27 Dec 2013 AMC - Market finally broke winning streak
Market Summary
Before Market Opens
S&P futures vs fair value:
+1.20. Nasdaq futures vs fair value: +3.70.
The S&P 500 futures continue to hold a one-point gain versus fair value.
Asian markets ended on a higher note. China's Shanghai Composite (+1.4%) led the way while Japan's Nikkei settled just above its flat line. Economic data focused mostly on Japan as National CPI rose 1.5% year-over-year (1.1% prior) while the core reading increased 1.2% (1.1% expected, 0.9% previous). Tokyo CPI increased 0.9% (0.9% last) while the core reading ticked up 0.7%, as expected (0.6% prior). Separately, industrial production ticked down 0.1% month-over-month (0.4% forecast, 1.0% last) and the Manufacturing PMI ticked up to 55.2 from 55.1. Also of note, retail sales rose 4.0% year-over-year (2.9% forecast, 2.3% last), average cash earnings increased 0.5% year-over-year (0.4% consensus, -0.1% prior), and household spending increased 0.2% year-over-year (1.7% expected, 0.9% last). Finally, the unemployment rate held steady at 4.0% (3.9% consensus). Elsewhere, South Korea's manufacturing BSI Index increased to 84.0 from 82.0.
Among news of note, China's Ministry of Commerce reiterated its year-end forecast for retail sales and industrial production, expecting a 13.0% year-over-year increase in sales and a 9.8% rise for industrial production.
The S&P 500 futures continue to hold a one-point gain versus fair value.
Asian markets ended on a higher note. China's Shanghai Composite (+1.4%) led the way while Japan's Nikkei settled just above its flat line. Economic data focused mostly on Japan as National CPI rose 1.5% year-over-year (1.1% prior) while the core reading increased 1.2% (1.1% expected, 0.9% previous). Tokyo CPI increased 0.9% (0.9% last) while the core reading ticked up 0.7%, as expected (0.6% prior). Separately, industrial production ticked down 0.1% month-over-month (0.4% forecast, 1.0% last) and the Manufacturing PMI ticked up to 55.2 from 55.1. Also of note, retail sales rose 4.0% year-over-year (2.9% forecast, 2.3% last), average cash earnings increased 0.5% year-over-year (0.4% consensus, -0.1% prior), and household spending increased 0.2% year-over-year (1.7% expected, 0.9% last). Finally, the unemployment rate held steady at 4.0% (3.9% consensus). Elsewhere, South Korea's manufacturing BSI Index increased to 84.0 from 82.0.
Among news of note, China's Ministry of Commerce reiterated its year-end forecast for retail sales and industrial production, expecting a 13.0% year-over-year increase in sales and a 9.8% rise for industrial production.
·
Japan's Nikkei ended little changed despite the yen
weakening to 105.00 per dollar for the first time since October 2008. Shippers
outperformed with Mitsui OSK Lines climbing 3.0%. Names with strong ties to
China lagged as Fanuc and Kyocera sank 1.3% and 1.5%, respectively.
·
Hong
Kong's Hang Seng added 0.3%,
advancing for a third straight session. The index was buoyed by strength in
heavyweight Tencent Holdings, which rallied 3.0% to a record high.
·
China's Shanghai Composite jumped 1.4%, climbing off a
four-month low as money rates continued to ease. Overnight SHIBOR paced today's
decline, falling 49 basis points to 3.513%. Financials were in-line with the
broader index as China Construction Bank added 1.2% and China Citic Bank gained
1.6%.
Major European indices hover near
their highs as they catch-up to gains registered in the U.S. over the past two
trading days. France's CAC (+1.1%) leads the way while other core indices
follow not far behind. Economic data was limited as French PPI increased 0.5%
(-0.2% expected, -0.2% prior) and Spain's current account surplus expanded to
EUR1.71 billion (EUR340 million prior).
Notably, the euro has been on a tear this morning, gaining as much as 200 pips against the dollar. The single currency has retreated off its best level of the session, but remains up almost 140 pips versus the greenback. The pair trades near 1.3820.
Notably, the euro has been on a tear this morning, gaining as much as 200 pips against the dollar. The single currency has retreated off its best level of the session, but remains up almost 140 pips versus the greenback. The pair trades near 1.3820.
·
Great
Britain's FTSE is higher by 0.7%
with miners contributing to the strength. Antofagasta, Glencore Xstrata, and
Fresnillo are all up between 2.2% and 3.2%. Insurers lag with RSA Insurance
Group and Old Mutual lower by 0.2% and 1.1%, respectively.
·
Germany's DAX trades up 0.8% as 28 of 30 components
register gains. Basic materials are among the leaders with BASF and K+S trading
higher by 1.4% and 2.8%, respectively.
·
In
France, the CAC displays a
gain of 1.1%. Growth-sensitive names sit in the lead with ArcelorMittal,
Bouygues, and Technip up between 2.0% and 2.5%.
Market Internals
Market Internals -Technical-
The Nasdaq closed down 11 (-0.3%) at 4157, the S&P 500 closed down 1 (-0.6%) at 1841, and the Dow closed down 1 (-0.01%) at 16478. Action came on below average volume (NYSE 414 mln vs. avg. of 705; NASDAQ 1173 mln vs. avg. of 1745), with mixed advancers and decliners (NYSE 1602/1482, NASDAQ 1247/1339) and new highs outpacing new lows (NYSE 240/59, NASDAQ 200/14).
ETF Strength: Greece-GREK +3.9%, Metals & Mining-XME +2.9%, Jr. Gold Miners-GDXJ +2.6%, South Korea-EWY +2.4%, Silver-SLV +2.2%, Malaysia-EWM +2.0%, Steel-SLX +1.7%, Taiwan-EWT +1.6%, Emerging Markets-EEM +1.6%, Palladium-PALL +1.6%, Indonesia-IDX +1.6%, Platinum-PPLT +1.5%
ETF Weakness: Natural Gas-UNG -2.9%, Turkey-TUR -2.2%, Cocoa-NIB -1.0%
Leaders and Laggards
Technical Updates
Commentaries
Closing Market Summary: Stocks
Finish Strong Week on Flat Note
The major averages did little to distinguish themselves in the final session of the week. The Dow Jones Industrial Average and S&P 500 both ended flat while the Nasdaq underperformed, shedding 0.3%.
Today's trading range was limited to just five points in the S&P 500, but that masks the fact the index rested near its flat line for the vast majority of the trading day. It is understandable that some rest was in order after the benchmark index gained 3.4% during the previous six affairs.
Buyers and sellers alike stuck to the sidelines today, but then again, just about everyone elected to forego today's session. On that note, NYSE floor volume totaled a paltry 414 million shares.
There was no concerted leadership among individual sectors as two cyclical groups—energy (+0.5%) and materials (+0.2%)—and two defensive sectors—consumer staples (+0.3%) and utilities (+0.2%)—posted gains.
The energy sector was powered, in part, by crude oil, which rose 0.8% to $100.31 per barrel. The sector also drew strength from its top-weighted components. Chevron (CVX 125.23, +0.42) and ExxonMobil (XOM 101.51, +0.61) gained 0.3% and 0.6%, respectively.
The other commodity-related sector, materials, was kept afloat by steelmakers. The largest steel producer, ArcelorMittal (MT 17.75, +0.42) jumped 2.4% while the broader Market Vectors Steel ETF (SLX 49.71, +0.83) advanced 1.7%.
Despite the modest gains in a handful of sectors, the broader market was held in check by the underperformance of its three largest groups as technology (-0.2%), financials (-0.1%), and health care (-0.1%) spent the entire afternoon in the red.
Although the major averages ended little changed, the same could not be said for a recent momentum favorite. Twitter (TWTR 63.75, -9.56) plunged 13.0% after Macquarie downgraded the stock to ‘Underperform' from ‘Neutral.' Entering today, shares of Twitter were up 76.4% in December but today's tumble trimmed its month-to-date advance to 53.4%.
Elsewhere, the Treasury market endured a sleepy session as the 10-yr note slipped three ticks with its yield ending just a shade below 3.01%.
There was no data released today and Monday's economic data will be limited to the Pending Home Sales report, which will be released at 10:00 ET.
The major averages did little to distinguish themselves in the final session of the week. The Dow Jones Industrial Average and S&P 500 both ended flat while the Nasdaq underperformed, shedding 0.3%.
Today's trading range was limited to just five points in the S&P 500, but that masks the fact the index rested near its flat line for the vast majority of the trading day. It is understandable that some rest was in order after the benchmark index gained 3.4% during the previous six affairs.
Buyers and sellers alike stuck to the sidelines today, but then again, just about everyone elected to forego today's session. On that note, NYSE floor volume totaled a paltry 414 million shares.
There was no concerted leadership among individual sectors as two cyclical groups—energy (+0.5%) and materials (+0.2%)—and two defensive sectors—consumer staples (+0.3%) and utilities (+0.2%)—posted gains.
The energy sector was powered, in part, by crude oil, which rose 0.8% to $100.31 per barrel. The sector also drew strength from its top-weighted components. Chevron (CVX 125.23, +0.42) and ExxonMobil (XOM 101.51, +0.61) gained 0.3% and 0.6%, respectively.
The other commodity-related sector, materials, was kept afloat by steelmakers. The largest steel producer, ArcelorMittal (MT 17.75, +0.42) jumped 2.4% while the broader Market Vectors Steel ETF (SLX 49.71, +0.83) advanced 1.7%.
Despite the modest gains in a handful of sectors, the broader market was held in check by the underperformance of its three largest groups as technology (-0.2%), financials (-0.1%), and health care (-0.1%) spent the entire afternoon in the red.
Although the major averages ended little changed, the same could not be said for a recent momentum favorite. Twitter (TWTR 63.75, -9.56) plunged 13.0% after Macquarie downgraded the stock to ‘Underperform' from ‘Neutral.' Entering today, shares of Twitter were up 76.4% in December but today's tumble trimmed its month-to-date advance to 53.4%.
Elsewhere, the Treasury market endured a sleepy session as the 10-yr note slipped three ticks with its yield ending just a shade below 3.01%.
There was no data released today and Monday's economic data will be limited to the Pending Home Sales report, which will be released at 10:00 ET.
·
Nasdaq +37.7% YTD
·
Russell 2000 +36.7%
YTD
·
S&P 500 +29.1%
YTD
·
DJIA +25.8% YTD
Commodities
Closing Commodities: Crude Oil Close
Over $100/Barrel, Gaining 1% On The Week
·
Precious metals traded
higher today, gaining support from a weaker dollar index
·
Feb gold extended
yesterday's gains as it rose to a session high of $1218.90 per ounce in early
morning pit trade. It pulled back slightly as the session progressed and
settled 0.2% higher at $1214.30 per ounce, booking a gain of 0.9% for the week
·
Mar silver rose for a
third consecutive session, advancing to a session high of $20.10 per ounce in
morning floor action. It spent the remainder of the session trading in a
consolidative pattern just below that level and settled with a 0.8% gain at
$20.06 per ounce. Today's climb brought gains for the week to 3.1%
·
Feb crude oil also got a
boost from the weaker dollar index and better-than-anticipated inventory data
·
The EIA reported that
for the week ending Dec 20, crude oil inventories had a draw of 4.731 mln
barrels when consensus called for a smaller draw of 2.5 mln. The energy
component lifted from its session low of $99.75 per barrel and rose as high as
$100.75 per barrel by early afternoon pit action. It pulled back slightly
heading into the close and settled 0.8% higher at $100.31 per barrel, booking a
gain of 1.0% for the week
·
Feb natural gas, on the
other hand, spent all of today's floor trade in the red. It rose to a session
high of $4.44 per MMBtu shortly after inventory data showed a draw of 177 bcf,
in-line with expectations, but was unable to hold the momentum
·
Natural gas settled 2.7%
lower at its session low of $4.36 per MMBtu, booking a weekly loss of 2.2%
NYMEX Energy Closing Prices
Feb crude oil rose $0.76 to $100.31/barrel
·
Crude oil extended
yesterday's gains as it gained support from a weaker dollar index and
better-than-anticipated inventory data. The EIA reported that for the week
ending Dec 20, crude oil inventories had a draw of 4.731 mln barrels when
consensus called for a smaller draw of 2.5 mln. The energy component lifted
from its session low of $99.75 and rose as high as $100.75 by early afternoon
pit action. It pulled back slightly heading in the close and settled 0.8%
higher, booking a gain of 1.0% for the week.
Feb natural gas fell 12 cents to $4.36/MMBtu
·
Natural gas, on the
other hand, spent all of today's floor trade in negative territory. It rose to
a session high of $4.44 after inventory data showed a draw of 177 bcf, in-line
with expectations, but was unable to hold the momentum. Natural gas settled
2.7% lower at its session low, booking a weekly loss of 2.2%.
Feb heating oil rose 1 cent to $3.09/gallon
Feb
RBOB settled unchanged at $2.81/gallon
CBOT
Agriculture and Ethanol/ICE Sugar Closing Prices
·
Mar
corn rose 1 cent to
$4.28/bushel
·
Mar
wheat rose 2 cents to
$6.08/bushel
·
Mar
soybeans rose 9 cents to
$13.14/bushel
·
Feb
ethanol rose 3 cents to
$1.83/gallon
·
Mar
sugar (#16 (U.S.)) rose
0.17 of a penny to 19.73 cents/lbs
COMEX
Metals Closing Prices
Feb gold rose $2.30 to $1214.30/oz
·
Gold extended
yesterday's gains as the dollar index traded in negative territory. The yellow
metal rose to a session high of $1218.90 in early morning pit trade but pulled
back slightly as the session progressed. It eventually settled 0.2% higher,
booking a gain of 0.9% for the week.
Mar silver rose $0.15 to $20.06/oz
·
Silver rose for a third
consecutive session, lifting to a session high of $20.10 in morning floor
action. It spent the remainder of the session trading in a consolidative
pattern just below that level and settled with a 0.8% gain. Today's advance
brought gains for the week to 3.1%.
Mar
copper fell 2 cents to $3.38/lbs
Treasuries
10y Reclaims 3.000%: 10-yr:
-05/32..3.007%..USD/JPY: 105.16..EUR/USD: 1.3739
The Week in Review
The Week in Review
·
Treasuries lost ground
this week as the usual appetite for risk into year-end and a sleepy
holiday trade favored the bears. Click here to see an intraweek
yields chart.
·
Volumes
were light all week long as
many opted to take vacation instead of subjecting themselves to the sleepy
trade.
·
This week's economic
data was mixed. Personal income (0.2% actual v. 0.5% expected) and
Michigan Sentiment - Final (82.5 actual v. 83.3 expected) fell short of
estimates while durable orders (3.5% actual v. 2.2% expected) and new home
sales (464K actual v. 433K expected) saw notable beats.
·
Selling
had the biggest impact on the long end as the 30y tacked on +12bps to finish @ 3.943%, its highest
since July 2011. However, the selling was unable to run the yield above the
December high of 3.976%.
·
The 10y climbed +12bps
to end the week @ 3.006%. This week's action saw the benchmark yield
retake the 3.000% mark for the first time since July 2011.
·
A more modest +7bp
advance in the 5y saw the yield settle @ 1.744%. Traders continue to monitor
resistance in the 1.750% area as it guards the September highs (1.850%).
·
Even the 2y saw an
notable uptick of +2bps, which caused the yield to retake 0.400% for
the first time in three months.
·
A
steeper yield curve developed over the course of the week as the 2-10-yr spread
widened to 260.5bps.
The Week Ahead
·
Monday's data is limited
to pending home sales (10).
·
Tuesday will see the Case-Shiller
20-city Index (9), Chicago PMI (9:45), and consumer
confidence (10). The U.S. Treasury complex will close at 2pm
ET for New Year's Eve.
·
Markets
are closed Wednesday in observance of New Year's Day.
·
Thursday's data includes
initial and continuing claims (8:30), construction spending, and ISM
Index (10).
·
Friday will see just
auto/truck sales (14). Fed Chairman Ben Bernanke will be in
Philadelphia, PA to take part in "Chairman Bernanke Presentation" (14:30).
Fed Governor Stein will also be in Philadelphia, moderating a panel on
"Shadow Banking" (10:15) while Philly's Plosser discusses "The
Global Economy and Economic Institutions: Transitioning From a Low Interest Rate
Environment" (10:15) at the same conference.
On other news....
EIA Petroleum Inventory Data
The EIA reports that for the week ending Dec 20:
The EIA reports that for the week ending Dec 20:
·
Crude oil inventories
had a draw of 4.731 mln (consensus called for a draw of 2.5 mln)
·
Gasoline inventories had
a draw of 0.614 mln (consensus called for a build of 1.2 mln)
·
Distillate inventories
had a draw of 1.85 mln (consensus called for a draw of 0.4-1.0 mln)
·
Change in refinery
utilization is at +1.2%
Currencies
Dollar Erases Early Losses: 10-yr
-04/32..3.007%..USD/JPY: 105.11..EUR/USD: 1.3740
The Dollar Index continues to trim its losses as steady buying persists throughout the U.S. session. Early weakness dropped the Index to a low of 79.70, but trade is now pressing 80.40. The flat line rests just above, near 80.50. Click here to see a daily Dollar Index chart.
The Dollar Index continues to trim its losses as steady buying persists throughout the U.S. session. Early weakness dropped the Index to a low of 79.70, but trade is now pressing 80.40. The flat line rests just above, near 80.50. Click here to see a daily Dollar Index chart.
·
EURUSD is +50 pips @ 1.3740 as trade has given up the
majority of its early gains. The single currency climbed to a high of almost
1.3900 despite a quiet day for news and data out of the region as an early stop
hunt near 1.3800 proved successful. However, the euro was unable to hold onto
its gains as trade slipped back below the resistance level.
·
GBPUSD is +70 pips @ 1.6465 as action mimics that of
the euro. Sterling tested 1.6600 early in the session, and remains on
track to close at its best level since August 2011 despite giving up
most of its gains.
·
USDCHF is -45 pips @ .8910 as trade tests minor support
in the area. The pair slumped to a 25-month low of .8800 early
this morning, but has recovered a large portion of its losses. A minor victory
for the bulls would be the retaking of .8925.
·
USDJPY is +35 pips @ 105.15 as action holds at
a five-year high. Sparking today's advance was Japan's hottest CPI reading
since 2008. Today's advance caps off a ninth straight week of gains.
·
AUDUSD is -25 pips @ .8865 as action presses
back towards the August/December lows (.8850). Traders continue to
watch that level as a breakdown would produce the lowest print since the summer
of 2010.
·
USDCAD is +65 pips @ 1.0710 as trade presses session
highs. Today's advance has trade in search of its best close since late
2009/early 2010.
Weekly Analysis
Week 38
Technical Updates
Briefing's Commentaries
Week in Review: Santa Claus Visits NYSE
On Monday, the S&P 500 settled higher by 0.5%, registering its third consecutive gain. The benchmark index extended its December advance to 1.2% as eight of ten sectors ended in the green. Stocks jumped at the open with the technology sector (+1.5%) driving the early surge. The space received considerable support from its largest component,Apple (AAPL 560.09, -3.81), which spiked 3.8% after inking a long-rumored distribution agreement with China Mobile (CHL 52.76, +0.26).
Stocks ended Tuesday's abbreviated session with modest gains that were paced by cyclical sectors. The S&P 500 added 0.3% as energy (+0.6%), industrials (+0.5%), and materials (+1.0%) outperformed.
On Wednesday, U.S. bond and equity markets were closed for Christmas.
The bullish trend continued on Thursday with little in the way of the major averages. 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. Technology (+0.3%) and the financial sector (+0.2%) were the only cyclical groups 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. Although trading volume finished at a one-year low, Twitter 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%.
Next Week In View
Economic Commentaries
Economic Summary: No US data today;
Pending Home sales Monday at 10:00; Japan CPI 1.5% YoY
Upcoming Economic Data:
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
National CPI rose 1.5% year-over-year (1.1% prior) while the core reading
increased 1.2% (1.1% expected, 0.9% previous). Tokyo CPI increased 0.9% (0.9% last) while the
core reading ticked up 0.7%, as expected (0.6% prior). Separately, industrial
production ticked down 0.1% month-over-month (0.4% forecast, 1.0% last) and the
Manufacturing PMI ticked up to 55.2 from 55.1. Also of note, retail sales rose
4.0% year-over-year (2.9% forecast, 2.3% last), average cash earnings increased
0.5% year-over-year (0.4% consensus, -0.1% prior), and household spending
increased 0.2% year-over-year (1.7% expected, 0.9% last). Finally, the
unemployment rate held steady at 4.0% (3.9% consensus).
Jason's Commentaries
Well... it was kinda expected that the market is going to be flat on Friday after such a rally on a low volume on Thursday. As 2013 is coming to an end, we are having the Santa Claus coming particularly late this year to rally the market to a all time high. On the Dow, we're having the 16500 level. VIX as expected, fell back to 12.50 level again. Market on Friday is having a 419.9m shares traded on the NYSE, Utilities, Energy, Materials and Staples held the market up while discretionary weights. While we're going to have another 2 more trading session before 2013 wraps up, I reckon we're likely to go into some short retracement. Have fun people!
Market Call: FLAT to downside
Date: 30 Dec 2013
