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News and Events Digest
Friday, July 09, 2010 at 6:56:49 AM ET
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The Dow Jones Industrial Average ended up 120.71 points, or 1.20%, to 10,138.99. The S&P500 finished up 9.98 points, or 0.94%, to 1,070.25. The Nasdaq Composite increased 15.93 points, or 0.74%, to 2,175.40. On the NYSE, advancers outnumbered declining issues by 3.4 to 1 where consolidated volume came to 5.23 billion shares compared with 5.87 billion shares traded Wednesday. All sectors rose. The S&P's move from 1020 late Tuesday to 1070 early Thursday ushered in some consolidation before a strong finish. Thursday's finish was interesting as locals got caught short and the squeeze by the institutional traders continued after the cash close.
Since yesterday's close, TSMC Q2 sales beat f'casts on strong chip demand. Lawson Software shares fall after results in line but light guidance. Conceptus cuts Q2, fiscal 2010 outlook; shares plunge. Air Products ups Airgas offer to $63.50 a share. HP in potential $3.4 billion US Navy network deal. Citigroup expands Asia energy business. United June traffic up 3.5%, capacity rises 1.1%. China June car sales growth slowest in 14 months. No swaps with foreign cen banks in latest week - NY Fed. Fed's balance sheet little changed in latest week. Foreign central bank U.S. debt holdings fall - Fed. Money Supply: M-1 up $20.0 bln, M-2 up $11.9 bln (boost since mid-April). South Korea in surprise interest rate rise. Administration declines to cite China on currency. The Obama administration is preparing to unveil a revised deepwater oil drilling moratorium after a federal court refused on Thursday to reinstate an earlier ban. SNB Will Suffer €8 Billion In FX Interventions in Q2. The 10-year yield is up 2 basis points at 3.05%. Gold is -0.50 to $1,195.60/oz. Crude oil is +0.30 to $75.74/brl.
S&P bollinger band levels are 1140, 1077, 1014. S&P 13-wk ma 1124; 39ma 1113. The VIX is already approaching the lower band while the S&P is still below the mid-band. With seasonality so favorable for stocks, it's odd that the euro has such negative seasonality for late July and early August. Another thing to worry about is stocks rally sharply in bear markets and a 5% rally in a little more than one day is unusually sharp. Similarly, euro/yen seasonality suggested we'd rally to over 113 in July from the 107s, so it was somewhat mystifying to see it at nearly 112.50 in early Thursday trading.
Futures
(6:00 AM) S&P futures (-0.90 vs Fair Value -0.15). The range is +2 to -3. Japan moved down 0.7% the first hour and then trended 0.9% higher. Sinapore trended 0.7% higher after the open but it was all in by just after lunch and it looked like everyone left for the weekend. Hong Kong gained 1% in the first two hours and tacked on a bit after lunch, as well. India had an up and down 0.3% range day with a high 1.5 hours in, a low 2 hours later, a run back up to the high just before the close, and settle just below the open. Everything appeared set for Europe to turn higher at 5AM but London is a drag so far. The rally is interesting as 10-day volume is relatively strong and YOY even stronger, so this is a difference from seeing advances on declining volume even though the late rally on Thursday was on declining volume.
US Treasury Market Review
U.S. Treasuries saw the 10-year yield finished up 5 basis points at 3.03%. Treasury sells 10-yr TIPS at lower yield than seen. Fed To Offer $2.0 Billion In 84-Day Term Deposits Monday. US Treasury will auction off $69 billion of 3, 10 and 30 Year bonds.
$35 billion in 3 Year Bonds on July 12
$21 billion in 10 Year Bonds (reopening) on July 13
$13 billion in 30 Year Bonds (reopening) on July 14
Commodities Review
Crude Oil settled +$1.37 at $75.44/brl. Crude Oil Inventories Decline More Than Expected.
GOLD settled -$2.80 to $1,196.10/oz.
Reuters/Jefferies CRB Futures Price Index +1.27 to 259.51. To view chart: (http://quotes.ino.com/chart/index.html?s=NYBOT_CR&t=&a=&w=&v=d12).
Friday 8:30AM is the monthly crop report. Where is wheat going? It'll be interesting to see if some selling comes in regardless of the report as it's up over 20% in a little over a week. Given that so many markets are linked up in various ways, it's helpful to do the same technical analysis on linked items. For stocks, some traders are using euro/yen and some are using aud/yen and some are even using copper/gold. Capitalism is a thing of beauty the more you watch the way individuals adapt to conditions. It's a shame that Washington misses out on this beauty.
International Review
Tokyo Nikkei 225 (+49.58 / +0.52%)
Hong Kong Hang Seng (+328.10 / +1.64%)
Australia S&P/ASX 200 (+39.60 / +0.91%)
(6:00 AM)
UK FTSE 100 (-4.41 / -0.09%)
France CAC 40 (+18.07 / +0.51%)
Germany DAX (+27.57 / +0.46%)
FOREX
USD/JPY sent down to 88.40.
EUR/USD upside strength extended to 1.2720 and then pulls back to 1.2672.
AUD/JPY retests 77.295 overnight low.
AUD/USD pulls back to 0.8737.
GBP/USD rises to 1.5199.
Chinese purchases of JGBs explains USD/JPY weakness over last few weeks.
Vietnamese Hoard U.S. Dollars as Inflation Hedge.
SNB Will Suffer €8 Billion In FX Interventions in Q2.
(6:00 AM)
Dollar / Yen (+0.27 to 88.63)
Euro / Dollar (-0.0026 to 1.2672)
Looking Ahead...
Friday, July 9
Earnings: BSDM -0.07 ELN -0.05 PSMT 0.35 STRI 0.34
Economic Indicator: 10:30AM Weekly Leading Index.
Economic Indicator: 10:00AM Wholesale Inventories for May.
Economic Indicator: 6:00AM OECD Leading Indexes, Japan Composite Indexes, 7:00AM Canada Employment, France Ind'l Prod, Italy Ind'l Prod, UK PPI.
Monday, July 12
Earnings: ACU 0.5 AA 0.15 ATLO 0.24 AMR 0.01 AXR -0.09 AROW 0.5 ASBC -0.16 VOXX -0.01 BMS 0.55 BRKL 0.11 CDCS 0.29 CNBKA 0.56 CTAS 0.33 CBSH 0.58 CTO -0.01 CRRC 0.16 CSX 0.95 CVBF 0.15 MSN -0.08 LION -0.03 HTLD 0.16 HITK 0.55 IIIN 0.22 JOEZ 0.01 KMP 0.4 KMR 0.4 LPHI 0.57 MMR -0.21 MTOX 0.13 MTG -1 MFSF 0.12 NKSH 0.54 FIZZ 0.18 NVLS 0.6 OPTT -0.57 PBNY 0.09 RBCAA 0.27 RUE 0.26 SHAW 0.54 TPX 0.41 TXI -0.33 USAK 0 VALU 0.41
Economic Indicator: 9:45AM NFIB Small-Business Optimism for June.
Economic Indicator: Japan WPI.
Note: Sunday 7/11 solar eclipse.
Tuesday, July 13
Earnings: AIR 0.31 OZRK 0.56 EXL -0.09 FAST 0.44 INTC 0.43 OPTT -0.57 TRIB 0.15 YUM 0.54
Economic Indicator: 7:45AM Weekly retail sales.
Economic Indicator: 8:30AM Trade Balance for May.
Economic Indicator: 10:00AM JOLTS Survey for May.
Economic Indicator: 2:00PM Treasury Budget for June.
Economic Indicator: 5:00AM: UK Composite Indexes, Japan Confidence, European Monster Employment, 8:30AM: Canada Trade Balance, France CPI, UK CPI, ZEW Confidence.
Wednesday, July 14
Earnings: ACGY 0.27 ADTN 0.35 ASML 0.56 MSN -0.08 HCSG 0.2 IGTE 0.17 JTX 1.06 LSTR 0.48 MAR 0.28 NE 1.23 PPHM -0.09 TXI -0.34 UFPI 0.89 WABC 0.8 WINA 0.3
Economic Indicator: 7:00AM Weekly Mortgage Applications, 10:30AM Crude Inventories.
Economic Indicator: 8:30AM Retail Sales for June.
Economic Indicator: 8:30AM Import Prices for June.
Economic Indicator: 10:00AM Business Inventories for May.
Economic Indicator: 2:00PM FOMC Minutes.
Economic Indicator: UK Employment, 5:00AM EuroZone Ind'l Prod.
Thursday, July 15
Earnings: AMD 0.07 ALNC 0.55 ANGO 0.13 SCHW 0.15 CKSW 0.09 CBST 0.41 EDE 0.26 FCS 0.31 FEIM 0.02 GOOG 6.55 JBHT 0.36 JPM 0.72 KED 0.35 NXY 0.34 PBCT 0.09 PPG 1.41 SLP 0.04 TCB 0.27 VMI 1.08 VVUS -0.23 GWW 1.5 WWW 0.33
Economic Indicator: 8:30AM Initial Unemployment Claims, 10:30AM Crude Inventories, 4:30PM Money Supply.
Economic Indicator: 8:30AM NY Mtfg Survey for July.
Economic Indicator: 8:30AM PPI for June.
Economic Indicator: 9:15AM Ind'l Prod/Cap Util for June.
Economic Indicator: 10:00AM Philly Fed Idx for July.
Economic Indicator: 8:30AM Canada Factory Orders, BOJ Meeting, ECB Mthly, 4:00AM: Spain Composite Indexes, 7:30AM OPEC Monthly Report.
All Times Eastern
Economics
(7/8)
Initial Unemployment Insurance Claims Ease and Continued Claims Hit a New Low.
Same-Store Retail Sales Are Slightly Weaker Than Expected for a Third Month in a Row.
Credit Growth Drops More Than Expected From Sharply Downwardly Revised Data.
Money Supply: M-1 up $20.0 bln, M-2 up $11.9 bln June 28 wk (interesting that both have been boosted since the stock market started to flag in April).
Must Read Reflections From GMO's Edward Chancellor On The Sovereign Debt Crisis.
http://www.zerohedge.com/article/must-read-reflections-gmos-edward-chancellor
The Keiser Report: Markets! Finance! Drunk Brokers!
http://www.ritholtz.com/blog/2010/07/the-keiser-report-markets-finance-drunk-brokers/
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