20 June 2013 AMC

20 June 2013 AMC

Market Summary 

Market Internals

Leaders and Laggards

Technical Updates

Briefing's Commentaries 

Stock Market Update 16:20 ET Dow -353.87 at 14758.32, Nasdaq -78.57 at 3364.64, S&P -40.74 at 1588.19 :[BRIEFING.COM] Equities ended with sharp losses across the board as yesterday's selling persisted into today's trade, and dragged global shares into the fray. The S&P 500 fell 2.5% after losing its 50-day moving average at the open.  Markets across the globe sold off after yesterday's comments from Federal Reserve Chairman Ben Bernanke were interpreted as a warning of an impending modification to the Fed's asset purchase program. Although the Fed Chairman qualified his statement by saying the economy must continue showing improvement before modifications can be made, investors looked past this condition and chose to focus on the potential timeframe instead.  Concerns regarding possible tapering, as well as worries about the Fed losing control over the situation, have caused a significant spike in interest rates. Since yesterday, the yield on the 10-yr note has jumped 25 basis points to 2.414%, with ten of those coming during today's session.  Elevated Treasury yields have contributed to selling in high-yielding, defensively oriented sectors. To that end, the consumer staples sector led to the downside with a loss of 3.0%. Health care (-2.6%) and utilities (-2.9%) also saw significant selling while the fourth countercyclical group, telecom services, outperformed with a loss of 2.3% after leading yesterday's decline with a 2.7% slide.  Meanwhile, commodity-related names saw the heaviest selling among cyclical sectors with energy and materials dropping 2.7% and 2.6%, respectively. On a related note, crude oil slumped 3.6% to $94.98 per barrel while copper tumbled 3.0% to $3.05 per pound. Precious metals had a flashback to mid-April as gold sank 6.8% to $1280.10 per ounce while silver dropped 9.4% to $19.59 per ounce. Softness in those metals pressured the Market Vectors Gold Miners ETF (GDX 24.55, -1.96), sending it lower by 7.4%.  The sharp losses in metals were rivaled by homebuilders as PulteGroup (PHM 18.87, -1.89) and Ryland Group (RYL 38.65, -4.35) both plunged more than 9.0% while the broader iShares Dow Jones US Home Construction (ITB 22.34, -1.36) sank 5.7%.  Today's weakness caused investors to adjust their near-term volatility expectations. As a result, the CBOE Volatility Index (VIX 20.47, +3.83) ended at its highest level of the year. Interestingly, this month's weakest group, financials, finished ahead of the remaining sectors with a loss of 2.2%.  The initial claims level increased from an upwardly revised 336,000 (from 334,000) for the week ending June 8 to 354,000 for the week ending June 15. The Briefing.com consensus expected the initial claims level to increase to 340,000.  The Conference Board's Index of Leading Indicators increased 0.1% in May, down from an upwardly revised 0.8% (from 0.6%) gain in April. The Briefing.com consensus expected the index to increase 0.2%.  Manufacturing activity improved in the Philadelphia region as the Philadelphia Fed's Business Outlook Survey increased from -5.2 in May to 12.5 in June. That was the highest reported Philly Fed Index since April 2011. The Briefing.com consensus expected the Philly Fed Index to increase to -0.2.  Existing home sales jumped above the 5.00 million mark for the first time since the homebuyer tax credit temporarily boosted sales in late 2009. Home sales rose from 4.97 million in April to 5.18 million in May. The Briefing.com consensus expected existing home sales to increase to 5.00 million. Future sales are still supply constrained. Only 2.2 million homes are currently on the market, representing a 5.1-month supply, which is down 10.1% from a year ago. There is usually a 6-month supply during normal selling conditions. Anything below that level signals upward pricing pressures. ..NYSE Adv/Dec 148/2994. ..NASDAQ Adv/Dec 364/2160.

Commodities

Commodities End Sharply Lower

NYMEX Energy Closing Prices
Aug crude oil fell $3.39 to $95.09/barrel. Crude oil fell alongside the equities markets as investors reacted to statements from Federal Reserve Chairman Ben Bernanke that suggested a potential reduction to the stimulus program. A stronger dollar index also put pressure on prices. The energy component slid further into negative territory after pulling-back from its session high of $96.55 set at pit trade open. It eventually settled 3.4% lower. July natural gas fell $0.08 to $3.88/MMBtu. Natural gas also spent its entire pit session in the red as inventory data for the week ending June 14 showed a build of 91 bcf when a build of 89 bcf was anticipated. Although prices initially popped to a session high of $3.95 and quickly slipped to a session low of $3.84 on the data, natural gas corrected to early morning price levels and ultimately settled with a 2.0% loss. Aug heating oil fell 10 cents to $2.87/gallon. Aug RBOB gasoline fell 10 cents to $2.78/gallon.

COMEX Metals Closing Prices
Aug gold fell $87.90 to $1285.90/ounce. Gold extended overnight losses as it tumbled below $1300 to its lowest levels since September 2010. Investors reacted to statements from Federal Reserve Chairman Ben Bernanke that signaled a potential reduction to the Fed's asset purchase program in 2014 if the economy continues to improve. Strength in the dollar index also added to selling pressure. The yellow metal booked a 6.4% loss as it settled at its session low. July silver fell $1.79 to $19.82/ounce. Silver fell for a fourth consecutive session alongside gold. Prices plummeted below $20 to levels not seen since September 2010. The metal settled slightly above its session low of $19.70, booking a loss of 8.3%. July copper fell 8 cents to $3.06/lb.

CBOT Agriculture and Ethanol/ICE Sugar Closing Prices
July corn fell 7 cents to $6.73/bushel
Dec corn fell 9 cents to $5.61/bushel
July wheat fell 5 cents to $7.00/bushel
Nov soybeans fell 25 cents to $12.86/bushel
Aug ethanol fell 3 cents to $2.38/gallon
Sep sugar (#16 (U.S.)) fell 0.64 of a penny to 18.95 cents/lbs

Treasuries

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Other news


European Markets Update
Major European indices hover near their lows following the release of a full slate of economic news. The Eurozone Manufacturing PMI ticked up to 48.7 from 48.3 (48.6 expected) while Services PMI rose to 48.6 from 47.2 (47.5 forecast). Germany's Manufacturing PMI fell to 48.7 from 49.4 (49.8 expected) while Services PMI rose to 51.3 from 49.7 (50.0 forecast). In addition, PPI declined 0.3% month-over-month (-0.1% expected, -0.2% prior). French Manufacturing PMI rose to 48.3 from 46.4 (47.0 expected) while Services PMI ticked up to 46.5 from 44.3 (44.8 forecast). Italian industrial orders rose 0.6% month-over-month (1.1% forecast, 1.8% previous). Great Britain's retail sales rose 2.1% month-over-month (0.8% expected, -1.1% prior) while core retail sales also increased 2.1% month-over-month (0.9% forecast, -1.2% prior). In addition, CBI Industrial Trends Orders ticked up to -18 from -20 (-15 expected). 

Also of note, the Bank of England said five of eight banks had an aggregate capital shortfall of GBP27.1 billion at the end of 2012.

• Great Britain's FTSE trades lower by 3.0% as 99 of 101 members register losses. Miners are among the weakest index members as Fresnillo, Randgold Resources, and Rio Tinto sport losses between 3.8% and 5.7%. The only two advancers, Carnival and Lloyds Banking, trade with slim respective gains of 0.1% and 0.4%.
• In Germany, the DAX is lower by 3.3% with 29 of 30 components in the red. Exporters BMW and Volkswagen lead to the downside with losses near 4.0%. On the upside, Fresenius Medical is higher by 0.3%.
• France's CAC trades down 3.7% as Renault leads to the downside with a loss of 5.0%. Financials have also shown weakness as BNP Paribas sheds 3.2% while Societe Generale trades lower by 3.6%.

Jason's Commentaries


Just 2 sessions... the entire gains from May and June were all gone. Nasty isn't it. Market opened when the futures were down 1%. Market did not fight back at all. The market went on a constant decline all the way till closing bell. What a sign of weakness in the market. All sectors were down by at least 2%, with the financials being the weakest loser of 2.22% loss. Volumes were way up high at 1066m shares traded in the NYSE. DVOL outweight UVOL by 20:1. It was a bloodshed. Asia was not spared yesterday as well. However, Asia seemed to find some footing today with Nikkei up marginally. Futures were up at 92 points at 6am ET. 

 Treasuries were being hammered after FOMC statements. Commodities were also not spared from this bloodshed. There is no data coming out on Friday. It seems to be a good day to cover some shorts. Stay safe guys. Haze is covering Singapore. Pray for rain!

Market Call: UP

Date: 21 June 2013