Friday, 5 June 2015 - AMC

Dow -56.12 at 17849.46, Nasdaq +9.33 at 5068.46, S&P -3.01 at 2092.83

I think market was profit taking ahead to tomorrow employment numbers and data. Given Friday is the due date for Greece's debt payment and even with the delay the situation does not seem to be optimistic, I reckon we should see the volatility in the market. In addition, OPEC meeting on the same day and that is going to impact the oil market depending on the production set.    

Direction for Friday 5 June, 2015; Abstain

Nonfarm Payroll was better than expected but unemployment increased by 0.1%. Is that considered some divergence? That brought the market to a short rally in the early session. Anyway market was purely flat except NASDAQ which closed in positive. 

OPEC meeting on Friday held that the cartel is continuing to maintain production which could mean the oil glut might still continue. Meanwhile Greece delays on their debt payment but I don't think they can get away from this.                       

Market Summary

Industry Watch

Strong: Energy, Financials, Industrials

Weak: Consumer Discretionary, Consumer Staples, Health Care, Materials, Utilities, Telecom Services

Other Market Moving Factor:

• May Nonfarm Payrolls beat expectations (280K; Briefing.com consensus 225K): hourly earnings growth (+0.3%; consensus 0.2%) supports rate hike argument 
• Greece delays debt payment to International Monetary Fund, opting for a bundled payment on June 19 instead
• OPEC leaves production unchanged

[BRIEFING.COM] The stock market ended the week on a flat note, locking in its second consecutive weekly decline. The S&P 500 shed 0.1%, losing 0.7% for the week while the Nasdaq Composite (+0.2%) outperformed, ending essentially unchanged (-0.03%) in the first week of June.  

Friday morning featured a whirlwind of global and economic developments, but they barely registered with the market when the dust settled. 

Starting in Europe, Greece did not make today's debt payment to the International Monetary Fund, opting instead to bundle all June payments into a single installment of EUR1.60 billion, to be paid on June 19. This will allow discussions to continue, but the developments weighed on investor sentiment in Europe. After European markets closed, Greek Prime Minister Alexis Tsipras addressed the Greek parliament, saying the proposals received from the lenders are unrealistic and that debt restructuring must be included in any potential agreement.  

Staying in Europe, the Organization of the Petroleum Exporting Countries met in Vienna, electing to maintain its current production target at 30 million barrels per day. Crude oil struggled in the early going, revisiting last week's lows, but ended higher by 1.9% at $59.13/bbl. Meanwhile, the energy sector (+0.7%) ended in the lead while only two other groups—financials (+0.6%) and industrials (+0.1%)—registered gains. Going back to oil, the energy component overcame greenback strength that sent the Dollar Index higher by 0.9%, which resulted from a better than expected Nonfarm Payrolls Report for May. 

Specifically, the strong report revealed the addition of 280,000 jobs while the Briefing.com consensus expected a reading of 225,000. More notably, average hourly earnings increased 0.3% (Briefing.com consensus 0.2%), which boosted aggregate earnings by 0.5% in May. 

The Fed has stated multiple times that the first fed funds rate hike will be contingent on data trends that show the inflation rate gradually moving toward its 2.0% target. The 0.3% increase in hourly wages and the 0.5% increase in aggregate earnings place the economy on that path. 

Treasuries plunged in immediate reaction to the report with the 10-yr yield spiking as many as 13 basis points to 2.44% before ending at 2.40% (+9 bps). Also of note, selling in the 2-yr note pushed its yield up to 0.71% (+5 bps), its highest level since 2010. For the week, the benchmark 10-yr yield jumped 28 basis points.  

Eight sectors registered losses with defensively-oriented utilities (-1.3%) and consumer staples (-1.4%) ending behind other groups. Both sectors were pressured by high-yielding members as they lost some attractiveness relative to Treasuries. For the week, the utilities sector lost 4.2%. 

Elsewhere among countercyclical groups, the health care sector (unch) settled just below its flat line, but that masked afternoon strength in biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 367.04, +4.25) gained 1.2% and helped the Nasdaq Composite end ahead of the broader market while the S&P 500 hit resistance at its 50-day moving average (2,100) early on, and retreated into the afternoon amid weakness in most sectors. 

Also contributing to the Nasdaq's strength was the high-beta chipmaker group. The PHLX Semiconductor Index added 0.1%, but losses among large cap members like Intel (INTC 31.84, -0.47) and ASML (AMSL 109.10, -1.49) offset gains in 21 of 30 index components. Smaller index components displayed continued strength amid speculation more mergers and acquisitions could be in the works; however, the broader technology sector (-0.3%) ended among the laggards.  

Unlike technology, the second largest sector by weight—financials (+0.6%)—spent the day in positive territory with banks expected to benefit from rising rates at the longer end of the curve. For the week, the financial sector gained 0.8%. 

Also of note, the industrial sector (+0.1%) eked out a slim gain thanks to newfound strength among transportation names. The Dow Jones Transportation Average climbed 0.9%, extending its weekly advance to 2.5%.  

Today's participation was ahead of recent averages with more than 766 million shares changing hands at the NYSE floor. 

Economic data released included Nonfarm Payrolls and Consumer Credit: 

• Nonfarm payrolls added 280,000 jobs in May after adding a downwardly revised 221,000 (from 223,000) in April while the Briefing.com consensus expected an increase of 225,000 
  • Nonfarm private payrolls increased by 262,000 jobs (Briefing.com consensus 225,000), up from a 206,000 increase in April 
  • Average hourly earnings increased 0.3% in May (Briefing.com consensus 0.2%) after increasing only 0.1% in April. The May increase, combined with increase in payrolls, pushed aggregate earnings up 0.5% 
  • The average workweek was flat at 34.5 hours 
  • The unemployment rate increased to 5.5% in May from 5.4% in April while the consensus expected no change at 5.4% 
    • The entire increase in the unemployment rate was due to discouraged workers returning to the labor force. If the labor force remained at its April level, the unemployment rate would have declined to 5.3% 
• The Consumer Credit report for April showed an increase of $20.50 billion, which was higher than the Briefing.com consensus estimate of $16.80 billion 
  • The prior month's credit growth was revised to $21.40 billion from $20.50 billion 

There is no economic data on Monday's schedule. 

• Nasdaq Composite +6.6% YTD 
• Russell 2000 +4.6% YTD 
• S&P 500 +1.6% YTD 
• Dow Jones Industrial Average +0.2% YTD

Week in Review: Global Bond Yields Spike 

The stock market began June on a modestly higher note with the S&P 500 adding 0.2%. Index futures spiked just before 7:00 ET, reacting to chatter that a deal between Greece and its creditors would be announced shortly. That rumor was struck down within 15 minutes of making the rounds, but equity futures did not retrace that morning spike until the cash market opened for action. The major averages returned to their flat lines once the cash session began, but persistent relative strength among influential groups like health care (+0.4%), technology (+0.3%), consumer discretionary (+0.3%), and industrials (+0.4%) helped the market climb to a fresh high during the afternoon. However, it is worth noting that the Monday advance occurred amid light volume with just 665 million shares changing hands at the NYSE floor. Eight sectors registered gains with industrials (+0.4%) ending atop the leaderboard thanks to a rebound in transport stocks. The Dow Jones Transportation Average rallied 1.1% with airlines pacing the move.  

The market registered a slim loss on Tuesday, making for a near carbon copy of Monday's affair with the S&P 500 shedding 0.1%. Equities faced some selling pressure at the start after the overnight session was filled with more speculation about Greece's future in the eurozone. With Greece remaining in limbo, a short squeeze in the euro sent the single currency higher by 2.0% against the dollar to 1.1145. Contributing to the euro strength was some chatter that the European Central Bank could stop its quantitative easing program early due to inflationary pressures. To that point, eurozone CPI rose 0.3% year-over-year in May (expected 0.2%) while core CPI increased 0.9% (consensus 0.7%). Germany's 10-yr bund tumbled in response, sending its yield higher by 17 basis points to 0.72%. Similarly, the U.S. 10-yr note retreated overnight and continued backtracking into the afternoon. The benchmark note settled just above its worst level of the day with its yield higher by eight basis points at 2.26%. As for stocks, the S&P 500 found early support in the neighborhood of its 50-day moving average (2,100) and returned to its flat line shortly after noon ET.  

Equity indices ended the midweek session on a modestly higher note, but once again, investor participation was on the light side with fewer than 670 million shares changing hands at the NYSE floor. The S&P 500 added 0.2% while the Nasdaq Composite (+0.5%) outperformed. Stocks began the day on a modestly higher note and extended their gains in the early going; however, a return to their opening levels followed once selling pressure appeared in the neighborhood of this week's highs. Meanwhile, another day went by without an agreement between Greece and its creditors. The lack of progress did not stop the euro from rallying 1.1% against the dollar to 1.1270. To be fair, today's euro strength followed a set of better than expected Services PMI readings with the Eurozone Services PMI climbing to 53.8 from 53.3 (expected 53.3). Also of note, the European Central Bank made no changes to its policy stance, but ECB President Mario Draghi warned that low rates invite high volatility. Fittingly, Germany's 10-yr bund extended this week's plunge, sending its yield higher by 17 basis points to 0.89%. Similarly, U.S. Treasuries sold off with the 10-yr yield rising 11 basis points to 2.37%. Six of ten sectors registered gains with a few cyclical groups holding the lead throughout the day. Specifically, consumer discretionary (+0.7%), financials (+0.7%), and industrials (+0.5%) kept the market afloat with the industrial sector receiving support from transport stocks.  

Thursday ended on a lower note following a daylong retreat that sent the S&P 500 (-0.9%) below its 50-day moving average (2,100). Equities struggled from the start as continued uncertainty surrounding Greece weighed on investor sentiment in Europe and the U.S. The International Monetary Fund made headlines in the morning, urging the Federal Reserve to delay its first rate hike until the first half of 2016. A lowered growth forecast was cited to support that argument with the IMF now expecting 2015 GDP growth of 2.5%, down from the previous forecast of 3.1%. Treasuries marked fresh highs following the outlook change at the IMF, and built on their gains in the afternoon with the 10-yr yield falling six basis points to 2.31%. All ten sectors ended in the red with most growth-sensitive groups showing relative weakness. Energy (-1.2%) and materials (-1.3%) spent the bulk of the session behind other groups with energy pressured by a 2.8% drop in crude oil, which ended the pit session at $58.00/bbl ahead of the semiannual OPEC meeting.

Global Market

ASIA

Asian Markets Close: Japan’s Nikkei -0.1%; Hong Kong’s Hang Seng -1.1%; China’s Shanghai Composite +1.5%
There was some mixed trading action in the Asia-Pacific region on Friday with the volatility in government bond markets, the weak showing from Wall Street on Thursday, and a wait-and-see stance ahead of the U.S. jobs report, OPEC’s meeting, and Greece negotiations holding things back. The Shanghai Composite wasn’t held back though. It added another 1.5%, leaving it up 8.9% for the week. Conversely, Australia’s S&P/ASX 200 dipped 0.1%, leaving it down 4.8% for the week, which was its worst weekly showing in three years.

Economic data

• Japan
• April Leading Index +1.2% month-over-month (prior +0.8%)
• Coincident Indicator +1.9% month-over-month (prior -1.2%)
• Australia
• May AIG Construction Index 47.8 (prior 47.0)

Equity Markets

• Japan’s Nikkei declined 0.1% with a last-hour rally helping to trim the day’s losses. The financial sector (-1.1%) was an influential source of weakness that offset relative strength in the consumer non-cyclical (+0.3%) and industrial (+0.2%) sectors. Sojitz Corp (-3.5%) was the worst-performing issues while Casio Computer (+3.1%) was the best-performing issue. Out of the 225 index members, 85 ended higher, 132 finished lower, and 8 were unchanged. For the week, the Nikkei was down 0.5%.
• Hong Kong’s Hang Seng declined 1.1% and finished near its lows for the day. Losses were paced by the communications (-1.3%), diversified (-1.3%), energy (-1.3%), and technology (-1.3%) sectors. The influential financial sector fell 0.9%. Cheung Kong Property Holdings (-3.3%) and Bank of Communications (-3.1%) led decliners while Cathay Pacific Airways (+1.5%) and China Mengniu Dairy (+1.2%) led advancers. Out of the 50 index members, 12 ended higher, 36 finished lower, and 2 were unchanged. For the week, the Hang Seng declined 0.6%.
• China’s Shanghai Composite saw another volatile session, shedding 1.0% in the first half of its trading day and then gaining roughly 2.6% in the second half to close with a 1.5% gain. The basic materials (+3.0%), utilities (+2.2%), and industrials (+1.8%) sectors were the best-performing areas in the Chinese market on Friday. For the week, the Shanghai Composite increased 8.9%.
• India’s Sensex declined 0.2%, surrendering larger gains with a 0.9% decline in the final hour of trading. Losses were paced by the financial (-1.0%) and technology (-0.8%) sectors. ICIC Bank (-2.1%), Tata Motors (-2.0%), and Axis Bank (-1.4%) were the worst performers. Coal India (+4.3%), GAIL India (+3.2%), and NTPC (+2.3%) topped the list of individual winners. Out of the 30 index members, 14 ended higher, 15 finished lower, and 1 was unchanged. For the week, the Sensex declined 3.8%.
• Australia’s S&P/ASX 200 declined 0.1%, weighed down by weakness in its financial (-0.6%), information technology (-0.5%), and metals & mining (-0.1%) sectors. Liquefied Natural Gas (-3.9%), Sundance Energy (-3.7%), and Senex Energy (-2.9%) were the top laggards. Bradken (+5.9%) and Virtus Health (+4.7%) led the gainers. Out of the 200 index members, 105 ended higher, 74 finished lower, and 21 were unchanged. For the week, the S&P/ASX 200 declined 4.8%, marking its worst week in three years.
• Regional advancers: Malaysia +0.2%, Indonesia +0.1%, Thailand +1.3%, Vietnam +1.6%
• Regional decliners: South Korea -0.2%, Taiwan -0.1%, Singapore -0.3%, Philippines -0.4%

FX

• USD/CNY +0.04% at 6.2034
• USD/INR -0.2% at 63.850
• USD/JPY +0.4% at 124.83

EUROPE

Major European indices trade lower across the board with Italy’s MIB (-1.9%) showing the largest decline. As speculated yesterday, Greece did not make its payment to the International Monetary Fund, instead opting to bundle all payments due in June into a single installment that will be paid on June 19. Elsewhere, the Bundesbank has raised its 2015 GDP growth forecast for Germany to 1.7% from 1.0% while boosting the 2016 outlook to 1.8% from 1.6%.

• Germany’s April Factory Orders +1.4% month-over-month (expected 0.5%; prior 1.1%)
• France’s April Trade Balance -EUR3.00 billion (expected -EUR4.00 billion; prior -EUR4.40 billion)
• Spain’s April Industrial Production +1.8% year-over-year (expected 1.5%; last 3.2%)

Closing Prices

• UK’s FTSE: -0.8%
• Germany’s DAX: -1.3%
• France’s CAC: -1.3%
• Spain’s IBEX: -0.6%
• Portugal’s PSI: -1.2%
• Italy’s MIB Index: -2.1%
• Irish Ovrl Index: -0.5%
• Greece ASE General Index: -5.0%

Macroeconomic Data

Economic Data

from Briefing.com

• Nonfarm Payrolls : 280K vs 225K (Prior 221K - Down)
• Nonfarm Private Payrolls : 262K vs 225K (Prior 206K - Down)
• Unemployment Rate : 5.5% vs 5.4% (Prior 5.4%)
• Hourly Earnings : 0.3% vs 0.2% (Prior 0.1%)
• Average Workweek : 34.5 vs 34.5 (Prior 34.5)
• Consumer Credit : $20.5B vs $17.0B (Prior $21.3B - Up)

NONFARM PAYROLLS 

Highlights

• Nonfarm payrolls added 280,000 jobs in May after adding a downwardly revised 221,000 (from 223,000) in April. The Briefing.com Consensus expected nonfarm payrolls to increase by 225,000 jobs.
• Nonfarm private payrolls increased by 262,000 jobs, up from a 206,000 increase in April. The consensus expected private payrolls to increase by 225,000.
• The unemployment rate increased to 5.5% in May from 5.4% in April. The consensus expected the unemployment rate to remain at 5.4%.

Key Factors

• The immediate reaction to the employment report is generally focused on the upside surprises in both total and private payrolls. But the report actually shows a much stronger labor market than even those surprises would suggest.
• Average hourly earnings increased 0.3% in May after increasing only 0.1% in April. The average workweek was flat at 34.5 hours.
• The combination of the increase in payrolls and the increase in average hourly earnings pushed aggregate earnings up 0.5% in May. That easily topped the 0.3% gain in April and puts upward pressure on both inflation and consumption trends.
• The Fed has stated multiple times that the first rate hike will be contingent on data trends that show the inflation rate gradually moving toward its 2.0% target. The 0.3% increase in hourly wages and the 0.5% increase in aggregate earnings place the economy on that path.
• A couple more months of job and wage growth like what was seen in May will confirm the Fed’s rate hike expectations.
• The increase in the unemployment rate, however, was another sign of improving labor force conditions. The entire increase in the unemployment rate was due to discouraged workers returning to the labor force. If the labor force remained at its April level, the unemployment rate would have declined to 5.3%.
• As employment conditions continue to improve, it would not be surprising to see the unemployment rate continue to inch higher as more discouraged workers return to the labor force.

Big Picture

• Big gains in aggregate earnings should nudge the Fed in the direction of the first rate hike.

CONSUMER CREDIT

Highlights

• Consumer credit increased by $20.5 bln in April after increasing an upwardly revised $21.3 bln (from $20.5 bln) in March. The Briefing.com Consensus expected consumer credit to increase by $16.8 bln.

Key Factors

• That was the first time that consumer credit increased by more than $20 bln in two consecutive months since August and September 2000.
• Consumer credit typically goes through sizable revisions before the final numbers are released. Any future revision is unlikely to materially impact current growth trends.
• Revolving credit increased by $8.6 bln, from $889.5 bln in March to $890.9 bln in April.
• Nonrevolving credit increased to $2,485.0 bln in April from $2,473.0 bln in March, a gain of $11.9 bln.

Big Picture

• Consumer credit has increased by an average of $17.5 bln each month over the past 12 months.

Market Internals

NYSE:

Higher Volumes than the day before – 783.4M vs 729.7M 


Decliners outpaced Advancers (adv/dec): 1434 / 1643

New Lows outpaced New Highs (highs/lows): 62 / 151

NASDAQ:

Higher Volumes than the day before – 1832.5M vs 1795.1M

Advancers outpaced Decliners (adv/dec): 1806 / 983

New Highs outpaced New Highs (highs/lows): 121 / 47

VOLATILITY S&P500 (VIX)
14.21 -0.50 (-3.40%)

Volume is returning to the market while internals are still looking flat. But New Lows spike to a high which indicates the lack of bullishness. NASDAQ is showing otherwise and I think there is some divergence in the overall market. Reaction from the VIX did not reflect much bullishness also, as it still remains below 15.00.

Technical Updates

DOW JONES INDUSTRIAL AVERAGE ($INDU: CBOT)

17,849.46 -56.12 (-0.31%)

Volume: 89,139,415 (below average of 99,284,314)
Range: 17,822.90 - 17,940.78

NASDAQ COMPOSITE INDEX ($COMPQ.IDX: NASDAQ)

5,068.46 +9.33 (+0.18%)
Volume: 426,331,211 (below average of 426,926,277)

Range: 5,025.52 - 5,074.98

S&P 500 INDEX (SPX: CBOE)

2,092.83 -3.01 (-0.14%)

Volume: 559,311,000 (above average of 526,336,323)

Range: 2,085.67 - 2,100.99 

It looks to me that the market is still having a correction with the downtrend. However the market is finding a support and this might leads to some pullback. NASDAQ broke below the trend with a double top formed but managed to find another support on the channel. Maybe a rebound next week would be plausible.  

Commodities

Closing Commodities: WTI Oil Finishes The Day Higher, Above $59/Barrel

• Oil prices were volatile today following OPEC’s decision and color on the oil market
• Ultimately, July crude oil finished today’s floor trading session +1.9% at $59.13/barrel
• Natural gas lost $0.04 to $2.59/MMBtu today
• Precious metals lost steam today with both gold and silver closing the day with a loss
• Aug gold fell $7.10 to $1168.10/oz, while July silver fell $0.12 to $15.99/oz
• Copper ended the day unchanged at $2.69/lb.

Energy

• July crude oil futures rose $1.13 (+1.9%) to $59.13/barrel
• July natural gas closed $0.04 lower at $2.59/MMBtu
• RBOB Gasoline closed $0.05 higher (+2.5%) to $2.03/gallon
• Heating oil futures closed $0.03 higher at $1.87/gallon
• The Baker Hughes total U.S. rig count showed a decline of 7 to 868, marking the 26th consecutive week of decline

Agriculture

• July corn closed $0.02 lower at $3.61/bushel
• July wheat closed $0.06 lower to $5.17/bushel
• July soybeans closed $0.08 lower to $9.39/bushel
• Ethanol closed flat at $1.55/gallon
• Sugar #11 closed 0.07 cents lower to 12.05 cents/lb

Metals

• August gold ended today’s session $07.10 lower to $1168.10/oz
• July silver closed $0.12 lower at $15.99/oz
• July copper closed flat at $2.69/lb

Currencies

Dollar Rallies on Robust Employment Report

• The U.S. dollar mitigated what would have otherwise a disastrous week after May's Employment Situation Report showed that the U.S. economy added 280K non-farm jobs. Previous estimates were revised up by 32K, so the report was even more positive than the headline number reflected. Workers finally saw a boost in hourly earnings as well, with growth in May of +0.3%
  • U.S. Dollar Index: +0.96% to 96.38
• EUR/USD: -0.74% to $1.1112
  • German Factory Orders grew 1.4% m/m in April, well ahead of expectations and the 1.1% increase from March
  • Spanish Industrial Production rose 1.8% y/y in April, ahead of expectations but less than the very robust 3.2% growth seen in March
• GBP/USD: -0.59% to $1.5271
• USD/JPY: +0.94% to 125.62
• USD/CHF: +0.57% to 0.9404
• USD/CAD:-0.23% to 1.2469
  • Canada added 59,000 jobs in the month of May, well ahead of consensus estimates. The unemployment rate remained at 6.8%
• AUD/USD: -0.81% to $0.7617
• NZD/USD: -1.12% to $0.7043

Bonds

May Employment Report Knocks Treasuries Lower

• The 2-year note yield hit its highest yield since 2010 today, as a very robust Employment Situation Report for May showed that both job creation and wage increases are proceeding at a pace that will encourage the FOMC to start hiking rates. Remarks today from William Dudley, President of the New York Fed, reinforced the idea that government bond investors should be prepared for policy normalization
• Yield Check:
  • 2-yr: +5 bps to 0.71%
  • 5-yr: +10 bps to 1.74%
  • 10-yr: +9 bps to 2.40%
  • 30-yr: +7 bps to 3.11%

• News:
  • The U.S. economy added 280K nonfarm jobs in May after adding a downwardly revised 221,000 (from 223,000) in April. The Briefing.com consensus was +225K
  • Nonfarm private payrolls increased by 262,000 jobs, up from a 206,000 increase in April. The consensus expected private payrolls to increase by 225,000
  • Average hourly earnings increased 0.3% in May after increasing only 0.1% in April. The average workweek was flat at 34.5 hours
    • The Fed has stated multiple times that the first rate hike will be contingent on data trends that show the inflation rate gradually moving toward its 2.0% target. The 0.3% increase in hourly wages and the 0.5% increase in aggregate earnings place the economy on that path
  • New York Fed President Dudley said that a rate hike is likely this year even though there is lingering uncertainty on economic growth trends. Dudley also said that the upward path for rates would be very gradual and that there might be market turbulence once it begins. He is a permanent FOMC voter and on the dovish wing of the FOMC according to Joseph LaVorgna, Deutsche Bank's chief economist
  • Greek Prime Minister Alexis Tsipras addressed the Greek parliament today
    • He said that the plan submitted by Greece's creditors is unrealistic. Tsipras said that debt relief is essential to any agreement
    • He said he would like to see the opposition take a stand on the lenders' proposals
    • The prime minister also said that a deal is closer than ever, which is somewhat at odds with the negotiating positions that each side has staked out

• Commodities:
  • WTI crude: +1.60% to $58.93/bbl
  • Gold: -0.39% to $1,170.60/troy oz.
  • Copper: +0.37% to $2.697/lb.

• Currencies:
  • EUR/USD: -0.74% to $1.1112
  • USD/JPY: +0.95% to 125.63

• Week Ahead:
  • Monday: (no scheduled events)
  • Tuesday: April Wholesale Inventories (10:00 ET); April JOLTS – Job Openings (10:00 ET); $24 billion 3-year note auction (results at 13:00 ET)
  • Wednesday: MBA Mortgage Index for the week ending 6/6 (07:00 ET); Crude Oil Inventories for the week ending 6/6 (10:30 ET); $21 billion 10-year note auction (reopening) (results at 13:00 ET); May Treasury Budget (14:00 ET)
  • Thursday: Initial Jobless Claims for the week ending 6/6 and Continuing Jobless Claims for the week ending 5/30 (08:30 ET); May Retail Sales and Retail Sales ex-auto (08:30 ET); May Export Prices ex-agriculture and Import Prices ex-oil (08:30 ET); April Business Inventories (10:00 ET); Natural Gas Inventories for the week ending 6/6 (10:30 ET); $13 billion 30-year bond auction (reopening) (results at 13:00 ET)
  •  Friday: May PPI and Core PPI (08:30 ET); June Michigan Sentiment (10:00 ET)

Treasury Yields:

• 2 Year Note 0.73% +0.07
• 5 Year Note 1.75% +0.10
• 10 Year Note 2.41% +0.10
• 30 Year Bond 3.11% +0.08

2/30 Spread: 238 bps ( +1 ) …  2/10 Spread: 168 bps ( +3 )

Preview for the week Monday 8 June to Friday 12 June, 2015

Economic Data

Monday (8 June) :

• No Economic Data

Tuesday (9 June) :

• Wholesale Inventories : 0.2% (Prior 0.1%)
• JOLTS - Job Openings : (Prior 4.994M)

Wednesday (10 June) :

• MBA Mortgage Index : (Prior -7.6%)  
• Crude Inventories : (Prior -1.948M)
• Treasury Budget : (Prior -$130.0B)

Thursday (11 June) :

• Initial Claims : 278K (Prior 276K)
• Continuing Claims : 2200K (Prior 2196K)
• Retail Sales : 1.1% (Prior 0.0%)
• Retail Sales ex-auto : 0.7% (Prior 0.1%) 
• Export Prices ex-agri: (Prior -0.7%)
• Import Prices ex-oil : (Prior -0.4%)
• Business Inventories : 0.2% (Prior 0.1%)
• Natural Gas Inventories : (Prior 132 bcf)

Friday (12 June) :

• PPI : 0.5% (Prior -0.4%)
• Core PPI : 0.1% (Prior -0.2%)
• Michigan Sentiment : 91.5 (Prior 90.7)

Earnings Highlights

Monday (8 June) :
BMO - BRLI DATE PRGN SHLD MTN
AMC - CASY CBK PLAY FCEL HRB HQY KANG LAYN PBY SB TPLM UNFI

Tuesday (9 June) :
BMO - BURL CMN FGP HDS HOV ISLE LULU ZQK SAIC
AMC - APIC GEF LMNR MFRM OXM SIGM SURG

Wednesday (10 June) :
BMO - FRAN
AMC - BV BOX DDC KKD MW

Thursday (11 June) :
BMO - BOJA XONE GLPW KFY LF PFIE RLD RH
AMC - None Scheduled

Friday (12 June) : 
BMO - None Scheduled
AMC - None Scheduled

Summary

With the employment number looking slightly divergence, I think we might see some adjustment in the market on Monday or maybe early next week. From the technicals, the market is still undergoing a downtrend which may lead to more downside also.

To be honest I think market is still lacking in leadership and that is why we have been seeing a sideway for the past few months.      

Direction for Monday 8 June, 2015; Up

Direction for the week Monday 8 June to Friday 12 June, 2015; Down

2015 Daily Directional Accuracy: 45/83 (54.22%) 

2015 Weekly Directional Accuracy: 12/20 (60.00%)