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Market Commentary |
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| News and Events Digest |
| News and Events Digest |
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News and Events Digest
Friday, June 18, 2010 at 8:44:39 AM ET
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The Dow Jones Industrial Average ended up 24.71 points, or 0.24%, to 10,434.17. The S&P500 finished up 1.43 points, or 0.13%, to 1,116.04. The Nasdaq Composite increased 1.23 points, or 0.05%, to 2,307.16. On the NYSE, declining issues outnumbered advancers by 1.01 to 1 where consolidated volume came to 5.25 billion shares compared with 5.66 billion shares traded Wednesday. Six out of ten sectors managed to gain. Thursday was interesting in that even though oil prices were weaker, the energy sector was sticking to the S&P like white on rice. We just couldn't shake it. Then the speculitive issues started getting bid up in the afternoon and the whole thing just became a bit uncomfortable.
Since yesterday's close, Smart Modular Q3 results tops Street, sees strong Q4. Appalachia mine permit system suspended; coal miners angry. General Dynamics gets NASA contract up to $642M. Motorola to buy back debt, pump cash into spinoff. U.S. money supply: M-1 down $10.1 bln, M-2 up $7.3 bln. No swaps with foreign cen banks in latest week - NY Fed. U.S. Fed's balance sheet edges up in latest week. Foreign central bank U.S. debt holdings rise - Fed. Tax bill fails second test vote in U.S. Senate. White House moves to weaken shareholder rights. UAW vows to 'pound' Toyota in unionizing effort. UBS Customers May Have `Mere Hours' to Report to IRS as Swiss Seal Accord. The 10-year yield is up 1 basis point at 3.20%. Gold is -3.20 to $1,245.50/oz. Crude oil (Aug) is -0.62 to $77.42/brl.
Today is Quadruple Witching. S&P bollinger band levels are 1123, 1084, 1045. S&P 13-wk ma 1146; 39ma 1112. The S&P made a slightly lower high and low but so did the VIX. FedEx remains at previous lows. Interest rates having backed off is a positive for stocks, so hopefully oil prices will do the same. Utilities wouldn't be expected to lead further if seasonality is any indication but would likely hold up better than most on any shakeout in the interim. Probably the reason that this 8-day rally is so unusual is that the trigger was having become so oversold from an Arms standpoint. Our short-term relative price measurement (instrument relative to its recent self) shows everything positive, even bonds and dollar/yen. This doesn't normally last long, so somethings got to break. Oil would be the obvious. Maybe corn or wheat. Or, maybe everything softens up for a week or two. One thing that started in 2007, stopped in late 2008 and 2009, but has picked up again even more so than ever is stocks and interest rates moving together. In 2010, oil prices have joined to make it a three-some. We don't want to say it's creepy but 2010 sometimes feels like we've entered some sort of twilight zone. You see these three moving up in down in actual harmony and then all the declarations out of Washington...it's all very strange.
Futures
(6:00 AM) S&P futures (+0.30 vs Fair Value +0.24). The range is +2 to -3. Japan's high was the open and slipped off 0.3% in the morning, picked up closer to the open after lunch and then fell off to the day's low just before the close but the total slippage was less than 0.6%. Singapore was similar but with a little more strength before lunch and scraping the lows before and after lunch but it's the same -0.6% move. Hong Kong remained flat after the early high, so maybe London can hold firm until later in the day. India generally trended lower by 0.8% after the open and the 1PM bump up was just that. Europe's high was early on but London has held up better while Germany slipped off 0.6%. 10-day volume YOY remains relatively strong.
US Treasury Market Review
U.S. Treasuries saw the 10-year yield finished down 7 basis points at 3.19%. $108 Billion In 2, 5, And 7 Year Treasury Issuance On Deck. Here is the breakdown of the upcoming bond issuance:
June 22, $40 Billion 2 Year Notes, $42 Billion issued last
June 23, $38 Billion 5 Year Notes, $40 Billion issued last
June 24, $30 Billion 7 Year Notes, $31 Billion issued last
Commodities Review
Crude Oil (Aug) settled -$0.68 at $78.04/brl. (July fell 88 cents to settle at $76.79) further out fell less, or even a gain for 2011/12 winter
GOLD settled +$18.20 to $1,248.20/oz. Dollar/yen hasn't done anything for a month, so it's interesting that seasonality suggests a good downside test over the next week or so. 2004 was generally pretty stable for dollar/yen but there seems to be a lot of issues going on that we didn't have in 2004, so we'll see how it plays out.
Reuters/Jefferies CRB Futures Price Index -0.85 to 263.30. To view chart: (http://quotes.ino.com/chart/index.html?s=NYBOT_CR&t=&a=&w=&v=d12). If grains are in for a rough year like 2004, that 3.80 in corn may be it for the upside. We have some nasty seasonal suggestions following a nice bounce. Wheat's had a nice runup too. Beans less so but used to lag and may be getting back to being a lagger this year.
International Review
Tokyo Nikkei 225 (-4.38 / -0.04%)
Hong Kong Hang Seng (+148.31 / +0.74%)
Australia S&P/ASX 200 (+24.60 / +0.54%)
(6:00 AM)
UK FTSE 100 (+21.28 / +0.41%)
France CAC 40 (+4.64 / +0.13%)
Germany DAX (+6.79 / +0.11%)
FOREX
EUR/USD testing 3-week high at 1.2410.
GBP/USD accelerates towards 1.4885 in the European start.
USD/JPY picks up from 3-week low at 90.50 amid a generally weak session.
EUR/GBP is at the day's low of 0.8330.
EUR/JPY moving erratically between 112.37 and 112.77 (peaked yesterday at 113.17).
China tells G20 to keep its hands off the yuan.
Medvedev Says He Cannot Rule Out Euro Collapse Amid Region's Debt Crisis.
Polish Voters May Endorse Euro Adoption in Choosing Kaczynski's Successor.
(6:00 AM)
Dollar / Yen (-0.33 to 90.67)
Euro / Dollar (-0.0016 to 1.2373)
Looking Ahead...
Friday, June 18
Earnings: ALOY MTLK
Economic Indicator: 10:30AM Weekly Leading Index.
Economic Indicator: 8:30AM Canada Comp Indexes, BOJ Minutes, UK CBI Survey, Germany PPI, UK Money Supply.
Note: Quadruple witching.
Monday, June 21
Earnings: AZZ 0.57 CKR 0.19 DRI 0.88 FLOW -0.02 GRB 0.04 FUL 0.38 MLHR 0.18 LEN 0.00 PALM -0.68 SONC 0.21 SCS -0.06
Economic Indicator: 4:00AM France Composite Indexes.
Tuesday, June 22
Earnings: ADBE 0.42 APOG -0.05 CMC -0.13 EBF 0.36 JBL 0.34 JEF N/A PRGS 0.53 RHT 0.18 WAG 0.57
Economic Indicator: 7:45AM Weekly retail sales.
Economic Indicator: 10:00AM Existing Home Sales for May.
Economic Indicator: 10:00AM Richmond Mtfg/Services Surveys for June.
Economic Indicator: Eurozone Curr Acct, 5:00AM: Germany Composite Indexes, Germany IFO, Germany IFO Services, 7:00AM: Canada CPI.
Wednesday, June 23
Earnings: AVAV 0.59 BBBY 0.48 KMX 0.33 NKE 1.05 PAYX 0.31 RAD -0.14 SMTS 0.12 SPEC 0.23
Economic Indicator: 7:00AM Weekly Mortgage Applications, 10:30AM Crude Inventories.
Economic Indicator: 10:00AM New Home Sales for May.
Economic Indicator: 2:15PM FOMC Policy Announcement.
Economic Indicator: 8:30AM: Canada Retail Sales, UK BOE Minutes, 9:00AM Belgium Confidence, Italy Consumer Confidence.
Thursday, June 24
Earnings: ACN 0.69 AMN 0.70 MOC 0.05 CAG 0.40 DRI 0.88 DFS 0.09 FINL 0.15 HRB 2.04 LEN 0.00 MKC 0.45 ORCL 0.54 RIMM 1.34 RBN 0.21 SNX 0.68 TIBX 0.13 TIGR -0.02
Economic Indicator: 8:30AM Initial Unemployment Claims; 4:30PM Money Supply.
Economic Indicator: 8:30AM Durable Goods Orders for May.
Economic Indicator: 11:00AM KC Fed Survey for June.
Economic Indicator: Eurozone Industrial Orders, Aussie Composite Indexes, 11:00AM: Mexico Composite Indexes.
All Times Eastern
Economics
(6/17)
CPI Growth Rates Slow After Nearing the Normal Recovery Average and Normally Wouldn't Pick Up Until 2011.
Initial Unemployment Insurance Claims Could Flatten Out Closer to 500,000 if Similar to the 1970s.
Current Account Deficit Improvement Fades Since Q209.
U.S. Leading Index Growth Rates Weaken from Near the Mid-1970s Recovery High; Lagging Index Remains Negative But Growth Rates Bottomed; Economy Bottomed in June09 (Long Leading Indicators suggest a bit of nasty weather is brewing).
Philly Fed Idx is Weaker Than Expected Weighed Down by Inflation and Employment Indicators; Prices Paid Back to Near the Overall Index.
U.S. money supply: M-1 down $10.1 bln, M-2 up $7.3 bln June 7 wk.
Chanos Shorting Oil Majors, Ford; Discusses Ways To Express Chinese Bearishness
http://www.zerohedge.com/article/chanos-shorting-majors-ford-discusses-ways-express-chinese-bearishness
Open outcry audio samples
http://www.youtube.com/user/tradersaudio
Peak Oil discussed previously by Matt Simmons is very interesting (7 parts on real visionary topics).
http://www.youtube.com/watch?v=4YvW3j2jYzY
Markets (oil price and interest rate growth rates relative to the stock market):
Long term: Positive 6/17.
Intermediate: Neutral 6/9.
Short-term: Neutral 6/11.
Sectors (basic materials and energy growth rates relative to the other sectors):
Long term: Neutral 6/8.
Intermediate:Neutral 6/7.
Short-term: Neutral 6/2.
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