21 Aug 2014 AMC - S&P500 broke new high in rally

21 Aug 2014 AMC - S&P500 broke new high in rally

Market Summary 

European Markets Closing Prices

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

• UK's FTSE: + 0.3%
• Germany's DAX: + 0.9%
• France's CAC: + 1.2%
• Spain's IBEX: + 1.3%
• Portugal's PSI: + 0.7%
• Italy's MIB Index: + 2.1%
• Irish Ovrl Index: + 0.6%
• Greece ASE General Index: + 2.1%

Before Market Opens 

S&P futures vs fair value: +2.30. Nasdaq futures vs fair value: +3.70.
The S&P 500 futures trade two points above fair value.

Asian markets ended the Thursday session on a mixed note.

• In economic data: 
  • China's HSBC Manufacturing PMI fell to 50.3 from 51.7 (expected 51.5) 
  • Japan's Manufacturing PMI jumped to 52.4 from 50.5 (consensus 51.7) 
  • Hong Kong's CPI climbed to 4.0% year-over-year from 3.6% (consensus 3.5%) 
  • Australia's CB Leading Index rose 0.4% month-over-month (prior 0.2%) 
  • New Zealand's Visitor Arrivals fell 0.5% month-over-month (prior -0.3%), while Credit Card Spending increased 4.5% year-over-year (last 6.0%) 

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• Japan's Nikkei rose 0.9%, gaining for a ninth straight session to finish near one-month highs. Exporters gained on the back of the weaker yen with Sony tacking on 1.9%. 
• Hong Kong's Hang Seng lost 0.7%, sliding from its best levels in more than six years. Coal names were pressured as China Shenhua Energy and Yanzhou Coal Mining gave up 0.4% and 0.9%, respectively. 
• China's Shanghai Composite shed 0.4%, slipping off eight-month highs. Energy plays weighed as PetroChina lost 0.6% and Sinopec fell 1.3%. 

Major European indices trade higher across the board with Italy's MIB (+1.6%) pacing the rally.

• Participants received several data points: 
  • Eurozone Manufacturing PMI fell to 50.8 from 51.8 (expected 51.3), while Services PMI slipped to 53.5 from 54.2, as expected 
  • Germany's Manufacturing PMI ticked down to 52.0 from 52.4 (consensus 51.8), while Services PMI slipped to 56.4 from 56.7 (expected 55.7) 
  • French Manufacturing PMI fell to 46.5 from 47.8 (forecast 47.8), while Services PMI improved to 51.1 from 50.4 (expected 50.0) 
  • Great Britain's Retail Sales ticked up 0.1% month-over-month (expected 0.4%; prior 0.2%), while the year-over-year reading rose 2.6% (expected 3.0; prior 3.4%). Core Retail sales increased 0.5% month-over-month (expected 0.4%; last -0.1%), while the year-over-year reading rose 3.4% (consensus 3.4%; prior 3.8%) 

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• Great Britain's FTSE is higher by 0.2% with financials among the leaders. Hargreaves Lansdown, Old Mutual, and Schroders are up between 0.8% and 2.5%. Miners lag with Antofagasta, Fresnillo, and Rio Tinto down between 0.5% and 3.1%. 
• Germany's DAX trades up 0.5% with 25 of 30 components showing gains. Heavyweights Deutsche Bank and Siemens lead with respective gains of 0.9% and 1.5%. On the downside, steelmaker ThyssenKrupp is lower by 0.9%. 
• In France, the CAC holds an advance of 0.8%. Countercyclical names are mixed as Veolia Environnement leads with an increase of 2.6%, while Pernod Ricard is the weakest performer, down 0.9%. 
• Italy's MIB outperforms with a gain of 1.6%. Banca di Milano Scarl, Intesa Sanpaolo, and UBI Banca are up between 3.0% and 5.5%.

U.S. Equities

• Equity futures suggest little change at the open
• The S&P 500 and DJIA remain within striking distance of record highs while the Nasdaq holds near its best level since April 2000
• The VIX (11.78) is at a one-month low 

• S&P Futures +3 @ 1986
• Dow Futures +32 @ 16,982
• Nasdaq Futures +4 @ 4044

Asia

• Markets finished mixed across Asia
• China's HSBC Flash Manufacturing PMI (50.3 actual v. 51.5 expected, 51.7 previous) missed estimates
• Australia's CB Leading Index improved to 0.4% (0.2% previous)
• Japan's Nikkei (+0.9%) gained for a ninth straight session to finish near one-month highs
• Hong Kong's Hang Seng (-0.7%) slid off its best levels in more than six years
• China's Shanghai Composite (-0.4%) slipped off eight-month highs
• India's Sensex (+0.2%) finished near record highs
• Australia's ASX (+0.1%) gained for the eighth time in nine days and finished at a six-year high

Market Internals

Market Internals -Technical-
The Dow closed up 61 (+0.36%) at 17040, the S&P 500 closed up 6 (+0.29%) at 1992, and the Nasdaq closed up 6 (+0.12%) at 4532. Action came on below average volume (NYSE 554 mln vs. avg. of 660; NASDAQ 1309 mln vs. avg. of 1660), with advancers outpacing decliners (NYSE 1863/1248, NASDAQ 1499/1216) and new highs outpacing new lows (NYSE 183/17, NASDAQ 75/45).

Relative Strength:
Italy-EWI +1.94%, Sugar-SGG +1.8%, Eastern Europe-ESR +1.54%, Natural Gas-UNG +1.47%, Banks-KBE +1.31%, Financial Services-IYG +1.25%, Russia-RSX +1.23%, Regional Banks-KRE +1.22%, France-EWQ +1.11%, Sweden-EWD +1.06%.

Relative Weakness:
Gold Miners-GDX -2.21%, Biotechnology-XBI -1.87%, Silver Miners-SIL -1.67%, Cocoa-NIB -1.46%, South Korea-EWY -1.33%, Hong Kong-EWH -1.32%, China 25 Index-FXI -1.31%, Gold-GLD -1.08%, Asia-AAXJ -0.74%, Taiwan-EWT -0.74%
.

Leaders and Laggards

Technical Updates

Briefing's Commentaries

Closing Market Summary: Blue Chips Send S&P 500 to New Record High
The stock market ended the Thursday session on an upbeat note with blue chips showing relative strength for the second consecutive day. The Dow Jones Industrial Average (+0.4%) and S&P 500 (+0.3%) settled ahead of the Russell 2000 (+0.2%) and the Nasdaq Composite (+0.1%). It is worth mentioning the benchmark index posted its fourth consecutive gain, registering a new record closing high at 1992.38.

Equity indices climbed out of the gate thanks to early strength among the four countercyclical sectors. Despite the early outperformance, the defensively-oriented sectors ended below their opening highs, while the six cyclical groups were mixed. Financials (+1.1%) and technology (+0.5%) contributed to the modest advance, while other heavily-weighted groups like consumer discretionary (-0.1%), industrials (unch), and energy (unch) kept the market from going on a bigger run.

The health care sector (+0.1%) was an early leader, but finished near its low amid weakness in biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 264.45, -2.40) ended lower by 0.9% after spending the session in a steady retreat. The ETF succumbed to profit taking after soaring 6.0% since last Tuesday.

In addition to pressuring the health care sector, biotechnology weighed on the Nasdaq, but the relative strength of the tech sector helped the index finish in the green. Intel (INTC 35.15, +0.65) and IBM (IBM 191.23, +1.13) posted respective gains of 1.9% and 0.6%, while Hewlett-Packard (HPQ 37.00, +1.88) jumped 5.4% after reporting in--line earnings.

Elsewhere, the financial sector spent the session in a steady climb. Bank of America (BAC 16.16, +0.64) was a notable standout, surging 4.1% after confirming its settlement with the Department of Justice, which is expected to negatively impact Q3 earnings by about $0.43 per share. The magnitude of today's advance on heavy volume suggests participants believe a big overhang is now gone and the bank can realize its full potential by focusing on its core business rather than being preoccupied with litigation.

The remaining cyclical sectors lagged throughout the day with the consumer discretionary space spending the session near its flat line. Retailers struggled following disappointing earnings from Sears Holdings (SHLD 33.38, -2.57), Kirklands (KIRK17.30, -1.68), Buckle (BKE 48.78, +1.70), Bon-Ton Stores (BONT 10.21, +1.16), andDollar Tree (DLTR 54.28, -0.72). The broader SPDR S&P Retail ETF (XRT 87.49, -0.19) shed 0.2%. On the upside, L Brands (LB 63.72, +0.74) gained 1.2% after reporting a one-cent beat.

Despite the gains in equities, Treasuries maintained a bullish bias throughout the session. The 10-yr note added seven ticks with its yield slipping two basis points to 2.41%.

Participation remained below average with just over 550 million shares changing hands at the NYSE.

Economic data included Initial Claims, Existing Home Sales, Philadelphia Fed Survey, and Leading Indicators:

• The initial claims level fell to 298,000 from an upwardly revised 312,000, while the Briefing.com consensus expected a decline to 308,000 
  • The Department of Labor reiterated that there were no special factors that influenced the initial claims level, suggesting the reading resulted from an improvement in labor market conditions 
• Existing home sales increased 2.4% to 5.15 million SAAR in July from a slightly downwardly revised 5.03 million SAAR (from 5.04 million) in June, while the Briefing.com consensus expected a decline to 5.00 million SAAR 
  • This was the fourth consecutive monthly gain and contrasted with the downward move in both the Pending Home Sales Index and MBA Mortgage Purchase Index 
  • Sales are down 4.3% from a year ago 
• The Philadelphia Fed's Business Outlook Survey increased to 28.0 in August from 23.9 in July, while the Briefing.com consensus expected a drop to 15.5 
  • The strength in the headline result is confusing and masks an oddly weaker subset of data 
    • Outside of the headline result, the only gains came from the average workweek index (13.3 from 12.5) and inventories (8.3 from 4.8) 
• The Conference Board's Index of Leading Indicators increased 0.9% in July after increasing an upwardly revised 0.6% (from 0.3%) in June, while the Briefing.com consensus expected an increase of 0.6% 

There is no economic data on tomorrow's schedule.

• Nasdaq Composite +8.5% YTD 
• S&P 500 +7.8% YTD 
• Dow Jones Industrial Average +2.8% YTD 
• Russell 2000 -0.3% YTD

Commodities

Closing Commodities: Nat gas rises 1.8% following inventory data

• Dec gold declined for a fifth consecutive session as economic data this morning showed that the initial claims level fell to 298K from an upwardly revised 312K. The Briefing.com consensus expected a decline to 308K. The yellow metal fell as low as $1273.40 per ounce, its lowest level since June. Unable to gain buying support, it settled with a 1.5% loss at $1275.20 per ounce.
• Sep silver also chopped around in negative territory and touched a session low of $19.32 per ounce in early morning action. It eventually settled at $19.41 per ounce, or 0.5% lower.
• Sep crude oil lifted from its session low of $92.98 per barrel in early morning action and broke into positive territory. It trended higher to a session high of $94.45 per barrel and settled with a 0.6% gain at $93.97 per barrel.
• Sep natural gas fell from its session high of $3.91 per MMBtu following inventory data that showed a build of 88 bcf when a build of 82-83 bcf was anticipated. It brushed a session low of $3.79 per MMBtu but managed to recover back into positive territory in afternoon action. Natural gas eventually settled 1.8% higher at $3.89 per MMBtu.

COMEX Metals Closing Prices

Dec gold fell $19.80 to $1275.20/oz 

• Gold declined for a fifth consecutive session as economic data this morning showed that the initial claims level fell to 298K from an upwardly revised 312K. The Briefing.com consensus expected a decline to 308K. The yellow metal fell as low as $1273.40, its lowest level since June. Unable to gain buying support, it settled with a 1.5% loss. 

Sep silver fell $0.09 to $19.41/oz 

• Silver also chopped around in negative territory and touched a session low of $19.32 in early morning action. It eventually settled with a 0.5% loss. 

Sep copper settled unchanged at $3.18/lb

CBOT Agriculture and Ethanol/ICE Sugar Closing Prices

• Sep corn rose 2 cents to $3.62/bushel 
• Sep wheat rose 7 cents to $5.47/bushel 
• Nov soybeans rose 2 cents to $10.39/bushel 
• Sep ethanol rose 2 cents to $2.15/gallon 
• Nov sugar (#16 (U.S.)) rose 0.47 of a penny to 25.60 cents/lb

NYMEX Energy Closing Prices

Oct crude oil rose $0.57 to $93.97/barrel 

• Crude oil lifted from its session low of $92.98 in early morning action and broke into positive territory. It trended higher to a session high of $94.45 and settled with a 0.6% gain.

Sep natural gas rose 7 cents to $3.89/MMBtu 

• Natural gas fell from its session high of $3.91 following inventory data that showed a build of 88 bcf when a build of 82-83 bcf was anticipated. It brushed a session low of $3.79 but managed to recover back into positive territory in afternoon action. Natural gas eventually settled 1.8% higher. 

Sep heating oil rose 2 cent to $2.84/gallon 

Sep RBOB rose 4 cents to $2.75/gallon

Treasuries
Good Day for US Economy (and Treasuries): 10-yr +7/32.. 2.405%.. USD/JPY 103.81.. EUR/USD 1.3282

• It was a good day from the front of the curve to the back of the curve for the US Treasury market
• Yields across the curve dropped by one to three basis points
• 10-yr note settled near its high for the day (+7/32)
• Today's economic data provided an ample basis to sell Treasuries, but that didn't happen
• Weekly Initial Claims were 298K vs Briefing.com consensus of 308K; last week was revised to 312K from 311K. Weekly Continuing Claims 2.500 M vs Briefing.com consensus of 2.530 M; last week was revised to 2.549 M from 2.544 M
• July Existing Home Sales were 5.15 mln vs Briefing.com consensus of 5.00 mln; June was revised to 5.03 mln from 5.04 mln
• August Philadelphia Fed 28.0 vs Briefing.com consensus of 15.5; July was 23.9
• July Leading Indicators 0.9% vs Briefing.com consensus of 0.7%; June was revised to 0.6% from 0.3%
• Interest rate differentials presumably contributed to the Treasury market's relative strength. To that end, the yields on the German bund, the French OAT, and Japanese government bond crossed at 0.99%, 1.38%, and 0.52%, respectively
• US Dollar Index (-0.1%) was slightly weaker, yet precious metals were on the defensive
• Gold -$18.40 to $1276.80/troy ounce
• Silver -$0.06 to $19.51/troy ounce
• Platinum -$8.60 to $1420.00/troy ounce
• The $16 bln 4-yr -8-mo TIPS auction drew a high yield of -0.281%
• Treasuries extended their gains for the day following the auction
• Some flattening in the 2-10yr spread, which started the day at 196 bps and ended the day at 194 bps
• No data on Friday. 
• All eyes and ears will be tuned to Jackson Hole Symposium on Friday
• Fed Chair Yellen speaks at 10:00 a.m. ET about the labor market
• ECB President Draghi to speak at 2:30 p.m. ET

On other news.... 

Currencies 



Next Week In View




Economic Commentaries

Economic Summary: Existing Home Sales Leading Indicators, & Philly Fed all top top expectations; Jackson Hole 2014 begins, Yellen & Draghi to speak tomorrow
Economic Data Summary:

• Weekly Initial Claims 298K vs Briefing.com consensus of 308K; Last Week was revised to 312K from 311K
• Weekly Continuing Claims 2.500 M vs Briefing.com consensus of 2.530 M ; Last Week was revised to 2.549 M from 2.544 M
• The Department of Labor reiterated that there were no special factors that influenced the initial claims level. In its view, the sub-300,000 claim levels over the past several weeks are the result of improvements in labor market conditions. The motor vehicle industry, however, did not reduce production for retooling like it normally does during the summer months. That has artificially boosted employment levels and has likely contributed toward seasonal biases in the claims data. 
• July Existing Home Sales 5.15 M vs Briefing.com consensus of 5.00 M ; June was revised to 5.03 M from 5.04 M
• The expansion in supply, however, did not help soften price gains. Distressed property sales, which have declined in recent months, accounted for 9% of total sales. That was the first time since the data started being tracked in October 2008 that distressed properties accounted for less than 10% of sales. These homes sell at a substantial discount, and less distressed sales mean higher median existing home prices.
• August Philadelphia Fed 28.0 vs Briefing.com consensus of 15.5; July was 23.9
• The strength in the headline result is confusing and masks an oddly weaker subset of data. Nearly all of the components of the survey declined significantly in August. The only gains - outside of the headline result - came from the average workweek index which increased to 13.3 in August from 12.5 in July and inventories, which rose to 8.3 in August from 4.8 in July. 
• July Leading Indicators 0.9% vs Briefing.com consensus of 0.7%; June was revised to 0.6% from 0.3%
• Since 8 of the 10 components of the index are known prior to the release, the difference between the actual and the consensus is generally small. In this case, stronger-than-expected building permit data were released after the consensus made their projections and contributed to the upward surprise. 

Upcoming Economic Data:

• August New Home Sales due out Monday at 10:00 (Briefing.com consensus of ; July was 406K )

Upcoming Fed/Treasury Events:

• Kansas City Fed President Esther George (hawkish, non-voter) to speak tonight at 20:00.
• Jackson Hole Fed Conference to be held Thursday August 21st-25th.  Fed Chair Janet Yellen to speak Friday August 22nd at 10:00 and ECB President Mario Draghi to speak Friday August 22nd at 14:30

Other International Events of Interest

• China's HSBC Flash Manufacturing PMI (50.3 actual v. 51.5 expected, 51.7 previous) missed estimates

Jason's Commentaries


No commentaries for today







Market Call: FLAT to upside

Date: 22 Aug 2014

20 Aug 2014 AMC - Market ended higher despite hawkish FOMC minutes

20 Aug 2014 AMC - Market ended higher despite hawkish FOMC minutes

Market Summary 

 European Markets Closing Prices -Technical-
European markets are now closed; stock markets across Europe performed as follows:

• UK's FTSE: -0.4%
• Germany's DAX: -0.2%
• France's CAC: -0.4%
• Spain's IBEX: + 0.3%
• Portugal's PSI: -0.4%
• Italy's MIB Index: -0.2%
• Irish Ovrl Index: -0.7%
• Greece ASE General Index: + 1.0%

Before Market Opens 

S&P futures vs fair value: -3.40. Nasdaq futures vs fair value: -5.80.
The S&P 500 futures trade three points below fair value.

Markets finished mixed across Asia. Reserve Bank of Australia Governor Glenn Stevens testified in front of the House of Representatives' Standing Committee on Economics and noted rates are likely to remain unchanged for the foreseeable future.

• In economic data: 
  • Japan's trade deficit narrowed to JPY1.02 trillion from JPY1.07 trillion (expected deficit of JPY770 billion) as imports rose 2.3% (consensus -1.7%) and exports increased 3.9% (forecast 3.8%). Separately, All Industries Activity Index slipped 0.4% month-over-month (consensus -0.2%; prior 0.6%) 
  • Australia's MI Leading Index ticked down 0.1% month-over-month (prior 0.1%) 

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• Japan's Nikkei registered a fractional gain as trade ticked higher for an eighth session. Heavyweights Softbank and KDDI Corp. provided support as both added 1.0%. 
• Hong Kong's Hang Seng added 0.2%, finishing at its best level since May 2008. Bank of China HK jumped 3.6% following its earnings beat. 
• China's Shanghai Composite shed 0.2%, slipping from eight-month highs. Real estate shares were pressured with Vanke and Poly Real Estate down 2.0% and 1.1%, respectively.

Major European indices hover in the red. The Bank of England released the minutes from its latest meeting, which revealed a split vote in favor of continuing on the current course. Seven members voted to keep current policy intact, while Martin Weale and Ian McCafferty voted in favor of hiking the benchmark rate by 25 basis points. This represented the first dissent in more than three years.

• Economic data was limited: 
  • Germany's PPI ticked down 0.1% month-over-month (expected 0.1%; prior 0.0%), while the year-over-year reading fell 0.8% (consensus -0.7%; last -0.7%) 
  • Great Britain's CBI Industrial Trends Orders jumped to 11 from 2 (expected 4) 

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• Great Britain's FTSE is lower by 0.5% amid broad weakness. Homebuilders are among the weakest performers with Barratt Developments and Persimmon both down near 2.1%. Royal Mail outperforms with a solid gain of 1.9%. 
• In France, the CAC holds a loss of 0.7%. Consumer and telecom names underperform with Carrefour, Kering, Orange, and Vivendi down between 1.0% and 1.4%. Publicis Groupe is the top performer, up 0.6%. 
• Germany's DAX trades down 0.8% with 26 of 30 components showing losses. Infineon Technologies and Continental are among the weakest performers with losses close to 2.0% apiece. Deutsche Boerse outperforms with an increase of 0.8%.

U.S. Equities

• Equity futures point to small losses at the open as sellers look to put in the second loss in nine days
• The Nasdaq ended yesterday's session at its best levels since April 2000 while the S&P 500 and DJIA finished within striking distance of all-time highs
• The VIX (12.21) holds at its lowest levels of August
• MBA Mortgage Index (+1.4%)

• S&P Futures -2 @ 1975
• Dow Futures -11 @ 16,870
• Nasdaq Futures unch @ 4034

Asia

• Markets finished mixed across Asia
• Reserve Bank of Australia Governor Glenn Stevens testified in front of the House of Representatives' Standing Committee on Economics and noted rates are likely to remain unchanged for the foreseeable future
• Japan posted a wider than expected trade deficit (JPY1.02 trln actual v. JPY0.77 trln expected)
• Japan's Nikkei (UNCH) put in a fractional gain as trade ticked higher for an eighth session
• Hong Kong's Hang Seng (+0.2%) finished at its best level since May 2008
• China's Shanghai Composite (-0.2%) slipped off eight-month highs
• India's Sensex (-0.4%) slid off record highs as sellers took control for the first time in seven days
• Australia's ASX (+0.2%) ended at a six-year high 

Market Internals

Market Internals -Technical-
The Dow closed up 60 (+0.35%) at 16979, the S&P 500 closed up 5 (+0.25%) at 1987, and the Nasdaq closed down 1 (-0.02%) at 4526. Action came on below average volume (NYSE 529 mln vs. avg. of 659; NASDAQ 1392 mln vs. avg. of 1667), with mixed advancers/decliners (NYSE 1583/1527, NASDAQ 1017/1686) and new highs outpacing new lows (NYSE 148/17, NASDAQ 75/41).

Relative Strength:
Cotton-BAL +2.56%, Copper-JJC +2.44%, Base Metals-DBB +2.35%, Greece-GREK +2.17%, Sugar-SGG +1.78%, Industrials-XLI +1.06%, Hong Kong-EWH +0.98%, Australia-EWA +0.71%, Taiwan-EWT +0.56%, Japan-EPP +0.55%.

Relative Weakness:
Turkey-TUR -1.67%, Livestock-COW -1.51%, Grains-JJG -1.45%, Natural Gas-UNG -1.13%, Biotechnology-XBI -0.93%, Corn-CORN -0.92%, Austria-EWO -0.85%, Japanese Yen-FXY -0.83%, South Africa-EZA -0.82%, France-EWQ -0.81%.

Leaders and Laggards

Technical Updates

Briefing's Commentaries

Closing Market Summary: Blue Chips Post Gains Despite Afternoon Dip
The stock market ended the midweek session on a mixed note. Blue chip listings bolstered the Dow Jones Industrial Average (+0.4%) and S&P 500 (+0.3%), while the Russell 2000 (-0.4%) and Nasdaq Composite (-0.02%) underperformed.

Equity indices began the day in the red, but wasted no time regaining their flat lines. Small-cap stocks were not as fortunate as the Russell 2000 spent the day in the red.

Upon returning into positive territory, the key indices were confined to narrow ranges until the minutes from the July FOMC meeting crossed the wires. The minutes revealed that many officials saw recent job gains as a potential reason to bring forward the first fed funds rate hike; however, most officials showed preference for waiting for more evidence before changing their outlook on rates.

The minutes were followed by a retreat among equities, but the slide was not sustained. The S&P 500 was trading at a fresh session high within an hour of the release. Treasuries, meanwhile, slumped in reaction to the discussion on rates. The 10-yr note fell seven ticks with its yield climbing three basis points to 2.43%.

Eight sectors ended in the green with industrials (+1.0%) spending the entire session in the lead. The cyclical sector was supported by Dow components Boeing (BA 127.35, +1.77) and General Electric (GE 26.36, +0.31) as the two added 1.4% and 1.2%, respectively. Despite the strength in the two names, the broader PHLX Defense Index (+0.9%) ended just behind the sector. Similarly, transport stocks could not keep pace with the sector as the Dow Jones Transportation Average added 0.6%.

Also of note, shares of Hertz (HTZ 30.33, -1.23) endured quite the roller coaster ride. The stock settled at $31.56 yesterday, but fell all the way to $27.47 this morning after the company said it expects to fall short of its full-year guidance, which was withdrawn. The stock spent the bulk of the day inching off its low with a big boost coming after Carl Icahn disclosed a stake in the company and said he may seek a seat on the board. Hertz ended the session with a 3.9% decline.

The consumer discretionary sector (+0.5%) finished in second place after a handful of retailers reported their quarterly results. American Eagle (AEO 12.98, +1.39), Lowe's (LOW 52.33, +0.81), and PetSmart (PETM 70.52, +0.82) all reported better than expected results, while Target (TGT 60.33, +1.08) and Staples (SPLS 11.32, -0.30) met expectations, but issued cautious guidance. For its part, the SPDR S&P Retail ETF (XRT 87.68, +0.63) gained 0.7%.

Elsewhere, the financial sector (+0.3%) was the only outperformer of note, while the remaining sectors finished near their respective flat lines. Bank of America (BAC 15.52, +0.07) was in the headlines after the Wall Street Journal reported the bank is nearing a $17 billion settlement with the Department of Justice over the sales of mortgage-backed securities.

Participation remained on the light side with just under 530 million shares changing hands at the NYSE.

Economic data was limited to the weekly MBA Mortgage Index, which rose 1.4% to follow last week's 2.7% decline.

Tomorrow, weekly initial claims will be reported at 8:30 ET (Briefing.com consensus 308K), while Existing Home Sales for July (consensus 5.00 million), August Philadelphia Fed Survey (consensus 15.5), and July Leading Indicators (expected 0.7%) will all be released at 10:00 ET.

• Nasdaq Composite +8.4% YTD 
• S&P 500 +7.5% YTD 
• Dow Jones Industrial Average +2.4% YTD 
• Russell 2000 -0.5% YTD

Commodities

Closing Commodities: Gold Ends 0.1% Lower, Silver Gains 0.4%, Following Fed Minutes

• Dec gold traded below the $1300 per ounce level today as investors awaited the release of the FOMC minutes from the July policy meeting. The yellow metal pulled back slightly from its session high of $1299.00 per ounce set in early morning action and dipped to a session low of $1293.40 per ounce.
• It eventually settled with a 0.1% loss at $1295.00 per ounce.
• Gold slipped further in electronic trade after the release of the FOMC minutes and is currently trading at $1290.80 per ounce, or 0.5% lower. 
• Sep silver touched a session high of $19.58 per ounce shortly after equity markets opened but retreated to a session low of $19.45 per ounce as the session progressed. It chopped around near the $19.50 per ounce level in afternoon action and settled at that price, booking a gain of 0.4%. 
• Oct crude oil traded in positive territory today, advancing as high as $96.61 per barrel following inventory data. The EIA reported that for the week ending Aug 15, crude oil inventories had a draw of 4.47 mln barrels when a draw of 1.2-1.8 mln barrels was anticipated.
• The energy component briefly dipped below $93 per barrel in early afternoon action but eventually settled with a 0.6% gain at $93.40 per barrel.
• Sep natural gas, on the other hand, spent its entire session in negative territory. It brushed a session low of $3.79 per MMBtu and settled with a 1.5% loss at $3.82 per MMBtu.

COMEX Metals Closing Prices

Dec gold fell $1.80 to $1295.00/oz

• Gold traded below the $1300 level today as investors awaited the 14:00 ET release of the FOMC minutes from the July policy meeting. A stronger dollar index also weighed on prices. The yellow metal pulled back slightly from its session high of $1299 set in early morning action and dipped to a session low of $1293.40. It eventually settled with a 0.1% loss. 

Sep silver rose $0.08 to $19.50/oz 

• Silver touched a session high of $19.58 shortly after equity markets opened but retreated to a session low of $19.45 as the session progressed. It chopped around near the $19.50 level in afternoon action and settled with a 0.4% gain. 

Sep copper rose 9 cents to $3.18/lb

CBOT Agriculture and Ethanol/ICE Sugar Closing Prices

• Sep corn fell 3 cents to $3.60/bushel
• Sep wheat fell 7 cents to $5.40/bushel
• Nov soybeans fell 16 cents to $10.37/bushel
• Sep ethanol rose 1 cent to $2.13/gallon
• Nov sugar (#16 (U.S.)) fell $0.57 to 25.13 cents/lb

NYMEX Energy Closing Prices

Oct crude oil rose $0.54 to $93.40/barrel 

• Crude oil traded in positive territory today, advancing as high as $96.61 following inventory data. The EIA reported that for the week ending Aug 15, crude oil inventories had a draw of 4.47 mln barrels when a draw of 1.2-1.8 mln barrels was anticipated. The energy component briefly dipped below $93 in early afternoon action but eventually settled with a 0.6% gain. 

Sep natural gas fell 6 cents to $3.82/MMBtu 

• Natural gas, on the other hand, spent its entire session in negative territory. It brushed a session low of $3.79 and settled with a 1.5% loss. 

Sep heating oil rose 1 cent to $2.82/gallon 

Sep RBOB rose 2 cents to $2.71/gallon

Treasuries

FOMC Minutes Cause Yields in the Belly to Climb: 10-yr: -06/32..2.425%..USD/JPY: 103.70..EUR/USD: 1.3261

• Treasuries hovered little changed into afternoon trade before what is being described by some as 'hawkish' FOMC minutes pressed maturities to their worst levels of the day. Click here to see an intraday yields chart.
• The minutes from the July 29/30 policy meeting suggested, "Many participants noted that if convergence toward the Committee's objectives occurred more quickly than expected, it might become appropriate to begin removing monetary policy accommodation sooner than they currently anticipated."
• Up front, the 2y climbed +3.5bps to 0.472%. The yield finished near its highest levels of August as action punched through resistance in the 0.450% area. 
• Post-minutes selling had the biggest impact on the belly as the 5y rallied +5bps to 1.630%. The yield reclaimed the 200 dma, and is now testing resistance near 1.640% that is guarded by both the 50 and 100 dma. 
• A +2.1bp advance ran the 10y up to 2.426%. Three days of selling has the benchmark yield at its highest level in more than a week, and approaching the important 2.450% region.
• A flat session at the long end saw the 30y close @ 3.220%. Afternoon selling caused action to probe resistance in the 3.225% area, but so far action has been unable to breakout. 
• Today's action caused some flattening along the curve as the 2-10-yr spread narrowed to 195.5bps and the 5-30-yr spread tightened to 159bps.
• Precious metals went off near their lows as gold fell -$6 to $1291 and silver added +$0.03 to $19.45. 
• Data: Initial and continuing claims (8:30), existing home sales, Philly Fed, and leading indicators (10).
• Fed Speak: The Kansas City Fed's Jackson Hole Symposium begins.

On other news.... 

Currencies 
Dollar Hits 11-Month High: 10-yr: -03/32..2.411%..USD/JPY: 103.36..EUR/USD: 1.3290

• The Dollar Index holds onto small gains near 82.05 as trade looks to put in its first close above 82.00 since September. Click here to see a daily Dollar Index chart.
• Action has spent the entire U.S. session in a tight 10 cent range as traders await the FOMC minutes, which are due out at the top of the hour. 
• EURUSD is -30 pips @ 1.3285 as trade presses to its lowest level in 11 months. The single currency has been under pressure since early-May as negative and slow growth environments plague much of the region and have some worried of a Japan-like stagnation. The 1.3200 support level will be monitored into Friday's Jackson Hole speech by ECB head Mario Draghi. Flash Manufacturing and Services PMI data from across the eurozone will be released tomorrow. 
• GBPUSD is +5 pips @ 1.6620 after surrendering all of its early gains. Sterling surged to the 1.6680 level after the latest MPC votes indicated two members were in favor of a 25 bp rate hike at the August meeting; however, action was rejected at resistance and the 200 dma and has pushed lower over the course of the session. Britain's retail sales and public sector net borrowing are scheduled for tomorrow. 
• USDCHF is +15 pips @ .9110 as action contends with its best close of 2014. A quiet day for news and data from Switzerland has left action at the mercy of the euro. Swiss data is limited to the trade balance. 
• USDJPY is +45 pips @ 103.35 as trade rallies to its best level in more than four months. Fueling today's advance was the larger than trade balance miss, which marked the 40th consecutive month of a deficit. The 104.00 level will be key in the days ahead.
• AUDUSD is +10 pips @ .9310 as trade recoups its early losses. The hard currency has seen a relatively uneventful trade despite overnight comments from RBA Governor Glenn Stevens indicating rates were likely to remain on hold for a while. Resistance in the .9340 area is guarded by the 100 dma. Australia's CB Leading Index is due out tonight. China's HSBC Final Manufacturing PMI will cross the wires this evening. 
• USDCAD is +10 pips @ 1.0950 amid a mostly uneventful trade. A close above 1.0972 would mark the best since late-April.

Next Week In View




Economic Commentaries

Economic summary: FOMC Minutes at 14:00; Weekly Jobless Claims and July Existing Home Sales out tomorrow morning
Economic Data Summary:

• Weekly MBA Mortgage applications were up 1.4% last week.

Economic Data out tomorrow, Thursday, August 21:

• Weekly Initial Jobless Claims Thursday at 8:30 (Briefing.com consensus of 308K; was 311K)
• Continuing Claims at 8:30 (Briefing.com consensus of 2.53 mln; was 2.54 mln)
• July Existing Home Sales at 10:00 (Briefing.com consensus 5.0 mln vs. 5.04 mln in June)
• August Philly Fed at 10:00 (Briefing.com consensus of 15.5; was 23.9)
• July Leading Indicators at 10:00 (Briefing.com consensus of +0.7%; was +0.3%)

Upcoming Fed/Treasury Events:

• FOMC Minutes at 14:00
• Jackson Hole Fed Conference to be held Thursday August 21st-25th. 
• Fed Chair Janet Yellen to speak Friday August 22nd at 10:00 and ECB President Mario Draghi to speak Friday August 22nd at 14:30

Jason's Commentaries

The day started with a very flat note as the market is waiting for the release of FOMC minutes. However, after the FOMC minutes which were perceived as hawkish, market rallied as well. Internals were supporting a upside movement. However, towards the end of the trading session, the market had some profit taking. On the technicals, the S&P500 reached its all time high. I reckon the market is likely to start flat for a while before breaking up higher. However, I believe the market will be staying on the sidelines for a while as Yellen is poised to speak on Friday before the Jackson Hole Symposium.








Market Call: FLAT to downside

Date: 21 Aug 2014

17 Aug 2014 AMC - Nasdaq breaks into new high as market priced in

17 Aug 2014 AMC - Nasdaq breaks into new high as market priced in

Market Summary 

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

• UK's FTSE: + 0.6%
• Germany's DAX: + 1.0%
• France's CAC: + 0.6%
• Spain's IBEX: + 0.4%
• Portugal's PSI: + 0.8%
• Italy's MIB Index: + 0.0%
• Irish Ovrl Index: -0.1%
• Greece ASE General Index: + 2.1%

Before Market Opens 

S&P futures vs fair value: +4.30. Nasdaq futures vs fair value: +7.00.
The S&P 500 futures trade four points above fair value.

It was a sea of green across Asia as all of the major bourses finished in positive territory. The latest Reserve Bank of Australia minutes warned of ‘significant' uncertainty ahead, but maintained that rates are likely to remain stable.

• In economic data: 
  • South Korea's PPI ticked up 0.1% month-over-month (previous 0.0%), while the year-over-year reading increased 0.2%, as expected (prior 0.1%) 
  • New Zealand's Inflation Expectations slipped to 2.2% from 2.4% quarter-over-quarter. Separately, Input PPI fell 1.0% quarter-over-quarter (expected 0.7%; previous 1.0%) and Output PPI declined 0.5% (consensus 0.8%; prior 0.9%) 

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• Japan's Nikkei rose 0.8%, gaining for a seventh consecutive day. Heavyweight Softbank provided support, adding 2.1%. 
• Hong Kong's Hang Seng added 0.7%, climbing to its best levels since May 2008. Real estate developer China Resources Land jumped 7.6% following reports the company agreed to buy property in Shenzhen. Terms were not disclosed. 
• China's Shanghai Composite rose 0.3%, finishing at an eight and a half-month high. Media names like People.cn and Shanghai Xinhua Media finished limit up, 10%, on news Beijing is looking to reform the sector. 

Major European indices trade higher with Germany's DAX (+1.0%) leading for the second day in a row.

• Economic data was limited: 
  • Eurozone Current Account surplus narrowed to EUR13.10 billion from EUR19.80 billion (expected surplus of EUR19.00 billion) 
  • Great Britain's CPI fell 0.3% month-over-month (expected -0.2%; prior 0.2%), while the year-over-year reading increased 1.6% (consensus 1.8%; previous 1.9%). Separately, Input PPI fell 1.6% month-over-month (expected -1.1%; prior -0.9%) and Output PPI slipped 0.1% month-over-month (consensus 0.1%; previous -0.1%) 
    • CPI spent its fifth consecutive month below the Bank of England's 2.00% target as clothing retailers used discounts to lure in shoppers 

------

• In France, the CAC is higher by 0.4%. Automotive-related stocks outperform with Renault and Valeo up 0.9% and 3.4%, respectively. Electricite de France is the weakest performer, down 1.1%. 
• Great Britain's FTSE trades up 0.5% with financials showing strength. Aberdeen Asset Management has added 1.5% and Royal Bank of Scotland is higher by 2.7%. BHP Billiton underperforms with a loss of 4.6%. Earlier, the miner said it will spin off its nickel, aluminum, and other assets. 
• Germany's DAX has added 1.0% with help from exporters. Volkswagen and Daimler hold respective gains of 1.8% and 0.7%. On the downside, Deutsche Telekom is lower by 0.9%. 
• In Italy, the MIB is lower by 0.4%. Financials lag with Banco Popolare down 1.2% and UBI Banca lower by 1.1%.

U.S. Equities

• Futures point to small gains at the open 
• The Nasdaq finished yesterday's session at its best level since April 2000
• The VIX (12.32) is at a three-week low
• CPI (+0.1% actual v. +0.1% expected)
• Core CPI (+0.1% actual v. +0.1% expected)
• Housing Starts (1093K actual v. 964K expected)
• Building Permits (1052K actual v. 1001K expected)

• S&P Futures +5 @ 1972
• Dow Futures +50 @ 16,843
• Nasdaq Futures +10 @ 4023

Asia

• It was a sea of green across Asia as all of the major bourses finished in positive territory
• The latest Reserve Bank of Australia minutes warned of ‘significant' uncertainty ahead, but maintained the view rates are likely to remain stable
• Japan's Nikkei (+0.8%) gained for a seventh straight day
• Hong Kong's Hang Seng (+0.7%) climbed to its best levels since May 2008
• China's Shanghai Composite (+0.3%) finished at an eight and a half-month high
• India's Sensex (+0.1%) ticked into record territory
• Australia's ASX (+0.7%) ended just shy of six-year highs

Market Internals

Market Internals -Technical-
The S&P 500 closed up 10 (+0.50%) at 1982, the Dow closed up 81 (+0.48%) at 16920, and the Nasdaq closed up 19 (+0.43%) at 4528. Action came on below average volume (NYSE 544 mln vs. avg. of 659; NASDAQ 1441 mln vs. avg. of 1672), with advancers outpacing decliners (NYSE 1990/1137, NASDAQ 1459/1240) and new highs outpacing new lows (NYSE 183/18, NASDAQ 101/33).

Relative Strength:
U.S. Home Construction-ITB +2.39%, Natural Gas-UNG +2.16%, Turkey-TUR +2.06%, Homebuilders-XHB +2.02%, Hong Kong-EWH +1.58%, Retail-RTH +1.52%, Taiwan-EWT +1.32%, Retail-XRT +1.29%, BRICs-EEB +1.1%, Russia-RSX +1.04%.

Relative Weakness:
Coffee-JO -3.51%, Silver Miners-SIL -1.64%, Cocoa-NIB -1.61%, Junior Gold Miners-GDXJ -1.28%, Sugar-SGG -1.23%, Columbia Index-GXG -1.08%, Peru-EPU -0.73%, British Pound-FXB -0.67%, Chile-ECH -0.64%, Italy-EWI -0.58%
.

Leaders and Laggards

Technical Updates

Briefing's Commentaries

Closing Market Summary: Discretionary Sector Leads Stocks Higher
The stock market continued its strong start to the week with a broad-based Tuesday rally that sent the S&P 500 higher by 0.5%. Nine of ten sectors registered gains while the benchmark index extended its week-to-date advance to 1.4%.

Equities received an opening boost from a pair of economic data points that crossed the wires this morning. An in-line CPI report suggested inflationary pressures remain contained, while a better than expected Housing Starts report underpinned homebuilders and the discretionary sector.

Fittingly, the consumer discretionary space (+0.8%) surged out of the gate and spent the entire session among the leaders. Homebuilders rallied following the upbeat data and better than expected earnings from Home Depot (HD 88.23, +4.64). The Dow component jumped 5.6%, while the iShares Dow Jones US Home Construction ETF (ITB 23.99, +0.56) advanced 2.4%.

Retail stocks also played a part in the outperformance of the discretionary sector after Dick's Sporting Goods (DKS 44.21, +0.70) and Urban Outfitters (URBN 38.59, +1.67) beat their earnings estimates. The SPDR S&P Retail ETF (XRT 87.05, +1.11) rose 1.3%.

While the influential discretionary sector displayed broad strength, other heavily-weighted groups were a bit more mixed. Technology (+0.7%) outperformed, while financials (+0.2%) and industrials (+0.2%) lagged.

The top-weighted sector—technology—received support from chipmakers. The PHLX Semiconductor Index recaptured its 50-day moving average and added 0.6% with all but five components posting gains. Meanwhile, most large cap tech components were limited to modest gains, but shares of Apple (AAPL 100.53, +1.37) climbed to a fresh all-time high.

Elsewhere, the top-weighted countercyclical sector—health care (+0.7%)—trailed the broader market for the majority of the session, but spiked during afternoon action in reaction to reports from the Wall Street Journal, indicating Salix Pharmaceuticals (SLXP 160.80, +21.63) was approached by Allergan (AGN 161.82, +6.21) about a potential acquisition. Shares of SLXP ended higher by 15.5%, while the iShares Nasdaq Biotechnology ETF (IBB 267.23, +1.02) tacked on 0.4% after showing intraday weakness.

Similar to health care, the utilities sector (+1.2%) outperformed, while the remaining two defensively-oriented groups—consumer staples (+0.2%) and telecom services (-0.3%)—lagged.

Treasuries began the day with solid gains, but spent the session in a steady retreat. The 10-yr note shed one tick with its yield ending at 2.40%.

Participation was well below average with fewer than 550 million shares changing hands at the NYSE.

Economic data was limited to CPI, and Housing Starts/Building Permits:

• Consumer prices increased 0.1% in July following a 0.3% increase in June, which matched the Briefing.com consensus 
  • As expected from the July PPI report, energy prices fell 0.3% in July after increasing 1.6% in June 
  • Food prices accelerated, up 0.4% in July from a 0.1% increase in June 
    • Food at home prices, typically from grocery stores, increased 0.7%, which was the largest increase since August 2011 
  • Excluding food and energy, core CPI increased 0.1% for a second consecutive month in July, which is what the consensus expected 
• Housing starts increased 15.7% in July to 1.093 million from an upwardly revised 945,000 (from 893,000) in June, while the Briefing.com consensus expected an increase to 964,000 
  • The big news out of the housing data was an 8.3% increase (to 656,0000) in single-family construction after declines were observed in May and June 
• Building permits rose to a seasonally adjusted annualized rate of 1.052 million in July versus a revised 973K for June, while the Briefing.com consensus expected an increase to 1.001 million 

Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET, while the minutes from the latest FOMC policy meeting will cross the wires at 14:00 ET.

• Nasdaq Composite +8.4% YTD 
• S&P 500 +7.2% YTD 
• Dow Jones Industrial Average +2.1% YTD 
• Russell 2000 -0.1% YTD

Commodities

Closing Commodities: Commodities decline, dollar index ends at HoD

• The dollar index continued to hold gains, which helped weigh on commodities today 
• Commodities such as crude oil, gold, silver and copper all sold off today and ended the on today's lows
• Sept crude oil fell as low as $94.26 and ended today floor trading session $2.97 lower at $94.34/barrel
• Dec gold lost $2.40 to $1296.80/oz, Sept silver fell $0.22 to $19.42/oz and Sept copper fell 2 cents to $3.09
• Natural gas futures rallied today and finished 2.4% higher at $3.88/MMBtu
• Sept corn recovered and gained 3 cents to $3.63/bushel.

COMEX Metals Closing Prices

• Dec gold fell $2.4 to $1296.80/oz
• Sep silver fell $0.22 to $19.42/oz
• Sep copper fell 2 cents to $3.09/lbEuropean Markets Closing Prices

CBOT Agriculture and Ethanol/ICE Sugar Closing Prices

• Sep corn rose 3 cents to $3.63/bushel
• Sep wheat rose 4 cents to $5.47/bushel
• Nov soybeans fell 3 cents to $10.53/bushel
• Sep ethanol fell 1 cent to $2.12/gallon
• Nov sugar (#16 (U.S.)) fell $0.05 to 25.70 cents/lb

NYMEX Energy Closing Prices

• Sep crude oil fell $2.97 to $94.34/barrel
• Sep natural gas rose 9 cents to $3.88/MMBtu
• Sep heating oil closed unchanged at $2.81/gallon
• Sep RBOB rose 3 cents to $2.69/gallon

Treasuries

Treasuries See Second Day of Selling: 10-yr: -02/32..2.402%..USD/JPY: 102.90..EUR/USD: 1.3317

• Treasuries finished on their lows as sellers remained in control for a second session. Click here to see an intraday yields chart.
• The complex held small gains into the cash open, and put in its best levels of the day shortly before the in-line CPI (+0.1%) and better than expected housing starts (1093K actual v. 964K expected) and building permits (1052K actual v. 1001K expected)data crossed the wires.
• Selling over the remainder of the session would erase the early gains and push maturities into negative territory.
• Light selling up front saw the 2y tack on +1.3bps to 0.435%. Participants will be watching resistance in the 0.450% region over the coming days. 
• The 5y climbed +1.3bps to 1.580% after surviving an early test of support near 1.540%. Many traders are keeping a close eye on the 1.600% level as resistance there is guarded by the 200 dma. 
• The 10y added +1.8bps to 2.405%. The benchmark yield settled on minor resistance in the 2.400%2.425% region. 
• The 30y lagged, rallying +2.7bps to 3.221%. The yield on the long bond finished near a one-week high as action finished on resistance near 3.225%/3.250%. 
• A slightly steeper curve took hold as the 2-10-yr spread widened to 197bps. 
• Precious metals went off on their lows with gold -$3 @ $1296 and silver -$0.25 @ $19.39.
• Data: MBA Mortgage Index (7) and the latest FOMC minutes (14).

On other news.... 

Currencies 
Dollar Readies for Best Close in 11 Months: 10-yr: unch..2.398%..USD/JPY: 102.87..EUR/USD: 1.3317

• The Dollar Index trades near 81.90 as action looks likely to close at an 11-month high. Click here to see a weekly Dollar Index chart.
• The greenback is higher against all of its major counterparts. 
• EURUSD is -45 pips @ 1.3315 as trade readies for its lowest close since September. Fears of a Japan-like stagnation have weighed on the single currency in recent days with traders now shifting their focus to ECB head Mario Draghi's speech on Friday at the Jackson Hole Symposium. 
• GBPUSD is -115 pips @ 1.6610 as trade flushes to its lowest level in more than four months. Today's cooler than expected CPI data has pushed back Bank of England rate hike expectations with many now not expecting action until sometime next year. Today's session will see sterling close below its 200 dma for the first time since August 2013. Tomorrow, the latest Bank of England Monetary Policy Committee votes accompany CBI Industrial Order Expectations. 
• USDCHF is +25 pips @ .9090 as action contends with its best levels of 2014. Today's bid is correlated with the weakness in the euro and has action testing the key .9100 area.
• USDJPY is +30 pips @ 102.85 as trade flirts with its best close in four and a half months. A move through 103.00 puts the 104.00 area and the 2014 highs in focus. Japanese data due out tonight is limited to the trade balance. 
• AUDUSD is -15 pips @ .9305 as sellers take control for the first time in five days. The hard currency saw some early buying develop after the Reserve Bank of Australia minutes warned of ‘significant' uncertainty ahead while maintaining its view rates are likely to remain stable; however, trade was rejected at .9340 resistance and the 100 dma and is now contending with its lowest close in a week. RBA Governor Glenn Stevens will testify tonight before the House of Representatives' Standing Committee on Economics. 
• USDCAD is +60 pips @ 1.0945 as buyers take charge for the first time in seven days. Canada's wholesale sales will be released tomorrow.

Next Week In View




Economic Commentaries

Economic Summary: CPI in line with estimates; Housing Starts top expectations
Economic Data Summary:

• July CPI 0.1% vs Briefing.com consensus of 0.1%; June was 0.3%
• July Core CPI 0.1% vs Briefing.com consensus of 0.1%; June was 0.1%
• Scheduled to appear: As expected from the July PPI report, energy prices fell 0.3% in July after increasing 1.6% in June. Gasoline prices also fell 0.3% in July after increasing 3.0% in June. Food prices accelerated, up 0.4% in July from a 0.1% increase in June. Food at home prices, typically from grocery stores, increased 0.7%, which was the largest increase since August 2011. Fruits and vegetable prices, which were flat in July, was the only component of the grocery store index that did not report positive price growth. 
• July Housing Starts 1.093 M vs Briefing.com consensus of 964K; June was revised to 945K from 893K
• July Building Permits 1.052 M vs Briefing.com consensus of 1001K ; June was revised to 973K from 963K
• Scheduled to appear: The big news out of the housing data was an 8.3% increase, to 656,0000, in single-family construction. New single-family construction levels declined in both May and June after reaching roughly 650,000 in April. Since single family construction trends are typically stable, the two month decline suggested that housing construction may have peaked. While it is possible that the July gain could be a one-off rebound, it gives hope that the overall housing outlook may be on stronger footing then once thought.

Upcoming Economic Data:

• Weekly MBA Mortgage Applications due out Wednesday at 7:00 (Briefing.com consensus of ; Last Week was -2.7%)

Upcoming Fed/Treasury Events:

• FOMC Minutes tomorrow at 14:00
• Jackson Hole Fed Conference to be held Thursday August 21st-25th.  Fed Chair Janet Yellen to speak Friday August 22nd at 10:00 and ECB President Mario Draghi to speak Friday August 22nd at 14:30

Other International Events of Interest

• Great Britain's CPI fell 0.3% month-over-month (expected -0.2%; prior 0.2%), while the year-over-year reading increased 1.6% (consensus 1.8%; previous 1.9%). Separately, Input PPI fell 1.6% month-over-month (expected -1.1%; prior -0.9%) and Output PPI slipped 0.1% month-over-month (consensus 0.1%; previous -0.1%) 

Jason's Commentaries

One day ahead of the FOMC minutes, market is taking precaution not to let the gain in stock prices go down as much while Yellen might make some changes to her plans in monetary policies. Although there is drop in the unemployment rate(U3), the U6 did not indicate a drop. U6 was at a staggering 12.2%, twice of what the U3 standard is, which means that 6.2% of the population was actually having part time employment. This is definitely not how the normal economic market is like. With such employment situation, Yellen might have her hands forced to delay the full taper of the QE. Ahead of that, the defensive sectors are moving higher. On the technicals side, the S&P500 is approaching its all time high and there is a good chance that S&P500 is likely to drag the rest of the indices down.








Market Call: ABSTAIN

Date: 18 Aug 2014