8 Aug 2013 AMC

8 Aug 2013 AMC

Market Summary 

 
 

Market Internals

The Nasdaq closed up 15 (+0.41%) at 3669, the S&P 500 closed up 7 (+0.39%) at 1697, and the Dow closed up 28 (+0.18%) at 15498. Action came on mixed volume (NYSE 689 mln vs. avg. of 766; NASDAQ 1727 mln vs. avg. of 1647), with advancers outpacing decliners (NYSE 1993/1056, NASDAQ 1492/1020) and new highs outpacing new lows (NYSE 154/92, NASDAQ 133/24). 

Relative Strength: 
Junior Gold Miners-GDXJ +9.25%, Silver Miners-SIL +8.18%, Copper Miners-COPX +5.02%, Rare Earths-REMX +4.42%, Metals and Mining-XME +4.14%, Chile-ECH +4.00%, Greece-GREK +3.36%, Poland-EPOL +3.25%, India-INP +3.08%, Latin America 40-ILF +3.03%. 

Relative Weakness: 
Volatility-VXX -1.56%, MLP Index-AMJ -1.08%, Biotechnology-XBI -0.62%, Telecommunications-IYZ -0.53%, Japan-EWJ -0.48%, Biotechnology-IBB -0.47%, Japanese Yen-FXY -0.26%

Leaders and Laggards

Technical Updates

Briefing's Commentaries 

Stocks Post Gains Despite Early Weakness

Sector Performance (% change of the day): Materials (+1.52%), Consumer Discretionary (+0.70%), Energy (+0.56%), Consumer Staples (+0.49%), Industrials (+0.42%), Utilities (+0.40%), Tech (+0.35%), Financials (+0.24%), Health Care (+0.07%), Telecom (-1.00%).

Dow +0.2%, S&P 500 +0.4%, Nasdaq +0.4%, Nasdaq 100 +0.4%, S&P 400 +0.5%, Russell 2000 +0.5%

The S&P 500 settled higher by 0.4% despite enduring a first-hour selloff.

Equities began the session with modest gains after upbeat data from China helped ease some concerns regarding the pace of global growth. The Middle Kingdom reported an increase in exports (+5.1% actual, +3.0% expected) and imports (+10.9% actual, +2.1% forecast) while its trade surplus narrowed to $17.82 billion from $27.10 billion.

Shortly after the start of the session, the S&P notched a high of 1,700.20 before aggressive selling pressured the benchmark index back to its flat line. The slide coincided with notable dollar/yen weakness that sent the pair below 96.00 for the first time since June 19.

The slide in equities and dollar/yen was halted shortly after the first hour of action. Stocks then returned to their highs but the S&P was unable to reclaim the 1,700 level.

The rebound took place as most cyclical sectors outperformed with materials in the lead. The sector advanced 1.5% as the Chinese data underpinned steelmakers and miners. The Market Vectors Steel ETF (SLX 42.29, +1.20) jumped 2.9% and the Market Vectors Gold Miners ETF (GDX 26.00, +2.06) surged 8.6%. On a related note, gold futures rose 2.1% to $1311.80 per troy ounce and copper futures added 2.8% to $3.263 per pound.

Other commodity-related sectors also rallied. Industrials settled higher by 0.4% and Dow component Caterpillar (CAT 83.96, +1.53), which does a good portion of its business in China, climbed 1.9%.

Elsewhere, the energy sector ended with a gain of 0.6% even as crude oil slumped 0.5% to $103.85 per barrel.

Discretionary shares also contributed to the rebound as retailers outperformed. The SPDR S&P Retail ETF (XRT 81.53, +0.75) posted a gain of 0.9% after retailers reported their same store sales for July. L Brands (LTD 60.25, +2.95) added 5.2% after surpassing estimates while Costco (COST 117.39, -1.95) slipped 1.6% after missing expectations.

Although most cyclical sectors registered gains, financials trailed behind the broader market. JPMorgan Chase (JPM 54.83, -0.47) shed 0.9% after the company said it is being investigated by the U.S. Attorney's Office for Eastern District of California over its mortgage-backed securities offerings.

Treasuries were trapped inside of a narrow range and the benchmark 10-yr yield shed two basis points to 2.59%.

In today's economic data, the initial claims level increased from an upwardly revised 328,000 (from 326,000) for the week ending July 27 to 333,000 for the week ending August 3. The Briefing.com consensus expected the initial claims level to increase to 340,000. Even though the claims level increased this week, the headline number is actually a strong positive sign for the labor market.

Throughout July, the initial claims data were distorted by seasonal adjustment problems from the motor vehicle industry. The Department of Labor announced that this week's claims data were unaffected by seasonal biases. That means the initial claims, which were around 350,000 prior to the distortions, actually improved throughout July.

Tomorrow, June wholesale inventories will be reported at 10:00 ET.

After-Hours Report
A recap of the day’s market activity in addition to an overview of key news stories released after the close and key events that are scheduled for the next trading day.

Updated: 08-Aug-13 17:49 ET

UBNT +22.6%, OLED +20.9%, PCLN +5.5%, CPST -18.4%, BRKS -13.3% following earnings/guidance The S&P 500 settled higher by 0.4% despite enduring a first-hour selloff. Today after the close the following companies were scheduled to reported earnings: DV, GERN, AMRS, MRGE, SHOR, UNXL, IPXL, NSIT, CUBE, ELON, ELX, HAYN, MFLX, NFG, OPLK, SAAS, SEM, UEIC, ALNY, LXU, NOG, PEGA, ESE, FF, MODN, ONXX, ATLS, CLNE, EPAM, NES, MIDD, MNST, RAX, WG, AGO, AIRM, AL, ANAC, ASYS, AUQ, BCEI, BFAM, BRKS, CCIX, CFN, CPE, DAR, DNDN, ECPG, FXEN, GXP, INWK, KTOS, MCP, MDRX, MDVN, NNI, NPSP, NVDA, OLED, PCLN, PDLI, RICK, RNDY, SF, SLXP, UBNT, WIFI, ZGNX, EDG, YOKU, ENV, LGF, BNNY, DATA, LGP, NDLS Other notable movers on earnings/guidance: UBNT +22.6%, MEET +21.2%, OLED +20.9%, NOAH +15.4%, WAVX +15.1%, DATA +14.1%, RAX +10.8%, GERN +7.8%, FF +6.6%, NPSP +6%, AEZS +5.6%, PCLN +5.5%, WIFI +5.2%, WG +4.2%, CUBE +2.9%, OPLK +2.4%, CLNE +2.4%, LGF +2.3%, OGXI +2.2%, CALL +2.2%, AIRM +2%, PDLI +1.5%, INTX +1.4%, ONXX +1.2%, SRC +1.1%, CPE +1%, CPST -18.4%, BRKS -13.3%, MCP -13.1%, DNDN -10.9%, SAAS -9.6%, MDRX -6.4%, ELON -5.7%, MNST -5.3%, YOKU -5.1%, RNDY -4.3%, BCEI -3.9%, BNNY -3.7%, TWER -3.6%, RPTP -3.3%, NOG -3.1%, NDLS -3%, AUQ -2.7%, PEGA -2.5%, NVDA -2.5%, KTOS -2%, UNXL -2%, GPS -1.8%, FXEN -1.1%, RICK -1%, HRG -1% Futures are higher after hours: S&P 500 futures are +0.65 from fair value of 1693.85 and Nasdaq100 futures are +1.88 from fair value of 3127.62. Tomorrow morning before the open no economic reports are scheduled to be released. Tomorrow before the open the following companies are scheduled to report earnings: ABFS, JRCC, TPC, ZEUS, FSS, MINI, NRG, MEA, WWAV, BECN, DRH, EBIX, EVEP, MGA, PGNX, STRL, VTG, HNR, MHR

Commodities

Treasuries

Treasuries Tick Higher in Uneventful Trade: Treasuries ended the day with some gains amid a rather uneventful trade. The complex erased its overnight gains ahead of this morning’s data, but returned to its best levels of the session after initial claims saw a small uptick to 333K (340K expected). Trade was choppy over the remainder of the session with yields confined to just a 2 bp range. Even this afternoon’s disappointing $16 bln 30-yr bond offering failed to break the range, drawing 3.652% and a soft 2.11x bid/cover (weakest since August 2011). Direct (17.1%) and indirect (40.2%) bidders saw larger than usual takedowns, leaving primary dealers with left with 42.7% of the supply. Yields across the curve ended lower by less than 2 bps with the 10-yr slipping to 2.587% at the cash close. Participants will be watching the 2.550% area as minor near-term support, with the 2.450% level being more important from a technical standpoint. Today’s action caused some flattening along the yield curve as the 2-10-yr spread tightened to 228 bps. Elsewhere, precious metals ended near their highs with gold climbing $25 to $1310 and silver surging $0.75 to near $20.25. Data concludes for the week on Friday with wholesale inventories (10).

Next Day In View 

On other news.... 

Currencies 

Dollar Remains Under Pressure: The Dollar Index is lower for a fifth straight session with buyers providing some support in the 80.90 area. The current losing streak has dropped the greenback below its 200-day moving average, and has action on track to post its lowest close since the middle of June. The 80.80 area will be viewed as critical support in the days ahead as the level dates back to February. 

·         EURUSD is +50 pips at 1.3385 as action tests seven-week highs. The single currency is on track for its fourth gain over the last five sessions, and is testing the key 1.3400 area that corresponds with the June highs. Today’s strength has come on the heels of the better than expected German trade surplus, and despite Greek unemployment climbing to 27.6%. Eurozone data out tomorrow is limited to French industrial production. 

·         GBPUSD is +60 pips at 1.5550 as trade probes the 200-day moving average. A run of better than expected data to start the month of August has been a tailwind for sterling as the currency has managed to tack on close to 450 pips against the greenback. Britain’s trade balance will be released tomorrow. 

·         USDCHF is -15 pips at .9195 as trade tests key support in the vicinity. Action over the last month has been problematic for the pair with trade tumbling close to 550 pips off the July highs. Any close below .9195 will mark the worst since February. 

·         USDJPY is flat at 96.35 after last night’s policy meeting saw the Bank of Japan stand pat. Early selling in the U.S. session pressured the pair to a seven-week low of 95.80, but it has since managed to erase those losses. Japan’s Tertiary Industry Activity is due out this evening. 

·         AUDUSD is +125 pips at .9120 as trade squeezes higher following last night’s Chinese trade data. Today’s bid has the hard currency higher for a fourth straight session, and has trade nearing a test of .9150 resistance. If bulls are able to retake that level, they will be looking to test the key .9300 area. The Statement from the latest Reserve Bank of Australia meeting will cross the wires tonight. Chinese data includes fixed asset investment, industrial production, CPI, and PPI. 

·         USDCAD is -100 pips at 1.0320 as trade remains on track to post its biggest drop in a month. Today’s selling comes despite the New Home Price Index miss (0.2% MoM actual v. 0.3% MoM expected), and has trade looking to test 1.0300 support. Canadian employment data is due out tomorrow morning.  

Jason's Commentaries


Definitely a very volatile day last night. The market started with a bullish bias which quickly sold off till around 11am ET and started reversing and wiped out all the losses. Dow managed to held above the support at 15,400. After market wiped out all the losses, it remained flat throughout the session. The main leader for the market last night was Materials, led by names like Monsanto, Dow Chemicals and Mosaic which gained 2.46%,1.71% and 5.13% respectively. Microsoft was also a notable names which gained 2.59% while the other tech components are not performing as well. The total volume last night were 689.4m shares traded on the NYSE and the UVOL is significantly higher than the DVOL and the rest of the internals were pointing at the bullish direction. Sounds like a bullish day to me. VIX went down 1.93% as well. While we're not having any economic data coming out, i suppose the technical side of the market is likely to work its magic. However, we do not have much catalyst to push the market higher. So as of now, we're likely to enter a sideway consolidated market as Dow held above 15,400. 

Meanwhile, I would like to wish Singapore a very happy 48th birthday. I'm very fortunate to be staying in such a prosperous country and it's definitely one of the best place to stay in the world. I'm proud to be a Singaporean =D

Market Call: FLAT

Date: 9 Aug 2013