11 Nov 2014 AMC - Market ended flat on Veteran's Day; Ukraine-Russia ceasefire collapses

11 Nov 2014 AMC - Market ended flat on Veteran'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: + 0.2%

·         France's CAC: + 0.5%

·         Spain's IBEX: + 0.6%

·         Portugal's PSI: -0.1%

·         Italy's MIB Index: 0.0%

·         Irish Ovrl Index: 0.0%

·         Greece ASE General Index: -0.9%

Before Market Opens 

S&P futures vs fair value: +1.80. Nasdaq futures vs fair value: +2.70.
The S&P 500 futures trade two points above fair value.

Asian markets ended the day on a mixed note with Japan's Nikkei (+2.1%) finishing in the lead after Reuters reported Prime Minister Shinzo Abe is likely to push back the next sales tax increase. The reports also indicated the prime minister may call for a snap election. The news weighed on the yen, sending the dollar/yen pair into the 116 area. 

·         In economic data: 

o    Japan's current account surplus expanded to JPY963 billion from JPY287 billion (expected surplus of JPY534 billion). Separately, Household Confidence slipped to 38.9 from 39.9 (expected 40.6), Economy Watchers Current Index fell to 44.0 from 47.4 (consensus 49.2), and Machine Tool Orders increased 31.2% year-over-year (prior 34.7%) 

o    Australia's NAB Business Confidence ticked down to 4 from 5 while the House Price Index increased 1.5% quarter-over-quarter (expected 1.6%; prior 1.9%) 

o    New Zealand's Electronic Card Retail Sales rose 1.0% month-over-month (consensus 0.5%; prior -0.1%) 

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·         Japan's Nikkei jumped 2.1% to settle on its high. Industrial names ended among the leaders with Chiyoda and JGC climbing 7.6% and 5.1%, respectively. 

·         Hong Kong's Hang Seng added 0.3%, but slipped from highs into the close Lenovo ended in the lead, climbing 3.2%, while gaming names also outperformed. Galaxy Entertainment and Sands China both rose near 2.5%. 

·         China's Shanghai Composite surrendered its gain ahead of the close to end lower by 0.2%. Bank of China spiked 10.0% while Hangzhou Iron & Steel lost 9.5%. 

·         India's Sensex settled just above its flat line. Tata Steel gained 2.0% and Reliance Industries rose 0.9%. Bharat Heavy Electrical was the weakest performer, falling 2.2%.

Major European indices trade higher across the board with Spain's IBEX (+0.9%) in the lead. Investors did not receive any notable economic data and action has been subdued with some away for Armistice Day. In news, European Central Bank board member Yves Mersch said purchases of asset-backed securities will begin next week. 

·         Great Britain's FTSE is higher by 0.1% with consumer names showing strength. J Sainsbury, EasyJet, and Carnival are up between 1.3% and 2.7%. Energy names lag with Tullow Oil down 4.9%. 

·         Germany's DAX has added 0.2% amid strength in defensively-oriented names. Deutsche Post, Deutsche Telekom, and RWE hold gains between 0.6% and 2.8%. Daimler is among the laggards, down 1.0%. 

·         In France, the CAC trades up 0.5%. Telecom provider Orange leads with a gain of 4.2%. On the downside, Total and Technip hold respective losses of 1.3% and 2.3%. 

·         Spain's IBEX outperforms with a gain of 0.9%. Bankinter, Bankia, and BBVA are up between 1.1% and 2.6%.

Market Internals

Market Internals -Technical-
The Nasdaq closed up 9 (+0.19%) at 4661, the S&P 500 closed up 1 (+0.07%) at 2040, and the Dow closed up 1 (+0.01%) at 17615. Action came on below average volume (NYSE 599 mln vs. avg. of 778; NASDAQ 1521 mln vs. avg. of 1861), with mixed advancers/decliners (NYSE 1602/1534, NASDAQ 1263/1421) and new highs outpacing new lows (NYSE 209/37, NASDAQ 121/52).

Relative Strength: 
Junior Gold Miners-GDXJ +6.41%, Silver Miners-SIL +5.64%, Sugar-SGG +4.5%, Grains-JJG +2.2%, Middle East and Africa-GAF +1.83%, U.S. Home Construction-ITB +1.73%, Indonesia-IDX +1.47%, New Zealand-ENZL +1.1%, Peru-EPU +1%, South Africa-EZA +0.98%.

Relative Weakness: 
Natural Gas-UNG -1.65%, Steel-SLX -0.95%, Columbia Index-GXG -0.88%, Shipping-SEA -0.87%, Clean Energy-PBW -0.85%, Greece-GREK -0.84%, South Korea-EWY -0.82%, Israel-EIS -0.75%, Chile-ECH -0.71%, Realty Majors-ICF -0.47%.

Leaders and Laggards

Technical Updates

Briefing's Commentaries

Closing Market Summary: Stocks Register Slim Gains on Veterans Day
The major averages ended the Tuesday session on a flat note after spending the trading day near their unchanged levels. The S&P 500 added 0.1% after maintaining a five-point range throughout the day.

Today's trading volume (600 million shares at NYSE) represented the lowest total since early September, but the subdued participation was understandable since the bond market was closed for Veterans Day. The European session had a similar feel with some investors away for Armistice Day. Elsewhere, Japan's Nikkei spiked 2.0% after Reuters reported Prime Minister Shinzo Abe is likely to push back the next sales tax increase and may call for a snap election. The news weighed on the yen, sending the dollar/yen pair into the 116.00 area, but intraday dollar weakness resulted in a pullback below 115.50.

The modest 0.3% retreat in the Dollar Index (87.54, -0.27) helped crude oil ($77.83, +0.43) to a gain of 0.6% while the energy sector (+0.3%) ended the session near its high after showing opening weakness.

Meanwhile, the remaining cyclical sectors ended mixed. Financials (-0.2%), and industrials (-0.1%) lagged while consumer discretionary (+0.4%), technology (+0.1%), and materials (+0.5%) registered gains.

Industrials kept pace with the market early on, but slumped alongside General Electric (GE 26.38, -0.09). The top-weighted sector component lost 0.3% while transport stocks also underperformed. The Dow Jones Transportation Average shed 0.1%.

On the upside, the materials sector received support from miners as Market Vectors Gold Miners ETF (GDX 18.22, +0.77) rallied 4.4%. The smallest cyclical sector by weight climbed ahead of the health care (+0.4%), which started in the lead, but retreated from its early high.

Unlike health care, the other countercyclical groups ended in the red. The utilities sector (-0.4%) was the weakest performer while consumer staples (-0.2%) and telecom services (-0.1%) settled closer to their flat lines.

Participants did not receive any economic data today and tomorrow's economic news will be limited to the 7:00 ET release of the MBA Mortgage Index and the Wholesale Inventories report for September (Briefing.com consensus 0.2%), which will be released at 10:00 ET. 

·         Nasdaq Composite +11.6% YTD 

·         S&P 500 +10.4% YTD 

·         Dow Jones Industrial Average +6.3% YTD 

·         Russell 2000 +1.5% YTD

Commodities

Closing Commodities: Crude Oil Rallies In Afternoon Trade

·         Crude's LoD of 76.42 was reached in overnight trading, but those levels were tested again around the lunch hour.

·         However, futures took a leg higher shortly after and ended today's session at $77.87/barrel.

·         Natural gas also found a session bottom in overnight trading, hitting a LoD of 4.121 before trended higher.

·         Dec gold rose $3.30 (+0.3%) to $1163.10/oz Dec silver rose 2.9 cents (+0.2%) to $15.70/oz Copper rose 1.1 cents (+0.4%) to $3.031/lb

Metals closing prices

  Gold rose $3.30 (+0.3%) to $1163.10/oz

·         Gold has been trending higher throughout the session, moving back towards resistance at the 1170 level. Gold touch its HoD of 1165.9 just about an hour ago.

  Silver rose 2.9 cents (+0.2%) to $15.70/oz

·         Although it is still trading at a 4.5 year low, silver trended higher throughout the session, now ending the session near the HoD of 15.745. 

  Copper rose 1.1 cents (+0.4%) to $3.031/lb

Agricultural price action

·         Corn rose 4.75 cenmts (+1.3%) to $3.74/bushel

·         Wheat rose 7 cents (+1.4%) to $5.2425/bushel

·         Soybeans rose 38.25 cents (+3.7%) $10.64/bushel

·         Ethanol fell 2 cents (-1%) to 1.90/gallon

·         Sugar #11 rose 3.9% to 16.27 cents/lb

Energy price action

  Crude oil rose 43 cents $77.83/barrel

·         Crude's LoD of 76.42 was reached in overnight trading, but those levels were tested again around the lunch hour, but futures took a leg higher shortly after and are now settling near the HoD of 78.04.

  Natural gas fell 0.4 cents (-0.05%) to $4.251/MMBtu

·         Natural gas also found a session bottom in overnight trading, hitting a LoD of 4.121 before trended higher. 

  Heating oil fell 0.1% to $2.467/gallon

  RBOB was flat on the day at $2.10/gallon


Treasuries

Resting Up

·         With the Treasury market closed in observance of Veterans Day, rates were locked down. Heading into Wednesday, here is where things stand: 

o    2-yr note at 0.54% 

o    5-yr note at 1.64% 

o    10-yr note at 2.36% 

o    30-yr bond at 3.09% 

·         Tuesday saw some volatility in the currency market that featured a notable swing in the dollar-yen cross from an overnight high of 116.11 to 115.34 as of this writing 

·         As the yen battled back, the U.S. Dollar Index slumped from an overnight high of 88.06 to 87.50 as of this writing 

·         Commodities were weak early but garnered some support from the dollar retracement 

o    Crude oil +0.5% to $77.83/bbl 

o    Gold +0.7% to $1167.50/troy ounce

o    High-grade copper +0.6% to $3.04/lbs 

·         Stocks in a meandering mode for most of Tuesday with the major indices holding close to the unchanged mark 

·         Wednesday auction: $24 billion 10-yr note with results at 1:00 p.m. ET 

·         Wednesday Data: MBA Mortgage Index (7:00 a.m. ET) and September Wholesale Inventories (10:00 a.m. ET) 

·         Separate item to watch is the release of the European Commission's findings in relation to its review of budgets for member states

On other news.... 

Currencies 



Next Week In View




Economic Commentaries

Economic Summary: No US data today; Wholesale inventories tomorrow at 10:00
Upcoming Economic Data:

·         Weekly MBA Mortgage Applications due out Wednesday at 7:00 (Last Week was -2.6%)

·         September Wholesale Inventories due out Wednesday at 10:00 (Briefing.com consensus of 0.2%; August was 0.7%) 

Upcoming Fed/Treasury Events:

·         Philadelphia Fed President Charles Plosser (voting FOMC member, hawkish) to speak tomorrow at 3:00 & 12:30

·         The Treasury is expected to auction off new debt this week. Remaining auctions include

o    $24 bln 10 year Treasury Note Auction -- Wednesday

o    $16 bln 30 Year Treasury Bond Auction -- Thursday

Other International Events of Interest

·         Japan's current account surplus expanded to JPY963 billion from JPY287 billion (expected surplus of JPY534 billion). Separately, Household Confidence slipped to 38.9 from 39.9 (expected 40.6), Economy Watchers Current Index fell to 44.0 from 47.4 (consensus 49.2), and Machine Tool Orders increased 31.2% year-over-year (prior 34.7%) 

Jason's Commentaries

The market last night was rather volatile with lesser volumes of 614.4m shares traded on the NYSE only. Dow and S&P500 had quite a flat day while Nasdaq and Russells managed to make some decent gain. Before lunch time last night, the market managed to break highs once again. However, the market is down 0.35% before market open. Likely due to the Ukraine-Russia crisis. As the cease fire collapses, i believe that is likely to cause some fear in the market that is causing it to retrace tonight. We're very likely to correct a little tonight.








Market Call: Flat to downside

Date: 12 Nov 2014