23 Dec 2013 AMC- Market went higher as Apple led
Market Summary
European
Markets Closing Prices
European
markets are now closed; stock markets across Europe performed as follows:
·
UK's FTSE: + 1.1%
·
Germany's DAX: + 0.9%
·
France's CAC: + 0.5%
·
Spain's IBEX: + 0.7%
·
Portugal's PSI: + 1.5%
·
Italy's MIB Index: + 0.7%
·
Irish Ovrl Index: 0.0%
·
Greece ATHEX Composite: -1.1%
Before Market Opens
S&P futures vs fair value:
+11.30. Nasdaq futures vs fair value: +34.70.
The S&P 500 futures trade 11 points above fair value.
Asian markets finished the uneventful session on a broadly higher note. Among news of note, the People's Bank of China conducted its second consecutive liquidity injection, but that did not stop money market rates from continuing their recent climb. Most notably, the two-week Shanghai Interbank Offered Rate jumped over 124 basis points to 8.246%.
Economic data was limited to Hong Kong's CPI, which increased 4.3% year-over-year, as expected.
The S&P 500 futures trade 11 points above fair value.
Asian markets finished the uneventful session on a broadly higher note. Among news of note, the People's Bank of China conducted its second consecutive liquidity injection, but that did not stop money market rates from continuing their recent climb. Most notably, the two-week Shanghai Interbank Offered Rate jumped over 124 basis points to 8.246%.
Economic data was limited to Hong Kong's CPI, which increased 4.3% year-over-year, as expected.
·
Japan's Nikkei was closed for Emperor's Birthday.
·
Hong
Kong's Hang Seng finished with
a modest gain, adding 0.5%, with consumer names contributing to the advance. Li
& Fung and Want Want China gained 0.9% and 2.8%, respectively.
·
China's Shanghai Composite eked out a slim gain of 0.2%
as Great Wall Motor provided support. The carmaker gained 6.0%.
Major European indices display
modest gains as the quiet session continues. Among news of note, Fitch affirmed
the sovereign rating of France at ‘AA+' with a ‘Stable' outlook. Elsewhere,
According to the annual report prepared by Germany's Economics Ministry, the
government expects annual GDP growth to be in the neighborhood of 1.5% through
2018.
Economic data was limited to a handful of releases. Germany's Import Price Index ticked up 0.1% month-over-month (-0.2% expected, -0.7% prior) while the House Price Index ticked down 0.4% month-over-month (0.8% last). Italian consumer confidence slipped to 96.2 from 98.2 (98.8 expected). Spain's PPI ticked down 0.6% year-over-year (-0.1% consensus, -0.2% last). Swiss Consumption Indicator increased to 1.43 from 1.26. Also of note, Norway's unemployment rate fell to 3.3% from 3.4% (3.5% expected).
Economic data was limited to a handful of releases. Germany's Import Price Index ticked up 0.1% month-over-month (-0.2% expected, -0.7% prior) while the House Price Index ticked down 0.4% month-over-month (0.8% last). Italian consumer confidence slipped to 96.2 from 98.2 (98.8 expected). Spain's PPI ticked down 0.6% year-over-year (-0.1% consensus, -0.2% last). Swiss Consumption Indicator increased to 1.43 from 1.26. Also of note, Norway's unemployment rate fell to 3.3% from 3.4% (3.5% expected).
·
Great
Britain's FTSE trades up 0.8% as
financials display strength. Aberdeen Asset Management, London Stock Exchange,
and Standard Chartered are all up between 1.4% and 2.2%. Miners lag with
Fresnillo and Glencore Xstrata down 0.5% and 0.2%, respectively.
·
Germany's DAX is higher by 0.7% with chemical
manufacturers contributing to the strength. Lanxess trades higher by 3.4% after
the company CEO affirmed its guidance. Peer BASF holds an advance of
0.9%.
·
In
France, the CAC holds a modest
gain of 0.1% with banks setting the pace. BNP Paribas is higher by 1.2% and
Societe Generale trades up 1.5%.
Market Internals
Market Internals -Technical-
The Nasdaq closed up 44 (+1.08%) at 4149, the S&P 500 closed up 10 (+0.53%) at 1828, and the Dow closed up 73 (+0.45%) at 16295. Action came on below average volume (NYSE 598 mln vs. avg. of 724; NASDAQ 1663 mln vs. avg. of 1780), with advancers outpacing decliners (NYSE 2214/914, NASDAQ 1906/731) and new highs outpacing new lows (NYSE 344/36, NASDAQ 339/22).
Relative Strength:
U.S. Home Construction-ITB +3.02%, Homebuilders-XHB +2.27%, Poland-EPOL +2.01%, Social Media-SOCL +1.98%, Russia-RSX +1.91%, South Africa-EZA +1.88%, Biotechnology-XBI +1.87%, Brazilian Real-BZF +1.81%, Chile-ECH +1.75%, Shipping-SEA +1.74%.
Relative Weakness:
Volatility-VXX -3.54%, Turkey-TUR -2.10%, Peru-EPU -1.61%, Junior Gold Miners-GDXJ -1.47%, Sugar-SGG -1.30%, Cocoa-NIB -0.91%, Cotton-BAL -0.82%, Thailand-THD -0.33%, Greece-GREK -0.28%, Malaysia-EWM -0.19%.
Leaders and Laggards
Technical Updates
Briefing's Commentaries
Closing Market Summary: Technology
Leads Stocks Higher
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 570.09, +21.07), which spiked 3.8% after inking a long-rumored distribution agreement with China Mobile (CHL 52.47, +0.84).
Emboldened by Apple's strength, other top sector components also rallied. Google (GOOG 1115.10, +14.48), Oracle (ORCL 36.94, +0.57), and Intel (INTC 25.32, +0.27) gained between 1.1% and 1.5%. Despite Intel's strength, other chipmakers struggled to keep pace with the sector as Micron (MU 21.49, -0.68) weighed after Bank of America/Merrill Lynch downgraded the stock to ‘Underperform' from ‘Neutral.' The broader PHLX Semiconductor Index advanced 0.9%.
Social media names also took part in the tech party as Facebook (FB 57.77, +2.65) and Twitter (TWTR 64.54, +4.53) settled higher by 4.8% and 7.6%, respectively.
Outside of technology, gains in other sectors were much more subdued. In fact, the telecom services sector (+1.1%) was the only other outperformer.
Although all six growth-oriented groups posted gains, the energy sector spent the entire session in a steady slide from its opening high. The group ended little changed while crude oil slipped 0.4% to $98.93 per barrel.
The remaining cyclical sectors—consumer discretionary (+0.5%), industrials (+0.4%), and materials (+0.4%)—logged modest gains. However, the discretionary sector failed to capture the relative strength of homebuilders. The iShares Dow Jones US Home Construction ETF (ITB 24.31, +0.71) jumped 3.0%. A Citigroup upgrade of KB Home (KBH 18.19, +1.28) to ‘Neutral' from ‘Sell' and news that incoming FHFA Director Mel Watt is going to delay the implementation of new mortgage fees on government-backed loans, which many think will crimp new housing demand, factored into the outperformance.
On the countercyclical side, the telecom sector posted a solid gain while consumer staples (-0.2%), health care (+0.4%), and utilities (-0.3%) lagged.
Also of note, following Friday's close, the CBOE Skew Index (SKEW 143.20, +5.34) jumped above the 139 level for the first time in almost two years. Unlike the VIX, which measures the expected near-term volatility to the upside or downside, the Skew index updates after each session and measures the perceived likelihood of a tail event. The index ranges from 100 to 150 with higher values signaling increased demand for low-strike puts. With the index hovering just below its upper limit, we can conclude that investors are demanding downside protection.
Treasuries settled on their lows with the benchmark 10-yr yield up four basis points at 2.93%.
Participation was well below average as many elected to sit today's session out. Only 598 million shares changed hands on the floor of the New York Stock Exchange.
Today's economic data was limited to just two reports, neither of which saw a notable reaction in the market. Personal income increased 0.2% in November after declining 0.1% in October. The Briefing.com consensus expected personal income to increase 0.5%. Compensation levels were a little softer than the employment report implied, increasing 0.3% instead of 0.6%. That difference likely caused the weaker-than-expected income gain. Personal spending rose 0.5%, in-line with consensus expectations, after increasing an upwardly revised 0.4% (from 0.3%) in October.
Separately, the December University of Michigan Consumer Sentiment Index remained at 82.5 in the final reading while the Briefing.com consensus expected the index to be revised up to 83.3.
Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET while November Durable Orders will cross the wires at 8:30 ET. The October FHFA Housing Price Index will be reported at 9:00 ET while the New Home Sales report for November will be revealed at 10:00 ET.
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 570.09, +21.07), which spiked 3.8% after inking a long-rumored distribution agreement with China Mobile (CHL 52.47, +0.84).
Emboldened by Apple's strength, other top sector components also rallied. Google (GOOG 1115.10, +14.48), Oracle (ORCL 36.94, +0.57), and Intel (INTC 25.32, +0.27) gained between 1.1% and 1.5%. Despite Intel's strength, other chipmakers struggled to keep pace with the sector as Micron (MU 21.49, -0.68) weighed after Bank of America/Merrill Lynch downgraded the stock to ‘Underperform' from ‘Neutral.' The broader PHLX Semiconductor Index advanced 0.9%.
Social media names also took part in the tech party as Facebook (FB 57.77, +2.65) and Twitter (TWTR 64.54, +4.53) settled higher by 4.8% and 7.6%, respectively.
Outside of technology, gains in other sectors were much more subdued. In fact, the telecom services sector (+1.1%) was the only other outperformer.
Although all six growth-oriented groups posted gains, the energy sector spent the entire session in a steady slide from its opening high. The group ended little changed while crude oil slipped 0.4% to $98.93 per barrel.
The remaining cyclical sectors—consumer discretionary (+0.5%), industrials (+0.4%), and materials (+0.4%)—logged modest gains. However, the discretionary sector failed to capture the relative strength of homebuilders. The iShares Dow Jones US Home Construction ETF (ITB 24.31, +0.71) jumped 3.0%. A Citigroup upgrade of KB Home (KBH 18.19, +1.28) to ‘Neutral' from ‘Sell' and news that incoming FHFA Director Mel Watt is going to delay the implementation of new mortgage fees on government-backed loans, which many think will crimp new housing demand, factored into the outperformance.
On the countercyclical side, the telecom sector posted a solid gain while consumer staples (-0.2%), health care (+0.4%), and utilities (-0.3%) lagged.
Also of note, following Friday's close, the CBOE Skew Index (SKEW 143.20, +5.34) jumped above the 139 level for the first time in almost two years. Unlike the VIX, which measures the expected near-term volatility to the upside or downside, the Skew index updates after each session and measures the perceived likelihood of a tail event. The index ranges from 100 to 150 with higher values signaling increased demand for low-strike puts. With the index hovering just below its upper limit, we can conclude that investors are demanding downside protection.
Treasuries settled on their lows with the benchmark 10-yr yield up four basis points at 2.93%.
Participation was well below average as many elected to sit today's session out. Only 598 million shares changed hands on the floor of the New York Stock Exchange.
Today's economic data was limited to just two reports, neither of which saw a notable reaction in the market. Personal income increased 0.2% in November after declining 0.1% in October. The Briefing.com consensus expected personal income to increase 0.5%. Compensation levels were a little softer than the employment report implied, increasing 0.3% instead of 0.6%. That difference likely caused the weaker-than-expected income gain. Personal spending rose 0.5%, in-line with consensus expectations, after increasing an upwardly revised 0.4% (from 0.3%) in October.
Separately, the December University of Michigan Consumer Sentiment Index remained at 82.5 in the final reading while the Briefing.com consensus expected the index to be revised up to 83.3.
Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET while November Durable Orders will cross the wires at 8:30 ET. The October FHFA Housing Price Index will be reported at 9:00 ET while the New Home Sales report for November will be revealed at 10:00 ET.
·
Nasdaq +37.4% YTD
·
Russell 2000 +36.3%
YTD
·
S&P 500 +28.2%
YTD
·
DJIA +24.4% YTD
Commodities
Closing Commodities: Gold Closed
Below $1200/Ounce
·
Feb gold traded lower
today despite a weaker dollar index. The yellow metal brushed a session high of
$1203.40 per ounce in late morning pit trade but trended lower for the
remainder of the session. It eventually settled with a 0.6% loss at $1197.00
per ounce
·
Mar silver oscillated
between positive and negative territory with prices rising to a session high of
$19.52 per ounce. Unable to stay in the black, it settled 0.2% lower at its
session low of $19.41 per ounce
·
Feb crude oil also spent
today's session in the red. The energy component dipped to a session low of
$98.67 per barrel after pulling back from its session high of $99.30 per barrel
set at pit trade open. It eventually settled with a 0.4% loss
·
Jan natural gas, on the
other hand, traded higher, with prices touching a session high of $4.51 per
MMBtu. It pulled back slightly in afternoon floor action and settled with a 1.1%
gain at $4.46 per MMBtu
COMEX Metals Closing Prices
- Gold traded lower today despite a weaker dollar index. The yellow metal brushed a session high of $1203.40 in late morning pit trade but trended lower for the remainder of the session. It eventually settled with a 0.6% loss.
- Silver oscillated between positive and negative territory with prices rising to a session high of $19.52. Unable to stay in the black, it settled 0.2% lower at its session low.
CBOT
Agriculture and Ethanol/ICE Sugar Closing Prices
·
Mar
corn settled unchanged at
$4.34/bushel
·
Mar
wheat fell 5 cents to
$6.09/bushel
·
Jan
soybeans fell 9 cents to
$13.29/bushel
·
Jan
ethanol rose 1 cent to
$1.92/gallon
·
Mar
sugar (#16 (U.S.)) rose
0.11 of a penny to 19.50 cents/lbs
NYMEX
Energy Closing Prices
Feb crude oil fell $0.40 to $98.93/barrel
·
Crude oil spent today's
session in negative territory despite a weaker dollar index. The energy
component dipped to a session low of $98.67 after pulling back from its session
high of $99.30 set at floor trade open. It eventually settled with a 0.4%
loss.
Jan natural gas rose 5 cents to $4.46/MMBtu
·
Natural gas, on the
other hand, traded higher today, with prices touching a session high of $4.51.
It pulled back slightly in afternoon pit action and settled with a 1.1%
gain.
Jan heating oil fell 2 cents to $3.06/gallon
Jan
RBOB settled unchanged at $2.78/gallon
Treasuries
Treasuries Slip Amid Holiday Trade:
10-yr: -09/32..2.930%..USD/JPY: 104.06..EUR/USD: 1.3692
·
Treasuries
ended on their worst levels as
modest selling persisted throughout the session. Click here to see an intraday
yields chart.
·
The complex hovered
little changed into the U.S. open before this morning's in-line to
disappointing economic data coupled with an appetite for risk provoked
the selling.
·
Personal spending (0.5%)
and PCE Prices - Core (0.1%) were in-line with estimates while personal
income (0.2% actual v. 0.5% expected) and Michigan Sentiment -- Final
(82.5 actual v. 83.3 expected) missed.
·
The 5y tacked on
+2.3bps, ending @ 1.693%. Action continues to probe the 1.700% area, but
remains trapped at resistance guarding the September highs.
·
Today's weakness had the
biggest impact on the 10y, which added +4.2bps and finished @ 2.929%. The close
marked the highest for the benchmark yield in over three months, and has action
holding just below the September highs.
·
A +2bp advance at the
long end caused the 30y to finish @ 3.844%. The yield saw an early test of
support in the 3.800% area, but was unable to pierce the pierce the level as
buyers emerged in defense of the 50 and 100 dma.
·
Selling
swung the yield curve steeper as the 2-10-yr spread trades wider @ 254.5bps.
·
Precious metals trade
lower with gold -$7 @ $1197 and silver -$0.05 @ $19.40.
·
Tomorrow's
Data: MBA Mortgage Index
(7), durable orders, durable orders -ex transportation (8:30), FHFA Housing
Price Index (9), and new home sales (10).
·
U.S.
equity markets will close at 1pm ET and the U.S. Treasury market will close at
2pm ET for Christmas Eve.
Next Day In View
Economic Commentary
Economic Summary: Personal Income
& Spending rise; Michigan Sentiment below expectations, but steady from
prelim figures
Economic Data Summary:
Economic Data Summary:
·
November
Personal Income 0.2% vs Briefing.com consensus of 0.5%; October was -0.1%
·
November
Personal Spending 0.5% vs Briefing.com consensus of 0.5%; October was revised
to 0.4% from 0.3%
o Compensation levels were a little softer
than the employment report implied, increasing 0.3% instead of 0.6%. That
difference likely caused the weaker-than-expected income gain. Personal
spending rose 0.5%, in-line with consensus expectations, after increasing an
upwardly revised 0.4% (from 0.3%) in October. Goods spending rose 0.4% in
November, down from a 0.6% gain in October and below the levels reported in the
retail sales data. Services spending increased 0.6%. The personal savings rate
fell for a second consecutive month and now stands at 4.2%.
·
November PCE Prices -
CORE 0.1% vs Briefing.com consensus of 0.1%; October was 0.1%
·
December
Michigan Sentiment 82.5 vs Briefing.com consensus of 83.3; December prelim was
82.5
o Sentiment levels have recovered everything that
was lost during the government shutdown. However, recent negative reports
following the failed rollout of the Affordable Care Act have dampened feelings
about the future. The Consumer Expectations Index dropped to 72.1 in the final
reading from 72.7 in the preliminary reading for December.
Upcoming Economic Data:
·
Weekly MBA Mortgage
Applications due out Tuesday at 7;00 (Last Week was -5.5%)
·
November Durable Goods
due out Tuesday at 8:30 (Briefing.com consensus of 2.2%; October was -1.6%)
·
November Durable Goods
Ex Transportation due out Tuesday at 8:30 (Briefing.com consensus of 0.6%;
October was 0.4%)
·
October FHFA Housing
Price Index due out Tuesday at 9:00 (September was 0.3%)
·
Novemebr New Home Sales
due out Tuesday at 10:00 (Briefing.com consensus of 433K; October was 444K)
Other International Events of
Interest
·
India's Sensex (+0.1%)
gained for the third time in four sessions as buyers remained in control after
the Reserve Bank of India surprised markets by holding its Repo Rate steady at
7.75% (8.00% expected) at last week's meeting. The Sensex has seen the benefit
of a recent uptick in foreign flows (+$492.4 mln) since the decision.
On other news....
Currencies
Dollar Drifts Amid Lackluster Trade:
10-yr: -09/32..2.930%..USD/JPY: 104.01..EUR/USD: 1.3696
The Dollar Index holds just off session lows near 80.35 as a sleepy trade drifts towards the close. Volume has been light, and is expected to remain that way for the remainder of the year, as traders close their books on 2013. Click here to see a daily Dollar Index chart.
The Dollar Index holds just off session lows near 80.35 as a sleepy trade drifts towards the close. Volume has been light, and is expected to remain that way for the remainder of the year, as traders close their books on 2013. Click here to see a daily Dollar Index chart.
·
EURUSD is +30 pips @ 1.3700 as buyers remain in control
for a second session. The flight to risk has been aided the single currency,
which is ticking higher amid a lack of data and news from the region. French
Consumer spending is due out tomorrow with markets across the region
closed or closing early for Christmas Eve.
·
GBPUSD is +20 pips @ 1.6345 as a light bid has action
ticking higher for the first time in three days. The quiet session has seen
trade stuck in a 50 pip range as action lingers just off its best levels since
August 2011. Britain's BBA Mortgage Approvals will be released tomorrow.
·
USDCHF is -20 pips @ .8935 as trade presses its
worst levels of the session. Traders are monitoring current levels closely as a
breakdown would likely provoke another test of the .8850 level, which is the
lowest for the pair since November 2011.
·
USDJPY is flat @ 104.05 amid an uneventful session.
Action has been trapped in a tight 35 pip range as data and news out Japan
remains absent.
·
AUDUSD is +25 pips @ .8940 as buyers look likely to
produce a third straight day of gains. The three-day advance has trade looking
to reclaim the .8950 area, which would open up a test of the more important
.9150 level.
·
USDCAD is -35 pips @ 1.0595 moderate selling persists
for a third day with today's better than expected Canadian GDP being
the catalyst for the selling. Traders continue to watch the 1.0575 area as
support at the level has held up for the entire month of December.
Jason's Commentaries
On the eve of Christmas eve, Apple decided to strike a deal with a China telco to bring Apple products into China. That got Apple flying, with a more than 3% gain last night. That immediately got the Nasdaq and S&P500 to be the biggest gainers. The rest of the market remained rather flat with volumes around 600m shares traded on the NYSE. On the technical part, we're having a breakout and it's definitely going to continue its uptrend after Christmas. While we're having a half trading day on the eve, volumes is likely to be light and the market is likely to go flat. Nothing spectacular to talk bout except for the Christmas mood!
Wishing everyone a merry Christmas, and god bless everyone =D
Market Call: FLAT
Date: 24 Dec 2013
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