12 Aug 2013 AMC

12 Aug 2013 AMC

Market Summary 

Market Internals

Market Internals
The Nasdaq closed up 10 (+0.27%) at 3670, the Dow closed down 6 (-0.04%) at 15420, and the S&P 500 closed down 2 (-0.12%) at 1689. Action came on below average volume (NYSE 586 mln vs. avg. of 754; NASDAQ 1366 mln vs. avg. of 1634), with advancers outpacing decliners (NYSE 1636/1427, NASDAQ 1428/1085) and new highs outpacing new lows (NYSE 107/64, NASDAQ 107/28).

Relative Strength: 
Junior Gold Miners-GDXJ +8.74%, Silver Miners-SIL +6.28%, Peru-EPU +3.34%, China 25 Index-FXI +3.24%, Corn-CORN +2.7%, Coal-KOL +2.43%, Grains-JJG +2.38%, Hong Kong-EWH +1.45%, Turkey-TUR +1.2%, Indonesia-IDX +1.13%.

Relative Weakness: 
Lithium-LIT -1.59%, Indian Rupee-ICN -1.56%, Mexico-EWW -1.41%, MLP Index-AMJ -1.06%, Middle East and Africa-GAF -0.99%, Realty Majors-ICF -0.91%, Biotechnology-IBB -0.85%, Spain-EWP -0.85%, Real Estate-IYR -0.82%, Israel-EIS -0.78%.

Leaders and Laggards

Technical Updates

Briefing's Commentaries 

Closing Market Summary: Stocks Begin Week on Lower Note
Equities ended today's quiet session on a mixed note as the S&P 500 shed 0.1% while the Nasdaq added 0.3%. 

Stocks began in the red after Japan's second quarter GDP report (0.6% actual, 0.9% forecast) missed expectations. Another piece of news out of Asia indicated the People's Bank of China could lower the reserve requirement ratio for small to mid-sized banks. Both items were perceived as beneficial to precious metals with Japan's below-consensus growth leaving the door open to further monetary easing while news from China discussed outright easing. 

Gold futures advanced 1.8% while silver futures surged 4.6%, causing the precious metals to end at $1335.70 and $21.34 per troy ounce, respectively. In turn, miners rallied broadly as the Market Vectors Gold Miners ETF (GDX 28.01, +1.54) spiked 5.8%. However, the outperformance of miners was not enough to keep the materials sector (-0.2%) out of the red. 

Similarly, most other growth-oriented sectors registered losses. Industrials and technology were the only exceptions as the two groups added 0.1% and 0.7%, respectively. 

The industrial sector advanced as machinery producers and transportation companies displayed strength. Caterpillar (CAT 86.32, +1.81) rose 2.1%, and the Dow Jones Transportation Average tacked on 0.2%. 

Elsewhere, the tech sector ended in the lead, contributing to the outperformance of the Nasdaq. The top-weighted sector (and index) component, Apple (AAPL 467.36, +12.91), settled higher by 2.8% following an International Trade Commission decision to issue an import and sale ban on some Samsung devices after the company infringed on Apple patents. 

Remaining in the tech sector, BlackBerry (BBRY 10.78, +1.02) was another notable outperformer after the company said it has begun exploring strategic alternatives. 

The solid gains in technology helped the S&P climb off its early lows, but the index was unable to close in the green. However, small caps outperformed as the Russell 2000 advanced 0.5%. 

Treasuries were confined to a narrow range and the benchmark 10-yr yield slipped three basis points to 2.61%. 

As mentioned earlier, participation was lacking as only 586 million shares changed hands on the floor of the New York Stock Exchange. 

Today's economic data was limited to the July Treasury budget, which showed a deficit of $97.6 billion following a deficit of $69.6 billion in July 2012. Since the Treasury data are not seasonally adjusted, the data cannot be compared with the June level. The Briefing.com consensus expected the budget to show a deficit of $96 billion. 

The Congressional Budget Office released their budget preview last week and predicted a shortfall of $96 billion. The market is well aware of the CBO's forecast and the reaction to the budget data is limited. 

Tomorrow, July retail sales, export prices ex-agriculture, and import prices ex-oil will all be reported at 8:30 ET. The day's data will be topped off with the 10:00 ET release of June business inventories.

Equities ended today's quiet session on a mixed note as the S&P 500 shed 0.1% while the Nasdaq added 0.3%.

Today after the close the following companies were scheduled to reported earnings: ALIM, APP, EGL, FN, HMIN, IAG, IOC, NQ, SINA, SPR, TWGP, TRQ, WX

Other notable movers on earnings/guidance: ARTX +30.7%, SINA +5.3%, NQ +4.3%, SPR +3.9%, FN +2.3%, NTI +2.3%, HMIN +1.1%, BIOD +1.1%, HLS +1.0%, IAG +0.6%, EGL +0.2%, RWC -21.9%, APP -4.0%, APRI -0.9%, TTPH -0.7%, WX -0.3%

Futures are higher after hours: S&P 500 futures are +1.92 from fair value of 1686.18 and Nasdaq100 futures are +2.72 from fair value of 3123.28.

Tomorrow morning before the open four economic reports are scheduled to be released: 1) Retail Sales (Consensus 0.2%), 2) Retail Sales ex-auto (Consensus 0.3%), 3) Export Prices ex-ag and 4) Import Prices ex-oil.

Tomorrow before the open the following companies are scheduled to report earnings: CACH, AG, FLO, SCR, TPH, USAC, VAL

Commodities

Treasuries

10-Yr:-07/32..2.606%.. USD/JPY:96.66.. EUR/USD:1.3306
Treasuries Reverse to Lows: Treasuries finished on their lows as steady selling persisted over the course of the U.S. session. The complex climbed to its best levels ahead of the U.S. equity open, but ran into some decent sized selling as stocks recovered their early losses. Maturities slipped to their worst levels of the day following the disappointing Treasury budget (-$97.6B actual v. -$96.0B expected) before chopping around into the close. The 10-yr yield pressed minor support in the 2.550-2.580% region thanks to the early bid, but was unable to pierce the level and ended the day up 2.5 bps at 2.605%. Curve steepening developed on today’s slide as the 2-10-yr spread widened to 229 bps. Elsewhere, precious metals saw solid gains with gold up $24 at $1336 and silver higher by $1.00 near $21.40.Data picks up on Tuesday with retail sales, retail sales ex-auto, import/export prices (8:30), and business inventories (10). ATL’s Lockhart will be on his home turf giving his economic outlook to the Kiwanis Club (12:45).   

Next Day In View 

On other news.... 

LMT Lockheed Martin awarded ~$852.3 mln Navy contract modification (123.00 -1.02)
Co was awarded a not-to-exceed $852,298,021 undefinitized modification to the previously awarded Low Rate Initial Production Lot 6 Advance Acquisition contract. This modification provides for the procurement of special tooling and special test equipment for the U.S. Navy, U.S. Air Force and the international partners, which is critical to preserving the current F-35 delivery schedules and meeting future production rates. Work is expected to be completed in December 2016. Fiscal 2011 Aircraft Procurement, Air Force, fiscal 2011 and 2012 Aircraft Procurement Navy, and International Partner contract funds in the amount of $639,223,516 will be obligated at time of award, $515,865,111 of which will expire at the end of the current fiscal year.






Currencies 

10-Yr:-04/32..2.601%.. USD/JPY:96.57.. EUR/USD:1.3302
Dollar Gains Amid Lackluster Trade: The Dollar Index continues to hold modest gains amid a rather lackluster session. The quiet trade has action on track to post its second day of gains as trade nears a test of the 81.60 resistance level. 

·         EURUSD is -45 pips at 1.3290 with action pushing lower for a second day. The 1.3200/1.3300 support band will be in focus tomorrow as Eurozone data includes ZEW Economic Sentiment, industrial production, and German ZEW Economic Sentiment. 

·         GBPUSD is -30 pips at 1.5460 as trade continues to slip off the 200-day moving average (1.5530). Near-term support lurks in the 1.5400 area, and should see some additional help from the 50- and 100-day moving averages which lurk just below the level. Britain’s CPI, PPI input, and RPI will be released tomorrow. 

·         USDCHF is +30 pips at .9260 as trade continues to work its way off the .9200 support level. The pair tested resistance in the .9280 area early in the session, but sellers proved too strong. 

·         USDJPY is +40 pips at 96.60 as trade holds between 96.00/97.00 as it has for the past couple of days. Overnight selling developed following the disappointing Japanese GDP figure, but trade has managed to reverse into the green. The 98.00 will continue to serve as resistance. Japan’s core machinery orders will accompany tonight’s release of the minutes from the latest BOJ meeting. 

·         AUDUSD is -55 pips at .9140 as sellers have been in control since late last night. Overnight action saw the pair test its 50-day moving average (.9235), but sellers stepped in to defend the level. Australia’s NAB Business Confidence is due out tonight. 

·         USDCAD is +20 pips at 1.0305 as trade looks to be on track to halt its two-day skid. Buyers continue to lend support at the 100-day moving average near 1.0275 as that level has held up for the past three weeks.    

Jason's Commentaries


Another very volatile session last night in the market. All 3 indices all started the day with a bearish bias which quickly reversed into a quick rally till 11am ET. After 11am ET, the market started losing its gains till 1pm ET,after which, market decided to reverse again to the day high. However, the main market mover last night was Apple, which rallied a good 2.84% which led the Nasdaq composite. However the majority of the stocks are in the negative region. Industrials also made some slight gains as Catepillar and Deere managed to shrug off the influence from the rest of the market. The biggest laggards were the Utilities, Financials, Energy and Healthcare. With the internals, we can see that it was rather a mixed day, VIX went down by 4.47% and the rest of the internals being mixed. Volumes was weak despite that volatility. However, on the technical perspective, all 3 indices held above their support level. And it's gonna take a lot to break that price level. 

Market Call: UP

Date: 13 Aug 2013