5 Jul 2013 AMC

5 Jul 2013 AMC

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Week 38



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 Briefing's Commentaries



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Jason's Commentaries

Now my portfolio is telling me that I might be wrong soon. Jobs report were terrific. But the unemployment rate has gone up. Many people were asking why and the main reason is because there was more people removed from work force compared to the jobs added. Don't forget there are many people in the market that are on contract jobs as companies are reluctant to pay for their health care in US. Now the market is mainly focused on the QE and the main focus will be switched to the coming Wednesday's Fed's minute. As the Fed focus on the growth in the economy as a benchmark to alter monetary policy, perhaps the increase in unemployment was a good sign that the Fed won't be tapering QE that quickly. 

Friday's volume were pathetic, moving 625m shares in the NYSE. In such thin market, the market makers can do whatever they want. It wasn't a very bullish day despite the market moving near 1% gain across the board. However, right now the technicals are showing me that the market is moving away from the short bearish trend into perhaps a volatile and flat period. I reckon we might be turning bullish due to short covering and bottom buying to push the market up. However, I doubt very much we're going much higher after this period. 

Treasuries made another major down day and commodities had a rough ride as well. Crude oil spiked to $104.12 on Monday morning due to Egypt's political issues. With all these distractions, I believe the volatility could increase even further. To make things worse. It's going to be the start of earnings season once again with Alcoa announcing its earnings today.

Tighten up your seat belt and prepare for the volatility ahead =D

Market Call: Flat to downside

Date: 8 Jul 2013

3 July 2013 AMC

3 July 2013 AMC

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Stock Market Update 13:15 ET Dow +56.14 at 14988.55, Nasdaq +10.27 at 3443.67, S&P +1.33 at 1615.41 :[BRIEFING.COM] The S&P 500 settled with a slim gain of 0.1% after shaking off its opening losses.  Stocks began the shortened session on a lower note as global events injected a degree of uncertainty into the market.  In Egypt, President Mohammed Morsi was removed from his post through a military coup after he failed to answer the demands of protesting crowds within the timeframe specified by the country's armed forces.  Elsewhere, Portugal returned to headlines after two key government officials (finance minister and foreign minister) submitted their resignations. In addition, reports indicate two more ministers (agriculture and social security) are set to follow suit. Prime Minister Pedro Passos Coelho is scheduled to meet with the country's president tomorrow to discuss the ongoing situation. As a result, the country's benchmark 10-yr yield spiked 85 basis points to 7.31%. In addition Portugal's PSI index fell 5.3%. The concerns regarding the country's future spilled over to other peripheral economies. Italy's 10-yr yield climbed 11 basis points at 4.51% while Spain's benchmark 10-yr yield jumped 14 basis points to 4.70%.  Equities fought back from their opening losses with the technology space pacing the advance. The sector ended with a gain of 0.6% as large components like Apple (AAPL 420.80, +2.31) and Oracle (ORCL 30.70, +0.60) provided notable support. Chipmakers also displayed strength as the PHLX Semiconductor Index added 0.3%.  The discretionary sector also outperformed the broader market. Homebuilders displayed broad strength and the iShares Dow Jones US Home Construction ETF (ITB 22.42, +0.16) added 0.7%.  On the downside, the renewed sovereign debt concerns pressured the financial sector, which ended lower by 0.4% after spending the entire session in the red.  Although equities ended in positive territory, market breadth remained negative throughout the day as declining issues on the New York Stock Exchange outpaced advancers by a 1.6:1 ratio.  Today's economic data was plentiful.  The initial claims level decreased from an upwardly revised 348,000 (from 346,000) for the week ending June 15 to 343,000 for the week ending June 29. The Briefing.com consensus pegged the initial claims level at 348,000.  For the past several weeks, the initial claims level has moved in a slight sawtooth pattern, but overall, trends have been relatively flat. Labor conditions have not materially changed over this time.  June ADP Employment Change came in at 188,000 while the Briefing.com consensus expected a reading of 150,000. In addition, June Challenger Job Cuts rose 4.8% year-over-year to follow the prior month's decline of 41.2%.  The June ISM Services Index was reported at 52.2, below the 54.0 forecast by the Briefing.com consensus, and down from the May reading of 53.7.  Separately, the U.S. trade deficit widened to $45.0 billion in May from an upwardly revised $40.1 billion (from $40.3 billion) in April. That was the largest deficit since November 2012. The Briefing.com consensus expected the trade deficit to increase to $40.8 billion.  The goods deficit rose to $63.4 billion in May from $58.4 billion while the services surplus increased to $18.4 billion from $18.3 billion.  May exports fell by $0.5 billion from $187.6 billion in April to $187.0 billion.  Bond and equity markets will be closed tomorrow in observance of Independence Day. On Friday, June nonfarm payrolls, nonfarm private payrolls, average workweek, hourly earnings, and the unemployment rate will all be reported at 8:30 ET. ..NYSE Adv/Dec 1161/1806. ..NASDAQ Adv/Dec 1350/1027.

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This is a very eventful Wednesday for me. Besides ADP Employment report came out better than expected, however, ISM non-manufacturing PMI fell to 52.2 and the unemployment claims are flat. The stock market closed at noon due to Independence day. Market was up 56 points, providing some support. It was pretty clear that everyone else was in holiday mood such that the market ended flat on Wednesday. Friday is the real stuff. The NFP will definitely gyrate the market like mad. I have no confidence in calling the direction for Friday. If NFP is better than expected, we might see the market starting to turn to the upside already. If it suck, I believe there's gonna be more down week to come.

Market Call: ABSTAIN

Date: 5 Jul 2013

2 July 2013 AMC

2 July 2013 AMC

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Stock Market Update 16:15 ET Dow -42.55 at 14932.41, Nasdaq -1.09 at 3433.4, S&P -0.88 at 1614.08 :[BRIEFING.COM] The S&P 500 settled lower by 0.1% after recovering a portion of its losses into the close.  Equities saw little change at the start of today's session after index futures surrendered their pre-market gains just ahead of the opening bell. The decline in futures coincided with euro weakness after reports indicated the International Monetary Fund and Eurozone officials gave Greece three days to prove its reforms are on course.  Contributing to the euro weakness was the situation in Portugal where the country's foreign minister resigned after the finance minister, who constructed the country's EU/IMF bailout, submitted his resignation yesterday. The resignations of two key figures put the spotlight on Prime Minister Pedro Passos Coelho, who said he does not plan to step down. The uncertainty pushed the Portuguese 10-yr yield higher by nine basis points to 6.42%.  Stocks were able to look past the cautious open and the S&P 500 climbed to a session high less than a point above its 50-day moving average. However, similar to yesterday, the index was unable to hold above that level into the close.  The major averages retreated from their highs amid headlines from Germany, where Chancellor Angela Merkel said Greece may not receive the full bailout amount as planned. Instead, the funds could be paid out in installments.  The follow-up to earlier headlines took some wind out the market's sails and eventually pressured the euro below 1.3000, to a one-month low against the dollar.  Today's dollar strength did not slow the advance in crude oil as the energy component added 1.4% to $99.40 per barrel. On a related note, U.S. television networks brought some additional attention to the intensifying protests in Egypt. Yesterday, the Egyptian military said it will intervene if a solution is not reached in 48 hours. Today, subsequent reports indicated the military will suspend the constitution and dissolve the country's government if no agreement is reached by tomorrow.  While crude oil registered a solid gain, other commodities underperformed. Copper futures slid 0.7% to $3.134 per pound while gold futures declined 1.1% to $1242.00 per ounce. This weighed on the materials sector, which ended with a loss of 0.4%.  Elsewhere, the industrial space trailed behind the broader market from the start. Transportation-related names lagged as the Dow Jones Transportation Average shed 0.5%. In addition, defense contractors displayed broad weakness. The PHLX Defense Index fell 1.3% as 16 of its 17 components ended in the red. Of the 16 decliners, 11 names registered losses larger than 1.0%.  Countercyclical sectors ended in mixed fashion as the telecom space outperformed with a gain of 0.5% while the health care sector shed 0.3% after the Centers for Medicare and Medicaid Services announced a 9.4% decrease in payments to dialysis providers starting in 2014.  Today's economic data was limited to manufacturing orders, which increased 2.1% in May, up from an upwardly revised 1.3% (from 1.0%) in April. The Briefing.com consensus expected factory orders to increase 2.0%.  A full slate of economic reports is scheduled for tomorrow, beginning with the 7:00 ET release of the weekly MBA Mortgage Index. June Challenger Job Cuts and ADP Employment Change will be reported at their respective 7:30 ET and 8:15 ET while weekly initial claims will cross the wires at 8:30 ET. Finally, the May trade balance will be reported at 8:30 ET while June ISM Services Index will be announced at 10:00 ET. ..NYSE Adv/Dec 1190/1850. ..NASDAQ Adv/Dec 1227/1283.

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What a volatile day. Market started with a bullish bias and couldn't last through lunch once again. Dow hit a high of 15060 but couldn't seem to advance anymore. Volumes were normal and the bears merely outpaced the bulls for a while. While looking at the heatmap, Apple was the biggest leader in the tech sector while being offset by the fall in Microsoft drop of 1.22%. The industrials like GE, UTX fell 1% last night, making the industrials the biggest laggard in the market last night. The rest of the sectors are being flat. Looking at the Technicals, the Dow and S&P500 are facing the resistance by the 50MA while the Nasdaq Composite is sitting just nicely above the 50MA. Oil hit a high of $102 10PM ET. Ahead of the ADP report, the market seemed to be taking their positions off the table to expect any unwanted volatility. As of 1.45am ET, most of Asia indices were red.

Market Call: DOWN

Date: 2 Jul 2013

1 July 2013 AMC

1 July 2013 AMC

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Stock Market Update 16:10 ET Dow +65.36 at 14974.96, Nasdaq +31.24 at 3434.49, S&P +8.68 at 1614.96 :[BRIEFING.COM] The S&P 500 advanced 0.5% to begin the third quarter on an upbeat note. Although the S&P registered a solid gain, the index closed almost 12 points below its session high after being rejected by its 20- and 50-day moving averages.  Stocks climbed at the open, taking a cue from gains in major markets across the world. Global investors favored equities despite mixed PMI data out of China as the country's Manufacturing PMI declined to 50.10 from 50.80 (50.00 expected) and the HSBC Manufacturing PMI remained in contraction with a downtick to 48.2 from 48.3 (48.3 forecast).  Meanwhile, most European Manufacturing PMI reports surprised to the upside, but only Great Britain (52.5 actual, 51.5 expected) posted an expansionary reading while Spain (50.0 actual, 48.5 expected) came in right on the border between contraction and expansion. The aggregate Eurozone Manufacturing PMI ticked up to 48.8 from 48.7.  Commodities began showing strength overnight, and those gains provided a boost to growth-oriented sectors. Copper futures jumped 3.3% to $3.157 per pound while gold futures rose 2.4% to $1252.50 per troy ounce. Similarly, the Market Vectors Gold Miners ETF (GDX 24.89, +0.40) added 1.6%, giving a measure of support to the materials sector, which ended among the leaders.  The industrial sector overtook producers of basic materials into the close as transportation-related names fared well. The Dow Jones Transportation Average posted a gain of 1.1%.  Elsewhere, the energy space advanced 0.6% as crude oil climbed 1.4% to $97.95 per barrel.  While most cyclical sectors outperformed the broader market, countercyclical groups ended in mixed fashion. The health care space received some support from biotechnology after Onyx Pharma (ONXX 131.33, +44.51) rejected an unsolicited acquisition proposal from Amgen (AMGN 97.49, -1.17). The iShares Nasdaq Biotechnology ETF (IBB 178.26, +4.38) advanced 2.5%.  On the downside, telecom services and utilities ended with respective losses of 0.1% and 1.3%.  Reviewing today's economic data, the ISM Index increased to 50.9 in June from 49.0 in May, ending a one-month contraction. The Briefing.com consensus expected the index to increase to 50.5.  Separately, construction spending increased 0.5% in May after increasing a downwardly revised 0.1% (from 0.4%) in April. That was exactly what the consensus expected.  Surprisingly, the entire gain in construction came from the public sector. After months of weakness, that sector increased 1.8% on strong overall growth.  Tomorrow, May factory orders will be released at 10:00 ET while automakers will be reporting their June sales throughout the day. ..NYSE Adv/Dec 2175/867. ..NASDAQ Adv/Dec 1779/734.

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Market started with a strong bullish bias last night that reached a high of near 200 points. Managed to held its high through lunch time before losing most of its gains after lunch. Dow closed at a gain of 65 points. Once again, Nasdaq is leading the market again, having the highest gains over the other 2 indices. Internals were all showing some sort of mixed signals. It's a flat day last night. Industrials were the major leader last night having a 1.06% gain across the industry. On the Technical note, Nasdaq has broken above the its 20MA while the other indices are facing some resistance from their respective 20MA. It seems to me that the market is starting to change its direction already. Treasuries are moving up for the past few sessions but after such massive drop. Perhaps the money is flowing back into the equity market already. With the employment reports coming out on Wednesday and Friday, I reckon Tuesday will be heading flat to the upside with anticipation of the employment reports.

Market Call: Flat to upside

Date: 2 July 2013

28 Jun 2013 AMC

 28 Jun 2013 AMC

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Stock Market Update 16:15 ET Dow -114.89 at 14909.6, Nasdaq +1.38 at 3403.25, S&P -6.92 at 1606.28 :[BRIEFING.COM] Stocks concluded their down week on a lower note as the S&P 500 shed 0.4%. Equities slipped out of the gate amid weakness in Treasuries. The 10-yr note sold off into the cash session open before erasing most of its losses. The benchmark 10-yr yield ended higher by two basis points at 2.493%. A disappointing Chicago PMI report for June (51.6 actual, 55.5 Briefing.com consensus, 58.7 prior) also contributed to the early weakness, but stocks were able to find support shortly thereafter. Today's session lows coincided with the release of a better-than-expected final University of Michigan Consumer Sentiment Index (84.1 final, 82.7 consensus, 82.7 preliminary). Stocks spent the following hour in a steady climb, allowing the S&P to erase its opening losses. However, the early buying interest fizzled out after the benchmark average returned to its flat line, where it held until the closing minutes of the session. The final five minutes of action saw the index return into the red as the small cap Russell 2000 index underwent its annual rebalancing. The S&P was anchored to its unchanged level for most of the afternoon as financials and technology weighed. The financial sector ended with a loss of 0.7% while the tech space shed 0.4%. While the tech sector was able to settle above its lows, not all components were as fortunate. Accenture (ACN 71.96, -8.26) tumbled 10.3% after its earnings beat was overshadowed by below-consensus revenue as well as downside fourth quarter revenue guidance. Separately, BlackBerry (BBRY 10.46, -4.02) plunged 27.8% after the company reported disappointing first quarter earnings and revenue. In addition, BB10 shipments of 2.7 million disappointed as investors expected BlackBerry to ship about 3.5 million units of its latest device. On the flip side, discretionary shares and utilities ended in positive territory. The discretionary sector received a boost from retailers after Finish Line (FINL 21.86, +0.66) surprised to the upside with its earnings and revenue. Meanwhile, homebuilders kept the discretionary space from logging further gains. Most major builders settled in the red while the iShares Dow Jones US Home Construction ETF(ITB 22.38, -0.37) shed 1.6%. Also of note, a 0.4% advance in utilities extended the sector's weekly gain to 3.0%, placing it atop this week's leaderboard. Meanwhile, the materials sector was the weakest group of the week, ending with a loss of 1.5%. However, gold miners had a strong showing today as the Market Vectors Gold Miners ETF (GDX 24.49, +1.70) surged 7.5%. On a related note, gold futures gained 1.6% to $1230.70 per ounce while silver futures jumped 5.6% to $19.60 per ounce.

Commodities

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Week 38



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Briefing's Commentaries

Week in Review: S&P 500 Tests 100-Day Moving Average 
On Monday, the stock market began the week on a fitful note as rising interest rates at home and falling equity markets abroad conspired to keep the major averages in negative territory throughout the day. The S&P 500 registered its first close below its 100-day moving average this year. Overseas, the drop in China was attributed to a growing sense of angst that a liquidity crisis and credit crunch are brewing there. The growth concerns weighed heavily on the cyclical sectors throughout the day. Financials (-1.8%) led the losses and were joined by materials (-1.7%), industrials (-1.7%), energy (-1.5%), and technology (-1.4%) as the worst-performing areas. 

Equities ended Tuesday's session near their highs, but were unable to erase their Monday losses. The S&P 500 climbed 1.0% as all ten sectors ended with gains. The bulk of the advance occurred in the first 90 minutes of the session amid a global rebound. Interestingly, two rate-sensitive sectors vaulted to the top of this month's leaderboard despite the continued climb in Treasury yields. The telecom services sector rose 2.0%, which turned its month-to-date loss to a gain of 1.0%. 

Wednesday began on an upbeat note despite some disappointing economic news. The final first quarter GDP reading was revised down to 1.8% from 2.4%. Typically, revisions to GDP in the third estimate are very minor. The large decline in this report was very unusual and caught all economists by surprise. Most of the downward revision came from consumption in services. In the previous estimate, services spending increased 3.1%. That was revised down to 1.7% growth and contributed 0.6 percentage points less to GDP growth. Stocks received this news in stride as sluggish growth suggests the Federal Reserve is less likely to withdraw its support from the markets. To that end, the Treasury complex received an aggressive bid immediately after the GDP revision crossed the wires. The benchmark 10-yr yield ended lower by seven basis points at 2.542%. 

On Thursday, the S&P 500 settled higher by 0.6% as nine sectors posted gains. Equities were off to the races at the sound of the opening bell, aided by the personal income report, which pointed to an increase of 0.5% in May. The Briefing.com consensus expected personal income to rise 0.2%. Stocks received a secondary boost from the pending home sales report as May sales rose 6.7% (1.5% consensus). The S&P notched its high of 1620 shortly after the market digested the latest housing data point. However, the index was unable to rise above that level as the 20- and 50-day moving averages served as resistance at the session high. ..NYSE Adv/Dec 1541/1488. ..NASDAQ Adv/Dec 1322/1180.


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Jason's Commentaries
Was right for the call for Friday, Dow was being dragged down by IBM while Nasdaq lead by Apple.. While S&P500 is showing some mixed signs. Market started with a bearish bias and went through a volatile session through the day. Volumes was standing at 1100m shares on the NYSE. While the internals are showing mixed signs. VIX went lower as well. Most sectors were performing in the red except for Consumer discretionary and Utilities. Both S&P500 and Dow showed a reversal pattern facing the resistance at the 20MA. While on the weekly perspective, we have all 3 indices sitting on the support. It's gonna be a very volatile week as we're having the employment reports coming this weeks. So... prepare for the ride. 

Market Call: Flat to upside

Date: 1 July 2013