26 Dec 2012 AMC

26 Dec 2012

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Briefing's Commentaries 

16:15 ET Dow -24.49 at 13114.59, Nasdaq -22.44 at 2990.16, S&P -6.83 at 1419.83 :[BRIEFING.COM] Stocks began the day on a positive note, but the early sentiment failed to hold. The key averages slipped to their respective lows during the first two hours of trade, and held there for the remainder of the session. As a result, the benchmark index finished lower by 0.5%. 

With only three trading days left in the year, and the budget deadline approaching, elevated volatility in financials can be expected. Today, the SPDR Financial Select Sector ETF (XLF 16.36, 0.00) ended flat, and the majors were mixed. Wells Fargo(WFC 34.33, -0.09) shed 0.3% while Citigroup (C 39.55, +0.17) added 0.4%. Also of note, Bank of America (BAC 11.54, +0.29) outperformed its peers and rose by 2.6%. 

Consumer stocks were among the worst performers. In the discretionary space, retailers saw general weakness and the SPDR S&P Retail ETF (XRT 61.09, -1.08) lost 1.7%. The softness followed a report from MasterCard Advisors SpendingPulse, which pointed to a 0.7% increase in holiday sales as compared to last year. The number was a disappointment as the general consensus expected sales to rise by as much as 4.0%. Instead, the modest uptick represented the slowest growth in four years. Among individual retailers and apparel producers, Coach (COH 54.13, -3.39), Gap (GPS 30.40, -0.97), Urban Outfitters (URBN 38.24, -1.06), and Macy's (M 37.13, -0.39) all lost between 1.0% and 6.0%. 

Consumer staples were broadly lower with only a handful of names able to resist the sector-wide pressure. Medifast (MED 25.50, -3.86) slumped 13.2% after Chief Financial Officer, Edward Powers, notified the company of his intent to resign. The resignation will become effective no later than January 4 and Mr. Powers will pursue other interests. 

On the upside, Inter Parfums (IPAR 19.75, +0.56) rose by 2.9% after the company signed an exclusive license agreement for Alfred Dunhill fragrances. The partnership is set to run for ten years, and Inter Parfums will take over production and distribution of the Alfred Dunhill collection. 

The materials sector was a notable outperformer. Earlier, China's new leadership said urban development will be a key portion of future economic reforms. The news was welcomed by the market, and a rise in anticipated demand for steel pushed major producers higher. Cliffs Natural Resources (CLF 36.05, +0.69) and United States Steel (X 24.26, +0.20) saw respective gains of 2.0% and 0.8%. 

The volatility index, or VIX, gained 8.1%, and the index settled at 19.30. Today's surge followed a steady climb observed over the course of the past week as investors sought downside protection in the event Washington lawmakers do not strike a budget deal in time. Note that VIX is now at levels not seen since late July. 

The October Case-Shiller 20-city Home Price Index rose by 4.3%, while a 3.9% increase had been expected by the Briefing.com consensus. This follows the prior month's increase of 3.0%. 

Tomorrow, weekly initial and continuing claims will be reported at 8:30 ET. In addition, November new home sales and December consumer confidence will both be reported at 10:00 ET. ..NYSE Adv/Dec 1053/1957. ..NASDAQ Adv/Dec 891/1569.

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Jason's Commentaries

Happy boxing day peeps! Totally did not trade on Xmas eve as I was busy having fun during xmas. And the market went down on Monday which formed a DFDM which i totally did not expect from the bullishness that was coming. I was thinking the Xmas Rally was gonna bring the market up... but sadly it didn't.. The silver lining in this is that the volume sucked.

On Tuesday note, it was flat day and I can hardly call this a down day. Volumes were at 475mil shared traded on NYSE and the internals were all showing it flat... nothing conclusive yesterday. Most institution are already on holiday and they have already priced in for the Xmas or waiting to enter their positions in Jan.

However, Timothy Geithner, the Treasury Secretary just realised a press conference that the US is going to hit the Debt ceiling by NYE. All the bs talk again. Guess the Congress will be forced to pass some legislation on the debt ceiling again, which means further devaluation in the US dollars. I guess the market will be sidelined, awaiting decisions from the Congress on this issue. Especially news on the fiscal cliff. Although many others are considering the Fiscal Cliff to be a non-event, I believe it will definitely gyrate the market in the short term before taking a firm direction.

27 Dec have some heavy data like the Consumer sentiments and the New home sales coming out. I presume the sales is gonna look bad due to the holiday mood in the States. While the consumer sentiments are likely to be flat. 

Market Call: DOWN

Date: 27 Dec 2012