15 June 2013 AMC

15 June 2013 AMC

Market Summary

Market Internals

Leaders and Laggards

Technical Updates

Commentaries 

Stock Market Update 16:15 ET Dow -105.90 at 15070.18, Nasdaq -21.81 at 3423.56, S&P -9.63 at 1626.73 : [BRIEFING.COM] The major averages ended in the red after early gains evaporated during the opening hour amid a confluence of factors. Yesterday, the S&P 500 bounced off its 50-day moving average, but today's session saw the index get rejected by its 20-day average in the 1642 area.  In addition, two heavily-weighted sectors (energy and financials) lagged from the open and their weakness overshadowed the relative strength of defensive sectors.  Contributing to the softness was news that the International Monetary Fund cut its 2014 growth outlook for the United States to 2.7% from 3.0%. The IMF also said the Federal Reserve's large-scale asset buying is warranted at least until year's end.  The foreign exchange market presented another hurdle as dollar/yen continued selling off in a move reminiscent of an unwinding of the short-yen trade that fueled much of the rally in Japan's Nikkei. Dollar/yen dipped as low as 93.99 before ticking up to 94.30 in afternoon action.  The financial sector led to the downside, ending lower by 1.3% as all major components settled in the red. American Express (AXP 72.97, -2.24) lost 3.0% after Barclays downgraded the stock to ‘Equal Weight' from ‘Overweight.'  Another growth-oriented sector, energy, dropped 1.0% even as crude oil rose 1.2% to $97.85 per barrel.  While most cyclical groups trailed behind the broader market, the discretionary sector outperformed amid strength in media companies and homebuilders. Time Warner Cable(TWC 103.93, +7.78) surged 8.1% after reports indicated Time Warner has no plans to merge with Charter Communications (CHTR 116.61, +5.72).  Meanwhile, major homebuilders like DR Horton (DHI 23.89, +0.23) and Lennar (LEN 39.03, +0.30) ended with gains near 1.0%.  As mentioned earlier, defensive sectors outperformed the broader market. However, only the utilities sector was able to end with a slim gain of 0.1%. Today's advance came after the group endured a rough six-week period. The sector saw its best level of the year on April 30, before heavy selling sent it lower by 8.0% in May. So far, June has been better for utilities as the sector holds a month-to-date gain of 0.6% versus a narrow loss of 0.3% for the S&P.  The CBOE Volatility Index (VIX 17.11, +0.70) climbed throughout the week to notch its highest weekly close of the year as investors adjusted their near-term volatility expectations. Treasuries booked gains this week as traders moved into the complex amid the weakness in equities. The benchmark 10-yr yield ended the week lower by three basis points at 2.126%.  Producer prices ended two consecutive months of declines and increased 0.5% in May after declining 0.7% in April. The Briefing.com consensus expected the PPI to increase 0.1%. The increase in producer prices was due almost entirely to higher food and energy costs. Food prices rose 0.6% in May after falling 0.8% in April. A 41.6% increase in egg prices accounted for most of the food price increase. Separately, energy prices, which had declined 2.5% in April and 3.4% in March, rose 1.3%. Most of that gain was the result of a 1.5% increase in gasoline costs.  Excluding food and energy, core prices rose 0.1% for a second consecutive month. That was exactly what the consensus expected.  Industrial production growth was unchanged in May after declining an upwardly revised 0.4% (from -0.5%) in April. The Briefing.com consensus expected industrial production to increase 0.1%.  The University of Michigan Consumer Sentiment Index dipped to 82.7 in the preliminary June report from 84.5 in May. The Briefing.com consensus expected the index to fall to 83.0. The Expectations Index rose to 76.7 in June from 75.8, which is the highest point since November 2012. The Present Conditions Index fell to 92.1 from 98.0 in May.  On Monday, the June Empire Manufacturing Survey and June NAHB Housing Market Index will be reported at 8:30 ET and 10:00 ET, respectively.

Commodities

Treasuries

Weekly Analysis
Week 38



Technical Updates




Briefing's Commentaries

Week in Review: Stocks Endure Volatile Week  The major averages ended Monday's session largely unchanged. Before the open, Standard & Poor's raised its US outlook to Stable from Negative. The change contributed to a strong start, but buying interest tapered off shortly thereafter. Apple (AAPL 430.05, -5.91) swung from seeing a solid intraday gain to ending with a loss after unveiling a new mobile operating system and announcing the launch of a radio service at its Worldwide Developers Conference.  On Tuesday, the S&P 500 settled lower by 1.0% as all ten sectors ended in the red. Stocks began the day sharply lower as overseas concerns contributed to a rise in global interest rates, which, in turn, fueled the selling of equities. The Bank of Japan's decision to maintain its policy stance underwhelmed investors who expected the central bank to address recent bond market volatility. However, the lack of relevant commentary caused investors to sell bonds and equities in favor of the yen. The financial sector ended lower by 1.7% amid losses in all major components.  Equities began Wednesday's session on their highs, but the major averages were unable to hold their flat lines past the opening 90 minutes. The S&P 500 spent the entire day in a steady decline as minor bounces were met with aggressive selling. In addition, early weakness coincided with a decline in dollar/yen, as the pair dropped to 95.25, before recovering a portion of its losses. Cooper Tire (CTB 33.40, -0.42) jumped 41.1% after the tire maker agreed to be acquired by Apollo Tyres for $35 per share. The purchase price represents a 42.5% premium.  On Thursday, the S&P 500 settled higher by 1.5% after a daylong climb off its opening lows was aided by the defense of the 50-day moving average. Homebuilders displayed broad strength as the iShares Dow Jones US Home Construction ETF (ITB 23.89, -0.01) jumped 4.4% after the industry ETF spent the previous three weeks in a steady decline. ..NYSE Adv/Dec 1399/1642. ..NASDAQ Adv/Dec 704/1790.

Next Week In View


Jason's Commentaries

DMA is finally back from Bangkok, the scam city! Have been monitoring the market from Bangkok and took my profits while i'm in Bangkok. The last few sessions last week have been nuts. On Wednesday, market was down about 100 points where I took my initial profit. On Thursday, Market went bananas and chunk up a near 200 points day. On Friday, a near 100 points day. Market is entering a consolidation period and we're going to expect more volatility until the market decides to take a direction after the FOMC statements. Market will be focusing on the sentiment within the Fed to see if the tapering of the QE will come anytime soon. If the sentiment in Fed's interest to taper the QE, market will definitely start to price into the market as Ben Bernake is likely to step down from the Fed Chairman post and Janet Yellen is touted to be the next Fed Chairwoman, where she's a advocate to end QE.  

On Friday, Volume was around average, with the bears outpacing the bulls slightly. TRIN was above 1 throughout the session.VIX closed at 17.15. Financials and Energy are the biggest losers in S&P while Utilities is the only gainer of the day. Treasuries were up on Friday. All I can say is... It's not exactly a bearish day. And i'll be expecting Monday to head up. 

On the weekly perspective, it's a bullish sign to see the past 2 session showing the market testing supporting and showing long shadows, ain't showing much of a bearish sign. For the coming week, it's going to be crucial as we're expecting the FOMC statements and Fed Fund Rate to be coming out on 19 June at 2pm ET. The coming 2 days will likely to be volatile and not taking a direction. Market will likely price in after the Fed's statement.

Market Call: UP

Date: 17 June 2013