9 Dec 2013 AMC- Monday ended flat after huge gain on Friday
Market Summary
S&P futures vs fair value: +3.80. Nasdaq futures vs fair value: +10.80.
The futures market is working to maintain a positive disposition coming off Friday's broad-based rally. It has been successful so far as the S&P futures continue to point to a slightly higher start for the market when trading begins.
There isn't any economic data for the US today, but there is a lineup of Fed speakers, including Richmond Fed President Lacker (12:50 ET), St. Louis Fed President Bullard (13:05 ET), and Dallas Fed President Fisher (13:15 ET), all of whom will be addressing the economy in today's speeches. Mr. Bullard is an FOMC voter this year, Mr. Fisher will be an FOMC voter in 2014. Mr. Lacker does not have an FOMC vote this year and won't in 2014 either.
Market Internals
Market Internals -Technical-
The S&P 500 closed up 3 (+0.18%) at 1808, the Nasdaq closed up 6 (+0.15%) at 4069, and the Dow closed up 5 (+0.03%) at 16026. Action came on slightly below average volume (NYSE 684 mln vs. avg. of 701; NASDAQ 1587 mln vs. avg. of 1761), with advancers outpacing decliners (NYSE 1538/1524, NASDAQ 1062/1528) and new highs outpacing new lows (NYSE 154/64, NASDAQ 160/37).
Relative Strength:
Junior Gold Miners-GDXJ +2.77%, Natural Gas-UNG +2.63%, Metals and Mining-XME +2.23%, Egypt-EGPT +2.17%, Silver-SLV +1.92%, Silver Miners-SIL +1.29%, Mexico-EWW +1.23%, Eastern Europe-ESR +1.04%, Peru-EPU +0.87%, Spain-EWP +0.85%.
Relative Weakness:
Clean Energy-PBW -2.25%, Gasoline-UGA -2.22%, Cocoa-NIB -2.1%, Australia-EWA -1.37%, Japan-EPP -0.95%, Rare Earths-REMX -0.93%, Volatility-VXX -0.82%, Chile-ECH -0.73%, China 25 Index-FXI -0.67%, Emerging Markets Small Cap-EWX -0.57%.
Leaders and Laggards
Technical Updates
Briefing's Commentaries
Closing Market Summary: Markets see
slight gains
There wasn't a lot of excitement in the stock market today and there is nothing wrong with that. After rallying in broad-based fashion on Friday, the major indices stood their ground (for the most part) amid a lack of conviction from buyers and sellers alike.
Today wasn't a case so much of the stock market going up as it was a case of some influential stocks going up to keep the major indices on a winning path. In fact, decliners were just about even with advancers at the NYSE and led by a 3-to-2 margin on the Nasdaq.
Apple (AAPL 566.43, +6.41) and Google (GOOG 1078.14, +8.27) were key drivers of the S&P 500 and Nasdaq Composite while ExxonMobil (XOM 95.84, +0.19), Chevron (CVX 123.34, +1.05), and Goldman Sachs (GS 167.67, +0.46) were key drivers specifically of the price-weighted Dow Jones Industrial Average.
Another distinction in today's market is that the small-cap sector generally sat this one out as evidenced by the underperformance of the Russell 2000 (-0.2%).
The S&P 500 made an attempt to switch into a higher gear, but it was rebuffed after peaking its head above the 1811 level. That area was a technical line in the sand that was tried and trumped on three separate occasions. The last time was around 1:25 p.m. ET. From that point forward, the broader market trended lower in a choppy trade, yet there was never a cascade of selling interest.
Three Federal Reserve Bank Presidents -- Lacker (Richmond), Bullard (St. Louis), and Fisher (Dallas) -- gave speeches today that touched on their economic views, but ultimately none of them surprised the market with their thinking.
On a related note, the Federal Reserve released a report today that showed household net worth hit a record high $77.3 tln in the third quarter. The stock market took that news and sat with it. Despite the encouraging statistic, it did little to add to household net worth today.
From a sector standpoint, there wasn't a single sector that moved up, or down, at least 1.0%. The biggest gainer today was the materials sector (+0.5%), which also happens to be one of the lowest-weighted sectors in the S&P 500. A decent showing by the financial (+0.4%) and industrials (+0.3%) sectors helped carry more of today's performance load. The utilities (-0.6%) and the consumer discretionary (-0.1%) sectors were the only sectors to end the day in red figures.
McDonald's (MCD 95.72, -1.08) was a notable blue chip laggard following the company's report that comparable sales in its US business declined 0.8% in November (they were up 0.5% overall). Separately, food services company Sysco (SYY 37.62, +3.31) enjoyed a strong day with investors applauding its decision to buy US Foods for a total consideration of $8.2 bln. Aside from stocks, the bond market also stood its ground today after Friday's advance. The 10-yr note added two ticks, leaving its yield at 2.85%.
Tomorrow's economic calendar features the Wholesale Inventories and JOLTS - Job Openings reports for October. Neither is known for having market-moving potential.
There wasn't a lot of excitement in the stock market today and there is nothing wrong with that. After rallying in broad-based fashion on Friday, the major indices stood their ground (for the most part) amid a lack of conviction from buyers and sellers alike.
Today wasn't a case so much of the stock market going up as it was a case of some influential stocks going up to keep the major indices on a winning path. In fact, decliners were just about even with advancers at the NYSE and led by a 3-to-2 margin on the Nasdaq.
Apple (AAPL 566.43, +6.41) and Google (GOOG 1078.14, +8.27) were key drivers of the S&P 500 and Nasdaq Composite while ExxonMobil (XOM 95.84, +0.19), Chevron (CVX 123.34, +1.05), and Goldman Sachs (GS 167.67, +0.46) were key drivers specifically of the price-weighted Dow Jones Industrial Average.
Another distinction in today's market is that the small-cap sector generally sat this one out as evidenced by the underperformance of the Russell 2000 (-0.2%).
The S&P 500 made an attempt to switch into a higher gear, but it was rebuffed after peaking its head above the 1811 level. That area was a technical line in the sand that was tried and trumped on three separate occasions. The last time was around 1:25 p.m. ET. From that point forward, the broader market trended lower in a choppy trade, yet there was never a cascade of selling interest.
Three Federal Reserve Bank Presidents -- Lacker (Richmond), Bullard (St. Louis), and Fisher (Dallas) -- gave speeches today that touched on their economic views, but ultimately none of them surprised the market with their thinking.
On a related note, the Federal Reserve released a report today that showed household net worth hit a record high $77.3 tln in the third quarter. The stock market took that news and sat with it. Despite the encouraging statistic, it did little to add to household net worth today.
From a sector standpoint, there wasn't a single sector that moved up, or down, at least 1.0%. The biggest gainer today was the materials sector (+0.5%), which also happens to be one of the lowest-weighted sectors in the S&P 500. A decent showing by the financial (+0.4%) and industrials (+0.3%) sectors helped carry more of today's performance load. The utilities (-0.6%) and the consumer discretionary (-0.1%) sectors were the only sectors to end the day in red figures.
McDonald's (MCD 95.72, -1.08) was a notable blue chip laggard following the company's report that comparable sales in its US business declined 0.8% in November (they were up 0.5% overall). Separately, food services company Sysco (SYY 37.62, +3.31) enjoyed a strong day with investors applauding its decision to buy US Foods for a total consideration of $8.2 bln. Aside from stocks, the bond market also stood its ground today after Friday's advance. The 10-yr note added two ticks, leaving its yield at 2.85%.
Tomorrow's economic calendar features the Wholesale Inventories and JOLTS - Job Openings reports for October. Neither is known for having market-moving potential.
·
Nasdaq +34.7% YTD
·
Russell 2000 +32.7% YTD
·
S&P 500 +26.8% YTD
·
DJIA +22.1% YTD
Commodities
COMEX
Metals Closing Prices
·
Feb gold rose $5 to
$1234.10/ounce
·
Mar silver fell $0.17 to
$19.07/ounce
·
Mar copper rose 1 cent
to $3.26/lb
CBOT
Agriculture and Ethanol/ICE Sugar Closing Prices
·
Mar corn rose $0.04 to
$4.38/bushel
·
Mar wheat fell 1 cent to
$6.50/bushel
·
Jan soybeans rose 17
cents to $13.43/bushel
·
Jan ethanol rose 2 cents
to $2.01/gallon
·
Jan sugar (#16 (U.S.))
fell 1.27 cents to 18.48 cents/lb (down 7%)
NYMEX
Energy Closing Prices
·
Jan crude oil fell $0.30
to $97.40/barrel
·
Jan natural gas rose 11
cents to $4.23/MMBtu
·
Jan heating oil fell 4
cents to $3.01/gallon
·
Jan RBOB gasoline fell 4
cents to $2.68/gallon
Treasuries
Treasuries Gain Amid Quiet Trade:
10-yr: +01/32..2.860%..USD/JPY: 103.27..EUR/USD: 1.3735
·
Treasuries booked small
gains as afternoon selling dropped maturities back onto their overnight
lows.
·
Today's
bid produced the complex's first gain in a week, and just the second gain in
the past two weeks as buyers moved
into the complex despite rising prospects the Fed will soon begin to pare back
its bond-buying program.
·
Shorter dated maturities
ended little changed with the 5y slipping 0.8bps to 1.497%. The 1.450% area
will be watched closely over the coming days as what was a lid on action since
September is now home to support helped by the 50 dma. Click here to see an intraday
yields chart.
·
The 10y shed -2.6bps,
closing @ 2.857%. Early action saw the benchmark yield hit a session low of
2.835%, ~10bps off Friday's high print. The 2.800% region should provide some
support if 2.830% gives way.
·
The 30y lost -3bps to
finish @ 3.889%. Today's bid caused the yield on the long bond to edge off
Friday's close, which was the highest since August 2011.
·
A
slightly flatter curve persisted as the 2-10-yr spread tightened to 256.5bps.
·
Precious metals went off
on their highs with gold +$11 @ $1240 and silver +$0.40 @ $19.93.
·
Tomorrow's
Data: Wholesale inventories
and JOLTS - Job Openings (10).
·
Tomorrow's
Auction: $30 bln 3y notes.
Next Day In View
Economic Commentary
Economic Summary: No US data today;
Bullard says small taper may recognize labor market improvement; Wholesale
Inventories tomorrow at 10:00
Fed/Treasury Events Summary:
Fed/Treasury Events Summary:
·
Saint Louis Fed
President Jamess Bullard gave a speech on policy today. He made the
following comments:
o In regard to the asset purchase program, he
emphasized that any Federal Open Market Committee (FOMC) decision on tapering
is data dependent, where tapering refers to reducing the pace of purchases.
"Data dependence encompasses both cumulative progress in labor
markets since September 2012 and a judgment concerning the sustainability of
that progress," Bullard explained. He also noted that
"inflation continues to surprise to the downside."
o While labor market outcomes have been
considerably better than those predicted at the time of the September 2012
decision, Bullard noted that inflation has surprised to the downside.
"There is no widely accepted reason why inflation is running as low
as it is in the face of extraordinarily accommodative policy from the
Fed," \
o "A small taper might recognize labor market
improvement while still providing the Committee the opportunity to carefully
monitor inflation during the first half of 2014," Bullard said.
"Should inflation not return toward target, the Committee could
pause tapering at subsequent meetings.
o He discussed three possible options for altering
forward guidance, including lowering the unemployment threshold. However,
Bullard cautioned, this "puts the credibility of the thresholds approach
at risk." He said another option would be to establish an inflation
floor at 1.5 percent, which would be symmetric with the current
forward guidance on inflation and which could be helpful if inflation continues
to behave in an unusual manner. The third option would be to state
verbally that the FOMC is unlikely to raise rates even after the 6.5 percent
unemployment threshold is crossed, which Chairman Ben Bernanke has already
done. This option is "less complicated and possibly just as
effective," Bullard said.
o Bullard repeated his call for press conferences
to be held after every FOMC meeting instead of only some meetings.
·
Richmond Fed President
Jeff Lacker (non voter, hawkish) also spoke and made the following remarks:
o He indicated that he expects discussion
regarding tapering at December meeting
o He said "Even though the federal funds rate
is effectively at the zero lower bound, this does not mean that the Fed has no
tools to attempt to stimulate economic activity. It is unclear to me that
further stimulus would achieve desired results, however, but it could make it
more difficult for the Fed to ultimately pursue an "exit policy" from
its extremely accommodative stance."
Upcoming Economic Data:
·
October
Wholesale Inventories due out Tuesday at 10:00 (Briefing.com consensus of 0.3%;
September was 0.4%)
·
October JOLTS - Job
Openings due out Tuesday at 10:00 (Briefing.com consensus of ; September was
3.913 M )
Upcoming Fed/Treasury Events:
·
Dallas Fed President
Richard Fisher (2014 voter, hawkish) to speak at 14:15
·
The Treasury is expected
to auction off $64 bln in new debt this week. Results for each auction will be
announced at 13:00
o Tuesday: $30 bln in 3 year notes
o Wednesday: $21 bln in 10 year notes
o Thursday: $13 bln in 30 year bonds
Other International Events of
Interest
·
China's Shanghai
Composite (+0.1%) and Hong Kong's Hang Seng (+0.3%) eked out gains after the
latest trade data from the Middle Kingdom pointed to a larger than expected
trade surplus ($33.8 bln actual v. $21.3 bln expected, $31.1 bln previous) on a
jump in exports (12.7% actual v. 7.0% expected). Chinese CPI was also released,
slowing to 3% YoY (3.2% YoY previous).
On other news....
Currencies
Dollar Dips to 80.15, Lowest Since
Late-October: 10-yr: +03/32..2.849%..USD/JPY: 103.23..EUR/USD: 1.37.5
The Dollar Index trades on session lows near 80.15. The greenback spent most of the session hovering near 80.20 before some afternoon selling pressured trade to its lowest levels since late-October. Click here to see a daily Dollar Index chart.
The Dollar Index trades on session lows near 80.15. The greenback spent most of the session hovering near 80.20 before some afternoon selling pressured trade to its lowest levels since late-October. Click here to see a daily Dollar Index chart.
·
EURUSD is +35 pips @ 1.3740 as buyers remain in control
for a fifth straight session. The single currency has been able to withstand
Germany's disappointing trade balance and industrial production figures with
trade ticking to new highs as comments from the Eurogroup meetings cross the
wires. The 1.3750/1.3775 area is the last level of resistance before a test of
the October highs. Industrial production reading from across the eurozone will
be released tomorrow. ECB head Mario Draghi will speak in Rome.
·
GBPUSD is +85 pips @ 1.6425 as action is on
track to post its best close since August 2011. Sterling has outperformed
in recent weeks as better than expected data continues to emerge out of the UK,
prompting many to bet the Bank of England will be the first of the major
central banks to tighten policy. Britain's manufacturing production and trade
balance will be announced ahead of NIESR GDP Estimate.
·
USDCHF is -15 pips @ .8900 as trade slumps to
its worst levels since late-October. Traders will continue to monitor the
.8900 level as that area has held up since the fall of 2011.
·
USDJPY is +40 pips @ 103.30 as trade looks to
be on track to post its best close since October 2008. Fueling today's
gains was today's Q3 Final GDP miss and the unexpected current account deficit.
The weak data may have been the cause for both Prime Minister Shinzo Abe and
Bank of Japan Governor Haruhiko Kurdoa to suggest ‘Abenomics' will not be going
away anytime soon. Japan's BSI Manufacturing Index and Tertiary Industry
Activity are due out tonight.
·
AUDUSD is +5 pips @ .9105 as trade has managed to erase
its early losses. The hard currency has seen a boost from the strong
Chinese trade data, and is looking to retake the important .9150 level.
Australian data includes NAB Business Confidence and home loans. China's
industrial production and fixed asset investment will cross the wires tonight.
·
USDCAD is +5 pips @ 1.0640 amid a sleepy session.
Recent action has produced several tests of the 1.0700 mark, but so far the
pair has been unable to close above the level.
Jason's Commentaries
Turns out to be a boring Monday as expected. The S&P500 was the leader amongst the indices while the Russell 2000 lagged. Apple and Google was the main reason why S&P500 was up. Dow was being lagged by MacDonald where their US business declined 0.8% in November. The market started with a bullish bias and went into a volatile session towards the close last night. Internals were showing some flat action and VIX declined to 13.49. Average volatility is likely to stay low for the Dec. As the broader market lagged much, we're having the Financials leading the market last night with a 0.42% gain and Materials gaining a 0.52%. This week we're having very light data, and we're likely to stay sideways for quite a while. Furthermore, we're having all the indices forming dojis last night and the Russell forming a hanging man. However I believe we're likely to go flat to the upside this week, which will likely break the high on the S&P500.
Market Call: FLAT to upside
Date: 10 Dec 2013
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