3 Jan 2013 AMC

3 Jan 2013

Market Summary 

Defense Contracts 

Lockheed Martin, Grand Prairie, Texas, was awarded a $755,134,781 firm-fixed-price contract. The award will provide for the procurement of PATRIOT Advanced Capability-3, which includes support for Foreign Military Sales, and related services. Work will be performed in Grand Prairie; Lufkin, Texas; Camden, Ark.; Chelmsford, Mass.; and Ocala, Fla.; with an estimated completion date of July 31, 2015. One bid was solicited, with one bid received. The U.S. Army Contracting Command, Redstone Arsenal, Ala., is the contracting activity (W31P4Q-13-C-0068). 

Lockheed Martin Corp., Grand Prairie, Texas, was awarded a $197,604,608 firm-fixed-price contract. The award will provide for the modification of existing contract to procure Guided Multiple Launch Rocket System unitary rockets. Work will be performed in Grand Prairie; Lufkin, Texas; Camden, Ark.; and Ocala, Fla.; with an estimated completion date of May 31, 2015. The bid was solicited through the Internet, with one bid received. The U.S. Army Contracting Command, Redstone Arsenal, Ala., is the contracting activity (W31P4Q-12-C-0151).  

 General Electric, Cincinnati, Ohio, was awarded a $138,270,542 firm-fixed-price contract. The award will provide for the technical, engineering and logistical services in support of the T700 series turbine engines. Work location will be determined with each order, with an estimated completion date of Dec. 31, 2013. The bid was solicited through the Internet, with one bid received. The U.S. Army Contracting Command, Redstone Arsenal, Ala., is the contracting activity (W58RGZ-12-D-0015). 

   General Dynamic Land Systems, Sterling Heights, Mich., was awarded a $132,713,523 contract. The award will provide for the services in support of M1A2S Abrams Tank production for Foreign Military Sales. Work will be performed in Lima, Ohio, with an estimated completion date of July 31, 2014. One bid was solicited, with one bid received. The U.S. Army Contracting Command, Warren, Mich., is the contracting activity (W56HZV-13-C-0104).  

Market Internals

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Leaders and Laggards

Technical Updates

Briefing's Commentaries 

Stock Market Update

16:15 ET Dow -21.19 at 13391.36, Nasdaq -11.69 at 3100.57, S&P -3.05 at 1459.37 :[BRIEFING.COM] The S&P 500 shed 0.2% after the Federal Reserve released the minutes from its December policy meeting. The markets keyed in on comments from several members who voiced concerns over the duration of the asset purchase program. In addition, some participants "thought that it would probably be appropriate to slow or to stop purchases well before the end of 2013." Traditional safe-haven assets saw some selling in reaction the report. Gold dropped nearly 1.5% to its session low in the 1660.00 area. Meanwhile, Treasuries saw some selling, and the 10-yr yield jumped six basis points to 1.899%, its highest close since May.  Financials were some of the top performers during yesterday's rally. However, the market focus is now turning to the next step in the debate as the country nears the debt ceiling. The special measures currently being undertaken by the Department of Treasury are expected to delay the breach of the ceiling for about two months. Also of note, recent reports have indicated Treasury Secretary Tim Geithner will leave his post by the end of January. In addition, the approval of a tax plan was met with less-than-positive feedback from rating agencies which said more action on the deficit will be needed soon. Among individual financials, Goldman Sachs (GS 130.94, -0.72) and Wells Fargo (WFC 34.76, -0.29) both shed over 0.5%.  Shares of automakers responded to December car sales data. Among the notable movers, Ford Motor (F 13.46, +0.26) rose by 2.0% after the company reported a 5.0% increase in December car sales. Meanwhile, the company's utility vehicles saw 7.0% sales growth. In total, Ford sold nearly 2.2 million vehicles in 2012.  General Motors (GM 29.82, +0.69) sales also grew by 5.0%, and the stock added 2.4% in response to the positive data.  Looking at foreign-based carmakers, Toyota Motor (TM 95.37, -0.62) shed 0.7% despite reporting a 9.0% rise in its December sales. During 2012, Toyota sold almost 2.1 million vehicles.  Consumer discretionary stocks outperformed after retailers reported their December same store sales. Overall, the results were mixed as ten retailers beat the Retail Metrics consensus, while eight fell short of expectations. Among the companies which reported notable beats, Ross Stores (ROST 58.78, +4.34) and Zumiez (ZUMZ 21.22, +1.72) surged 8.0% and 8.8% respectively. Ross Stores saw strength after its sales grew 6.0%, while the general consensus expected an increase of 3.0%. However, Zumiez rallied after the company's December sales slipped by just 1.0%, while analysts expected a 3.5% decline.  Among the names which reported disappointing sales growth, Limited Brands (LTD 44.71, -2.69) slumped 5.7% after its 3.0% monthly sales growth disappointed the market, which expected an uptick of 4.7%.  The Dow Jones Transportation Average settled higher by 0.6%, and the bellwether complex outperformed the broader market. With today's gains, the index has added over 4.5% since Monday's open. In addition, transports ended the session at their best level since July 2011. Among individual components, airlines displayed relative strength asUnited Continental (UAL 24.93, +0.74) and Delta Air Lines (DAL 12.58, +0.35) both gained near 3.0%.  Trucking stocks underperformed. CH Robinson (CHRW 62.34, -0.82) lost 1.3% and was the biggest laggard.  The market received several economic data points this morning. According to the ADP National Employment Report, employment in the nonfarm private business sector rose by 215K in December. This was above the 140K increase expected by the Briefing.com consensus.  The latest weekly initial jobless claims count totaled 372,000, which was worse than the 365,000 that had been expected by the Briefing.com consensus. The tally was above the revised prior week count of 362,000. As for continuing claims, they rose to 3.245 million from 3.201 million.  The weekly MBA Mortgage Applications decreased by 10.4%, which follows last week's 11.2% downtick.  Elsewhere, December Challenger Job Cuts declined 22.1%, and today's reading follows the prior month's 34.4% increase.  Tomorrow's economic data will be plentiful. At 8:30 ET, December nonfarm payrolls, nonfarm private payrolls, the unemployment rate, hourly earnings, and average workweek will all be reported. Lastly, November factory orders and December ISM services will hit the wires at 10:00 ET. ..NYSE Adv/Dec 1709/1344. ..NASDAQ Adv/Dec 1187/1290.

After Hours

17:05 ET ROVI +5.2%, SHLM +3.1%, ARAY -20.4%, ITMN -5.6% following earnings/guidance :

The S&P 500 shed 0.2% after the Federal Reserve released the minutes from its December policy meeting. The markets keyed in on comments from several members who voiced concerns over the duration of the asset purchase program. In addition, some participants "thought that it would probably be appropriate to slow or to stop purchases well before the end of 2013." Traditional safe-haven assets saw some selling in reaction the report. Gold dropped nearly 1.5% to its session low in the 1660.00 area. Meanwhile, Treasuries saw some selling, and the 10-yr yield jumped six basis points to 1.899%, its highest close since May.

Today after the close the following companies are scheduled to report earnings: SHLM, ANGO, PRGS, SONC, FC

Futures are mixed after hours: S&P 500 futures are +0.20 from fair value of 1454.2 and Nasdaq100 futures are -0.18 from fair value of 2727.68.

Tomorrow morning before the open four economic reports are scheduled to be released: 1) Nonfarm Payrolls (Consensus 150k) and Nonfarm Private Payrolls (Consensus 145k), 2) Unemployment Rate (Consensus 7.7%), 3) Hourly Earnings (Consensus 0.2%), and 4) Average Workweek (Consensus 34.5).

Tomorrow before the open the following companies are scheduled to report earnings: FINL, MOS

Commodities

Treasuries

Next Day In View 




Jason's Commentaries

Didn't manage to do my DMA for 2 Jan as was busy setting up the trading system for Conrad. Was expecting the market to go on a stalled mode after such a bull day during the last trading of 2012 and first day of 2013. Took profit off the table on 2 Jan already... 

Extra volatility was added due to a few market moving factors. Firstly the ADP report, unemployment claims and most importantly the Fed minutes. At the start of the day, the lousy unemployment claims caused the market to start with a loss however market fought back up till the Fed Minutes were released. Finally the Fed is admitting that they are running out of bullets... Dude... WE ALREADY KNOW THAT. Market immediately sold off and handed back all the gains made during the first half of the day.

You can read more of the Fed Minutes here. 
http://www.marketwatch.com/story/fed-sees-bond-buying-program-ending-this-year-2013-01-03

Considering the internals, it was a mixed day, coupled with mixed results from the sectors. Although UNH were the biggest loser on the DOW, shedding a more than 4% loss. However, I don't see much movement for 3 Jan. I believe the market is still awaiting the non-farm payrolls coming out on the 4 Jan to position themselves. 

 And guess what... Alcoa is finally going to announce earnings on the 8 Jan! Another round of volatility gonna be expected next week as Alcoa kicks start the earnings seasons. 

We will be focusing on 2 major reports coming out today, which is the Non-farm Payrolls(830am ET) and the ISM report(10am ET). I'm expecting the market to sell off really bad if the NFP suck, but if the NFP doesn't, which is very likely, the market will go flat. Also the ISM might have a little effect on the Market. 

Good luck peeps! 

Gotta prepare to head to KL to teach now!      

Market Call: Flat to downside

Date: 4 Jan 2013