29 Nov 2013 AMC - Half trading day after Thanksgiving

29 Nov 2013 AMC - Half trading day after Thanksgiving

Market Summary 

European Markets Closing Prices

European markets are now closed; stock markets across Europe performed as follows:

·         UK's FTSE: -0.1%

·         Germany's DAX: + 0.2%

·         France's CAC: -0.2%

·         Spain's IBEX: -0.2%

·         Portugal's PSI: + 0.5%

·         Italy's MIB Index: -0.4%

·         Irish Ovrl Index: + 0.2%

·         Greece ATHEX Composite: + 1.3%

Before Market Opens 

S&P futures vs fair value: +1.80. Nasdaq futures vs fair value: +12.20.
The S&P 500 futures continue to hover near their highs.

Asian markets ended mixed with Hong Kong's Hang Seng (+0.4%) in the lead. Japan's Nikkei fell 0.4% in reaction to news China sent warplanes into its newly-established air defense zone after Japanese planes passed through without identifying themselves. In regional economic data (* reported on Thursday), Japan's retail sales* rose 2.3% year-over-year (2.1% consensus, 3.1% prior). Separately, national CPI rose 1.1% year-over-year (1.1% expected, 1.1% prior) and national core CPI increased 0.9% year-over-year (0.9% consensus, 0.7% last). Tokyo CPI rose 0.9% year-over-year (0.7% forecast, 0.6% last) and Tokyo core CPI increased 0.6% year-over-year (0.4% consensus, 0.3% prior). The unemployment rate held steady at 4.0% (3.9% forecast) and industrial production rose 0.5% month-over-month (2.0% forecast, 1.3% last). Also of note, Manufacturing PMI rose to 55.1 from 54.1 and household spending increased 0.9% year-over-year, as expected (3.7% prior). Lastly, construction orders rose 61.1% year-over-year (89.8% prior) and housing starts increased 7.1% (4.3% expected, 19.4% previous). South Korea's current account surplus* expanded to $7.92 billion from $4.93 billion. Separately, industrial production rose 1.8% month-over-month (1.5% expected, -2.3% last). Australia's HIA New Home Sales* fell 3.8% month-over-month (6.4% prior). Separately, building capital expenditure* rose 6.3% month-over-month (-1.0% expected, 2.8% last), plant/machinery capital expenditure* fell 1.5% quarter-over-quarter (-0.7% previous), and private new capital expenditure* increased 3.6% quarter-over-quarter (-1.2% expected, 1.6% prior). 

·         Japan's Nikkei shed 0.4% as growth-sensitive names lagged. Nisshin Steel Holdings and Oki Electric Industries lost 4.9% and 2.1%, respectively. Some exporters outperformed as Fujitsu, Konami, and Ricoh gained between 1.5% and 3.6%. 

·         Hong Kong's Hang Seng added 0.4% as food retailer Want Want China Holdings led with a gain of 2.3%. Cathay Pacific Airways lagged, falling 2.3%. 

·         In China, the Shanghai Composite tacked on 0.1% following an uneventful session. China Vanke advanced 0.8% and Shandong Jiangquan Industry lost 2.7%. 

Core European indices hold modest gains after ending the Thursday session on an upbeat note (Thursday: FTSE +0.1%, CAC +0.2%, DAX +0.4%). Among news of note, Standard & Poor's lowered the Netherlands sovereign rating to ‘AA+' from ‘AAA,' but raised the outlook to ‘Stable.' S&P also commented on Spain, raising the outlook to ‘Stable.' Investors received a full slate of data yesterday and today. The following data points crossed on Thursday: Eurozone consumer confidence slipped to -15.0 from -14.5, as expected. Consumer inflation expectations fell to 14.0 from 16.7 while industrial sentiment ticked up to -4.0 from -5.0, as expected. Business climate improved to 0.2 from -0.1 (0.1 forecast) and the Business and Consumer Survey rose to 98.5 from 97.7 (98.0 expected). Also of note, Retail PMI increased to 48.0 from 47.7, M3 money supply grew 1.4% year-over-year (1.9% expected, 2.0% last), and private loans decreased 2.1% year-over-year (-1.8% consensus, -2.0% prior). Germany's unemployment claims increased 10,000 (1,000 expected, 3,000 prior) while the unemployment rate held steady at 6.9%, as expected. Separately, the import price index decreased 0.7% (-0.5% forecast, 0.0% last) and CPI rose 0.2% month-over-month (0.1% forecast, -0.2% last). Italian business confidence increased to 98.1 from 97.4 (97.5 consensus). Spain's GDP rose 0.1% quarter-over-quarter, as expected. On an annualized basis, GDP decreased 1.1% (-1.2% forecast, -1.2% prior).

Today's data included eurozone CPI, which rose 0.9% year-over-year (0.8% forecast, 0.7% last) and the unemployment rate ticked down to 12.1% from 12.2% (12.2% consensus). Great Britain's BoE Consumer Credit rose GBP0.46 billion (GBP0.65 billion forecast, GBP1.07 billion last) and net lending to individuals increased GBP1.70 billion (GBP2.10 billion consensus, GBP2.20 billion last). Germany's retail sales fell 0.8% month-over-month (0.5% forecast, -0.2% prior). French consumer spending ticked down 0.2% month-over-month (0.2% consensus, -0.1% last) while PPI came in at -0.2% month-over-month (0.1% forecast, 0.3% prior). Italy's monthly unemployment rate held steady at 12.5%, as expected, while the quarterly unemployment rate rose to 12.3% from 12.1% (12.2% consensus). Separately, CPI ticked down 0.4% month-over-month (0.2% forecast, -0.2% last) while PPI fell 1.0% month-over-month (-0.1% expected, 0.0% prior). Spain's current account surplus narrowed to EUR340 million from EUR2.53 billion and the House Price Index fell 4.5% (7.6% last). 

·         Germany's DAX trades up 0.1% as materials lead while consumer names lag. K+S and Lanxess hold respective gains of 4.9% and 1.5% while Adidas and Merck trade lower by 0.4% and 0.2%, respectively. 

·         In France, the CAC is higher by 0.1%. Financials are among the leaders with BNP Paribas and Credit Agricole up 0.9% and 3.7%, respectively. Danone and L'Oreal are among the laggards, down 0.4% and 0.3%, respectively. 

·         Great Britain's FTSE holds an advance of 0.3% with miners trading mixed. Antofagasta is higher by 1.5% and Rio Tinto trades with a gain of 0.9%. On the downside, Anglo American is lower by 0.9%.

Market Internals

Market Internals -Technical-
The Nasdaq closed up 15 (+0.37%) at 4060, the Dow closed down 11 (-0.07%) at 16086, and the S&P 500 closed down 1 (-0.08%) at 1806. Action came on below average volume (NYSE 474 mln vs. avg. of 723; NASDAQ 825 mln vs. avg. of 1773), with advancers outpacing decliners (NYSE 1657/1337, NASDAQ 1507/942) and new highs outpacing new lows (NYSE 217/16, NASDAQ 329/12). 

Relative Strength: 
Junior Gold Miners-GDXJ +3.50%, Silver Miners-SIL +3.37%, Coffee-JO +2.88%, Greece-GREK +2.83%, Nuclear Energy-NLR +2.18%, Middle East and Africa-GAF +2.16%, Gold Miners-GDX +2.15%, South Africa-EZA +1.97%, India-INP +1.90%, Taiwan-EWT +1.55%.

Relative Weakness: 
Realty Majors-ICF -1.05%, Real Estate-IYR -0.93%, Energy-IYE -0.81%, Gasoline-UGA -0.80%, New Zealand-ENZL -0.76%, U.S. Home Construction-ITB -0.64%, Indonesia-IDX -0.63%, Japan-EPP -0.48%, Australia-EWA -0.47%, Brazilian Real-BZF -0.44%.

Leaders and Laggards

 

 

Technical Updates

Commentaries 

Closing Market Summary: Equities Endure Mixed Friday
Equity indices finished the holiday-shortened session on a mixed note. The Nasdaq stayed true to a theme that has held throughout the week, finishing ahead of its peers. The tech-heavy index advanced 0.4%, extending its week-to-date gain to 1.7%. The S&P 500 shed 0.1%, but still managed to secure its eighth consecutive weekly advance. The benchmark index gained 0.1% in the final week of November.

The S&P 500 suffered from late weakness, surrendering its entire gain during the final 30 minutes as financials (-0.4%) and industrials (-0.4%) tumbled into the red with most other sectors following suit. In addition, energy (-0.2%), which displayed intraday strength, also gave up its gain into the close. The sector lagged even as crude oil rallied 0.9% to $93.15 per barrel.

Meanwhile, the Nasdaq led from the opening bell as its largest component, Apple (AAPL 556.07, +10.11), charged out of the gate. The stock climbed 1.9% amid news the company has secured almost 76% of October smartphone sales in Japan. Biotechnology also provided a measure of support to the index as the iShares Nasdaq Biotechnology ETF (IBB 224.16, +0.83) rose 0.4%. However, biotech had a limited impact on the health care sector (-0.1%), which struggled to keep pace with the broader market.

Outside of technology, the discretionary sector (+0.1%) was the only other advancer. Online retailers like Amazon.com (AMZN 393.62, +6.91) and eBay (EBAY 50.52, +1.22) outperformed traditional names like Target (TGT 63.93, -0.48) and Wal-Mart (WMT 81.01, +0.08) even after the two brick-and-mortar retailers made upbeat-sounding comments regarding early Black Friday returns.

Countercyclical groups posted modest losses between 0.1% and 0.6% with telecom services rounding out the bottom of the leaderboard.

The late selloff sent the CBOE Volatility Index (VIX 13.75, +0.77) higher by 5.9% as the near-term volatility measure ended at its highest level in more than a week.

Trading volume was light as only 474 million shares changed hands on the floor of the New York Stock Exchange. 

·         Russell 2000 +34.6% YTD 

·         Nasdaq +34.5% YTD 

·         S&P 500 +26.6% YTD 

·         DJIA +22.8% YTD

Commodities

NYMEX Energy Closing Prices

·         Jan crude oil rose $0.43 to $92.73/barrel

·         Jan natural gas rose 7 cents to $3.96/MMBtu

·         Jan heating oil declined 1 cent to $3.03/gallon

·         Jan RBOB gasoline declined 4 cents to $2.66/gallon

CBOT Agriculture and Ethanol Closing Prices

·         Mar corn fell 1 cent to $4.25/bushel 

·         Mar wheat rose 5 cents to $6.69/bushel 

·         Jan soybeans rose 17 cents to $13.37/bushel 

·         Jan ethanol rose 1 cent to $1.70/gallon

COMEX Metals Closing Prices

·         Feb gold rose $12.40 to $1250.30/ounce 

·         Mar silver rose $0.36 to $20.04/ounce 

·         Mar copper rose 1 cent to $3.20/lb

Treasuries

Treasuries See Flat Week: 10-yr: unch..2.747%..USD/JPY: 102.45..EUR/USD: 1.3585
The Week in Review 

·         Treasuries ended the holiday-shortened week little changed as light volumes made for a sloppy trade.

·         Data that outpaced estimates this week included building permits (974K actual v. 932K expected), Case-Shiller 20-city Index (13.3% actual v. 13.0% expected), Chicago PMI (63.0 actual v. 58.0 expected), Michigan Sentiment - Final (75.1 actual v. 73.0 expected), and leading indicators (0.2% actual v. -0.1% expected).

·         Pending home sales (-0.6% actual v. 1.3% expected), consumer confidence (70.4 actual v. 72.4 expected), and durable orders ex-transportation (-0.1% actual v. 0.2% expected) were the notable misses. 

·         No maturity saw its yield deviate more than 2bps from last week's close. Click here to see an intraweek yields chart.

·         The 5y remained locked in the 20bp range (1.250/1.450%) that has been in place since the middle of September with action settling @ 1.367%.

·         A flat week in 10s saw the benchmark yields end @ 2.741%. 

·         Slight outperformance at the long end saw the 30y shed -2bps to close @ 3.808%. Support in the 3.750/3.800% area will be watched closely into next week.

·         Little change along the yields curve saw the 2-10-yr spread tighten ever so slightly to 245.5bps.

·         Monday's solid $32 bln 2y note auction drew 0.300% (0.303% when issued) and a solid 3.54x bid/cover as indirect (22.4%) and direct (27.3%) bidder takedowns were mostly in-line. Primary dealers ended up with 51.3% of the supply.

·         Tuesday's $35 bln 5y note auction drew 1.340% (1.340% when issued) and an in-line 2.61x bid/cover as a strong showing from indirect bidders (50%) helped offset a disappointing direct bid (10.8%). Primary dealers ended up with just 39.2% of the supply.

·         Wednesday's tepid $29 bln 7y note auction drew 2.106% and a weak 2.36x bid/cover as both indirect (34.1%) and direct (16.1%) bids fell short of their 12-auction averages. Primary dealers ended up with 48.2% of the supply. The meager results may be impacted by the unusual timing of the auction (11:30 am ET), which was a result of the holiday trade.

·         Monday's Data: ISM Index and two months of construction spending reports (10). 

·         Fed Speak: NY Fed Executive VP, Markets Group, Simon Potter will speak at NYU (18:15). 

On other news.... 








Currencies 

Weekly Analysis
Week 38



Technical Updates

Briefing's Commentaries

Weekly Wrap 

Dow -10.92 at 16086.41, Nasdaq +15.14 at 4059.89, S&P -1.42 at 1805.81

Equity indices finished the holiday-shortened session on a mixed note. The Nasdaq stayed true to a theme that has held throughout the week, finishing ahead of its peers. The tech-heavy index advanced 0.4%, extending its week-to-date gain to 1.7%. The S&P 500 shed 0.1%, but still managed to secure its eighth consecutive weekly advance. The benchmark index gained 0.1% in the final week of November.

The S&P 500 suffered from late weakness, surrendering its entire gain during the final 30 minutes as financials (-0.4%) and industrials (-0.4%) tumbled into the red with most other sectors following suit. In addition, energy (-0.2%), which displayed intraday strength, also gave up its gain into the close. The sector lagged even as crude oil rallied 0.9% to $93.15 per barrel.

Meanwhile, the Nasdaq led from the opening bell as its largest component,Apple (AAPL 556.07, +10.11), charged out of the gate. The stock climbed 1.9% amid news the company has secured almost 76% of October smartphone sales in Japan. Biotechnology also provided a measure of support to the index as the iShares Nasdaq Biotechnology ETF (IBB 224.16, +0.83) rose 0.4%. However, biotech had a limited impact on the health care sector (-0.1%), which struggled to keep pace with the broader market.

Outside of technology, the discretionary sector (+0.1%) was the only other advancer. Online retailers like Amazon.com (AMZN 393.62, +6.91) and eBay(EBAY 50.52, +1.22) outperformed traditional names like Target (TGT 63.93, -0.48) and Wal-Mart (WMT 81.01, +0.08) even after the two brick-and-mortar retailers made upbeat-sounding comments regarding early Black Friday returns.

Countercyclical groups posted modest losses between 0.1% and 0.6% with telecom services rounding out the bottom of the leaderboard.

The late selloff sent the CBOE Volatility Index (VIX 13.75, +0.77) higher by 5.9% as the near-term volatility measure ended at its highest level in more than a week.

Trading volume was light as only 474 million shares changed hands on the floor of the New York Stock Exchange.

Next Week In View



Economic Commentaries

Economic Summary: No US Data today; ISM Monday at 10:00

Upcoming Economic Data:

·         November ISM Index due out Monday at 10:00 (October was 56.4)

·         September Construction Spending due out Monday at 10:00 (Briefing.com consensus of ; August was 0.6%)

·         October Construction Spending due out Monday at 10:00 (Briefing.com consensus of ; September was )

Other International Events of Interest

·         Japan's Nikkei (-0.4%) slipped off six-month highs as data out was mostly disappointing. Household spending (0.9% YoY actual v. 1.2% YoY expected) and preliminary industrial production (0.5% actual v. 2.1% expected) were light while a hot Tokyo Core CPI (0.6% YoY actual v. 0.4% YoY expected) showed Abenomics is beginning to take hold. Traders also had to grapple with comments from Bank of Japan Governor Haruhiko Kuroda, suggesting the central bank must be careful with its JGB purchases as it does not want to erode confidence. 

Jason's Commentaries

The half day trading session is rather volatile with light trading session. The market started with a bullish bias and subsequently lost all its gains by 11am ET. Nasdaq was the main leader on that day as Microsoft , Apple and Amazon gained by more than 1%. However the rest of the market remains flat to the downside. Volumes were at approx at 463.7m shares traded on the NYSE. Since we're having a downside crucifix on the Dow and S&P500, and we're having  Bernanke talking on Monday, he might be pushing the market down. On top of that, next week will be a highly volatile as We're having ISM, ADP report, Non-farm payrolls and Black Friday sales results coming out. Stay safe and enjoy the ride!!

Market Call: ABSTAIN

Date: 2 Dec 2013