8 Mar 2013 AMC

8 Mar 2013 AMC

Market Summary 

Market Internals

Leaders and Laggards

Technical Updates

Commentaries 

Stock Market Update 16:15 ET Dow +67.58 at 14397.07, Nasdaq +12.28 at 3244.37, S&P +6.92 at 1551.18 :[BRIEFING.COM] The major averages ended the final session of the week with modest gains. The day started on an upbeat note after February nonfarm payrolls were reported well ahead of expectations.  However, the opening strength did not hold and the S&P 500 promptly slid back to yesterday's closing level. After returning to its flat line, the benchmark average staged a daylong climb, which ended at fresh session highs.  While stocks spent the majority of the session in an upward climb, the dollar held strong throughout the day.  Dollar strength manifested itself after today's jobs report revealed a 20 basis point drop in the unemployment rate. With the Federal Reserve indicating accommodative policy will remain in place until the unemployment rate nears 6.5%, a downtick brings the economy closer to that target.  The dollar index climbed to 82.90 shortly after the release of the jobs data. The index then retraced a part of its gains, but spiked higher once again after Fitch Ratings downgraded Italy's sovereign debt rating to ‘BBB+' from ‘A-' and assigned a negative outlook.  As equity markets climbed off their morning lows, cyclical sectors paced the advance. The consumer discretionary space was the day's leader as retailers contributed to the outperformance. The SPDR S&P Retail ETF (XRT 69.51, +0.65) advanced 0.9%.  Industrials and materials also drove the broader market towards session highs. The industrial sector was buoyed in part by the Dow Jones Transportation Average. The 20-stock complex gained 1.0% after displaying notable weakness over the course of the past two sessions. Today, airlines paced the advance and United Continental (UAL 31.35, +1.74) jumped 5.9%.  The financial sector was also in focus today after the Federal Reserve released the first round of results of its CCAR report, better known as the bank stress test. According to the test results, Ally Financial was the only bank which did not meet the required capital ratio under the adverse scenario. Meanwhile, major financials ended the day on a mixed note. Citigroup (C 46.68, +1.68) gained 3.7% while Goldman Sachs (GS 152.98, -3.64) fell 2.3%.  Looking back at the final sector performance, consumer discretionary (+1.1%), industrials (+0.9%), materials (+0.9%), and telecom (+0.7%) outperformed the broader market. On the downside, technology (+0.1%), consumer staples (+0.2%), utilities (+0.2%), and health care (+0.3%) lagged.  Trading volume was well below its 50-day average as 691 million shares changed hands on the floor of the New York Stock Exchange.  Reviewing today's economic data, the employment situation improved in February as nonfarm payrolls added 236,000 to follow a downwardly revised 119,000 (from 157,000) in January. Today's reading was reported well above the Briefing.com consensus expectation of a 165,000 job gain.  The average weekly hours worked increased from 34.4 in January to 34.5 in February. Hourly earnings rose 0.2% after increasing only 0.1% in January. Impressively, the increase in hours, earnings, and payrolls caused aggregate wages to increase 0.7%.  That gain is more than enough to keep consumption growth steady and help replenish lost savings after the January tax increases.  Strangely, even though the labor sector has shown strong stability and gradual improvement over the past few months, the labor force fell by 130,000 and the participation rate declined from 63.6% in January to 63.5%.  If the labor force participation rate had remained at its previous level, the unemployment rate would have held steady at 7.9%.  Wholesale inventories increased 1.2% in January after rising an upwardly revised 0.1% (from -0.1%) in December. The Briefing.com consensus expected wholesale inventories to increase 0.2%. Unfortunately, most of the gain was the result of a sharp drop in wholesale sales which led to more goods being left on the shelves. Wholesale sales fell 0.8% after holding flat in December.  There is no economic news scheduled for a Monday release. On Tuesday, the United States Treasury will report its February budget at 14:00 ET.

Commodities

Treasuries

Weekly Analysis
Week 38



Technical Updates














Briefing's Commentaries

Week in Review: Dow Jones Industrial Average Enters Uncharted Territory  On Monday, the S&P 500 settled with a gain of 0.5% despite spending the majority of the day in negative territory. The first session of the week began amid cautious trade resulting from news out of China where officials announced steps to curtail the rapid rise in the country's housing prices. The news contributed to a slightly lower open for the U.S. session, which lacked any notable economic data. Similarly, earnings reaction was rather muted with only a handful of names reporting their quarterly results. Apple (AAPL 431.72, +1.14) lost 2.4%, and its shares filled the gap which resulted from the company's January 2012 earnings report.  Tuesday began with all eyes turned to the Dow Jones Industrial Average after the blue chip index ended Monday's session just 37 points below its all-time closing high. However, the anticipation was promptly removed after the bell when equities jumped higher and the Dow marked its fresh all-time best at 14,286.37. Elsewhere, the Dow Jones Transportation Average marked an all-time high of its own. The bellwether complex settled higher by 1.5% thanks to outperformance from freight carriers and shipping services. Con-way (CNW 36.64, +1.03) and FedEx (FDX 107.80, +0.84) finished with respective gains of 3.9% and 2.0%.  Wednesday's session began on a positive note, but the initial strength was unable to hold throughout the day. The Dow managed to settle near its highs while the S&P 500 and Nasdaq finished near their lows. Consumer discretionary shares underperformed andStaples (SPLS 12.96, +0.20) fell 7.2% after its quarterly report beat on earnings and missed on revenue. Meanwhile, the broader SPDR S&P Retail ETF (XRT 69.51, +0.65) slid 0.4%.  On Thursday, the major averages ended the session on a higher note after spending the day in a narrow range. The Nasdaq settled as the top performing index with a gain of 0.3%. Several networking-related names outperformed after Ciena (CIEN 17.15, -0.38) reported first quarter earnings well ahead of its Capital IQ consensus estimate. The Dow Jones Transportation Average extended its decline since marking fresh highs, and ended the session down nearly 2.0% from the all-time best notched at Wednesday's open. ..NYSE Adv/Dec 2017/977. ..NASDAQ Adv/Dec 1680/793.

Next Week In View







Jason's Commentaries
The market went slightly higher than I expected, despite a much better than expected  NFP, which drop the unemployment rate to 7.7%. The market showed a lackluster start, however, fought its way up  to close higher. During the last 15 mins, we can see some minor profit taking going on. On the itnernals, we can see that it was slightly bullish days, conidering the financials were lagging the market. We had the bank stress test on Friday, which caused the Financials to look really mixed. Goldman Sachs sunk a 2.32%, BFA down by 1.55%, JP Morgan down by 0.85% and Morgan Stanley down by 0.82% while Citi, the only big financial rallied 3.73%. The leader for Friday was Consumer Discretionary, having gained more than 1%. With notable names like Disney, Home Depot, MacDonald gaining more than 1.5%. Not only that, we can see that Treasuries actually sunk, providing evidence that funds are being channeled into the equity market once again since the market has set its all time high. On the technical note, we are still making new highs, closing at 14,397 as of last Friday. It seems that we're likely to continue our bullish streak to 7 days.

While on the weekly perspective, as I've already mentioned that if the market were to break into higher high, we will go into a bull run and it's happening. And the worse thing of all, I'm not into the game. I believe that market is likely to continue it's bullish streak as I'm not seeing any slowing down in momentum yet.While looking at the industries that are performing, we can clearly see that the housing industry and the housing related industries are performing as the market is speculating that the housing climate is getting better.

On Monday, we're going to have the daylight savings shift, which means the market is going to open at 930pm, closing at 430am. We're not having much report coming out on Monday, so prepare for some flat day today.

Market Call: Flat to upside

Date: 11 Mar 2013