标题: [转贴] Market Blog [打印本页] 作者: 沁颍 时间: 2015-4-9 09:06 标题: Market Blog
4/9/2015
U.S. Equity Futures (/ES) look relatively quiet this morning although down slightly ahead of weekly unemployment claims scheduled to be released momentarily. The trend has remained under 300,000 initial filings for several consecutive weeks now and will be a key level to watch after last week’s dismal monthly indication consequently soured market sentiment temporarily.
Treasury markets are also seeing little change overnight with the 10 year yield still at 1.88% with more bond auction activity slated for today. This CBOE Volatility Index (VIX) closed under $14 for the first time in April after yesterday’s session with little economic data to disturb the recent trend lower. However, volatility may likely begin to be tested over the upcoming weeks as a new round of earnings was unofficially kicked off by Alcoa (AA) last night. The bellwether company missed revenue targets which were primarily blamed on the stronger dollar likely becoming an overall theme with multi-nationals.
Several global markets are seeing multi-year highs today after Greece announced it will honor a loan payment to the ECB ahead of their deadline. Germany also released upbeat industrial production numbers to ease concerns in the region. Oil futures (/CL) are seeing some relief this morning after taking a painful 6% hit yesterday. Saudi Arabia was the latest scapegoat after announcing record production levels to add to an already problematic global inventory excess.
Stock Stories:
Bed Bath and Beyond (BBBY) – Taking a Bath – The home goods retailer missed quarterly estimates last night after aggressive promotions cut into profit margins with ever increasing online competition. Forward guidance was also reduced as a result with a recently popular wage increase in the works for employees. Shares are down 3% pre-market following the bad news.
Major Economic Reports:
Chain Store Sales-All Day
7:30 am CT – Weekly Jobless Claims
9:00 am CT –Wholesale trade
9:30 am CT – Natural gas Inventories
12:00 pm CT – 30-Year Bond Auction Results
Notable Earnings:
Thursday – 4/9:
Before Market: RAD, STZ, WBA
After Market: PSMT, RT
Friday – 4/10:
Before Market: N/A
After Market: N/A作者: 沁颍 时间: 2015-4-10 08:50
4/10/2015
U.S. equity futures (/ES) are posturing slightly higher this morning, just under all-time highs after the index improved by 1.2% so far this week. Weekly jobless claims came in less than expected which helped to appease concerns over the labor markets. Crude (/CL) was also a major catalyst in yesterday’s broad rally as several oil services companies saw aggressive buying after the recent route.
Global markets continue to scream higher with ongoing Government stimulus at the heart of the trend. Key European and Asian markets are hitting fresh 15 year highs today to close out the week as the shift in policy is fueling an equity buying frenzy with record level bond yields. As a result, the US Dollar Index (DX) is flirting with the century mark again which has also been a notable boon oversees as rates continue to decouple.
Earnings will be ramping up in earnest next week after a few dissapointments so far and the likely focus will be on how the strengthening dollar has played into U.S. companies’ overall performance over the last quarter. Very little is scheduled on the economic front today with the exception of some Fed speak and Import/Export prices out this morning.
Stock Stories:
General Electric. (GE) –– It’s electric! The conglomerate announced this morning that they are selling their majority stake in GE Capital and using proceeds to purchase $50 Billion worth of stock in an attempt to focus more on its core business. Shares are up 7% pre-market as a result.
Major Economic Reports:
7:00 am CT –Fed’s Lacker Speaks
7:30 am CT – Import & Export Prices
11:20 am CT –Fed’s Kocherlakota Speaks
1:00 pm CT – Treasury Budget
Notable Earnings:
Friday – 4/10:
Before Market: N/A
After Market: N/A
Monday – 4/13:
Before Market:
After Market: KMI作者: wsjboy 时间: 2015-4-23 11:28
4/23/2015
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Stocks rallied off of morning lows to finish Hump Day up about 0.5%. Small-caps lagged but Blue Chips set the tone on some corporate earnings. The Nasdaq (COMP) was strong and settled only 10 pts below its record high set in 2000. This morning, U.S. equity futures (/ES) are down slightly ahead of the opening bell as investors react to concerns about the Greek debt crisis, weaker economic data out of Europe, and unimpressive corporate earnings. Option Volatility remains at extremely low levels but hopefully we will see some upside today. The CBOE Volatility Index (VIX) looks too low at $12.71 with all of the economic headwinds but this could reverse higher quickly.
Bonds have continued to whip as investors can’t decide to buy or sell U.S. Treasures. The intraday moves have become exaggerated and it doesn’t look as if the gyrations will end anytime soon. Treasuries are a little higher this morning, in tandem with gains in European sovereigns as risk appetite diminishes. The 10-year yield has dropped over 2 bps to 1.95% in heavy trading. Equities are mixed with U.S. equity futures and most European bourses lower after disappointing data, in contrast to modest gains in most Asian markets. PMIs disappointed with China's flash reading falling to 49.2 (contraction), while the Euro manufacturing index sliding. U.K. retail sales unexpectedly declined too. The U.S. focus today will remain on earnings with a huge calendar on tap. Data includes March new home sales, the April flash PMI and weekly initial jobless claims.
Stock Stories:
Caterpillar (CAT) – Plowing ahead - The heavy industrial equipment manufacturer posted better than expected quarterly results this morning. The Companystill sees currency headwinds but they upped FY15 estimates above analyst expectations. The shares are cheering the report as they are up over 4% ahead of the opening bell.
Facebook (FB) – Liked?! – The social media company posted a slight miss on earnings last night after the close. The company stated that currency issues were to blame for the Revenue miss and reiterated that growth is intact. The anticipated move was 5% and the shares are down only 1.5% in the pre-market.
Before Market: AAL, AZN, BIIB, INFY, SPG, STT, TYC, XRX
After Market: N/A作者: wsjboy 时间: 2015-4-24 09:05
4/24/2015
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The tech-heavy Nasdaq (COMP) settled at an all-time high level and eclipsed the tech bubble highs of 2000 on Thursday. Option volatility sits at multi-year support as stocks revert back to all-time highs on Central Bank policy. The CBOE Volatility Index (VIX) sits at $12.48 and is showing that investors are confident but maybe too complacent despite mixed economic data and corporate Revenue misses. This morning, U.S. equity futures (/ES) are up slightly ahead of the opening belland the tech-heavy Nasdaq looks poised to spike higher on earnings from a few of its bellwethers.
Treasuries are lower this morning as the ‘Risk-On’ trade takes hold with equity rallies. The 10-year note yield rallied over 1.95% yesterday as Bonds reversed lower in the afternoon on Thursday. Overseas, German business confidence rose for the sixth straight month and the Greek saga continued as the country’s Prime Minister took his appeal directly to Germany’s Chancellor Merkel. Both leaders sounded somewhat optimistic after the meeting. However, EU officials cautioned that significant differences on several issues remain between Greece and its creditors as they are almost out of workable cash. Economic data is light today with only Durable Goods orders due. They have been weak going all the way back to last year summer, pressured by weak foreign demand and the negative effects of the strong dollar.
Stock Stories:
Google (GOOG/GOOGL) – Miss is good? - The internet search company missed quarterly EPS and Revenue numbers on its earnings call last night. The Companyblamed currency issues but competition is also heating up. The shares are cheering the mediocre report as they are up sharply ahead of the opening bell.
Amazon (AMZN) –Bad is Good? – The online retailer posted a slightly better than expected quarterly report. The company lowered Q2 revenue estimates and continues to lose money during most quarters. Despite this, analysts continue to upgrade and raise price targets as the shares are up sharply in the pre-market.
Major Economic Reports:
7:30 am CT – Durable Goods Orders
Notable Earnings:
Friday – 4/24:
Before Market: AAL, AZN, BIIB, INFY, SPG, STT, TYC, XRX
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Stocks rose in the morning to start the week yesterday but fell into negative territory as the day moved on. This morning, U.S. equity futures (/ES) are down modestly as investors may be becoming nervous ahead of the two-day FOMC meeting and a plethora of earnings. The Fed meeting begins today with the rate decision and statement tomorrow. There is not a press conference for this meeting. Economists continue to downgrade the upcoming GDP data as data is disappointing and jobs numbers were soft last month. Option volatility spiked higher on the reversal lower yesterday but still remains at extremely low levels.
Treasuries are basically flat as the benchmark 10-year yield hovers around 1.9%. Bonds were down sharply yesterday morning but rallied into positive territory as stocks dumped lower. Overseas, European equities were lower as they may be taking a break from their early year rally ahead of our Fed meeting. Greece continues to demand leniency on its debt issues while opposition from Euro-zone leaders gives a dimmer picture. Focus today will be on Apple (AAPL) earnings and the Consumer Confidence data.
Stock Stories:
Apple (AAPL) – iBeat! – The tech product maker beat estimates soundly on quarterly results after the close yesterday. The iPhone continues to sell well and the company expanded its buy-back program and increased its dividend. The stock is up slightly to record highs ahead of the opening bell.
After Market: AFL, AKAM, BWLD, CRUS, CLF, GPRO, KRFT, PNRA, TWTR, X
Wednesday – 4/29:
Before Market: ETN, EXC, GRMN, GD, GT, HES, MGM, MDLZ, NSC, SO, TWX, WM
After Market: BIDU, MTW, MAR, SAM, WMB, YELP作者: wsjboy 时间: 2015-4-29 08:37
4/29/2015
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Stocks started strong and fell mid-morning on Tuesday on reports of a U.S. ship being detained by the Iranians. This proved false and stocks rallied back to the flat level as investors shunned any downside concerns. Late day volatility was brought on by Twitter (TWTR) news on an early earnings release. This morning, U.S. equity futures (/ES) are down modestly as markets have become choppy ahead of the FOMC statement this afternoon. Not many economists are expecting any policy change as low inflation and a softer than expected jobs report last month may extend the first rate hike. The option market continues to believe that there is no downside risk to stocks as the CBOE Volatility Index (VIX) remains at extremely low levels. This could reverse higher quickly if the Fed statement signals something not expected.
Treasuries are down sharply again this morning and are looking to extend yesterdays massive slide lower. The benchmark 10-year yield may test the 2% level again as higher yields may be trying to predict a rate hike sooner than the equity market is predicting. Overseas, European equities are mixed is low volume trade and they may be waiting on results from our Fed meeting. Ahead of the FOMC meeting, we will get results on the economy this morning as the GDP number is due at 7:30 am CT. Investors will also focus on housing data and Oil Inventories this morning along with more earnings reports.
Stock Stories:
Twitter (TWTR) –Plucked! – The social media company had their earnings report leaked with about an hour left in the trading day. The stock immediately sold off a few percent. After the company halted shares and stated they missed expectations and lowered guidance, the stock ended the session down nearly 20%. The stock is flat from yesterdays dump ahead of the opening bell.
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Stocks took a dive yesterday as concerns over slow growth and low revenues caught up with the market. A positive Weekly Jobless claims number may have sparked investors to sell stocks as the data may support a rate hike. This morning, U.S. equity futures (/ES) are up slightly ahead of the opening bell. The CBOE Volatility Index (VIX) rose over 8% and final broke through the $14 level to the upside. We should expect some giveback today unless stocks turn negative again.
Treasuries are starting May on a negative note with yields going higher. A bearish tone has become firmly entrenched since yields broke out of their long standing range to the upside, with optimism over a Greek deal and supply also having weighed, along with better data yesterday. The 10-year yield has climbed to 2.07%. European bonds are mostly higher albeit on low volume. Overnight data showed China's PMI steady and Japanese core CPI rising while spending plunged. It's a busy day in the U.S. with April ISM, the PMI for April, final April consumer sentiment, April vehicle sales and March construction spending. Fed-speak resurfaces with comments from Mester and Williams, with only the latter a voter. Next week's economic calendar includes nonfarm payrolls, the ISM services report, and trade figures.
Stock Stories:
LinkedIn (LNKD) – Business doldrums - The Business social media company reported better than expected earnings after the bell last night. Despite the beat, the company lowered forward guidance. The shares are down 20% ahead of the opening bell and analyst downgrades are piling up.
Major Economic Reports:
Auto Sales – All Day
7:30 am CT –Fed’s Mester Speaks
8:45 am CT – PMI Mfg. Index
9:00 am CT – ISM Mfg. Index
9:00 am CT –Consumer Sentiment
9:00 am CT – Construction Spending
Notable Earnings:
Friday – 5/1:
Before Market: AON, CLX, CVX, DUK, KCG, MCO, VFC, WY
After Market: N/A作者: wsjboy 时间: 2015-5-3 23:30
May 3, 2015
Stocks ended the past week relatively flat as it showed little reaction to the economic data, earnings and the FOMC meeting. Changes in the FOMC statement may mean that they will be immediate in the reactions to data as they took out the time frame portion of the report. The horrible GDP number showed that the economy continues to under-perform despite near full employment and the low gas prices. We are seeing some big drops in specific Sectors and individual stocks recently. The past week saw big drops in the Pharma sector and stocks like Twitter (TWTR) and Facebook (FB) broke trends and sold off. Conservative guidance for their Watch also had market-leader Apple (AAPL) reeling for part of the week. The S&P 500 Index (SPX) was down 0.4% and the Blue Chip-heavy Dow Jones Industrial Average’s ($DJI) fell 0.3% for the week. The tech-heavy Nasdaq (QQQ) finished the week down 1.7% and the small caps (RUT, IWM) led losses as it fell over 3%.
Despite the relative weakness in equities, option volatility was stagnant. The CBOE Volatility Index (VIX) rose only 3% and can’t get away from the support level near $12. The moves in stocks has had no significant buying in options and we feel that traders are too complacent here. Treasuries fell sharply this past week as the moves lower gained momentum into the end of the week. Is the sell-off signaling that traders may be betting on a rate hike at the June Fed meeting? This was basically off the table as late as 7days ago but the dump in Bonds may have other ideas. The 10-year yield spiked to 2.1%, which we haven’t seen since the beginning of March. Oil futures (/CL) continued its grind higher and settled just below the $60 a barrel level. Inventories are still near record levels and production remains strong so its puzzling to see crude up.
Earnings will continue to sway markets this week as Pharma results are due. This is also a busy week for economic news ending with April employment data on Friday. The report that could affect rate-hike expectations and where the consensus is very wide. Weekly Jobless Claims were at low levels last week so many economists upped their predictions to over an expected 250K. Building up to the report will be updates on manufacturing with factory orders on Monday and updates on services with two related reports on Tuesday. The ADP employment report on Wednesday and jobless claims on Thursday will keep talk alive going into Friday.
Major Earnings for the Upcoming Week:
Monday:
A.M. – CVC, CAN, CMCSA, D, L, MGM, SYY, TSN
P.M. –APC, NUVA, THC
Tuesday:
A.M. – ADM, DTV, EOG, H, K, ODP, VMC, ZTS
P.M.– AGU, ALL, EA, DIS, FISV, FOSL, GRPN, HLF, NDLS, SCTY, ZU
9:00 am CT – Wholesale Trade作者: wsjboy 时间: 2015-5-5 23:37
5/5/2015
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Equities started off the week in positive territory but fell off of session highs into the close. Volumes were extremely light but the Bulls led the markets on Monday. This morning, U.S. equity futures (/ES) are down modestly ahead of the opening bell as investors await more earnings and economic data. 75% of S&P 500 companies have reported earnings and many companies have lowered forward guidance. In the wake of the lackluster earnings, investors have remained on the sidelines with the market at record levels as volumes remain weak. Lower than expected first quarter GDP and the possibility that interest rates will soon be raised are other factors that have kept the market range-bound.
Treasuries are modestly higher this morning after once again sliding yesterday. Bonds were strong in the morning but quickly traded into the red as the day went on. Many market ‘Experts’ are calling for lower bonds and higher rates but this scenario has not played out over the last 10 years. Gains in German Bunds amid safe haven buying on Greek concerns helped spark some demand for the Treasury note. Reports of significant differences between Greece and its creditors are again unnerving investors. In other news, U.K. construction PMI dove amid election uncertainties. Today's U.S. releases will be of interest, and they include the April ISM non-manufacturing index, the Services PMI, March trade numbers and weekly chain store sales. Earnings reports today include Walt Disney (DIS), DirectTV (DTV), Mylan (MYL), Herbalife (HLF) and Kellogg (K).
Stock Stories:
Apple (AAPL) – Rut - The tech product maker saw a swift reversal yesterday after rallying earlier in the session. Tax probes in the EU and mixed reports on the new Watch have investors taking profits after their last earnings report. The shares are down slightly ahead of the opening bell.
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Yesterday saw a wide-ranging fall for stocks despite a slight rally in Small Caps (IWM) as the Pharma sector spiked higher. This morning, equity futures (/ES) are indicating a more downside pressure as they are in the Red but have recovered from lows. Global equity markets are falling as Bond Yields rise in the Euro-Zone. Fed Chair Yellen stated that stock valuations are high yesterday during a meeting with the IMF’s LaGarde. Higher oil prices (/CL) recently have driven speculation that inflation may pick up. Crude is now firmly above $60 a barrel although they dropped significantly from morning highs above $62. Option volatility spiked again from over-sold levels yesterday. The CBOE volatility Index (VIX) rose above the $16 level at one point and should be strong if stocks stay in negative territory.
Treasuries are modestly higher today as the recent slide may look to take a break. The 10-year Note rate remains near year-to-date highs at 2.2%. Euro-Zone yields have spiked significantly and is being led by the German Bund whose yields have gone from flat to over 0.7% in a short period of time. The Moves may are significant as volumes and market depth are thin. U.S. investors will be watching the weekly jobless claims data, the Challenger job cuts report, and the weekly natural gas inventory data today.
Stock Stories:
Tesla (TSLA) – Driving lower - The electric car maker posted better than expected EPS but missed on top-line Revenue. The company stated operating leverage is expected to improve this year, with revenue and gross profit both growing more quickly than operating expenses. The shares are down 4% ahead of the opening bell.
Major Economic Reports:
Chain Store Sales
7:30 am CT – Weekly Jobless Claims
9:30 am CT – Natural gas Inventories
Notable Earnings:
Thursday – 5/7:
Before Market: ALU, MT, GOGO, MWW, OWW, PCLN, SEAS, TAP, TIME, VC
After Market: ED, MED, NVDA, RMAX, TSO, ZNGA
Friday – 5/8:
Before Market: AOL, NILE
After Market: N/A作者: wsjboy 时间: 2015-5-11 09:16
5/11/2015
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Friday saw stocks spike higher as the April Jobs Data was seen as a positive. This morning, equity futures (/ES) are basically flat as they look for direction. Asian markets rose following China’s rate cut, but European shares lagged due to concerns about Greece. U.S. investors have little to watch today as few pieces of economic data are due to be released. Option volatility is once again lagging near downside support and may be stagnant again today.
Treasuries are lower, in tandem with losses in European bonds on the continued stalemate on Greece. Bonds were mostly higher in Asian trading in follow-through from the "Goldilocks" jobs report. The 10-year Treasury yield has risen to 2.18% currently, with the German Bund rate up also. The Treasury auctions this week could keep bearish pressures on Treasuries in the near term too. In overnight news, the Peoples Bank of China cut its 1-year lending rate, which drove the Shanghai index over 3% higher. The Bank of England left policy unchanged. The FTSE continues to bask in the political Conservative victory. There's not a lot on the U.S. calendar today, but it's just a compilation of already known employment stats, so it won't provide any new information. This week's key releases are April retail sales (Wednesday), import prices (Wednesday), industrial production and the May Empire State manufacturing index (Friday).
Stock Stories:
Dish network (DISH) – Radar! – The satellite provider posted mixed earnings results this morning as Revenue missed slightly. The company added over 500K new subscribers and lost only about 145K during the quarter. The shares are slightly higher ahead of the opening bell.
Major Economic Reports:
9:00 am CT – Labor Market Conditions Index
Notable Earnings:
Monday – 5/11:
Before Market: ACT, DF, PLUG
After Market: MBI, RAX, USAT
Tuesday – 5/12:
Before Market: IFF
After Market: MCK, Z作者: aimei 时间: 2015-5-13 04:55
月饼MM 去那儿了？
谢谢花哥分享作者: wsjboy 时间: 2015-5-13 09:11
5/13/2015
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U.S. Equity Markets could have been described as indecisive in yesterday’s trading with an early double digit loss in the (/ES) S&P 500 index futures temporarily erased mid-day before yet another weak close. Bond yields saw violent swings throughout the session which fueled the uncertainty as the 10 year treasury note reached as high as 2.36%, a new intra-day high for 2015. Higher yields are already being blamed for a poor mortgage application report which dropped 3.5% over the last week.
Gold settled at the highest price in over a week at just under $1200 an ounce, thanks to a weaker dollar. Oil (/CL) also peaked above $60 a barrel after initial signals hinted of a decline in the supply chain contributed by domestic production. Oversees, OPEC also raised projections for crude citing stronger global demand into next year. The CBOE volatility Index (VIX) showed signs of confusion yesterday trading in both directions before finally closing at the $13.85 level which is near the recent average.
Investors are eagerly awaiting retail sales numbers due out momentarily as a pivotal component of the Fed’s overall criteria when deciding the right time to begin raising rates. Strong consumer buying may become the tipping point as far as the reality of an eventual hike. However, a recent slump in several major retailer's earnings report have investor's questioning the strength of the U.S. consumer even with the recent oil reprieve. Import prices, business inventories, and a 10 year bond auction will round out key data during today’s session.
Stock Stories:
Macy’s (M) – Shopping Spree! - The high-end retailer is slumping 3% pre-market after seeing both revenue and eps slip during the previous quarter. A generous $1.5 Billion share repurchase plan boost along with a dividend hike wasn't enought to impress investors as they see yet another example of a company trying to get creative after slipping on performance.
Major Economic Reports:
6:00 am CT – MBA Purchase Applications
7:30 am CT – Retail Sales
7:30 am CT – Import & Export Prices
9:00 am CT – Atlanta Fed Business Inflation
9:00 am CT – Business Inventories
9:30 am CT – Oil Inventories
12:00 pm CT – 10-Year Note Auction Results
Notable Earnings:
Wednesday – 5/13:
Before Market: IGT, M, RL
After Market: CSCO, JACK, SHAK
Thursday – 5/14:
Before Market: KSS, MANU, PBH
After Market: JCP, JWN, LOCO, SYMC作者: wsjboy 时间: 2015-5-15 10:27
5/15/2015
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The Benchmark S&P 500 Index (SPX) settled at all-time highs yesterday as stocks rallied on another dismal inflation report. The PPI number came in slightly negative and may be signally low inflation persistence. There is no more using weather as an excuse as prices drop on low demand from consumers. This morning, equity futures (/ES) are suggesting a modestly higher open as the market tries to build on yesterday’s gains. If stocks remain in positive territory, the Dow Industrials ($DJI) may also hit all-time highs as it settled just 0.2% below the mark at yesterday’s close. Option volatility continues to grind lower and remains in a tight range at over-sold levels. Earnings season is basically over and the results were mixed but the Bulls continue to push equities higher.
Treasuries are a little firmer, alongside gains in global bonds, though volume was on the light side. Stocks are also mostly higher, with the exception of China where energy and utility shares dropped. The dollar is up too and may have bottomed in the near-term. A major catalyst for the markets were comments from ECB's Draghi who reassured yesterday that QE would be implemented in full. Meanwhile, the IMF noted little progress on Greek talks, and is not optimistic. There wasn't a lot of data overnight, but the U.S. calendar is interesting today with April industrial production, the May Empire State manufacturing index and the preliminary May consumer confidence index.
Stock Stories:
United Parcel Service (UPS) – Delivering – The delivery behemoth saw some unusual option activity yesterday. Call volume was five times more than the Puts and the stock rose 1.2% on Thursday despite no news. Today, the company received a key analyst upgrade and investors are cheering the news as the shares of (UPS) are up 1% ahead of the opening bell.
Major Economic Reports:
7:30 am CT – Empire State Mfg. Survey
8:15 am CT – Industrial Production
9:00 am CT – Consumer Sentiment
3:00 pm CT – Treasury Intl. Capital
Notable Earnings:
Friday – 5/15:
Before Market: N/A
After Market: N/A作者: wsjboy 时间: 2015-5-17 12:20
RED Option – Weekend Update
May 17, 2015
Despite more downbeat news from the economy, stocks continue to trudge to new highs. The second-quarter is getting off to a rough start as weak payroll growth in the April employment report was followed up this past week by flat retail sales and a reversal for consumer sentiment. Economists were optimistic that consumer spending would pick up in April as the weather excuse was gone and low energy prices were still in favor. The Fed also uses consumer sentiment as a leading indicator but that number on Friday saw its steepest decline in over 3 years. Weekly jobless claims continues to be the only bright spot in an otherwise dismal spring. The economy across sectors is showing cracks and not much of a rebound at all from what the FOMC told us were the "transitory" setbacks to start the year. If the pace does not pick up, many will feel those first-quarter setbacks are really a fundamental economic slowing. As we said before, stocks continue to shun the glaring misses and feel the Fed will once again support risk assets such as stocks. The S&P 500 Index (SPX) was up only slightly but finished the week at record highs. The Blue Chip-heavy Dow Jones Industrial Average’s ($DJI) rose slightly also but finished just short of record territory. The tech-heavy Nasdaq (QQQ) finished the week up 0.8% and the small caps (RUT, IWM) finished on the plus side by 0.6%.
Option Volatility was choppy to start the week but once again fell into the close of the week. The CBOE Volatility Index (VIX) fell to our multi-level $12 support level once again and the complacency continues to baffle and frustrate us. Oil futures (/CL) finished the week in a relatively tight range but seems to be coiling for a move in either direction. Fuel prices have begun to grind higher over the last few weeks so the ‘Gas tax savings’ that was supposed to lift consumer spending may be over. For the Fed, the volatility in the bond market is evidence that even the most careful dedication to transparency may not fully limit market movements. The moves in the benchmark 10-year yield have been viscous as low volumes and liquidity exaggerate the moves. The 10-year yield ended the week at 2.15 percent, but it took a massive Treasury rally to cause the late fall in Yields. The moves may signal a pick-up in equity volatility may be overdue.
The week starts off slow on the economic front. The two indications on one of the most disappointing sectors of the economy are on tap as housing data is due on Monday and Tuesday. FOMC minutes on Wednesday will focus attention on the internal debate at the Fed and how dominant the view is that first-quarter slowing was only temporary. Thursday's calendar is very heavy with reports on jobless claims and existing home sales standing out, both indicators among the calendar's best performers. Friday wraps up the week with the consumer price index and whether it correlates with other data that show, despite the rise underway in gasoline prices, there are just about no inflationary pressures in the economy.
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The ‘Never short a boring market’ seems to be in play early this week as Monday saw a modest rise. Both the Dow industrials (DIA) and the S&P 500 (SPX) settled at all-time highs albeit on low volumes. Economic data is being ignored as Central Bank action and optimism have the Bulls in charge. Ahead of the opening bell this morning, equity futures (/ES) are suggesting another modestly higher open.The CBOE Volatility Index (VIX) actually rose slightly yesterday despite the rise in equities. The ‘Fear Gauge’ remains at low levels and we would possibly need a catalyst to send stocks lower at this point.
Bonds and stocks are higher around the world. Gains have been paced by European markets, inspired by comments from ECB's members, who indicated the central bank will accelerate bond purchases slightly in May and June and could extend the QE program beyond September next year if necessary. Also, the European Commission President’s optimism on a quick deal on Greece added support. Data also factored in as German and U.K. inflation unexpectedly declined. There isn't a lot on the U.S. calendar today with just April housing starts and weekly chain store sales. This lack of news may once again provide support for markets despite the frothy valuations.
Stock Stories:
Home Depot (HD) – Wilting – The home improvement reported better than expected EPS but the Revenue was only in-line. The company guided FY15 higher than expected but left out charges such as its recent data breach. The shares are up slightly ahead of the opening bell.
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Thursday saw low volumes and minimal losses for the major indices in stocks. M&A activity is keeping a bid in stocks and comments from the Fed’s Kocherlakota also supported riskier assets such as stocks. This morning, equity futures (/ES) are slightly lower ahead of the GDP report which is estimated to show a decline of nearly 1%. Concerns about an interest rate hike continued to put resistance in equities just below all-time highs. The Benchmark S&P 500 Index (SPX) is still up 1.7% for the month as the ‘sell in May and go away’ theory is shot once again. Option Volatility continues to show little concern from investors to the downside as the VIX sits near the $13 level.
Treasuries are mixed this morning as the 30-year Bond is out-performing shorter-dated Notes. The 10-year Treasury yield is at 2.12% and has risen from 1.6% since the end of January.U.S. equity futures are lower in sync with declines in European bourses. Overnight news was mixed but Greek fears continued to dominate. German retail sales were better than expected, but U.K. confidence disappointed, while the Swiss economy unexpectedly contracted. Today's U.S. focus will be the revised Q1 GDP report, the May Chicago PMI and consumer sentiment reports. Meanwhile, next week's calendar includes a number of key reports, as is the typical to start the new month, with the May jobs report headlining Friday.
Stock Stories:
Altera (ALTR) – Rumored – The shares of ALTR are up over 5% in the premarket as rumors swirl of a takeover by its rival Intel (INTC). M&A activity has picked up in the chip sector and volatility is rising as takeovers are in play.
