his belief in higher tax rates for top earners. He also stressed that if Congress fails to approve selective tax increases, going over the cliff will result in an across-the-board tax hike. The S&P 500 ended the session with a gain of 0.8%.  The Federal Reserve released its October Beige Book, which pointed to modest growth in seven Districts. Meanwhile, two Districts reported stronger growth while Boston, New York, and Philadelphia saw weak performance. The weakness in New York and Philadelphia was attributed to disruptions caused by Superstorm Sandy. Further, contacts in several regions expressed concerns over the uncertainty surrounding the ongoing budget debate.  Consumer credit was mixed as higher demand for home mortgage loans and auto loans increased consumer lending in some Districts. However, small business loan demand was generally described as weaker to only moderately higher.  Regarding hiring, "most districts reported modest gains while wage and price pressures remained subdued. "  Today's housing data pointed to a 0.3% decrease in October new home sales. The annualized rate of 368,000 fell short of expectations and caused homebuilder stocks to fall to their respective lows. Shares of major builders have enjoyed strong performance since the start of the year, but today's economic data contributed to industry-wide weakness. DR Horton (DHI 19.42, -0.16), PulteGroup (PHM 17.00, -0.11), and Lennar(LEN 38.38, -0.34) all lost between 0.6% and 0.9%.  Despite the weakness in homebuilders, consumer discretionary stocks outperformed after a handful of retailers reported strong earnings. American Eagle Outfitters (AEO 20.77, +1.38) surged 7.1% after beating on top and bottom lines. In addition, the company issued in-line fourth quarter earnings guidance.  PVH (PVH 116.46, +7.17) rose by 6.6% after its third quarter earnings of $2.34 beat the Capital IQ consensus estimate by $0.05. Despite the earnings beat, the company guided fourth quarter earnings below consensus and suggested revenue is expected to come in above analyst expectations. Regarding full-year earnings and revenue, the company expects both figures to be below current expectations.  Express (EXPR 14.15, +1.16) spiked 8.9% following its bottom line beat. In addition, the apparel retailer reported in-line revenue and issued upside fourth quarter earnings guidance.  Movado Group (MOV 35.50, +3.27) soared 10.2% after beating on earnings and revenue. The luxury distributor also raised its full-year earnings guidance in-line with the Capital IQ consensus. Lastly, the company declared a special dividend of $0.75.  Also of note, Green Mountain Coffee Roasters (GMCR 36.86, +7.91) surged 27.3% after reporting strong earnings. During the fourth quarter, the company earned $0.64, which was $0.16 ahead of the Capital IQ consensus estimate. Additionally, the beverage company beat on revenue and issued first quarter and full-year earnings and revenue guidance above consensus.  Elsewhere, Costco Wholesale (COST 102.58, +6.07) gained 6.3% after reporting a 6.0% increase in November comparable store sales. In addition, the wholesaler declared a special cash dividend of $7.00.  Solar stocks saw broad strength after JA Solar (JASO 0.70, +0.05) and Yingli Green Energy (YGE 1.62, +0.19) reported earnings. JA Solar rose by 7.7% after reporting mixed results. During the third quarter, the company recorded a loss of $0.30, which was $0.11 worse than the Capital IQ consensus estimate. However, JASO's revenue of $260.90 million exceeded expectations. Meanwhile, Yingli Green Energy spiked 13.3% after beating on earnings and reporting revenue below consensus. In addition, the company reaffirmed its full-year 2012 shipment guidance. Major solar names all outperformed and the Guggenheim Solar ETF (TAN 14.04, +0.68) rose by 5.1%.  The weekly MBA Mortgage Index reflected a 0.9% decrease in mortgage applications. Today's reading follows the prior week's decrease of 2.2%.  Tomorrow, weekly initial and continuing claims will be reported at 8:30 ET. In addition, the second estimate of third quarter GDP and the GDP deflator will also be announced at 8:30 ET. Lastly, October pending home sales will hit the wires at 10:00 ET.  The U.S. Treasury will auction off $29 billion in 7-yr notes. ..NYSE Adv/Dec 2070/929. ..NASDAQ Adv/Dec 1505/946.

After Hours

18:06 ET BLOX +17.6%, SMTC +8.1%, LZB -13.4%, ARO -7.2% following earnings/guidance :

Equities opened lower, but staged a reversal when top lawmakers reiterated their desire to reach a budget agreement. After marking a session low near its 200-day moving average, the S&P 500 reversed 25 handles to session highs. The reversal was aided by comments from House Speaker Boehner who said he is optimistic a deal can be reached in order to avoid going over the fiscal cliff. In addition, the President held a press conference where he reiterated his belief in higher tax rates for top earners. He also stressed that if Congress fails to approve selective tax increases, going over the cliff will result in an across-the-board tax hike. The S&P 500 ended the session with a gain of 0.8%.

Today after the close the following companies are scheduled to report earnings: ARO, CWTR, GMAN, GES, BLOX, LZB, NWY, PLL, RUE, SMTC, TIVO, WDAY

Futures are lower after hours: S&P 500 futures are -2.21 from fair value of 1408.11 and Nasdaq100 futures are -2.71 from fair value of 2664.46.

Tomorrow morning before the open two economic report is scheduled to be released: 1) Initial Claims (Consensus 395k) and Continuing Claims (Consensus 3325k), 2) GDP - Second Estimate (Consensus 2.8%) and GDP Deflator - Second Estimate (Consensus 2.8%).

Tomorrow before the open the following companies are scheduled to report earnings: BKS, BECN, CBRL, FRO, GBDC, ISLE, KR, LQDT, LTXC, NJR, SFL, TIF

Commodities

Treasuries

There are not much movements for the treasures and commodities.. Oil Inventories were under production by 300,000 barrels. We can be looking at some bounce from Oil for the next few days.

As for the equity market, we will be likely to be sideways and volatile for quite a while until the congress manage to come up with something feasible for all of us.

Market Call:FLAT to downside

Date: 29 Nov 2012