24 May 2013 AMC

24 May 2013 AMC

Market Summary 

Market Internals

Leaders and Laggards

Technical Updates

Commentaries 

Stock Market Update 16:10 ET Dow +8.60 at 15303.1, Nasdaq -0.27 at 3459.14, S&P -0.91 at 1649.6 :[BRIEFING.COM] Stocks entered the weekend on a mixed note as the S&P 500 shed 0.1% while the Dow ended with a gain of 0.1%.  The major averages began the day on a lower note as nine of ten sectors saw losses of more than 0.5%.  The consumer staples sector was the lone exception as the group spent the entire day in positive territory thanks to the relative strength of Dow component Procter & Gamble(PG 81.89, +3.19). The second-largest staple stock advanced 4.1% after the company reaffirmed its fourth quarter guidance and named Alan Lafley President, Chairman, and Chief Executive Officer. Mr. Lafley had previously served as company President and CEO from 2000 to 2009.  With light volume ahead of the holiday weekend, the broader market drifted back towards yesterday's closing levels. However, the S&P was kept from turning positive by the underperformance of influential sectors.  The energy space lost 0.4% as crude oil shed 0.4% to end at $93.92. Meanwhile, the other commodity-related sector, materials, slipped 0.3% as steelmakers lagged. TheMarket Vectors Steel ETF (SLX 41.67, -0.42) ended lower by 1.0%.  Industrials also pressured the broader market as transportation-related names sold off. Relative weakness in truckers, delivery services, and shippers caused the Dow Jones Transportation Average to lose 0.5%. However, another industrial subgroup, defense stocks, fared relatively well as the PHLX Defense Index rose 0.1%.  Cyclical groups saw comparable losses in early action. However, the financial sector displayed some afternoon strength as major banks registered gains. As a result, the sector ended with a slim gain of 0.1%.  Today's biggest laggards could be found in the high-yielding utilities sector as the group continued its recent weakness. Including today's 1.0% decline, the sector lost 3.7% this week, and is down 6.7% in May.  The CBOE Volatility Index (VIX 14.11, +0.04) spiked to 14.79% amid the early weakness before the near-term volatility measure surrendered the bulk of its gains.  As mentioned earlier, volume was well below average with only 591 million shares changing hands on the floor of the New York Stock Exchange.  Today's economic data was limited to durable goods orders. For April, orders rose 3.3% after declining an upwardly revised 5.9% (from -6.9%) in March. The Briefing.com consensus expected durable goods orders to rise 1.6%. The sawtooth pattern in transportation held up despite Boeing (BA 100.00, +0.25) announcing lower aircraft orders in April. Transportation orders rose 8.1% in April as defense and nondefense aircraft orders increased 25.7%.  Excluding transportation, durable goods demand was solid all-around and increased 1.3% in April after declining 1.7% in March.  Note that equity and bond markets will be closed on Monday for Memorial Day. On Tuesday, the March Case-Shiller 20-city Index will be reported at 9:00 ET while May consumer confidence will cross the wires at 10:00 ET.

Commodities

Treasuries

Weekly Analysis
Week 38



Technical Updates



Briefing's Commentaries

Week in Review: S&P 500 Registers First Weekly Loss of the Month 
On Monday, the major averages registered slim losses after intraday action saw the Russell 2000 cross above the 1,000 level for the first time. The lack of conviction was owed in part to a lack of stirring catalysts. M&A activity was among the notable developments as Yahoo! (YHOO 26.33, +0.31) acquired Tumblr for $1.1 billion in cash. Stocks ended Tuesday's session modestly higher as the S&P 500 climbed 0.2% and the Dow added 0.4% to register its 19th consecutive Tuesday of gains. Equity indices saw little change during morning action, but afternoon buying interest helped lift the three averages to session highs. Most cyclical sectors (with the exception of materials and technology) finished among the leaders, but the defensively-geared health care sector settled atop the leaderboard as biotechnology continued its strong run with the iSharesNasdaq Biotechnology ETF (IBB 180.74, -0.53) advancing 1.0%. 

Wednesday saw the S&P 500 settle lower by 0.8% after early strength turned into afternoon weakness. From highs to lows, the S&P fell 1.9% as investors focused on Ben Bernanke's testimony before the Joint Economic Committee. During his remarks, Chairman Bernanke said premature tightening of monetary policy could stall the pace of recovery. Equities spiked at the start of the testimony, but sellers made their presence known this afternoon as the major averages slumped to session lows. The utilities and telecom sectors led to the downside as traders continued to dump income-oriented names. Elsewhere, the energy space lost 1.2% as crude oil declined 2.1%. The energy component ended at $94.18 per barrel, and weighed on the growth-sensitive sector. 

On Thursday, the major averages ended modestly lower with the S&P 500 shedding 0.3%. The benchmark average saw an opening loss of 1.2% after Japan's Nikkei tumbled 7.3%. Japanese stocks sold off amid continued volatility in Japanese Government Bond futures as the 10-yr yield spiked to 1.002 before the Bank of Japan's JPY2 trillion liquidity injection caused yields to slide back to session lows. Adding insult to injury was news out of China where the HSBC Flash Manufacturing PMI (49.6 actual, 50.5 consensus, 50.4 prior) fell below 50 for the first time in seven months. The utilities sector was the weakest performer, ending lower by 0.8% after a morning flash crash in American Electric Power (AEP 47.71, -0.57) and NextEra Energy (NEE 77.30, -0.92) briefly wiped out more than $33 billion in combined market capitalization. ..NYSE Adv/Dec 1330/1639. ..NASDAQ Adv/Dec 1279/1174.
 

Next Week In View




Jason's Commentaries

On Friday, the market opened significantly lower with the futures down more than 100 points. However, the market started recovering at approx 1030am ET. By closing bell, the market regained all its losses and managed to end flat on the Dow but Nasdaq and S&P500 closed with a loss ahead of the long weekend in US. 

While looking at the internals, the volumes were much lesser than expected, with only 576mil shares traded. The internals were pointing towards a bearish sentiment rather than a bullish one. On the sectors performance, utilities were the biggest loser while consumer staples were the biggest gainer. The other sectors remained flat.The VIX ended at 14.19 after reaching a high of 14.8.

On the technical updates, we've 2 consecutive upside crucifix on the Dow, and we're likely to see a up day on Tuesday, especially after the long weekend. Treasuries sunk on Friday, which caused the market to be a little mixed. If we're able to have a bear day on Tuesday, the market is likely to go down fast. 

On the weekly perspective, we finally have our first week of reversal after 4 straight weeks of up weeks. However, I believe that the bullish sentiment might be able to keep the market through the last week of May. On the news that there are more sentiment within the Fed to end QE, which the market is heavily concerned about, there are likely more people pulling out of the market. Looking at the broader picture, Nikkei has been dropping tremendously, even on Monday we saw a drop of 3.2%

We're unlikely experience much volatility this week as there not much economic events happening. Futures were up 94 points on the Dow, and we're likely to a up Tuesday.

Market Call: UP

Date: 28 May 2013