11 July 2013 AMC

11 July 2013 AMC

Market Summary 

Market Internals

Leaders and Laggards

Technical Updates

Briefing's Commentaries 

16:20 ET Dow +169.26 at 15460.92, Nasdaq +57.55 at 3578.31, S&P +22.40 at 1675.02 : [BRIEFING.COM] The major averages saw gains between 1.1% and 1.6% with the Dow Jones and S&P 500 closing at fresh record highs. 

Equities registered the bulk of their advance at the open after yesterday's comments from Federal Reserve Chairman Ben Bernanke created some push back against the idea the Fed may begin slowing the pace of its asset purchases at the September meeting. 

Mr. Bernanke commented on the economic landscape by saying the current employment level is overstating the health of the job market and that rates may be kept low even after the previously mentioned unemployment threshold of 6.5% is reached. 

The comments caused market participants to shift into risk assets and away from the U.S. dollar. The foreign exchange market was the first to respond to the remarks as the greenback weakened against all major currencies. Selling dropped the Dollar Index by nearly 2.0% to 82.40. 

Notably, dollar/yen fell almost 200 pips to 98.60 with price action resembling the late-May move attributed to large unwinds of the yen carry trade. The pair was able to rebound into the afternoon, but fell back near its lows before the close. On a related note, some of Chairman Bernanke's comments focused on the carry trade, suggesting that when the Fed doesn't provide any information, "It's very likely that more highly levered, risk-taking positions might build up, reflecting some expectation of an infinite asset purchase program." 

Elsewhere, Treasuries received a solid bid following Chairman Bernanke's remarks, sending the 10-yr yield lower by 11 basis points to 2.572%. 

The Dow and S&P ended at fresh record highs as growth-sensitive sectors paced the advance. The tech sector (+1.7%) finished atop today's leaderboard, which helped the Nasdaq outperform the other two major averages. Chipmakers displayed significant strength as the PHLX Semiconductor Index added 2.1%. 

The tech sector was followed closely by materials and industrials. Producers of basic materials received a significant boost from steelmakers and gold miners. The Market Vectors Steel ETF (SLX 39.84, +1.52) jumped 4.0% and the Market Vectors Gold Miners ETF (GDX 24.97, +1.78) surged 7.7%. Meanwhile, gold futures climbed 3.0% to $1284.50 per troy ounce. 

Industrials also displayed broad strength. Transportation-related names provided the sector with solid support as the Dow Jones Transportation Average advanced 1.2%. 

However, another commodity-related sector, energy, underperformed with a gain of 0.9%. Crude oil fell 1.8% to $104.62 per barrel, but the energy component remains higher by 11.7% since June 21. 

Financials also trailed behind the broader market as the sector added 0.9%. Tomorrow morning, JPMorgan Chase (JPM 55.14, +0.32) and Wells Fargo (WFC 41.89, -0.18) will report their quarterly results ahead of the open. 

The initial claims level rose from an upwardly revised 344,000 (from 343,000) for the week ending June 29 to 360,000 for the week ending July 6. The Briefing.com consensus expected the initial claims level to increase to 345,000. 

The Department of Labor reported that seasonal adjustment biases from the July 4 holiday may have played a role in the unexpected jump in claims. If this is true, then the initial claims level should fall back below 350,000 next week. 

Separately, export prices, excluding agriculture, decreased by 0.2% in June after they had decreased 0.7% during the prior month. Excluding oil, import prices declined 0.3%, which follows last month's decline of 0.3%. 

The June Treasury Budget showed a surplus of $116.5 billion, which was slightly ahead of the surplus of $115.0 billion expected by the Briefing.com consensus. 

Tomorrow, June PPI and core PPI will be reported at 8:30 ET while the preliminary University of Michigan Consumer Sentiment Survey for July will be released at 9:55 ET. ..NYSE Adv/Dec 2672/399. ..NASDAQ Adv/Dec 1803/719.

After Hours

17:39 ET CPHD +1.2%, ANGO +0.2%, CERE -18.2%, VLO -4.4%, PPHM -3.3% following earnings/guidance :

The major averages saw gains between 1.1% and 1.6% with the Dow Jones and S&P 500 closing at fresh record highs.

Today after the close the following companies reported earnings: PPHM, EOPN, CERE, ANGO

Futures are nearly flat after hours: S&P 500 futures are -0.13 from fair value of 1669.73 and Nasdaq100 futures are +0.36 from fair value of 3053.64.

Tomorrow morning before the open two economic reports are scheduled to be released: 1) PPI (Consensus 0.3%) and 2) Core PPI (Consensus 0.1%)

Tomorrow before the open the following companies are scheduled to report earnings: INFY, JPM, WBS, WFC

Commodities

Treasuries

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Jason's Commentaries


Nasdaq led the market to a high last night, with Nasdaq Composite hitting a 13 year new high. Dow gained 169 and S&P500 gained 22.4 points. S&P500 is just a few points below its historical high. At such a pace, we will be breaking into the new highs soon. Notable names like Microsoft, HQ, AT&T, Verizon, Intel, General Electric, United Technologies gained over 1.5% last night. Almost all sectors gained more than 1% last night. Volumes were healthy and the bears were totally overwhelmed by the bulls. VIX closed lower at 14.01. I believe we might face some difficulty today at the high of the indices but in a longer run, I'm definitely bullish. Precious metals took a beating last night with silver closing down at 19.75. Crude Oil hit a high of $107 last night but unable to hold the high. As of 6.30am ET, Oil was at $104.8. I believe with no major news coming out from the banks' earnings, we're likely to end flat to the upside tonight.

 

Market Call: FLAT to upside

Date: 12 Jul 2013