Dow +237.77 at 17483.01, Nasdaq +56.73 at 4984.62, S&P +30.15 at 2053.19
It seems like market is setting up for a reversal. Market was finding the support at the early session and it turns out the support level is a strong hold. Eventually more buyers came in and bring the market higher. Futures were down on Sunday after the Paris's incident but Monday managed to gap up at the opening.
Mixed performance across Asian and European markets to start the week but most managed to recover in the late session. France market still saw a slight drop after the incident.
Market Summary
Industry Watch
Strong: Energy, Materials, Health Care, Consumer Staples
Weak:
Other Market Moving Factor:
- Energy sector rebounds from last week's 5.5% dive
- Marriott (MAR) to acquire Starwood Hotels (HOT) for $72.08/share
[BRIEFING.COM] The stock market began the trading week with a broad-based rally, which unfolded after a range-bound start to the trading day. The S&P 500 gained 1.5% while the Nasdaq Composite (+1.2%) underperformed throughout the session.
Overnight, it was reported that the Japanese economy has re-entered recession for the second time in as many years as Q3 GDP contracted 0.2% quarter-over-quarter (expected -0.1%; last -0.3%), according to the preliminary reading. Naturally, that news was met with hopes for more monetary support from the Bank of Japan, which boosted global equities while the yen retreated, sending the dollar/yen pair higher by 0.5% to 123.20. That being said, Japan's Nikkei could not stay in the green, falling 1.0%.
Once the focus turned to the U.S., stocks began the day with slim losses, but the opening weakness was erased promptly. The S&P 500 spent the first two hours of the day just above its flat line, but the index extended its gain during the afternoon with the energy sector (+3.3%) setting the pace.
The energy space extended its lead during afternoon action, aided by a 2.5% spike in crude oil, which put a sizable dent into last week's 8.2% decline. For its part, the energy sector was able to erase almost half of its 5.5% drop from last week.
Unlike energy, the remaining cyclical groups settled behind the broader market with the top-weighted technology sector (+1.4%) ending just behind the benchmark index. Large cap sector components had a solid showing throughout the day while chipmakers rallied into the close with the PHLX Semiconductor Index ending higher by 1.3%.
Elsewhere, financials (+1.3%) and consumer discretionary (+1.2%) spent the morning below their flat lines, but their early losses were a distant memory by the close. Notably, the discretionary sector advanced with homebuilders and retailers overshadowing losses in travel booking names like Expedia (EXPE 122.53, -2.67) and Priceline (PCLN 1266.87, -30.88). The pair lost 2.1% and 2.4%, respectively, following weekend terrorist attacks in Paris.
Staying in the discretionary sector, Urban Outfitters (URBN 22.67, -1.82) lost 7.4% ahead of its quarterly report with today's decline following eyebrow-raising news that the company acquired The Vetri Family group of restaurants. In other M&A news of note, Starwood Hotels (HOT 72.27, -2.72) agreed to be acquired by Marriott (MAR 73.72, +0.98) for $72.08/share.
Treasuries held gains during overnight action, but they returned to unchanged by the close with the 10-yr yield ending at 2.27%.
Investor participation was essentially in line with average as more than 830 million shares changed hands at the NYSE floor.
Today's economic data was limited to the Empire Manufacturing Survey for November, which registered a reading of -10.7. That was above the prior month's reading of -11.4, but below the Briefing.com consensus estimate, which was pegged at -6.0.
Tomorrow, October CPI (Briefing.com consensus 0.2%) will be reported at 8:30 ET, October Industrial Production (expected 0.1%) will be announced at 9:15 ET, and the November NAHB Housing Market Index (consensus 64.5) will be released at 10:00 ET.
Global Market
ASIA
The Asian equity markets closed mixed, after most of Asia opened up decisively negative in response to the terror attacks in Paris late Friday afternoon. There was an initial move to “safe-havens” with gold moving up ~0.5%, while the yen saw some strength early on. That strength was short-lived, however after Japan released its Q3 preliminary GDP, which confirmed its second recessionary reading in the past 2 years, while missing expectations at -0.2% (vs -0.1%e). The fall in the yen after the release likely represented the bias that the BOJ would take additional stimulus measures to help support the economy. The Nikkei did not see much benefit to that notion, with the index closing down 1.0%. The Shanghai was one of the few bright spots in the region, closing the day up 0.7%. The index may have seen a boost after IMF chief Lagarde seemed to signal her vote of approval for the yuan to be included in the IMF’s reserve currency basket.
Economic data
Equity Markets
FX
EUROPE
Major European indices trade in mixed fashion with UK’s FTSE (+0.4%) showing relative strength. European stocks lurched lower at the start in reaction to the weekend terrorist attacks in Paris, but the early weakness has been retraced. Meanwhile, the euro is lower by about 0.4% against the dollar, trading near 1.0725.
Closing Prices
The Asian equity markets closed mixed, after most of Asia opened up decisively negative in response to the terror attacks in Paris late Friday afternoon. There was an initial move to “safe-havens” with gold moving up ~0.5%, while the yen saw some strength early on. That strength was short-lived, however after Japan released its Q3 preliminary GDP, which confirmed its second recessionary reading in the past 2 years, while missing expectations at -0.2% (vs -0.1%e). The fall in the yen after the release likely represented the bias that the BOJ would take additional stimulus measures to help support the economy. The Nikkei did not see much benefit to that notion, with the index closing down 1.0%. The Shanghai was one of the few bright spots in the region, closing the day up 0.7%. The index may have seen a boost after IMF chief Lagarde seemed to signal her vote of approval for the yuan to be included in the IMF’s reserve currency basket.
Economic data
- Japan
- Q3 prelim GDP: -0.2% vs -0.1%e
- Annualized GDP: -0.8% vs -0.2%e
- New Zealand
- Q3 Retail Sales: +1.6% vs 1.4%e
- Oct Performance Services Index: 56.2 vs 59.0in Sep
- Australia
- Oct New Motor Vehicle Sales: -3.6% vs +5.5% in Sep
Equity Markets
- Japan’s Nikkei declined 1.0%. The Nikkei had been down over 1.5% lower earlier in the day, and managed to claw back by 0.5% by mid-session. But the index was relatively capped at that point, with a tight trading range for the duration of the day. Energy was the only sector to close positive on the day, with a 2.3% gain. Consumer Discretionary underperformed the broader market by 1.6%, while IT (-1.4%) and Materials (-1.1%) also lagged.
- Hong Kong’s Hang Seng declined 1.7% and finished at its lows in a seesaw session. Trading in the afternoon was accented by a steady downtrend in the market, with losses in the financial and gaming groups weighing. Among the notable gaming stocks that were hit due to concerns after the terror attacks were Sands China and Galaxy Entertainment, both both finishing the session down ~2.6%. On that same chip, air carriers were also down, with Air China closing 3.7% lower, China Southern Air was not far behind at -3.5%
- China’s Shanghai Composite rose 0.7% after being down 1.5% shortly after the start of trading. Participants bought the dip, bringing the Mainland index to just around the unchanged level. More aggressive buying emerged in the final hour to tip the market back into positive territory. Bucking the trend of the broader market were Brokerage stocks, which saw selling pressure after regulators increased margin deposite requirements on new trading accounts, to be effective at the beginning of next week. Of the brokerage names, CITIC Securities and Haitong Securities fell 3.3% and 3.0%, respectively, in response to the news.
- India’s Sensex rose 0.6% today. The benchmark opened over 100 points down before clawing its way back into the green. Indices were led higher by a rally seen in financials and consumer durables stocks. Among the 30 stocks in the index, 23 closed the session to the plus side. The BSE bankex was the top sectoral gainer, ending with 1.5% gain. Heavyweights Tata Steel and ICICI Bank managed to close up 3.4% and 2.1%, respectively.
FX
- USD/CNY -0.06% at 6.3701
- USD/INR -0.16% at 65.9962
- USD/JPY +0.42% at 123.10
EUROPE
Major European indices trade in mixed fashion with UK’s FTSE (+0.4%) showing relative strength. European stocks lurched lower at the start in reaction to the weekend terrorist attacks in Paris, but the early weakness has been retraced. Meanwhile, the euro is lower by about 0.4% against the dollar, trading near 1.0725.
- Eurozone October CPI +0.1%, as expected; +0.1% year-over-year (expected 0.0%; previous 0.0%). Separately, Core CPI +1.1% year-over-year (consensus 1.0%; last 1.0%)
Closing Prices
- UK’s FTSE: + 0.5%
- Germany’s DAX: + 0.1%
- France’s CAC: -0.1%
- Spain’s IBEX: + 0.1%
- Portugal’s PSI: + 0.7%
- Italy’s MIB Index: -0.1%
- Irish Ovrl Index: + 0.2%
- Greece ASE General Index: -1.3%
Macroeconomic Data
Economic Data
from Briefing.com
- Empire Manufacturing : -10.7 vs -6.0 (Prior -11.4)
Market Internals
NYSE:
Lower Volumes than the day before – 865.8M vs 947.5M
Advancers outpaced Decliners (adv/dec): 2221 / 823
New Lows outpaced New Highs (highs/lows): 13 / 124
NASDAQ:
Lower Volumes than the day before – 1798.7M vs 1983.4M
Advancers outpaced Decliners (adv/dec): 1737 / 1127
New Lows outpaced New Highs (highs/lows): 18 / 176
VOLATILITY S&P500 (VIX)
18.16 -1.92 (-9.56%)
Technical Updates
Range: 17,210.43 - 17,483.01
4,984.62 +56.73 (+1.15%)
Volume: 416,845,614 (below average of 466,753,184)Range: 4,908.66 - 4,984.91
2,053.19 +30.15 (+1.49%)
Range: 2,019.39 - 2,053.22
Basically the indices just rebounded from the support at their 61.8% Fib level and formed a bullish engulfing pattern. Also the indices were at the lower bound of their Bollinger Bands. Technically speaking we are seeing a good support and after this temporary correction, we might see another rally soon. The current resistance levels for the indices are 17500, 5000, and around 2080 respectively. This is going to determine if there are any serious buying interest in the market or just purely short-covering.
Currencies
Dollar Gains on Risk Rally
- The U.S. Dollar Index climbed 0.42% to to 99.41 today as the greenback rallied against all of the majors
- New York State's manufacturing activity declined again in November, with the Empire Manufacturing Index improving slightly to -10.7 from -11.4 in October. The Briefing.com consensus was -6.0. Negative readings indicate contraction in the sector
- EUR/USD: -0.81% to $1.0682
- Eurozone consumer prices grew more than expected in October
- The core CPI grew 0.2% m/m (1.1% y/y) versus 0.5% m/m growth in September (1.0% y/y)
- The headline CPI rose 0.1% (0.1% y/y) versus 0.2% m/m in September (0.0% y/y)
- ECB Governing Council member Ewald Nowotny said today that talks between Greece and its official creditors were moving in the right direction
- ECB Executive Board member Benoit Coeure said that the central bank is not blind to the financial stability ramifications of unconventional monetary policy
- Eurozone consumer prices grew more than expected in October
- GBP/USD: -0.17% to $1.5206
- The U.K.'s Rightmove House Price Index fell 1.3% m/m in November, missing expectations and reversing a gain of 0.6% in October
- USD/CHF: +0.39% to 1.0199
- USD/JPY: +0.54% to 123.27
- Japanese GDP fell by a worse-than-expected 0.8% annual rate in the third quarter, according to preliminary data. Output fell a revised 0.7% in Q2
- While the decline in GDP for the second-straight quarter satisfies the technical definition of recession, a large drawdown in inventories suggests that companies will have to increase output soon
- Capital expenditures fell a greater-than-expected 1.3% q/q in Q3 versus 0.9% in Q2
- Japanese GDP fell by a worse-than-expected 0.8% annual rate in the third quarter, according to preliminary data. Output fell a revised 0.7% in Q2
- USD/CAD: +0.06% to 1.3327
- Canadian manufacturing sales unexpectedly fell 1.5% m/m in September after declining a downwardly revised 0.6% in August
- AUD/USD: -0.43% to $0.7096
- New motor vehicle sales decline 3.6% m/m in October, reversing an upwardly revised 5.9% jump in September
- NZD/USD: -0.65% to $0.6497
- In New Zealand, retail sales rose 1.6% q/q in the third quarter, beating expectations and the 0.1% gain in Q2
Bonds
Treasury End Mostly Unchanged
- U.S. Treasuries were flat to lower today as an overnight flight to quality gave way to refreshed risk appetite among investors during the day session, depressing demand for government debt. The S&P 500 futures contract rallied almost 50 points or 2.5% from its overnight low and WTI crude rallied 3.26% to $42.07/bbl. The only scheduled market-moving event was the release of the Empire State Manufacturing Index, which missed economists' expectations
- Yield Check:
- 2-yr: +1 bp to 0.85%
- 5-yr: unch at 1.65%
- 10-yr: unch at 2.27%
- 30-yr: +2 bps to 3.07%
- News:
- New York State's manufacturing activity declined again in November, with the Empire Manufacturing Index improving slightly to -10.7 from -11.4 in October. The Briefing.com consensus was -6.0. Negative readings indicate contraction
- The subindex for shipments rose to -4.1 from -13.6
- The employment subindex edged up to -7.3 from -8.5, indicating another decline in manufacturing employment
- In an address to the G20, U.S. President Barack Obama ruled out sending ground troops to fight ISIS
- Over the weekend, Boston Fed President Rosengren made some optimistic remarks about the U.S. economy in an interview with the Financial Times. This is significant because Rosengren in an inflation dove and will vote on the FOMC in 2016
- New York State's manufacturing activity declined again in November, with the Empire Manufacturing Index improving slightly to -10.7 from -11.4 in October. The Briefing.com consensus was -6.0. Negative readings indicate contraction
- Commodities:
- WTI crude: +3.26% to $42.07/bbl.
- Gold: +0.07% to $1,081.70/troy oz.
- Copper: -2.42% to $2.1155/lb.
- Currencies:
- EUR/USD: -0.81% to $1.0682
- USD/JPY: +0.50% to 123.22
- Data out Tuesday:
- October CPI and Core CPI (08:30 ET)
- October Industrial Production and Capacity Utilization (09:15 ET)
- November NAHB Housing Market Index (10:00 ET)
- September Net Long-Term TIC Flows (16:00 ET)
- Fed Speakers:
- Fed Governor Powell (FOMC voter) (12:35 ET)
- Fed Govenor Tarullo (FOMC voter) (15:30 ET)
Treasury Yields:
- 2 Year Note 0.88% +0.02
- 5 Year Note 1.66% +0.01
- 10 Year Note 2.27% -0.01
- 30 Year Bond 3.07% +0.01
2/30 Spread: 219 bps ( -1 ) … 2/10 Spread: 139 bps ( -3 )
Preview for Tuesday 17 Nov, 2015
Economic Data
Tuesday (17 Nov) :
Earnings Highlights
Tuesday (17 Nov) :
- CPI : 0.2% (Prior -0.2%)
- Core CPI : 0.2% (Prior 0.2%)
- Industrial Production : 0.1% (Prior -0.2%)
- Capacity Utilization : 77.5% (Prior 77.5%)
- NAHB Housing Market Index : 64.5 (Prior 64)
- Net Long-Term TIC Flows : (Prior $20.4B)
Earnings Highlights
Tuesday (17 Nov) :
BMO
CMCM DKS HD JASO KLIC SOL TJX WMT
AMC
ARWR JACK LZB MTSI VIPS ZPIN
Summary
As it looks the market is over with correction, if we could see more buying strength returning then it is more likely to see more momentum to the upside.
I suppose we should see a bullish follow through in the market after a strong start for the week.
As it looks the market is over with correction, if we could see more buying strength returning then it is more likely to see more momentum to the upside.
I suppose we should see a bullish follow through in the market after a strong start for the week.
Direction for Tuesday 17 Nov, 2015: Up
2015 Daily Directional Accuracy: 116/182 (63.74%)
2015 Weekly Directional Accuracy: 26/42 (61.90%)
