24 Dec 2015 AMC - Santa Claus Rally... Can the market end the year with a GAIN??
Jason's Commentaries
After a selloff after the rate hike, the equities market got lifted by Santa's reindeer this week as Mon-Wed posted gains that nearly wiped out the losses after the rate hike. As everyone already expected the rate hike, there's not much shock to the equity market (kudos to Janet Yellen's hint that created the soft landing).
However, i doubt very much that the market will be having much volumes to drive the market up towards the end of the year. With much lesser upside, approx 70 points on the S&P500 to it's all time high, I doubt the punters will be pricing in towards the end of the year. In fact, i'm suspecting that the market is likely to end the year flat after such a volatile year. On the technical perspective, the main indices managed to break above the 200 day moving average, which is pointing at a bullish end to the year. I reckon that the upside is very near.
Towards the end of the trading day on Christmas Eve, the market took a quick profit take that ended the Christmas Eve in a flat note. It seemed that the traders are not willing to hold more risk through the long weekend. With just another 3 more trading days to the end of 2015, I think that the market is likely to end slight flat towards the downside despite of the technical perspective. The oil counters took some losses on the Christmas Eve despite gains in the Crude Oil for the past 2 trading sessions.
Now the main question is... What is going to happen to the equity market next year.. do stay tune to my year end report that will summarizes what happened in 2015.
Market Summary
European Markets Closing PricesEuropean markets are now closed; stock markets across Europe performed as follows:
- UK's FTSE: + 0.2%
- Germany's DAX: CLOSED
- France's CAC: -0.2%
- Spain's IBEX: + 0.4%
- Portugal's PSI: + 0.1%
- Italy's MIB Index: CLOSED
- Irish Ovrl Index: -0.4%
- Greece ASE General Index: CLOSED
Before Market Opens
S&P futures vs fair value: -2.50. Nasdaq futures vs fair value: -5.20.
Read more: http://www.briefing.com/Platinum/InDepth/InPlayFull.htm#ixzz3vYABBPKL
S&P futures vs fair value: -2.50. Nasdaq futures vs fair value: -5.20.
The S&P 500 futures trade three points below fair value.
Markets in the Asia-Pacific region ended the day on a mixed note following a quiet session. In Japan, investors returned from a midweek holiday, sending the Nikkei lower by 0.5% amid daylong yen strength that pressured the dollar/yen pair to 120.35 from the 121.00 area. It is worth noting that the Bank of Japan released its latest policy minutes, which showed that policymakers believe slow wage and capital expenditure growth is due to a slowdown in emerging markets. Elsewhere, the People's Bank of China released its Q4 Survey, which showed that 52.0% of households view property prices as too high (49.7% in Q3) while 51.1% of households see consumer prices as too high.
- In economic data:
- Australia's CB Leading Index -0.1% month-over-month (previous -0.1%)
- South Korea's December Consumer Confidence fell to 103 from 106
- Singapore's November Industrial Production -3.6% month-over-month (expected 0.8%; previous 2.9%); -5.5% year-over-year (consensus -2.7%; last -4.7%)
---Equity Markets---
- Japan's Nikkei lost 0.5% amid losses in all but two sectors. Energy (+1.4%) and industrials (+0.3%) outperformed while health care (-2.3%), utilities (-1.0%), and technology (-0.8%) struggled. Kyowa Hakko Kirin fell 11.0% after Nomura downgraded the stock. Elsewhere, Konami, Pioneer, Obayashi, and Mitsubishi Motors lost between 2.0% and 4.7%. On the upside, Komatsu, Kobe Steel, Mitsumi Electric, and Hitachi Construction gained between 2.3% and 3.2%.
- Hong Kong's Hang Seng spiked at the start of the session, spending the day in a slow retreat from its opening high. The index narrowed its gain to 0.4% by the close, receiving support from energy names like CNOOC, China Petroleum & Chemical, and Petrochina. The three names advanced between 2.5% and 3.1% while Li & Fung gained 1.2%. On the flip side, New World Development and China Resources Land lost 2.2% and 1.4%, respectively.
- China's Shanghai Composite lost 0.7% with brokerage names on the defensive once again. CITIC Securities, Industrial Securities, and Pacific Securities registered losses between 2.5% and 5.8%. Bank of Beijing outperformed, climbing 4.8%.
Major European indices have meandered inside narrow ranges with trading volume running well below average. The lack of participation is understandable considering most regional markets (Belgium, Denmark, Finland, Germany, Iceland, Italy, Poland, Greece, Norway, Switzerland, etc.) are closed for the rest of the week. The political picture in Spain remains uncertain after PSOE rejected Mariano Rajoy's coalition proposal yesterday. The euro rallied overnight, hitting 1.0939 against the dollar before pulling back to 1.0939 where the pair currently trades.
- Economic data was limited:
- UK's BBA Mortgage Approvals 45,000 (expected 46,200; previous 45,500)
---Equity Markets---
- France's CAC is lower by 0.1% amid losses in most components. Technip, Sanofi, and Alsto underperform with losses between 1.0% and 1.9% while financials are mixed. BNP Paribas trades down 0.9%, Societe Generale is flat, while Credit Agricole and Unibail Rodamco are both up near 0.3%.
- UK's FTSE hovers just above its flat line up 0.3% after spending the first half in a 25-point range. BP and Anglo American outperform with gains close to 1.5% apiece while Tesco, BT Group, and Glencore show losses between 1.0% and 1.6%.
- Germany's DAX is closed for Christmas Eve
Read more: http://www.briefing.com/Platinum/InDepth/InPlayFull.htm#ixzz3vYABBPKL
Market Internals
Market Internals -Technical-
DOW down to 17552 ( -0.29%). Nasdaq is up to 5048 ( 0.05%). S&P500 down to 2060.96 ( -0.16%). Action came on lower than average volume (NYSE 341 mln vs avg. of 948 mln; Nasdaq 711 mln vs avg. of 1880 mln) , w/ advancers outpacing decliners (NYSE 1642/1412, NASDAQ 1553/1218) and new highs outpacing new lows (NYSE 41/5, NASDAQ 52/39) .
Relative Strength:
Junior Gold Mine-GDXJ +2.25%, Gold Miners-GDX +1.68%, Global X Silver Miners -SIL +1.63%, Platinum-PPLT +1.6208%, Shipping-SEA +1.413%, Israel-EIS +1.34%, Colombia-GXG +0.93%, New Zealand-ENZL +0.74%, Vietnam -VNM +0.6115%, Provident Financial Services-PFS +0.6%
Relative Weakness:
Egypt -EGPT -2.635%, Russia-RSX -1.286%, Japan-EWJ -1.14%, U.S. Diesel-Heating-UHN -0.91%, South Korea -EWY -0.78%, Steel -SLX -0.74%, Coffee-JO -0.7356%, FTSE Pacific -VPL -0.6%, U.S. Energy -IYE -0.6%, Social Media -SOCL -0.5986%
Read more: http://www.briefing.com/Platinum/InDepth/InPlayFull.htm#ixzz3vY9pycIf
Leaders and Laggards
Technical Updates
Commentaries
Closing Market Summary: Stocks End Upbeat Holiday Week on Flat Note
The stock market completed an abbreviated trading week on a flat note as the sleepy Thursday session produced a slightly lower finish for the S&P 500 (-0.2%) while the Nasdaq Composite (+0.1%) settled just above its flat line. For the week, the S&P 500 gained 2.8% and the Nasdaq advanced 2.6%.
The Thursday half-session had the makings of a range-bound affair from the start, considering index futures spent the night inside narrow ranges. The overnight action saw mixed trade in Asia while yen strength pressured the dollar/yen pair to 120.30, where the pair traded through the New York session. Similarly, the few European markets that were open ended the day on a mixed note and there was no news on the Spanish political front.
Once the opening bell rang, the energy sector (-0.9%) slumped to the bottom of the leaderboard and remained there into the close. The sector halved its loss intraday, but returned to its low by the end of the day while crude oil climbed 1.6% to $38.08/bbl. Despite today's decline, the energy sector gained 4.8% for the week and crude oil advanced nearly 10.0%.
Outside of energy, the remaining sectors spent the bulk of the session near their flat lines, climbing into the green during the final hour; however, a late wave of selling sent the entire market to its opening low. The health care sector (+0.1%) settled in the lead thanks to strength in biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 339.79, +1.12) climbed 0.3%, which kept the Nasdaq ahead of the S&P 500 throughout the day.
To be fair, the Nasdaq also drew strength from chipmakers, evidenced by a 0.4% gain in the PHLX Semiconductor Index. Meanwhile, the broader technology sector (-0.1%) was held back by large cap names like Apple (AAPL 108.03, -0.58), Alphabet (GOOGL 765.84, -2.67), and Microsoft (MSFT 55.67, -0.15).
Above all, today's session saw very limited participation with fewer than 400 million shares changing hands at the NYSE floor.
Treasuries are on track to register slim gains with the bond market set to close in an hour. The 10-yr yield is lower by a basis point at 2.25%.
The weekly initial claims report was slightly better than expected, with claims for the week ending December 19 dropping by 5,000 to 267,000 (Briefing.com consensus 271,000). However, it was no different from what has been seen in these weekly reports for some time. Initial claims have been bounded between 250,000 and 300,000 since July 2014. The four-week moving average for initial claims increased by 1,750 to 272,500.
Continuing claims for the week ending December 12 decreased by 47,000 to 2.195 million (Briefing.com consensus 2.238 mln). That left the four week moving average at 2.211 million, up 10,000 from the prior week.
Investors will not receive any economic data on Monday.
- Nasdaq Composite +6.6% YTD
- S&P 500 +0.1% YTD
- Dow Jones Industrial Average -1.5% YTD
- Russell 2000 -4.3% YTD
Week in Review: Stocks Trot Higher on Light Volume
The stock market began the abbreviated trading week on a higher note thanks to a final-hour rally that lifted the market back to its opening high. The S&P 500 added 0.8% while the Nasdaq Composite (+0.9%) outperformed slightly. Overnight, Asian markets had a mixed showing with China's Shanghai Composite (+1.8%) outpacing other regional indices thanks to stimulus hopes. Meanwhile, European indices flashed solid intraday gains, but they slid into the close with Spain's IBEX diving 3.6% due to political uncertainty stemming from general elections that took place over the weekend. Mariano Rajoy's Partido Popular came out on top, receiving 123 votes, but forming a lasting coalition government will be a challenge considering the runner-up Socialist party has ruled out forming a joint government with PP. Spain's 10-yr note sold off in response, sending its yield higher by nine basis points to 1.79%. Once the attention shifted to the U.S., equity indices spiked out of the gate, hitting their session highs during the opening hour of the trading day. All ten sectors took part in the rally, but the market ran into some resistance that coincided with renewed selling in crude oil, which ended the day lower by 1.3% at $35.79/bbl.
The stock market registered its second consecutive advance on Tuesday with the S&P 500 climbing 0.9%. The benchmark index returned above its 100-day moving average (2,026) while the Nasdaq Composite (+0.7%) underperformed throughout the day. Overall, the Tuesday affair was very quiet, which was evidenced by light trading volume as fewer than 850 million shares changed hands at the NYSE floor. Equity indices ranged near their flat lines through the first two hours of the session, climbing to new highs during the afternoon. All ten sectors ended the day with gains, paced by the energy sector (+1.2%), which settled among the leaders. To little surprise, the rally in the energy sector was underpinned by crude oil as the commodity advanced 1.0% to $36.14/bbl. Similarly, another commodity-linked sector—materials (+1.2%)—spent the day near the top of the leaderboard while most other cyclical groups posted slimmer gains.
The major averages enjoyed a broad-based rally on Wednesday and the steady climb was undoubtedly facilitated by light trading volume ahead of Thursday's abbreviated Christmas Eve session. The S&P 500 spiked 1.2%, ending right above its 50-day (2,063) moving average, and the Nasdaq Composite (+0.9%) followed not far behind. Equity indices registered roughly half of their gains right at the open, rallying behind the energy sector (+4.4%), which held a solid lead throughout the day thanks to a rally in crude oil. The energy component surged 3.8% to $37.50/bbl, catching a second wind from bullish inventory data; however, it wasn't just energy, as every other sector ended the day comfortably in the green.
Read more: http://www.briefing.com/Platinum/InDepth/InPlayFull.htm#ixzz3vY9oHi4j
Commodities
Treasuries
Treasury Market Summary
Yield Curve Flattens
- The Treasury complex moved generally higher today although the 2-year fell as part of a curve-flattening move. The U.S. Dollar Index fell 0.41% to 97.93, the S&P 500 was barely changed at 2,061.9, and WTI crude made it two days up in a row (+1.65% to $38.12/bbl.). Gold rallied 0.70% to $1,075.80/troy oz.
- Yield Check:
- 2-yr: +1 bp to 0.99%
- 5-yr: -1 bp to 1.71%
- 10-yr: -1 bp to 2.24%
- 30-yr: -2 bps to 2.96%
- News:
- The weekly initial claims report was slightly better than expected, with claims for the week ending December 19 dropping by 5K to 267K (Briefing.com consensus 271K). Initial claims have been bounded between 250K and 300K since July 2014. The four-week moving average for initial claims increased by 1,750 to 272,500
- The Department of Labor said there were no special factors impacting the latest claims report
- Continuing claims for the week ending December 12 decreased by 47,000 to 2.195 mln (Briefing.com consensus 2.238 mln). That left the four week moving average at 2.211 mln, up 10K from the prior week
- Natural gas inventories fell by 32 bln cubic feet in the week ending 12/19 versus expectations for a fall of 25 bln bcf
- The weekly initial claims report was slightly better than expected, with claims for the week ending December 19 dropping by 5K to 267K (Briefing.com consensus 271K). Initial claims have been bounded between 250K and 300K since July 2014. The four-week moving average for initial claims increased by 1,750 to 272,500
- Week Ahead:
- Monday: 2-year Treasury auction, amount TBA (13:00 ET)
- Tuesday: October Case-Shiller 20-City Index (09:00 ET); December Consumer Confidence (10:00 ET); 5-year Treasury auction, amount TBA(13:00 ET)
- Wednesday: MBA Mortgage Purchase Index for the week ending 12/26 (07:00 ET); November Pending Home Sales (10:00 ET); Crude Inventories for the week ending 12/26 (10:30 ET); 7-year Treasury auction, amount TBA (13:00 ET)
- Thursday: Initial Jobless Claims for the week ending 12/26 and Continuing Jobless Claims for the week ending 12/19 (08:30 ET); December Chicago PMI (09:45 ET); Natural Gas Inventories for the week ending 12/26 (10:30 ET)
Read more: http://www.briefing.com/Platinum/InDepth/InPlayFull.htm#ixzz3vY9lWHzj
On other news....
Currencies
Dollar Loses Ground
Greenback Resumes Sell-Off
- The U.S. Dollar Index is coming under pressure today (-0.36% to 97.99). The dollar index halted a three-day sell-off on Wednesday but moved right back to a one-week low this morning
- USD/JPY is brushing against a six-week low (-0.45% to 120.37)
- EUR/USD: is up +0.30% to $1.0946
- GBP/USD: +0.34% to $1.4931
- USD/CHF: -0.26% to 0.9876
- USD/JPY: -0.50% to 120.31
- AUD/USD: +0.40% to $0.7266
- NZD/USD: +0.54% to $0.6832
- The New Zealand Dollar is nearing a six-month high (NZD: +0.46% to $0.6827)
Read more: http://www.briefing.com/Platinum/InDepth/InPlayFull.htm#ixzz3vY9zzV18
Next Week In View
Economic Commentaries
Economic Summary: Jobless Claims fall faster than expected
Economic Data Summary:
- Weekly Initial Claims 267K vs Briefing.com consensus of 271K; Last Week was revised to 272K from 271K
- Weekly Continuing Claims 2.195 M vs Briefing.com consensus of 2.228 M ; Last Week was revised to 2.242 M from 2.239 M
- The weekly initial claims report was slightly better than expected, with claims for the week ending December 19 dropping by 5,000 to 267,000 (Briefing.com consensus 271,000). Initial claims have been bounded between 250,000 and 300,000 since July 2014. The four-week moving average for initial claims increased by 1,750 to 272,500. The Department of Labor said there were no special factors impacting the latest claims report.
Other International Events of Interest
- The Bank of Japan released its latest policy minutes, which showed that policymakers believe slow wage and capital expenditure growth is due to a slowdown in emerging markets.
Read more: http://www.briefing.com/Platinum/InDepth/InPlayFull.htm#ixzz3vYA6UXs2
Market Call: FLAT to upside
Date: 28 Dec 2015
Stats: 1/1(100%)
Stats: 1/1(100%)