26 Dec 2013 AMC- Market traded with extremely low volume...

26 Dec 2013 AMC- Market traded with extremely low volume...

Market Summary 

Before Market Opens

S&P futures vs fair value: +4.90. Nasdaq futures vs fair value: +8.70.
The S&P 500 futures have padded their gain, and now trade almost five points above fair value.

Asian markets ended the quiet session on a mixed note. Economic data was limited to Japan's housing starts (14.1% year-over-year, 9.2% expected, 7.1% prior), construction orders (2.2% year-over-year, 61.1% previous) and South Korea's consumer confidence (107 actual, 106 expected, 107 prior).

Among news of note, on his one-year anniversary of taking office, Japan's Prime Minister Shinzo Abe visited the controversial Yasukuni war shrine, which commemorates those who died in service of the Japanese Empire, including convicted war criminals. The visit marked the first time a sitting prime minister appeared at the shrine since Junichiro Koizumi did so in 2006, and drew prompt condemnation from China and South Korea. 

·         Japan's Nikkei rallied 1.0% as the yen weakened to a five-year low against the greenback (104.75). Nissan Motor and Honda Motor added 0.8% and 0.5%, respectively, as exporters gained amid the weaker yen. Meanwhile, heavyweight Fast Retailing lagged, losing 0.7%.

·         Hong Kong's Hang Seng was closed.

·         China's Shanghai Composite lost 1.6% as trade snapped its three-day winning streak. The losses dropped action to a four-month low, and came as the People's Bank of China stopped injecting liquidity into the system. Financials were weak with Agricultural Bank of China giving up 1.2%. 

Markets across Europe are closed for Boxing Day. The euro slipped from its highs during the past 30 minutes, and now trades near 1.3680 against the dollar.

Market Internals

Market Internals -Technical-
The Dow closed up 122 (+0.8%) at 16480, the S&P 500 closed up 9 (+0.5%) at 1842, and the Nasdaq closed up 12 (+0.3%) at 4167. Action came on below average volume (NYSE 409 mln vs. avg. of 712; NASDAQ 1110 mln vs. avg. of 1755), with advancers outpacing decliners (NYSE 1643/1454, NASDAQ 1343/1250) and new highs outpacing new lows (NYSE 354/40, NASDAQ 289/17). 

ETF Strength: Rare Earth +2.8%, Platinum-PPLT +1.6%, Japan-EWJ +1.6%, Silver-SLV +1.4%, Solar-TAN +1.3%, Cotton-BAL +1.0%

ETF Weakness: Turkey-TUR -6.6%, Thailand-THD -3.0%, VXX -1.7%, Corn-CORN -1.4%, Cocoa-NIB -1.4%, Grains-JJG -1.3%

Leaders and Laggards

Technical Updates

Briefing's Commentaries 

Closing Market Summary: S&P 500 Logs Fourth Consecutive Gain
Not much stood in the way of the major averages on Thursday as they continued their year-end rally. The Dow Jones Industrial Average (+0.8%) logged its sixth consecutive gain while the S&P 500 (+0.5%) posted its fourth advance in a row. However, both ended the session at fresh record highs.

Despite the steady, day-long rally in the Dow and S&P, the Nasdaq (+0.3%) spent the entire session inside of a ten-point range, and settled essentially where it started the day.

The tech-heavy Nasdaq saw its rally attempts short-circuited by its top component, Apple (AAPL 563.90, -3.77), which fell 0.7%. Meanwhile, the S&P technology sector inched higher throughout the day and settled with a modest gain of 0.3%.

Outside of technology, the financial sector (+0.2%) was the only cyclical group that could not keep pace with the broader market. The remaining four cyclical sectors—consumer discretionary (+0.6%), energy (+0.9%), industrials (+0.7%), and materials (+0.6%)—all finished ahead of the S&P.

Of those four outperformers, energy and industrials provided leadership from the opening bell. The energy sector maintained its relative strength into the close while crude oil was limited to an increase of 0.4% (to $99.59/bbl). Top-weighted components, Chevron (CVX 124.81, +1.30) and ExxonMobil (XOM 100.90, +1.68) underpinned the growth-sensitive sector and their strength also factored into the outperformance of the Dow.

The price-weighted Dow also drew strength from 3M (MMM 138.29, +1.30) and Boeing (BA 138.27, +1.44), both of which helped the industrial sector (+0.7%) end not far behind energy.

Over on the countercyclical side, the third-largest S&P sector, health care (+0.7%), outperformed while consumer staples (+0.4%) and utilities (-0.4%) lagged. For its part, the telecom services sector (+0.5%) finished in-line with the broader market.

In part, the underperformance of utilities was rooted in the continued rise in yields. The 10-yr note slipped as its yield tested 3.000% before settling at 2.990%. Since the tapering announcement, the benchmark yield has added almost 11 basis points.

Participation was well, well, well-below average as only 410 million shares (versus an average of 726 million) changed hands on the floor of the New York Stock Exchange. Did we mention that today's participation was on the light side?

Although the broader market did not see much volume, Twitter (TWTR 73.21, +3.35) maintained its torrid pace on heaviest volume (82.5 million) since its market debut. The stock surged 4.8%, extending its December gain to 76.4%.

Today's economic data was limited to weekly initial claims, which dropped to 338,000 from an upwardly revised rate of 380,000 (from 379,000) while the Briefing.com consensus expected a decline to 350,000. Seasonal adjustment issues have been a recurring theme in claims data for the past few months, and the trend continued in today's report.

There is no economic data of note on tomorrow's schedule. 

·         Nasdaq +38.0% YTD 

·         Russell 2000 +36.9% YTD 

·         S&P 500 +29.2% YTD 

·         DJIA +25.8% YTD

Commodities

Precious Metals, Copper, Crude And Nat Gas All End Higher

  Commodities end the day mostly higher

  Gold and silver futures rallied early on in today's session with silver pushing above $20/oz and gold rising near $1215/oz

  At the end of pit trading today, Feb gold rose $8.70 to $1212/oz, while Mar silver gained $0.44 to $19.91/oz

  Crude oil rallied off its morning low... Feb crude finished $0.62 higher at $99.55/barrelNatural gas sold off, but recovered today

  Jan nat gas rose 3 cents on the day to $4.44/MMBtu

COMEX Metals Closing Prices.

·         Feb gold rose $8.70 to $1212/oz

·         Mar silver rose $0.44 to $19.91/oz

·         Mar copper rose 3 cents to $3.40/lbs

CBOT Agriculture and Ethanol Closing Prices

·         Mar corn fell $0.08 at $4.27/bushel

·         Mar wheat settled unch at $6.06/bushel

·         Jan soybeans fell 14 cents to $13.20/bushel

·         Jan ethanol were flat at $1.95/gallon

NYMEX Energy Closing Prices

·         Feb crude oil rose $0.62 to $99.55/barrel

·         Jan natural gas fell 2 cents to $4.44/MMBtu

·         Jan heating oil rose 3 cents to $3.11/gallon

·         Jan RBOB settled unchanged at $2.82/gallon

Treasuries

Treasuries Slip in Quiet Holiday Trade, 10y Hits 3.00%:

  Treasuries slipped amid a quiet holiday trade. 

  Today's session saw most yields confined to a 2bp range with volumes remaining well below average. Click here to see an intraday yields chart.

  Selling up front caused the 2y to tick to a three-month high of 0.430% before sliding to 0.414% (+0.8bps) by the cash close. 

  The 5y probed the 1.750% level early in the session, but finished unchanged @ 1.741%. 

  The 10y's long-awaited test of 3.000% finally came to fruition as the benchmark yield kissed the level but could not climb higher. A +1bp advance produced a close of 2.990%, the highest since August 2011. 

  The long bond lagged the rest of the complex with the 30y tacking on +2bps and ending @ 3.921%, its own 28-month high. 

  A slightly flatter curve developed as the 2-10-yr spread tightened to 257.5bps. 

  Precious metals were firm as gold finished +$8 @ $1211 and silver climbed +$0.31 to $19.80. 

  Tomorrow's Data: None.

Next Day In View 

Economic Commentary

Economic Summary: Jobless Claims fall faster than expected; Pending Home Sales Monday at 10:00
Economic Data Summary:

·         Weekly Initial Claims 338K vs Briefing.com consensus of 350K; Last Week was revised to 380K from 379K

·         Weekly Continuing Claims 2.923 M vs Briefing.com consensus of 2.850 M ; Last Week was revised to 2.877 M from 2.884 M

o    The Briefing.com consensus expected the initial claims level to fall to 350,000. Over the past several months, seasonal adjustment problems have introduced unwarranted volatility in the claims data. According to the Department of Labor, the problems continued as the Christmas and New Year holidays disrupted the adjustment components. Once the holiday period is over, we expect the initial claims level to return to around 330,000. The continuing claims level increased to 2.923 mln for the week ending December 14 from a downwardly revised 2.877 mln (from 2.884 mln) for the week ending December 7.

Upcoming Economic Data:

·         November Pending Home Sales due out Monday at 10:00 (Briefing.com consensus of 2.5%; October was -0.6%)

Other International Events of Interest

·         Japan's Nikkei (+1.0%) rallied as the yen weakened to a five-year low against the greenback after Japanese Prime Minister Shinzo Abe visited the Yasukuni War Shrine. The visit marked the first by a sitting Japanese Prime Minister in seven years, and has drawn the ire of Chinese leaders. 

On other news.... 

Currencies 

Dollar Little Changed Amid Sleepy Holiday Trade: 10-yr: -02/32..2.989%..USD/JPY: 104.75..EUR/USD: 1.3691
The Dollar Index hovers little changed near 80.50 as a sleepy holiday trade nears the final hour of trading for U.S. equities. Today's action has been locked in a 15 cent range (80.45/80.60) as markets across much of the world remained shuttered for the holidays. Click here to see a daily Dollar Index chart.

·         EURUSD is +10 pips @ 1.3690 as trade remains trapped in an inside range day. Today's action has been confined to a 40 pip range as data and news out of the region remained absent. 

·         GBPUSD is +65 pips @ 1.6415 as trade threatens the best levels of the year. The 1.6450 area remains on many traders' radars as any close above there would mark the best since August 2011. 

·         USDCHF is +5 pips @ .8960 amid a lackluster trade. The pair has been limited to just a 10 pip range for much of the U.S. session. 

·         USDJPY is +40 pips @ 104.75 as trade readies for its best close in over five years. Data was absent from today's session with Prime Minister Shinzo Abe's visit to the Yasukuni War Shrine (escalating tensions with China) being fingered for the yen weakness. Japanese data is heavy as average cash earnings, household spending, preliminary industrial production, retail sales, and Tokyo Core CPI are due out this evening. 

·         AUDUSD is -35 pips @ .8885 as action holds just off the lows. The .8850 area will be tracked closely over the coming days as a breakdown would produce the lowest print since the summer of 2010. 

·         USDCAD is +15 pips @ 1.0640 as action lingers just off session highs. The 1.0700 area remains of interest as trade has not held cleanly above the level since late-2009.

Jason's Commentaries


As expected, the market is still holding on their bullishness, however, we're looking at some weakness in the Russells which appeared to be the only laggard last night. The Dow was the strongest gainer as most of Dow's components were up. Across the larger persective, we've got most of S&P500 components up as well. Tech was lagging a little which is why Nasdaq was lagging behind. Across in the Russells, sentiments seem to be mixed. What is really surprising... is the VOLUME last night. 314.1m shares traded on the NYSE!?!??! The market is seriously too thin to manipulate... my guess is... after the market comes back to work, we're going to see some correction... We've got the Discretionary, Industrials, Energy and Healthcare leading last night. While we're looking at some drag by the Utilities.    

Market Call: FLAT

Date: 27 Dec 2013