17 Jan 2013 AMC

17 Jan 2013

Market Summary 

Market Internals

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Leaders and Laggards

Technical Updates

Briefing's Commentaries 

Stock Market Update 16:20 ET Dow +84.79 at 13596.02, Nasdaq +18.46 at 3136.00, S&P +8.31 at 1480.94 :[BRIEFING.COM] The major averages opened today's session on a strong note after weekly initial claims and housing starts were reported ahead of expectations. Meanwhile, a disappointing Philadelphia Fed Survey was not enough to cool optimism. Key indices spent the duration of the day in a steady upward climb, and the S&P 500 made its biggest advance in more than a week to end higher by 0.6%.  The market saw notable support from homebuilders after December housing starts data indicated the demand for fresh construction projects remains strong. Among individual builders, PulteGroup (PHM 20.37, +1.03) and Lennar (LEN 41.94, +1.42) saw respective gains of 5.3% and 3.5%. Meanwhile, the SPDR Homebuilders ETF (XHB 28.15, +0.51) settled higher by 1.9%.  While builder shares registered broad gains, Hovnanian Enterprises (HOV 5.95, -0.05) shed 0.8%, and was a notable laggard. In addition, the stock has seen heavy option activity with February $6.00 puts garnering interest.  The strength in homebuilders helped discretionary stocks outperform the remaining S&P 500 sectors. On the downside, financials lagged after Bank of America (BAC 11.28, -0.50) and Citigroup (C 41.24, -1.24) reported earnings which did not please the market. The two lost 4.2% and 2.9% as a result. Though most sector components have already delivered their quarterly results, a handful of names have yet to report. Following today's close, American Express (AXP 60.74, +0.12) will announce its fourth quarter earnings. In addition, the market will receive Morgan Stanley's (MS 20.75, +0.21) report ahead of tomorrow's open.  A familiar storyline was revisited today when morning reports indicated that European authorities along with the Federal Aviation Administration have ordered all Boeing (BA 75.26, +0.26) 787 flights to be halted. Boeing shares sold off on the news, but turned higher after Bloomberg reported that faulty batteries may have been the cause of electrical issues aboard the Dreamliner.  While the market displayed strength all around, Apple (AAPL 502.68, -3.41) did not participate in the rally. The largest tech stock shed 0.7% after yesterday's comments from technical analyst Tom Demark sent the stock higher by 3.0%.  In acquisition news, K-Swiss (KSWS 4.71, +1.52) soared 47.7% after the footwear manufacturer agreed to be acquired by E.Land World for $4.75 per share. The transaction price represents a 49.0% premium to K-Swiss' Wednesday closing price.  Crude oil rose by 1.1% and settled above $95.00 after a hostage situation in Algeria fueled supply concerns.  Another item of note lied in the CBOE Volatility Index (VIX 13.67, +0.25), which added 1.9%. The volatility measure spent the majority of the session in the red before crossing into positive territory during the last hour of trade as the S&P 500 slipped off its highs.  Today's NYSE floor volume was just north of 700 million shares, which lied in-line with its 100-day average.  Tomorrow's economic data will be limited to the January Michigan Sentiment, which is scheduled for a 9:55 ET release. Among notable earnings, General Electric (GE 21.30, +0.18) and Schlumberger (SLB 73.37, +0.15) will report their quarterly results prior to the opening bell. ..NYSE Adv/Dec 2285/719. ..NASDAQ Adv/Dec 1640/790.

After Hours

17:58 ET XLNX +0.5%, COF -6.9%, INTC -5.2% following earnings/guidance :

The major averages opened today's session on a strong note after weekly initial claims and housing starts were reported ahead of expectations. Meanwhile, a disappointing Philadelphia Fed Survey was not enough to cool optimism. Key indices spent the duration of the day in a steady upward climb, and the S&P 500 made its biggest advance in more than a week to end higher by 0.6%.

Today after the close the following companies reported earnings: AXP, ASBC, COF, INTC, MATW, PBCT, WTFC, WIT, XLNX

Futures are lower after hours: S&P 500 futures are -0.77 from fair value of 1475.77 and Nasdaq100 futures are -0.59 from fair value of 2741.09.

Tomorrow morning before the open no economic reports are scheduled to be released.

Tomorrow before the open the following companies are scheduled to report earnings: FHN, GE, JCI, MMR, MS, PH, PGR, COL, SLB, STT, STI, WBS

Commodities

Treasuries

Next Day In View 




Jason's Commentaries

With the Dec housing starts and the unemployment claims above expectation, the homebuilders managed to led the way last night. Despite having Citi and BFA announcing earnings that are very much in line with the investors' expectation, the financials were the only laggard last night. While after the close, we have a few more Dow components coming out with their earnings, like Morgan Stanley, Intel and American Express. Given that fact that there was a breakout last night, the VIX was at the low... in fact, it's a 5 year low. There's something to be concerned about. There's a few question that we should be asking ourselves. 

1) is the economy better or worse off than 5 years ago? 

2) If it's better or worse, is the market supposed to be at the level as it is right now? 

3) why is the VIX at a 5 year low right now? 

The market is being very complacent right now and if we were to rally through January, we're likely to see a major sell-off in the Feb. As of now, not much people are hedging and i'm going to hedge soon to protect myself... 

Looking at the internals, volumes were in line with it's 100day moving average, UVOL outpaced the DVOL at 2.5 times and the ADVN is outpacing the DECN. Market got into a short breakout which did not provide much strength. Furthermore the consumer sentiment report is coming out today. I reckon today is likely to be a flat day.

Market Call: FLAT to downside

Date: 18 Jan 2013