17 Jan 2014 AMC - Market went flat to downside as big names like GE and Intel lagged, however Visa and Amex pulled held Dow up ahead of Martin Luther King's Day
Market Summary
European Markets Closing Prices
European
markets are now closed; stock markets across Europe performed as follows:
·
UK's FTSE: + 0.2%
·
Germany's DAX: + 0.3%
·
France's CAC: + 0.2%
·
Spain's IBEX: + 0.1%
·
Portugal's PSI: + 0.3%
·
Italy's MIB Index: + 0.5%
·
Irish Ovrl Index: + 0.5%
·
Greece ATHEX
Composite: -0.2%
Before Market Opens
S&P futures vs fair value:
-1.80. Nasdaq futures vs fair value: -8.00.
Markets across Asia ended mostly lower as trade slipped following some disappointing earnings reports on Wall Street. News and data was mostly absent, limited to the Japanese government upped its economic assessment for the first time in four months.
Markets across Asia ended mostly lower as trade slipped following some disappointing earnings reports on Wall Street. News and data was mostly absent, limited to the Japanese government upped its economic assessment for the first time in four months.
·
Japan's Nikkei (-0.1%)
slipped amid a lackluster trade. Mitsubishi Motors was a notable outperformer,
surging 10.1% as traders covered their short bets.
·
Hong Kong's Hang Seng
(+0.6%) outperformed despite selling off into the close. Casino stocks led the
way as Galaxy Entertainment jumped 5.3% and Sands China rallied 3.5%. Recent
outperformer Lenovo slumped 4.0% as traders booked profits.
·
China's Shanghai
Composite (-0.9%) posted its lowest close in over five months as worries over
the onslaught of IPOs set to hit the market persist. Neway Valve jumped 43.4%
during today's debut.
The major European bourses hover
little changed. A quiet day for data saw U.K. retail sales blow past estimates
(2.6% MoM actual v. 0.5% MoM expected) while France's budget deficit widened to
EUR87.0 bln (EUR80.0 bln expected, EUR86.1 bln previous). Making headlines were
comments from French President Francois Hollande, suggesting the euro is too
high.
·
Britain's FTSE trades
flat as some recent selling has wiped away the early gains. Royal Dutch Shell
trades down 2.2% after lowering its guidance.
·
Germany's DAX is up 0.1%
amid a sleepy trade. Utilities lag as RWE and E.ON trade down 2.0% and 0.7%,
respectively.
·
France's CAC is
unchanged as trade has dipped back to the flat line. Automaker Renault sports a
gain of 2.9% as momentum carries over from yesterday's strong monthly sales
report.
Market Internals
Market Internals -Technical-
The Dow closed up 42 (+0.25%) at 16459, the S&P 500 closed down 7 (-0.38%) at 1839, and the Nasdaq closed down 21 (-0.50%) at 4198. Action came on above average volume (NYSE 876 mln vs. avg. of 681; NASDAQ 2072 mln vs. avg. of 1748), with decliners outpacing advancers (NYSE 1341/1762, NASDAQ 1076/1533) and new highs outpacing new lows (NYSE 184/21, NASDAQ 171/17).
Relative Strength:
Junior Gold Miners-GDXJ +5.91%, Vietnam-VNM +3.61%, Silver Miners-SIL +3.14%, Platinum-PPLT +2.85%, Heating Oil-UHN +1.60%, Hong Kong-EWH +1.53%, Cotton-BAL +1.35%, Peru-EPU +1.34%, Brazilian Real-BZF +0.81%, British Pound-FXB +0.31%.
Relative Weakness:
Turkey-TUR -2.85%, Cocoa-NIB -2.20%, Sugar-SGG -2.06%, Poland-EPOL -1.95%, Greece-GREK -1.84%, Natural Gas-UNG -1.83%, New Zealand-ENZL -1.74%, Clean Energy-PBW -1.45%, U.S. Home Construction-ITB -1.35%, Belgium-EWK -1.28%.
Leaders and Laggards
Technical Updates
Commentaries
The
broader market ended the week on a down note, undercut by a spate of
uninspiring earnings results and guidance from some widely-held companies that
put a damper on the bullish sentiment seen in the middle of the week.
There were some buying efforts on Friday that controlled the fallout, but generally speaking there wasn't a lot of conviction among buyers with the exception of some specific stocks. Those exceptions tended to reside in the price-weighted Dow Jones Industrial Average, which outperformed the other major indices on Friday.
American Express (AXP 90.97, +3.19), which came up shy of consensus earnings estimates but spotlighted encouraging card member spending, was instrumental in the Dow's outperformance. It joined with Visa (V 232.18, +10.41) -- the highest-priced stock in the Dow -- to effectively account for all of the Dow's gains. Remarkably, 21 out of the 30 Dow components ended lower on Friday.
Intel (INTC 25.85, -0.69) and General Electric (GE 26.58, -0.62) were among the Dow laggards. Both companies reported their results for the fourth quarter, yet neither wowed investors. Intel missed by a penny and said it expected FY14 revenues to be approximately flat. GE was in-line with expectations and said things were improving, albeit in a mixed environment.
Morgan Stanley (MS 33.40, +1.40), which beat by eight cents, and Schlumberger (SLB 90.21, +1.60), which beat by two cents, enjoyed positive outings that provided a measure of support for the broader market and their respective sectors.
Be that as it may, every S&P 500 sector closed in the red on Friday. The energy sector (-0.05%) was the relative strength leader while the consumer staples sector (-0.8%) was the biggest laggard. The latter was afflicted by a big earnings warning out of Elizabeth Arden (RDEN 27.96, -6.54).
Other notable companies warning they expect to fall short of earnings expectations included Con-way (CNW 40.59, -0.81), Royal Dutch Shell (RDS.a 70.57, -1.17), and UPS (UPS 99.91, -0.58). The warning from UPS drew a lot of attention, yet the company came back nicely from a loss of more than three points during the day as investors seemed to warm to the notion that its shortfall was tied to the bad weather and the operational challenges of meeting increased demand during the holiday selling period.
The earnings news was the focal point throughout the day. There were some early economic releases, but they didn't have much bearing on today's proceedings. Overall, the economic news was good enough not to create any newfound concerns about the economic recovery.
There were some buying efforts on Friday that controlled the fallout, but generally speaking there wasn't a lot of conviction among buyers with the exception of some specific stocks. Those exceptions tended to reside in the price-weighted Dow Jones Industrial Average, which outperformed the other major indices on Friday.
American Express (AXP 90.97, +3.19), which came up shy of consensus earnings estimates but spotlighted encouraging card member spending, was instrumental in the Dow's outperformance. It joined with Visa (V 232.18, +10.41) -- the highest-priced stock in the Dow -- to effectively account for all of the Dow's gains. Remarkably, 21 out of the 30 Dow components ended lower on Friday.
Intel (INTC 25.85, -0.69) and General Electric (GE 26.58, -0.62) were among the Dow laggards. Both companies reported their results for the fourth quarter, yet neither wowed investors. Intel missed by a penny and said it expected FY14 revenues to be approximately flat. GE was in-line with expectations and said things were improving, albeit in a mixed environment.
Morgan Stanley (MS 33.40, +1.40), which beat by eight cents, and Schlumberger (SLB 90.21, +1.60), which beat by two cents, enjoyed positive outings that provided a measure of support for the broader market and their respective sectors.
Be that as it may, every S&P 500 sector closed in the red on Friday. The energy sector (-0.05%) was the relative strength leader while the consumer staples sector (-0.8%) was the biggest laggard. The latter was afflicted by a big earnings warning out of Elizabeth Arden (RDEN 27.96, -6.54).
Other notable companies warning they expect to fall short of earnings expectations included Con-way (CNW 40.59, -0.81), Royal Dutch Shell (RDS.a 70.57, -1.17), and UPS (UPS 99.91, -0.58). The warning from UPS drew a lot of attention, yet the company came back nicely from a loss of more than three points during the day as investors seemed to warm to the notion that its shortfall was tied to the bad weather and the operational challenges of meeting increased demand during the holiday selling period.
The earnings news was the focal point throughout the day. There were some early economic releases, but they didn't have much bearing on today's proceedings. Overall, the economic news was good enough not to create any newfound concerns about the economic recovery.
·
December housing starts
slipped 9.8% to an annualized rate of 999,000 units, but the two-month average
for starts was the highest since March 2008.
·
Industrial production
jumped 0.3%, which was the fifth consecutive month industrial production
increased.
·
The preliminary reading
for the University of Michigan Consumer Sentiment report for January dipped to
80.4 from 82.5, but the downturn wasn't enough to cause any real concerns
Today
was an options expiration day, so volume was heavier than usual with 880 mln
shares having traded at the NYSE versus 641 mln on Thursday.
For the week, the S&P 500 declined 0.2%, the Dow Jones Industrial Average gained 0.1%, and the Nasdaq Composite increased 0.6%.
As a reminder, the stock and bond markets will be closed on Monday in observance of Martin Luther King, Jr. Day.
For the week, the S&P 500 declined 0.2%, the Dow Jones Industrial Average gained 0.1%, and the Nasdaq Composite increased 0.6%.
As a reminder, the stock and bond markets will be closed on Monday in observance of Martin Luther King, Jr. Day.
·
Dow Jones Industrial
Average -0.7% YTD
·
S&P 500 -0.5% YTD
·
Nasdaq Composite +0.5%
YTD
·
Russell 2000 +0.4% YTD
Commodities
Closing Commodities: Natural Gas
Rises 6.7% During The Week
·
Precious metals traded
higher today despite an advance by the dollar index. Feb gold rose to a session
high of $1254.60 per ounce after trading as low as $1242.70 per ounce in early
morning pit trade. It settled 1.0% higher at $1251.80 per ounce, booking a 0.4%
gain for the week.
·
Mar silver lifted from a
session low of $20.12 per ounce and peaked at $20.42 per ounce by late morning
action. It eventually settled 1.2% higher at $20.30 per ounce, gaining 0.3%
over the week.
·
Feb crude oil also
traded in positive territory. It pulled back from a session high of $94.94 per
barrel set at pit trade open to a session low of $93.94 per barrel. However, it
quickly recovered back above the $94 per barrel level and settled with a 0.4%
gain at $94.33 per barrel. Today's advance brought gains for the week to 1.8%.
·
Feb natural gas, on the
other hand, spent today's floor trade in the red. It rallied to a session high
of $4.39 per MMBtu after trading as low as $4.30 per MMBbt but lost momentum
heading into the close and closed 1.4% lower at $4.33 per MMBtu. Despite the
loss, natural gas gained 6.7% over the week.
CBOT
Agriculture and Ethanol/ICE Sugar Closing Prices
·
Mar
corn fell 3 cents to
$4.24/bushel
·
Mar
wheat fell 9 cents to
$5.63/bushel
·
Mar
soybeans rose 1 cent to
$13.16/bushel
·
Feb
ethanol fell 4 cents to
$1.89/gallon
·
Mar
sugar (#16 (U.S.)) rose
0.03 of a penny to 20.28 cents/lbs
COMEX
Metals Closing Prices
Feb gold rose $11.90 to $1251.80/oz
·
Gold traded higher today
despite an advance by the dollar index. The yellow metal rose to a session high
of $1254.60 after trading as low as $1242.70 in early morning pit trade. It
settled 1.0% higher, booking a 0.4% gain for the week.
Mar silver rose $0.24 to $20.30/oz
·
Silver also trended
higher for most of today's floor trade. Prices lifted from a session low of
$20.12 and peaked at $20.42 by late morning action. Silver eventually settled
1.2% higher, gaining 0.3% over the week.
Mar
copper settled unchanged at $3.34/lbs
NYMEX Energy Closing Prices
Feb crude oil rose $0.42 to $94.33/barrel
·
Crude oil traded higher despite
a stronger dollar index. It pulled back from a session high of $94.94 set at
pit trade open to a session low of $93.94. However, it quickly recovered back
above the $94 level and settled with a 0.4% gain. Today's advance brought gains
for the week to 1.8%.
Feb natural gas fell 6 cents to $4.33/MMBtu
·
Natural gas, on the
other hand, spent today's floor trade in the red. It rallied to a session high
of $4.39 after trading as low as $4.30 but gave up the momentum heading into
the close and settled 1.4% lower. Despite the loss, natural gas gained 6.7%
over the week.
Feb heating oil rose 4 cents to $3.02/gallon
Feb
RBOB rose 3 cents to $2.62/gallon
Treasuries
10y Posts Lowest Close in Five Weeks
: 10-yr: +05/32..2.822%..USD/JPY: 104.26..EUR/USD: 1.3528
The Week in Review
The Week in Review
·
Treasuries saw a mixed
week as selling took place up front while buyers were in control at the long
end. Click here to see an
intraweek yields chart.
·
Congress
passed a $1.1 trln spending bill that will fund the government through the end of September.
It was the first budget agreed upon by Congress in almost four years, and the
first by a bi-partisan Congress in 27 years.
·
Data
mostly outpaced estimates as Empire Manufacturing (12.5 actual v. 3.5 expected), housing
starts (999K actual v. 986K expected), Philly Fed (9.4 actual v. 8.0 expected),
and retail sales (0.2% actual v. 0.0% expected) topped forecasts.
·
There were some misses
as building permits (986K actual v. 1000K expected), Michigan Sentiment (80.4
actual v. 83.0 expected), and the NAHB Housing Market Index (56 actual v. 57
expected) fell short.
·
CPI posted an in-line
0.3% while PPI was hot at 0.4% (0.3%).
·
The latest Fed Beige
Book crossed the wires on Wednesday, and showed the U.S. economy expanded
at a ‘moderate' pace from late-November into the end of 2013.
·
Up front, the 2y and 3y
ticked lower over the course of the week with both adding +2bps. The 2y ticked
up to almost 38bps, and will remain on many traders' radars in the coming weeks
as another debt ceiling debate nears in Congress ahead of the February
7 deadline.
·
A flat week in for the
5y saw the yield settle @ 1.630%. Buying early in the week dropped the yield
below 1.600% before mid-week selling provided a test of 1.700%
resistance.
·
Action in 10s dropped
the benchmark yield -3bps to 2.827%, its lowest level in five weeks.
A breakdown of current levels puts the 2.700/2.750% area in focus.
·
Buying at the long end
dropped the 30y -5bps as action pressed to its lowest level since early-November.
Recent developments put the 3.700% level in play.
·
Cuve
flattening took hold as the 2-10-yr spread tightened to 244.5bps.
The Week Ahead
·
Markets are
closed on Monday in observance of Martin Luther King, Jr. Day.
·
There is no data on Tuesday.
·
Wednesday will see just
the weekly MBA Mortgage Index (7).
·
Thursday's data is the
most anticipated of the week as initial and continuing claims (8:30), FHFA
Housing Price Index (9), existing home sales, and leading
indicators (10) are due out.
·
Data is absent on
Friday.
On other news....
Earnings/Guidance
·
American Express (AXP)
misses by $0.04, reports revs in-line
·
BNY Mellon (BK)
reports EPS in-line
·
Capital One (COF)
misses by $0.12, beats on revs; Net interest margin of 6.73 percent,
down 16 basis points
·
Comerica (CMA)
beats by $0.03
·
Con-way (CNW)
guides Q4 EPS well below consensus
·
Elizabeth Arden (RDEN)
(halted, will resume trade at 16:50) lowers Q2 guidance; withdraws FY14 EPS and
rev outlook, expected to be below prior guidance
·
General Electric (GE)
reports EPS in-line, revs in-line; 2014 framework remains unchanged
·
Intel (INTC)
misses by $0.01, reports revs in-line; guides Q1 revs in-line; reaffirms FY14
revs guidance
·
Morgan Stanley (MS)
beats by $0.08, misses on revs
·
M&T Bank (MTB)
misses by $0.13
·
Sallie Mae (SLM)
misses by $0.12; co expects to initiate EPS guidance for 2014 upon
resolution of its separation plan; the co expects full-year 2014 private
education loan originations of $4 billion
·
Schlumberger (SLB)
beats by $0.02, reports revs in-line
·
SunTrust Banks (STI)
beats by $0.08, beats on revs
·
UPS (UPS) guides
FY14 EPS +10-15% to ~$5.03-5.26 vs. $5.49 consensus
News
·
Apple (AAPL)
iPhone China Mobile (CHL) getting weak response so far, according to
reports
·
Apple (AAPL) and
Samsung (SSNLF) expected to ship 80-90 mln tablets in 2014, according to
reports
·
Con Edison (ED)
increases quarterly dividend 2.4% to $0.63 from $0.615 per share
·
IBM (IBM) plans
to spend $1.2 bln to expand investment in cloud services, according to reports
·
Johnson & Johnson (JNJ):
FDA panel votes against recommending approval Janssen Pharmaceuticals' sNDA for
XARELTO
·
Microsoft (MSFT):
Xbox Wire blog states Xbox One was the number one selling console in the U.S.
in December
·
Schlumberger (SLB)
declares 28% increase in quarterly dividend to $0.40/share
·
Sysco (SYY) lower
in after hours; Reuters reporting Florida AG and other states are reviewing
Sysco /US Foods deal
·
T-Mobile US (TMUS)
and Sprint (S): Sprint has financing proposals from banks for T-Mobile
bid, according to reports
·
Standard & Poors
announces changes to U.S. indices: TSCO to replace LIFE in
the S&P 500; ALGN to replace RRTS in the
S&P MidCap 400, RRTS to replace ALGN in
the S&P SmallCap 600; BCC to replace VPHM in
the S&P SmallCap 600
Currencies
Dollar Flirts with Best Close Since
Mid-September: 10-yr: +03/32..2.832%..USD/JPY: 104.30..EUR/USD: 1.3525
·
The Dollar Index sits on
session highs near 81.25 as action contends with its best close since
the middle of September. Click here to see a
daily Dollar Index chart.
·
Today's bid has the
greenback higher for the third time in four sessions, and brings trade closer
to a retest of the 200 dma (81.59).
·
EURUSD is -95 pips @ 1.3525 as sellers have managed to
penetrate important support in the 1.3550/1.3600 area. Today's selling
has dropped the single currency to levels last seen around Thanksgiving while
also pushing action below both the 50 and 100 dma. The inability to quickly
retake support puts the 1.3400/1.3450 level in play. Eurozone data due out on
Monday includes German PPI and Spanish home prices.
·
GBPUSD is +55 pips @ 1.6410 as trade has slipped off
its best levels the session. This morning's strong U.K. retail sales
report ran sterling as high as 1.6460, but some afternoon selling has
dropped action off its best levels of the day as sellers emerged at the
resistance level. The 1.6300 support level remains key, and is aided by the 50
dma.
·
USDCHF is +70 pips @ .9115 as trade tests its best
level in two months following the tame Swiss PPI number. Resistance in the
.9100 area remains under close watch, but bulls will not breathe easy unless they
are able to retake the 200 dma (.9234).
·
USDJPY is flat @ 104.30 as action has held in a tight
25 pip range for the entire session. The pair has seen little response to the
Japanese government upping its economic assessment for the first time in four
months as it looks likes traders are opting to remain on the sidelines until
next week's Bank of Japan rate decision.
·
AUDUSD is -50 pips @ .8770 as trade presses the
lowest level since August 2010 ahead of China's GDP, industrial production, and
fixed asset investment data, which are scheduled to cross the wires over
the weekend.
·
USDCAD is +40 pips @ 1.0970 as trade looks
likely to put in its best close since September 2009. Traders remain
fixated on the psychologically important 1.1000 level as stops are likely to
rest at the round number.
Weekly Analysis
Week 1
Technical Updates
Briefing's Commentaries
Weekly
Wrap The
broader market ended the week on a down note, undercut by a spate of
uninspiring earnings results and guidance from some widely-held companies that
put a damper on the bullish sentiment seen in the middle of the week. There
were some buying efforts on Friday that controlled the fallout, but generally
speaking there wasn't a lot of conviction among buyers with the exception of
some specific stocks.
Those exceptions tended to reside in the price-weighted Dow Jones Industrial Average, which outperformed the other major indices on Friday.
American Express (AXP 90.97, +3.19), which came up shy of consensus earnings estimates but spotlighted encouraging card member spending, was instrumental in the Dow's outperformance. It joined with Visa (V 232.18, +10.41) -- the highest-priced stock in the Dow -- to effectively account for all of the Dow's gains. Remarkably, 21 out of the 30 Dow components ended lower on Friday.
Intel (INTC 25.85, -0.69) and General Electric (GE 26.58, -0.62) were among the Dow laggards. Both companies reported their results for the fourth quarter, yet neither wowed investors. Intel missed by a penny and said it expected FY14 revenues to be approximately flat. GE was in-line with expectations and said things were improving, albeit in a mixed environment.
Morgan Stanley (MS 33.40, +1.40), which beat by eight cents, andSchlumberger (SLB 90.21, +1.60), which beat by two cents, enjoyed positive outings that provided a measure of support for the broader market and their respective sectors.
Be that as it may, every S&P 500 sector closed in the red on Friday. The energy sector (-0.05%) was the relative strength leader while the consumer staples sector (-0.8%) was the biggest laggard. The latter was afflicted by a big earnings warning out of Elizabeth Arden (RDEN 27.96, -6.54).
Other notable companies warning they expect to fall short of earnings expectations included Con-way (CNW 40.59, -0.81), Royal Dutch Shell(RDS.a 70.57, -1.17), and UPS (UPS 99.91, -0.58). The warning from UPS drew a lot of attention, yet the company came back nicely from a loss of more than three points during the day as investors seemed to warm to the notion that its shortfall was tied to the bad weather and the operational challenges of meeting increased demand during the holiday selling period.
The earnings news was the focal point throughout the day and the week. There were some early economic releases, but they didn't have much bearing on Friday's proceedings. Overall, the economic news was good enough not to create any newfound concerns about the economic recovery.
Those exceptions tended to reside in the price-weighted Dow Jones Industrial Average, which outperformed the other major indices on Friday.
American Express (AXP 90.97, +3.19), which came up shy of consensus earnings estimates but spotlighted encouraging card member spending, was instrumental in the Dow's outperformance. It joined with Visa (V 232.18, +10.41) -- the highest-priced stock in the Dow -- to effectively account for all of the Dow's gains. Remarkably, 21 out of the 30 Dow components ended lower on Friday.
Intel (INTC 25.85, -0.69) and General Electric (GE 26.58, -0.62) were among the Dow laggards. Both companies reported their results for the fourth quarter, yet neither wowed investors. Intel missed by a penny and said it expected FY14 revenues to be approximately flat. GE was in-line with expectations and said things were improving, albeit in a mixed environment.
Morgan Stanley (MS 33.40, +1.40), which beat by eight cents, andSchlumberger (SLB 90.21, +1.60), which beat by two cents, enjoyed positive outings that provided a measure of support for the broader market and their respective sectors.
Be that as it may, every S&P 500 sector closed in the red on Friday. The energy sector (-0.05%) was the relative strength leader while the consumer staples sector (-0.8%) was the biggest laggard. The latter was afflicted by a big earnings warning out of Elizabeth Arden (RDEN 27.96, -6.54).
Other notable companies warning they expect to fall short of earnings expectations included Con-way (CNW 40.59, -0.81), Royal Dutch Shell(RDS.a 70.57, -1.17), and UPS (UPS 99.91, -0.58). The warning from UPS drew a lot of attention, yet the company came back nicely from a loss of more than three points during the day as investors seemed to warm to the notion that its shortfall was tied to the bad weather and the operational challenges of meeting increased demand during the holiday selling period.
The earnings news was the focal point throughout the day and the week. There were some early economic releases, but they didn't have much bearing on Friday's proceedings. Overall, the economic news was good enough not to create any newfound concerns about the economic recovery.
·
December housing starts
slipped 9.8% to an annualized rate of 999,000 units, but the two-month average
for starts was the highest since March 2008.
·
Industrial production
jumped 0.3%, which was the fifth consecutive month industrial production
increased.
·
The preliminary reading
for the University of Michigan Consumer Sentiment report for January dipped to
80.4 from 82.5, but the downturn wasn't enough to cause any real concerns
Friday was an options expiration day, so volume was heavier
than usual with 880 mln shares having traded at the NYSE versus 641 mln on
Thursday.
The early sense of things so far is that the fourth quarter wasn't a slam-dunk quarter despite the incoming signs of improving economic activity that were seen during the quarter. Furthermore, there hasn't been a lot of table pounding either with respect to the first quarter and the year ahead.
The latter is owed in part to the fact that the financial companies factored prominently on this week's earnings calendar and they don't typically provide specific earnings guidance. The coming week will provide some more clarity on the outlook when a larger number of industrial and technology companies report their results.
At the moment, the market is having some difficulty finding its way and has the semblance of being at a 'T' intersection, not knowing which way to turn. That indecision has led to some choppy trading action. The guidance from corporate America in the coming week may very well offer some navigational clues.
For the week that just concluded, the S&P 500 declined 0.2%, the Dow Jones Industrial Average gained 0.1%, and the Nasdaq Composite increased 0.5%.
As a reminder, the stock and bond markets will be closed on Monday in observance of Martin Luther King, Jr. Day.
The early sense of things so far is that the fourth quarter wasn't a slam-dunk quarter despite the incoming signs of improving economic activity that were seen during the quarter. Furthermore, there hasn't been a lot of table pounding either with respect to the first quarter and the year ahead.
The latter is owed in part to the fact that the financial companies factored prominently on this week's earnings calendar and they don't typically provide specific earnings guidance. The coming week will provide some more clarity on the outlook when a larger number of industrial and technology companies report their results.
At the moment, the market is having some difficulty finding its way and has the semblance of being at a 'T' intersection, not knowing which way to turn. That indecision has led to some choppy trading action. The guidance from corporate America in the coming week may very well offer some navigational clues.
For the week that just concluded, the S&P 500 declined 0.2%, the Dow Jones Industrial Average gained 0.1%, and the Nasdaq Composite increased 0.5%.
As a reminder, the stock and bond markets will be closed on Monday in observance of Martin Luther King, Jr. Day.
Next Week In View
Economic Commentaries
Economic Summary: Housing Starts top
expectations; IP in line with estimates; Michigan Sentiment misses the mark
Economic Data Summary:
Economic Data Summary:
·
December
Housing Starts 999K vs Briefing.com consensus of 986K; November was 1.091 M
·
December Building
Permits 986K vs Briefing.com consensus of 1.000 M ; November was 1.007 M
o One of the theories for the weak December
employment number was that December 2013 was brutally cold compared to previous
years and that kept workers at home. If that story is true, we would have
expected the cold weather temperatures to negatively impact the housing starts
number. That didn't happen. Instead, housing starts -- while down from November
-- posted their best two-month average since March 2008. The underlying trends
are encouraging.
·
December
Industrial Production 0.3% vs Briefing.com consensus of 0.3%; November was 1.1%
·
December Capacity
Utilization 79.2% vs Briefing.com consensus of 79.3%; November was 79.0%
o . That gain was in-line with the regional Fed
manufacturing surveys. Motor vehicle production increased 1.6% in December
after increasing 3.6% in November. Total motor vehicle assemblies rose to 11.80
mln SAAR from 11.53 mln in November. That was the most motor vehicle assemblies
since March 2006. Most of the increase in assemblies was due to higher car
production. Car assemblies increased to 4.64 mln SAAR from 4.41 mln SAAR. Truck
assemblies increased to 7.16 mln SAAR from 7.12 mln SAAR.
·
January
Michigan Sentiment 80.4 vs Briefing.com consensus of 83.0; December was 82.5
o The drop in sentiment is most likely the
result of uncertainty in the labor department. More than one million unemployed
workers lost their unemployment insurance benefits following the expiration of
the emergency benefits plan. At the same time, job growth in December came in
well below expectations. The subsequent drop in the unemployment rate was
spurred by workers leaving the labor force as opposed to an increase in
employment. Other factors that normally affect sentiment were also down over
the last couple of weeks.
·
November JOLTS - Job
Openings vs (October was 3.925 M)
Upcoming Economic Data:
·
Weekly MBA Mortgage
Applications due out Wednesday at 7:00 (Last Week was 11.9%)
Upcoming Fed/Treasury Events:
·
Richmond Fed President
Jeffrey Lacker (not a voting FOMC member, hawkish) to speak today at 12:30
Other International Events of
Interest
·
A quiet day for data saw
U.K. retail sales blow past estimates (2.6% MoM actual v. 0.5% MoM expected)
while France's budget deficit widened to EUR87.0 bln (EUR80.0 bln expected,
EUR86.1 bln previous)
Jason's Commentaries
The market generally went down on Friday night despite the long weekend ahead of the Martin Luther King's day. Dow was the only indices that ended up on Friday as Visa performed well which eventually dragged American Express up. Intel and GE were amongst the 2 laggard that dragged most stocks. Apple did not have a good day either, dragging down the tech sector as well. The indices started the day lower(except for Dow Jones), and attempted to close the gap, however, failed the retracement and continued to go down more. Volumes were exceptionally high, at 847m shares traded on the NYSE. Internals were pointing to the downside as well. Within the market, staples and industrials were the main laggard. On the technical side, it's apparent that the market is going to go through a sideways and volatile market during this earning seasons. Right now, the market is totally focusing on the earnings season and the attention has shifted from Financials to Tech and industrials. Names like Microsoft, IBM, United Technologies, General Dynamics will be releasing their earnings. The financials are having a lacklustre earnings and GE has started the industrial earnings with poor earnings. With such factors, the market will be definitely very volatile.
Market Call: UP
Date:21 Jan 2014
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