1 May 2013 AMC

1 May 2013 AMC

Market Summary 

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Technical Updates

Briefing's Commentaries 

Stock Market Update 16:15 ET Dow -138.85 at 14700.95, Nasdaq -29.66 at 3299.13, S&P -14.87 at 1582.69 :[BRIEFING.COM] Equities ended today's session on their lows as global growth concerns reemerged. The three major indices all lost 0.9%, but the underperformance of small cap stocks was notable as the Russell 2000 slid 2.5%.  Although most markets across the globe were closed in observance of Labor Day, some countries continued reporting their economic data.  China reminded investors of its importance to the global economy as the decline in the country's Manufacturing PMI (50.6 actual, 50.9 prior, 51.0 consensus) along with a disappointing U.S. ISM Index (50.7 actual, 51.3 prior, 51.0 consensus) pressured commodities and commodity-related sectors.  As a result, energy and materials both ended with losses near 1.7%. Crude oil settled lower by 2.7% at $90.95 after today's inventory report revealed that crude stockpiles climbed to 6.696 million barrels, a record high dating back to 1982 when the Energy Information Administration began tracking the data.  Meanwhile, the materials sector declined throughout the day as related metals sold off. Gold futures fell 1.1% to $1455.90 per troy ounce after being down as much as 2.1% intraday. Meanwhile, copper was unable to bounce off its lows as the red metal declined 3.8% to $3.068 per pound.  The relative weakness of gold pressured miners as the Market Vectors Gold Miners ETF (GDX 29.65, -0.71) settled lower by 2.3%. Steelmakers also displayed weakness throughout the day, and the Market Vectors Steel ETF (SLX 41.56, -0.87) slumped 1.9%. Disappointing manufacturing data from China and the U.S. weighed on the group, and Alcoa's (AA 8.43, -0.07) announcement of a possible curtailment of its smelting capacity reflected the sluggish global growth.  Concerns regarding economic health also pressured industrial shares, and specifically, the Dow Jones Transportation Average. The bellwether complex was one of the leaders of the first-quarter market rally. However, the sector underperformed last month, ending April with a loss of 1.2%.  The 20-stock complex kicked off the month on a cautious note as 18 components ended with losses of at least 1.0% while the Transportation Average slid 2.3%.  Stocks saw a brief afternoon bounce when the Federal Open Market Committee released its latest policy statement, which did not contain any groundbreaking news.  As expected, the FOMC maintained its purchasing program at $85 billion per month, and kept its target Federal Funds Rate steady at 0-0.25%. The central bank also reiterated its goal of staying true to the current policy course until the unemployment rate declines to 6.5%.  Today's statement did contain an explicit mention of a possible increase or decrease to the purchase program. However, this wasn't "new" as prior statements from the Fed have already allowed for the possibility of modifications to the program.  Looking back at the day's remaining economic data, total construction spending fell 1.7% in March after increasing an upwardly revised 1.5% (from 1.2%) in February. The Briefing.com consensus expected construction spending to increase 0.5%.  Most of the decline was the result of weaker public construction spending. That sector declined 4.1% in March after increasing 1.5% in February. This drop helps explain why government spending fell substantially in the first quarter GDP report.  Investors will receive a full slate of economic data tomorrow with the April Challenger Job Cuts Report set to kick things off at 7:30 ET. Weekly initial claims, preliminary first quarter productivity, first quarter unit labor costs, and the March trade balance will all be released at 8:30 ET.  Also of note, the European Central Bank will release its latest interest rate decision with many expecting a 25 basis point rate cut from 0.75% to 0.50%. ..NYSE Adv/Dec 841/2182. ..NASDAQ Adv/Dec 541/1950.

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Jason's Commentaries


Hi guys, sorry for the no-posting yesterday due to my exams. Just finished an Economics exam today and finally able to write my DMA. 

A near 1 percent drop last night as ADP employment sucked. Weaknessness in the market persisted through the day. Volumes were at 721 Million shares traded on the NYSE. Bears clearly outpaced the bulls. VIX went to 14.55 last night. Signs of bears are coming. However, Treasuries retreated yesterday along side with the market. The main laggards last night was Utilities, Financials, Materials and Industrials but the rest of the sectors were quite flat. On technicals, bearish candlesticks formation on all 3 indices and on exactly the first day of May. Whether we will sell in May again this year remains to be seen. The key to the movement this week will be the Nonfarm Payrolls. Since ADP already sucked, it's very likely that NFP will suck as well. Which might kick off to the sell in May. On Thursday, there are few key events, first is the Bid Rate for Euro, then the ECB Press Conference. ECB is cutting rates again, market remains sideways bounded as Unemployment claims came in much lower. I reckon Thursday will be a very flat but volatile day.

Market Call: FLAT to upside

Date: 1 May 2013