23 Jul 2014 AMC - S&P500 ended higher as Apple rally despite missing earnings
Market Summary
European Markets Closing Prices
European markets are now closed; stock markets across Europe performed as follows:
European markets are now closed; stock markets across Europe performed as follows:
- UK's FTSE: + 0.0%
- Germany's DAX: + 0.2%
- France's CAC: + 0.1%
- Spain's IBEX: 0.0%
- Portugal's PSI: + 1.6%
- Italy's MIB Index: -0.2%
- Irish Ovrl Index: + 0.1%
- Greece ASE General Index: + 0.2%
Before Market Opens
S&P futures vs fair value: +1.80. Nasdaq futures vs fair value: +11.20.
The S&P 500 futures trade two points above fair value.
Markets in Asia ended on a mostly higher note.
U.S. Equities
Asia
The S&P 500 futures trade two points above fair value.
Markets in Asia ended on a mostly higher note.
- Economic data was limited:
- Australia's CPI rose 0.5% quarter-over-quarter (expected 0.6%, previous 0.6%), while the year-over-year reading increased 3.0% (consensus 3.1%, prior 2.9%)
- Singapore's CPI slowed to 1.8% year-over-year from 2.7% (expected 2.4%)
- Taiwan's industrial production surged 8.6% year-over-year (expected 7.2%)
- Japan's Nikkei slipped 0.1% amid a lackluster trade. Exporters ended mixed with Honda Motor off 0.9% and Sony up 1.0%.
- Hong Kong's Hang Seng rallied 0.8% to its best levels since the beginning of December. Property developers saw strong gains as China Overseas Land & Investment and China Resources Land added 4.4% and 7.5%, respectively, on expectations of looser lending standards later in the year.
- China's Shanghai Composite added 0.1%, settling at a five-week high. Brokerage names were boosted by the next wave of IPOs coming to market with CITIC Securities rallying 1.0% and Haitong Securities climbing 2.3%.
- Participants received a handful of data:
- Great Britain's BBA Mortgage Approvals came in at 43,300 (expected 43,400, previous 41,900), while CBI Distributive Trades Survey jumped to 21 from 4 (expected 16)
- French Business Survey held steady at 97 (expected 98)
- Italy's non-EU trade surplus narrowed to EUR2.15 billion from EUR2.45 billion
- Great Britain's FTSE is higher by 0.2% with consumer names showing strength. Capita trades up 3.7%, while Associated British Foods and Marks & Spencer Group hold respective gains of 1.7% and 1.2%.
- In France, the CAC trades up 0.4%. Airbus is higher by 2.2% after signing a delivery contract with Hawaiian Airlines. Advertiser Publicis Groupe is the weakest performer, down 1.1%.
- Germany's DAX sports an advance of 0.6% with Daimler contributing to the strength. The exporter is higher by 0.6% following its upbeat quarterly report. Peer Volkswagen trades up 1.1%.
U.S. Equities
- Futures point to a flat open
- The DJIA and S&P 500 finished yesterday's session just shy of all-time highs
- Technology will be in focus as Apple (AAPL), Broadcom (BRCM), EMC (EMC), and Microsoft (MSFT) were among the names releasing their quarterly results
- MBA Mortgage Index (+2.4%)
- S&P Futures +4 @ 1979
- Dow Futures +16 @ 17,049
- Nasdaq Futures +15 @ 3965
- Markets gained across most of Asia
- Australia's CPI printed an in-line 0.5% MoM, which equates to a 3.0% YoY advance
- Japan's Nikkei (-0.1%) slipped amid a lackluster trade
- Hong Kong's Hang Seng (+0.8%) rallied to its best levels since the beginning of December
- China's Shanghai Composite (+0.1%) settled at a five-week high
- India's Sensex (+0.5%) posted a record-high close
- Australia's ASX (+0.6%) finished at its best level in over six years
- Indonesia's Jakarta Composite (+0.2%) eked out a gain as Joko Widodo was officially declared the winner of the presidential election
Market Internals
Market Internals -Technical-
The Nasdaq closed up 18 (+0.40%) at 4474, the S&P 500 closed up 3 (+0.18%) at 1987, and the Dow closed down 27 (-0.16%) at 17087. Action came on mixed volume (NYSE 569 mln vs. avg. of 656; NASDAQ 1752 mln vs. avg. of 1664), with mixed advancers/decliners (NYSE 1808/1322, NASDAQ 1327/1349) and new highs outpacing new lows(NYSE 190/27, NASDAQ 75/39).
Relative Strength:
Biotechnology-XBI +6.86%, Coffee-JO +4.73%, Cocoa-NIB +2.26%, Biotechnology-IBB +2.23%, Copper Miners-COPX +2.02%, Vietnam-VNM +1.38%, China 25 Index-FXI +1.33%, Egypt-EGPT +1.14%, Turkey-TUR +1.14%, Australia-EWA +1.08%.
Relative Weakness:
Semiconductors-SMH -2.07%, Junior Gold Miners-GDXJ -1.31%, Silver Miners-SIL -1.27%, Livestock-COW -1.18%, Sugar-SGG -1.14%, Latin America 40-ILF -1.02%, Chile-ECH -0.53%, Russia-RSX -0.52%, Brazilian Real-BZF -0.36%, South Korea-EWY -0.35%
.
Leaders and Laggards
Technical Updates
Briefing's Commentaries
Closing Market Summary: Earnings Send S&P 500 to Another Record Close
The stock market ended the Wednesday session on a mixed note. The tech-heavy Nasdaq displayed relative strength, climbing 0.4%, while the S&P 500 added 0.2% with five sectors settling in the green. For its part, the Dow Jones Industrial Average (-0.2%) spent the entire session below its flat line.
Equities started the midweek affair on a rather unassuming note in the absence of market-moving news or economic releases. With those pieces missing from the equation, participants turned their attention to quarterly earnings as another dose of better than expected results pushed the S&P 500 to a fresh record close at 1987.01.
The health care sector (+0.8%) surged at the open and never relinquished the lead thanks to a big earnings beat reported by Biogen Idec (BIIB 337.60, +33.93). The stock soared 11.2%, while the iShares Nasdaq Biotechnology ETF (IBB 259.34, +5.66) advanced 2.2%. Elsewhere among biotech names, Puma Biotech(PBYI 233.43, +174.40) nearly tripled in value after announcing positive trial results.
In addition to boosting the health care space, biotechnology provided a measure of support to the Nasdaq, which also drew strength from the shares of Apple (AAPL 97.19, +2.47). The top-weighted tech stock rose 2.6% after beating earnings estimates on below-consensus revenue. However, the company guided Q4 revenue below its Capital IQ consensus estimate.
Sticking to tech earnings, Microsoft (MSFT 44.87, +0.04) missed bottom-line estimates, but beat on revenue. Meanwhile, Broadcom (BRCM 38.15, -0.60) and Juniper Networks (JNPR 22.43, -2.39) retreated despite delivering above-consensus results. Notably, Broadcom and other chipmakers struggled to stay out of the red with the PHLX Semiconductor Index falling 2.3%.
The underperformance of microchip names prevented the technology sector (+0.2%) from extending its slim gain, while other cyclical sectors ended on a mixed note. Energy (+0.6%) and materials (+0.4%) finished ahead of the broader market, while financials (+0.2%) kept pace with the S&P 500. The remaining two growth-sensitive sectors—consumer discretionary (-0.1%) and industrials (-0.4%)—could not make it into the green.
The weakest sector of the day—industrials—lagged amid weakness in the shares of Boeing (BA 126.71, -3.03). The Dow component lost 2.3% despite beating earnings estimates and raising its fiscal-year 2014 earnings guidance.
Also of note, it was reported during the session that the International Monetary Fund lowered its growth forecast for the U.S. to 1.7% from 2.0% and said the Fed may need to delay its first rate hike due to the contraction that took place in the first quarter. However, the remarks had little impact on equities as the major averages held their ground. The Treasury market did not move either and the 10-yr note ended the day flat with its yield at 2.47%.
Participation was well below average with less than 570 million shares changing hands at the NYSE.
Economic data was limited to the weekly MBA Mortgage Index, which rose 2.4% to follow last week's 3.6% decline.
Tomorrow, weekly initial claims (Briefing.com consensus 308K) will be reported at 8:30 ET, while the New Home Sales report for June (consensus 475K) will cross the wires at 10:00 ET. On the earnings front, 3M (MMM 144.68, -0.44), American Airlines (AAL 43.33, +0.95), Caterpillar (CAT 108.38, -1.68), Ford Motor (F 17.78, -0.04), and General Motors (GM 37.41, -0.35) will report ahead of the opening bell.
The stock market ended the Wednesday session on a mixed note. The tech-heavy Nasdaq displayed relative strength, climbing 0.4%, while the S&P 500 added 0.2% with five sectors settling in the green. For its part, the Dow Jones Industrial Average (-0.2%) spent the entire session below its flat line.
Equities started the midweek affair on a rather unassuming note in the absence of market-moving news or economic releases. With those pieces missing from the equation, participants turned their attention to quarterly earnings as another dose of better than expected results pushed the S&P 500 to a fresh record close at 1987.01.
The health care sector (+0.8%) surged at the open and never relinquished the lead thanks to a big earnings beat reported by Biogen Idec (BIIB 337.60, +33.93). The stock soared 11.2%, while the iShares Nasdaq Biotechnology ETF (IBB 259.34, +5.66) advanced 2.2%. Elsewhere among biotech names, Puma Biotech(PBYI 233.43, +174.40) nearly tripled in value after announcing positive trial results.
In addition to boosting the health care space, biotechnology provided a measure of support to the Nasdaq, which also drew strength from the shares of Apple (AAPL 97.19, +2.47). The top-weighted tech stock rose 2.6% after beating earnings estimates on below-consensus revenue. However, the company guided Q4 revenue below its Capital IQ consensus estimate.
Sticking to tech earnings, Microsoft (MSFT 44.87, +0.04) missed bottom-line estimates, but beat on revenue. Meanwhile, Broadcom (BRCM 38.15, -0.60) and Juniper Networks (JNPR 22.43, -2.39) retreated despite delivering above-consensus results. Notably, Broadcom and other chipmakers struggled to stay out of the red with the PHLX Semiconductor Index falling 2.3%.
The underperformance of microchip names prevented the technology sector (+0.2%) from extending its slim gain, while other cyclical sectors ended on a mixed note. Energy (+0.6%) and materials (+0.4%) finished ahead of the broader market, while financials (+0.2%) kept pace with the S&P 500. The remaining two growth-sensitive sectors—consumer discretionary (-0.1%) and industrials (-0.4%)—could not make it into the green.
The weakest sector of the day—industrials—lagged amid weakness in the shares of Boeing (BA 126.71, -3.03). The Dow component lost 2.3% despite beating earnings estimates and raising its fiscal-year 2014 earnings guidance.
Also of note, it was reported during the session that the International Monetary Fund lowered its growth forecast for the U.S. to 1.7% from 2.0% and said the Fed may need to delay its first rate hike due to the contraction that took place in the first quarter. However, the remarks had little impact on equities as the major averages held their ground. The Treasury market did not move either and the 10-yr note ended the day flat with its yield at 2.47%.
Participation was well below average with less than 570 million shares changing hands at the NYSE.
Economic data was limited to the weekly MBA Mortgage Index, which rose 2.4% to follow last week's 3.6% decline.
Tomorrow, weekly initial claims (Briefing.com consensus 308K) will be reported at 8:30 ET, while the New Home Sales report for June (consensus 475K) will cross the wires at 10:00 ET. On the earnings front, 3M (MMM 144.68, -0.44), American Airlines (AAL 43.33, +0.95), Caterpillar (CAT 108.38, -1.68), Ford Motor (F 17.78, -0.04), and General Motors (GM 37.41, -0.35) will report ahead of the opening bell.
- S&P 500 +7.5% YTD
- Nasdaq Composite +7.1% YTD
- Dow Jones Industrial Average +3.1% YTD
- Russell 2000 -0.4% YTD
Commodities
Closing Commodities: Crude Oil Finishes 0.7% Higher, Gold 0.1% Lower
NYMEX Energy Closing Prices
Sep crude oil rose $0.73 to $103.12/barrel
Aug natural gas fell 1 cent to $3.76/MMBtu
Aug heating oil rose 3 cents to $2.88/gallon
Aug RBOB fell 2 cents to $2.86/gallon
CBOT Agriculture and Ethanol/ICE Sugar Closing Prices
Aug gold fell $1.60 to $1304.50/oz
Sep silver settled unchanged at $21.00/oz
Sep copper settled unchanged at $3.21/lbs
Treasuries
Treasuries Finish Little Changed: 10-yr: -01/32..2.466%..USD/JPY: 101.52..EUR/USD: 1.3460
Currencies
Dollar Holds at Levels Last Seen in February: 10-yr: unch..2.463%..USD/JPY: 101.50..EUR/USD: 1.3459
Next Week In View
Economic Commentaries
Jason's Commentaries
Apple is one such example which led the S&P500 into the new highs. Of cause, the Nasdaq got dragged up as well. Just happens that the Dow got dragged down as the industrials are lagging. Of the 4 major indices, only Dow opened lower while the other 3 indices opened up high and maintained their high till mid day where there's a huge profit taking. However the market was able to regain the gains. Internals were showing some divergence. Healthcare and Energy were the main leaders of the last night session. Nonetheless, the market is unlikely to head down unless there are new geopolitical situation and we're likely to stay sideways and volatile but towards the upward for the near term.
Market Call: FLAT to upside
- Aug gold touched a session high of $1311.80 per ounce in early morning pit trade but gave up the gain as it slipped below the unchanged line in afternoon action. It brushed a session low of $1303.50 per ounce and settled 0.1% lower at $1304.50 per ounce.
- Sep silver touched a session low of $20.94 per ounce after retreating from a session high of $21.10 per ounce. It then chopped around near the break-even line and settled unchanged at $21.00 per ounce.
- Sep crude oil traded higher today following bullish inventory data. The EIA reported that for the week ending July 18, crude oil inventories fell by almost 4 mln barrels when expectations called for a smaller draw of 2.6-2.9 mln barrels.
- The energy component rose as high as $103.34 per barrel and settled with a 0.7% gain at $103.12 per barrel.
- Aug natural gas advanced to a session high of $3.81 per MMBtu. However, prices pulled back into negative territory in late afternoon floor trade, leaving natural gas to settle 0.3% lower at its session low of $3.76 per MMBtu.
NYMEX Energy Closing Prices
- Crude oil traded higher today as it gained support on bullish inventory data. The EIA reported that for the week ending July 18, crude oil inventories fell by almost 4 mln barrels when expectations called for a smaller draw of 2.6-2.9 mln. The energy component rose as high as $103.34 and settled with a 0.7% gain.
- Natural gas spent morning action in positive territory, advancing to a session high of $3.81. However, prices pulled back into negative territory in late afternoon floor trade, leaving natural gas to settle 0.3% lower at its session low.
CBOT Agriculture and Ethanol/ICE Sugar Closing Prices
- Sep corn rose 2 cents to $3.62/bushel
- Sep wheat rose 5 cents to $5.30/bushel
- Aug soybeans rose 17 cents to $12.01/bushel
- Sep ethanol rose 2 cents to $2.01/gallon
- Sep sugar (#16 (U.S.)) fell 0.25 of a penny to 24.35 cents/lbs
COMEX Metals Closing Prices
- Gold touched a session high of $1311.80 in early morning pit trade but gave up the gain as it slipped below the unchanged line in afternoon action. It brushed a session low of $1303.50 and settled with a 0.1% loss.
- Silver touched a session low of $20.94 after retreating from a session high of $21.10. It then chopped around near the break-even line where it eventually settled unchanged.
Treasuries
Treasuries Finish Little Changed: 10-yr: -01/32..2.466%..USD/JPY: 101.52..EUR/USD: 1.3460
- Treasuries ended little changed amid a sleepy session. Click here to see an intraday yields chart.
- Action across the curve was confined to 2bp range as a lack of tradable news and data made for a lackluster day.
- Up front, the 2y eased -1.3bps to 0.463%. Participants will be monitoring support in the 0.450% region in the days ahead with a breakdown likely provoking a move towards 0.350%.
- The 5y slipped -0.8bps to 1.650%. Action pressed both the 50 and 100 dma, but could not break below the level. A move below 1.620% support puts the 200 dma (1.568%) in play.
- The 10y fell -0.2bps to 2.464%. The benchmark yield remains just a couple of bps above a 13-month closing low.
- The long bond lagged with the 30y ticking up +0.6bps to 3.258%. The yield lagged throughout the entire session, and finished just off the highs.
- A slightly steeper curve won out as the 2-10-yr spread widened to 200bps.
- Precious metals ended little changed with gold and silver @ $1306 and $20.98, respectively.
- Data: Initial and continuing claims (8:30) and new home sales (10).
On other news....
Currencies
Dollar Holds at Levels Last Seen in February: 10-yr: unch..2.463%..USD/JPY: 101.50..EUR/USD: 1.3459
- The Dollar Index drifts little changed near 80.80 as a quiet session draws to a close. Click here to see a daily Dollar Index chart.
- The entire session has seen trade locked in a tight 10 cent range as action fights for the best close in five and a half months.
- EURUSD is -5 pips @ 1.3460 as trade dips to an eight-month low. A session sans any tradable news and data has confined the single currency to a tight 20 pip range. Flash Manufacturing and Services PMI numbers from across the region will be released tomorrow.
- GBPUSD is -30 pips @ 1.7035 as trade looks likely to post a sixth straight loss. Selling over the six-day slide has been orderly as the pair has erased just more than 100 pips with no day seeing more than a 40 pip decline. Today's weakness came after the Bank of England votes showed unanimous decisions to keep policy on hold and preceded comments from Bank of England Governor Mark Carney indicating any rate increases will be gradual and limited. Support in the 1.7000 area remains in focus. British data is limited to retail sales.
- USDCHF is unchanged @ .9025 as action holds at its best level in over five months. Earlier, Swiss National Bank Chairman Thomas Jordan reiterated the EURCHF1.20 floor will remain in place for the ‘foreseeable future.'
- USDJPY is +5 pips @ 101.50 as buyers remain in control for a fourth session. Today's session has seen trade limited to a tight 25 pip range as action approaches resistance in the 101.60 region.
- AUDUSD is +55 pips @ .9450 as trade rallies to a three-month high in response to today's CPI report. The reading was in-line at 0.5% MoM, but the 3.0% YoY (2.9% YoY expected) print slightly outpaced estimates, and ignited a bid in the hard currency. Any close above .9495 would be the best since November.China's HSBC Flash Manufacturing PMI will cross the wires tonight.
- USDCAD is -5 pips @ 1.0730 amid a tame trade. Some early selling dropped action onto support near 1.0700 before the mixed core retail sales (0.1% MoM actual v. 0.3% MoM expected) and retail sales (0.7% MoM actual v. 0.6% MoM expected) numbers ran action back to the break even line.
Next Week In View
Economic Commentaries
Economic Summary: Mortgage Applications rise 2.4% this week; New Home Sales out tomorrow at 10:00
Economic Data Summary:
Economic Data Summary:
- Weekly MBA Mortgage Applications 2.4%; Last Week was -3.6%
- Weekly Initial Claims due out Thursday at 8:30 (Briefing.com consensus of 308K; Last Week was 302K)
- Weekly Continuing Claims due out Thursday at 8:30 (Briefing.com consensus of 2.533 M ; Last Week was 2.507 M )
- June New Home Sales due out Thursday at 10:00 (Briefing.com consensus of 475K ; May was 504K)
- Australia's CPI rose 0.5% quarter-over-quarter (expected 0.6%, previous 0.6%), while the year-over-year reading increased 3.0% (consensus 3.1%, prior 2.9%)
Jason's Commentaries
Apple is one such example which led the S&P500 into the new highs. Of cause, the Nasdaq got dragged up as well. Just happens that the Dow got dragged down as the industrials are lagging. Of the 4 major indices, only Dow opened lower while the other 3 indices opened up high and maintained their high till mid day where there's a huge profit taking. However the market was able to regain the gains. Internals were showing some divergence. Healthcare and Energy were the main leaders of the last night session. Nonetheless, the market is unlikely to head down unless there are new geopolitical situation and we're likely to stay sideways and volatile but towards the upward for the near term.
Market Call: FLAT to upside
Date: 24 July 2014
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