5 May 2014 AMC - Market narrowly escaped a DFDM ( backdated DMA)
Market Summary
European
markets are now closed; stock markets across Europe performed as follows:
·
UK's FTSE: Closed
·
Germany's DAX: -0.3%
·
France's CAC: + 0.1%
·
Spain's IBEX: 0.0%
·
Portugal's PSI: -0.2%
·
Italy's MIB Index: -0.7%
·
Irish Ovrl Index: Closed
·
Greece ATHEX
Composite: -0.6%
Before Market Opens
S&P futures vs fair value: -8.20.
Nasdaq futures vs fair value: -17.30.
The S&P 500 futures trade eight points below fair value.
Asian markets began the week on a mixed note, while Japan's Nikkei was closed for Children's Day. Elsewhere, Hong Kong's Hang Seng (-1.3%) trailed the region after China's HSBC Manufacturing PMI fell to 48.1 from 48.3 (expected 48.4). Separately, Non-Manufacturing PMI ticked up to 54.8 from 54.5. Also of note, China Securities Regulatory Commission has announced that 25 new companies will come to market, pushing the total number of recent IPOs past 200.
In other regional data, Australia's Building Approvals fell 3.5% month-over-month (consensus 1.0%, previous -5.4%), while ANZ Job Advertisements increased 2.2% (prior 1.4%). Separately, MI Inflation Gauge ticked up 0.4% month-over-month (previous 0.2%). Indonesia's GDP rose 0.95% quarter-over-quarter (expected 1.26%, prior -1.42%), while the year-over-year reading increased 5.21% (consensus 5.60%, previous 5.72%).
The S&P 500 futures trade eight points below fair value.
Asian markets began the week on a mixed note, while Japan's Nikkei was closed for Children's Day. Elsewhere, Hong Kong's Hang Seng (-1.3%) trailed the region after China's HSBC Manufacturing PMI fell to 48.1 from 48.3 (expected 48.4). Separately, Non-Manufacturing PMI ticked up to 54.8 from 54.5. Also of note, China Securities Regulatory Commission has announced that 25 new companies will come to market, pushing the total number of recent IPOs past 200.
In other regional data, Australia's Building Approvals fell 3.5% month-over-month (consensus 1.0%, previous -5.4%), while ANZ Job Advertisements increased 2.2% (prior 1.4%). Separately, MI Inflation Gauge ticked up 0.4% month-over-month (previous 0.2%). Indonesia's GDP rose 0.95% quarter-over-quarter (expected 1.26%, prior -1.42%), while the year-over-year reading increased 5.21% (consensus 5.60%, previous 5.72%).
· Japan's Nikkei was closed
· Hong Kong's Hang Seng
lost 1.3% after spending the bulk of the session in negative territory.
Heavyweight names lagged, with Hutchinson Whampoa, Want Want China Holdings,
and Lenovo Group down between 1.8% and 8.1%. China Unicom Hong Kong outperformed,
climbing 2.7%.
· China's Shanghai Composite
rallied off lows during the final 90 minutes of action, finishing with a slim
gain of 0.1%. Utility provider Shenyang Jinshan Energy surged 8.8%, while
financials lagged. China Vanke fell 2.0%.
Major European indices trade lower
across the board, while Great Britain's FTSE is closed for an Early May Bank
Holiday. Today's economic data was limited. Eurozone PPI fell 0.2%
month-over-month, as expected, while the year-over-year reading declined 1.6%
(consensus -1.7%, prior -1.7%). Separately, Sentix Investor Confidence fell to
12.8 from 14.1 (expected 14.2).
Among news of note, the European Commission has lowered its GDP and inflation forecasts for the eurozone. The Commission now expects 2014 inflation to come in at 0.8%, while next year's inflation is expected to increase 1.2%. The 2015 GDP forecast was also revised lower, to 1.7% from 1.8%.
Among news of note, the European Commission has lowered its GDP and inflation forecasts for the eurozone. The Commission now expects 2014 inflation to come in at 0.8%, while next year's inflation is expected to increase 1.2%. The 2015 GDP forecast was also revised lower, to 1.7% from 1.8%.
· Great Britain's FTSE
is closed.
· In France, the CAC is lower by 0.9%
amid weakness in financials. AXA, Credit Agricole, and Societe Generale are
down between 1.8% and 2.3%. On the upside, telecom provider Orange is the lone
advancer, up 0.3%.
· Germany's DAX holds
a loss of 1.4% with all 30 components in the red. Growth-sensitive names weigh
as BMW and Deutsche Bank trade lower by 2.0% and 2.3%, respectively.
U.S. Equities
· Equity futures suggest a heavy open as sellers look to remain in
control for a third session
· The early weakness comes amid ongoing concerns over the
sovereignty of eastern Ukraine and after Chinese data saw mixed results
· The VIX (12.91) closed Friday's session at the lowest level in
more than three months
o S&P Futures -8 @ 1866
o Dow Futures -69 @
16,378
o Nasdaq Futures -18 @
3561
Asia
· Markets finished little changed across much of Asia
· China's Shanghai Composite (+0.1%) saw early selling following the
mixed Non-Manufacturing PMI (54.8 actual v. 54.5 expected) and HSBC Final
Manufacturing PMI (48.1 actual v. 48.4 expected, 48.3 previous) numbers,
but managed to retake the flat line into the close
· Hong Kong's Hang Seng (-1.3%) was less fortunate as trade slumped
to a more than one-month low
· Japan's Nikkei was closed for Children's Day
Market Internals
Market Internals -Technical-
The Nasdaq closed up 14 (+0.34%) at 4138, the S&P 500 closed up 4 (+0.19%) at 1885, and the Dow closed up 18 (+0.11%) at 16531. Action came on below average volume (NYSE 596 mln vs. avg. of 727; NASDAQ 1445 mln vs. avg. of 1997), with decliners outpacing advancers (NYSE 1533/1569, NASDAQ 1153/1473) andmixed new highs/lows (NYSE 88/29, NASDAQ 31/70).
Relative Strength:
Biotechnology-XBI +1.88%, Biotechnology-IBB +1.85%, Coffee-JO +1.35%, Corn-CORN +1.2%, Junior Gold Miners-GDXJ +1.2%, Greece-GREK +0.92%, Egypt-EGPT +0.55%, Russia-RSX +0.4%, Eastern Europe-ESR +0.38%, Belgium-EWK +0.37%.
Relative Weakness:
South Africa-EZA -1.48%, Vietnam-VNM -1.31%, Homebuilders-XHB -1.29%, Hong Kong-EWH -1.22%, U.S. Home Construction-ITB -1.21%, Steel-SLX -1.18%, Heating Oil-UHN -1.18%, Gasoline-UGA -1.12%, Brazilian Real-BZF -1%, Chile-ECH -0.97%.
Leaders and Laggards
Technical Updates
Briefing's Commentaries
| 16:10 ET Dow +17.66 at 16530.55, Nasdaq +14.16 at 4138.06, S&P +3.52 at 1884.66 : [BRIEFING.COM] The stock market kicked off the new trading week on a sleepy note as the major averages spent the bulk of the session near their flat lines. However, a final push during the last hour of action placed the key indices at new highs into the close. The S&P 500 added 0.2%, while the Russell 2000 (-0.1%) lagged throughout the day. Equities began the session on their lows as renewed global growth concerns, combined with continued worries about Ukraine, conspired to ensure a cautious start. In China, the HSBC Manufacturing PMI fell to 48.1 from 48.3 (expected 48.4), signifying a slowdown in manufacturing activities. Elsewhere, the European Commission warned about slower-than-expected growth by lowering its 2014 inflation forecast to 0.8%. The commission also trimmed next year's inflation forecast to 1.2%, while lowering its 2015 GDP forecast to 1.7% from 1.8%. Strikingly, the worries that pressured index futures overnight were cast aside once the opening bell rang. The major averages returned to their flat lines during the first 90 minutes of action, but were unable to continue their rally as financials (-0.4%) acted as a wet blanket. The second-largest sector finished the day at the bottom of the leaderboard as JPMorgan Chase (JPM 54.22, -1.36) weighed after guiding for a 20.0% year-over-year decline in Q2 markets revenue. Shares of JPM fell 2.5%, while peers Bank of America (BAC 15.08, -0.17) and Citigroup (C 47.18, -0.55) both lost near 1.2%. Meanwhile, the remaining top-weighed sectors finished on a mixed note. Health care (+0.6%) and technology (+0.4%) outperformed, while the discretionary sector (+0.1%) lagged. Retailers contributed to the underperformance of the discretionary space, with Target (TGT 59.87, -2.14) falling 3.5% after announcing Chief Executive Officer Gregg Steinhafel will step down from his post. Homebuilders also factored into the relative weakness of the discretionary sector after investor Jeffrey Gundlach recommended shorting the housing sector at the Ira Sohn conference. The iShares Dow Jones US Home Construction ETF (ITB 23.66, -0.29) lost 1.2%. Elsewhere, the two commodity-related sectors—energy (+0.5%) and materials (+0.5%)—finished among the leaders. The energy space rallied even as crude oil shed 0.4% to $99.46/bbl, while producers of basic materials drew strength from miners. The Market Vectors Gold Miners ETF(GDX 24.41, +0.09) gained 0.4%, while gold futures climbed 0.5% to $1309.60/ozt. On the fixed income side, Treasuries finished in the red after sliding from their overnight highs. The benchmark 10-yr yield rose two basis points to 2.61%. Participation was well below average with less than 600 million shares changing hands at the NYSE. Economic data was limited to just one report:
|
Commodities
Closing Commodities: China Data Weighs On Crude Oil, Ends Below $100/Barrel
Treasuries
- June gold traded higher as it got a boost from a slightly weaker dollar index and escalating tension in Ukraine. The yellow metal brushed a session high of $1315.80 per ounce in early morning action and eventually settled with a 0.5% gain at $1309.40 per ounce.
- July silver pulled back from its session high of $19.75 per ounce set moments after floor trade opened. Although it remained in positive territory, silver cut gains for the day to 0.1% as it settled at $19.57 per ounce.
- June crude oil fell into the red as a disappointing Chinese HSBC Final Manufacturing PMI reading that came in at 48.1 (down from the flash reading of 48.4) weighed on prices. The energy component retreated from its session high of $100.06 per barrel and dipped as low as $98.91 per barrel. It eventually settled at $99.46 per barrel, or 0.4% lower.
- June natural gas traded in positive territory, touching a session high of $4.73 per MMBtu. It pulled back heading into the close and settled with a 0.4% gain at $4.69 per MMBtu.
COMEX
Metals Closing Prices
June gold rose $6.40 to $1309.40/oz
· Gold traded higher as it got a boost from a weaker dollar index
and escalating tension in Ukraine. The yellow metal brushed a session high of
$1315.80 in early morning action and eventually settled with a 0.5% gain.
July silver rose $0.01 to $19.57/oz
· Silver pulled back from its session high of $19.75 set moments
after floor trade opened. It remained in positive territory but cut gains for
the day to 0.1%.
July
Copper fell 2 cents to $3.05/lbs
CBOT
Agriculture and Ethanol/ICE Sugar Closing Prices
·
July corn rose 8 cents to $5.07/bushel
·
July wheat rose 12 cents to $7.28/bushel
·
July soybeans fell 8 cents to $14.63/bushel
·
May ethanol fell 5 cents to $2.09/gallon
·
July sugar (#16 (U.S.)) fell 0.10 of a penny to 24.50 cents/lbs
NYMEX Energy Closing Prices
· June crude oil fell
$0.35 to $99.46/barrel
o Crude oil fell into negative territory following a disappointing
Chinese HSBC Final Manufacturing PMI reading that came in at 48.1, down from
the flash reading of 48.4. The energy component retreated from its session high
of $100.06 and dipped as low as $98.91. It eventually settled with a 0.4%
loss.
· June natural gas rose 2
cents to $4.69/MMBtu
o Natural gas traded in positive territory today, trading as high as
$4.73 in morning action. It pulled back heading into the close and settled with
a 0.4% gain.
· June heating oil fell 1
cent to $2.91/gallon
· June RBOB fell 4
cents to $2.91/gallon
Treasuries
Treasuries Close on Lows: 10-yr:
-08/32..2.608%..USD/JPY:102.11..EUR/USD: 1.3875
· Treasuries closed on their lows as sellers took control
for the first time in five days. Click here to see an intraday yields chart.
· Maturities held small overnight gains into the cash open, but
quickly tumbled off of those levels after Services PMI (55.2 actual v.
54.0 expected) topped estimates.
· Post-data selling quickly dropped Treasuries onto their lows,
where they would remain for the remainder of the session.
· Selling weighed heaviest at the long end as the 30y added +4.1bps
to 3.408%. Today's selling ran the 30y off its 10-month lows.
· The 10y tacked on +2bps to finish @ 2.611%. Overnight
buying dropped the benchmark yield to its lowest since Halloween, but the
post-ISM Services selling allowed the yield to reclaim key 2.600% support.
· Light selling in the belly saw the 5y climb +0.7bps to 1.681%. The
yield saw an early bounce off 1.650% support that is aided by the 50 dma.
· A steeper curve took hold as the 5-30-yr spread widened to
172.5bps.
· Precious metals gained with gold adding +$7 to $1310 and silver
rallying +$0.06 to $19.61.
· Data: Trade balance
(8:30).
· Auction: $29 bln 3y notes
· Fed Speak: Fed Governor Stein will
speak at NYU (19)
On other news....
Currencies
Dollar Trades Flat: 10-yr:
-07/32..2.606%..USD/JPY: 102.09..EUR/USD: 1.3877
· The Dollar Index hovers little changed near 79.50 as a sleepy
session drifts into the final hour of trading. Click here to see a daily Dollar Index chart.
· Today's action has been lackluster, limited to a less than 10 cent
range.
· EURUSD is +10 pips @ 1.3880 as
trade fights for its best close in over three weeks. The single currency has
managed to tick higher amid today's sleepy session despite the EU
lowering its 2015 growth and inflation forecasts. Minor resistance in
the area is that all guards the March highs near 1.3925. Eurozone data is heavy
as retail sales accompany Spanish unemployment change and Italian and Spanish
Services PMI.
· GBPUSD is -5 pips @ 1.6870
as trade holds near its best levels since August 2009. Today's
session has been lackluster as British banks were closed in observance
of May Day. British data is limited to Services PMI.
· USDCHF is flat @ .8775 as a sleepy
session nears the finish. Traders have looked elsewhere for opportunity as
trade has been limited to just 15 pips.
· USDJPY is -5 pips @ 102.10 after early selling dropped
trade to a three-week low. All in all, action has been sloppy as Japanese
banks were closed for Children's Day, and remain closed tomorrow for Greenery
Day.
· AUDUSD is flat @ .9275. Trade over
much of the past two weeks has been trapped in a tight 50 pip range
(.9250/.9300). The Australian trade balance will cross the wires ahead of the
Reserve Bank of Australia rate decision.
· USDCAD is -20 pips @ 1.0950 as
trade fails to reclaim the 100 dma for a fourth straight session. A breakdown
of minor support in the area puts the April lows (1.0850) back in play.
Canada's trade balance and Ivey PMI are due out tomorrow.
Next Week In View
Economic Commentaries
Economic Summary: ISM tops
expectations; Fisher says QE should end in October
Economic Data Summary:
Economic Data Summary:
· April ISM Services 55.2 vs Briefing.com consensus of 54.0; March
was 53.1
o Business activities/production levels improved to 60.9 in April
from 53.4 in March. The increase in production was predicated on a large
increase in new orders (58.2 from 53.4). There is some concern that production
may not be sustainable without another influx of new orders growth.
Fed/Treasury Events Summary:
· Dallas Fed President Richard Fisher (2014 voter, hawkish) spoke
over the weekend and indicated that QE will end in October, and then the Fed
will consider a rate increase
Upcoming Economic Data:
· March Trade Balance due out March at 8:30 (Briefing.com consensus
of -$42.5 bln; February was -$42.3 bln)
Upcoming Fed/Treasury Events:
· The Treasury is scheduled to auction off new debt this week.
The results for each auction will be announced at 13:00
o Tuesday: $29 bln in 3 year notes
o Wednesday: $24 bln in 10 year notes
o Thursday: $16 bln in 30 year bonds
Other International Events of Interest
· China's HSBC Manufacturing PMI fell to 48.1 from 48.3 (expected
48.4). Separately, Non-Manufacturing PMI ticked up to 54.8 from 54.5.
Jason's Commentaries
As expected the market, narrowly escaped the DFDM. As May is here, the market was stuck at the top consolidating. While Nasdaq and Russells are lagging, i suspect that we're likely to head down more. S&P500 and Dow are at the top facing their resistance. Volumes are weak on monday as market is cautious. Market is likely to head down more this week.
Market Call: FLAT to upside
Date: 24 Feb 2014
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