Dow -179.72 at 16330.47, Nasdaq -72.23 at 4756.72, S&P -24.23 at 1942.74
That was a rather quiet session except for the big drop at the opening. For most of the session, market was moving in sideway with some short-covering in the last hour. However there was not much of bullish strength reflected on Tuesday.
Markets in Europe and Asia returned to red after slight recovery on Monday. Europe markets were mostly affected by the emissions scandal from Volkswagen.
Market Summary
Industry Watch
Strong: Utilities
Weak: Consumer Discretionary, Energy, Industrials, Materials, Technology
Other Market Moving Factor:
- Continued concerns about China as commodities retreat
- Volkswagen leads region-wide slide in Europe
[BRIEFING.COM] The stock market endured a rough trading day on Tuesday with the S&P 500 surrendering 1.2% while the Nasdaq Composite (-1.5%) underperformed.
Equity indices spent the duration of the session in the red after gapping lower at the start. The opening stumble occurred in response to continued concerns about China's economic growth, which was manifested through weakness in commodity prices. Furthermore, European automakers struggled with Volkswagen plunging 19.8% to extend this week's loss to 34.7% after announcing the establishment of a EUR6.50 billion reserve in anticipation of costs associated with the Department of Justice probe into the company's diesel engines. European markets registered losses across the board with Germany's DAX tumbling 3.8%.
Once the opening bell rang on Wall Street, the S&P 500 surrendered more than 15 points in short order and gave up another 20 into the afternoon. The index recovered about ten points during the final hour, but all ten sectors ended the day with losses.
The materials sector (-1.8%) spent the day at the bottom of the leaderboard as losses in commodities like copper (-3.8% to $2.30/lb) and gold (-0.7% to $1124.70/ozt) kept mining stocks under pressure. Accordingly, the Market Vectors Gold Miners ETF (GDX 13.36, -0.64) lost 4.6%.
Meanwhile, another commodity-related sector—energy (-1.1%)—began the day among the laggards, but was able to climb ahead of the broader market. The rebound off session lows was aided by similar price action in crude oil as the energy component ended lower by 1.3% at $46.31/bbl after trading below $45.50/bbl in the morning.
Elsewhere among cyclical sectors, financials (-1.3%), technology (-1.6%), and industrials (-1.4%) underperformed throughout the day, which prevented an intraday rebound from taking shape. To be fair, the health care sector (-0.6%) settled ahead of the broader market, but the same could not be said for biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 335.45, -5.02) ended lower by 1.5%, widening its week-to-date loss to 6.0%.
Biotechnology's underperformance contributed to relative weakness in the Nasdaq while high-beta chipmakers also weighed, evidenced by a 2.3% decline in the PHLX Semiconductor Index.
Switching gears, Treasuries rallied into the afternoon, erasing their losses from yesterday with the 10-yr yield falling seven basis points to 2.14%.
Today's participation was ahead of recent averages as more than 900 million shares changed hands at the NYSE floor.
Economic data was limited to the FHFA Housing Price Index for July, which rose 0.6% to follow last month's 0.2% uptick.
Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET.
Global Market
ASIA
Trading action was mixed in Asian-Pacific markets on Tuesday. Volumes remained on the lighter side as Japan’s market remained closed for a national holiday. China’s Shanghai Composite (+0.9%) scored another winning session, although it came under selling pressure in the final hour that cut the Composite’s earlier gain in half.
Economic data
- Australia
- Q2 House Price Index +4.7% quarter-over-quarter (expected +2.5%; prior +1.6%)
Equity Markets
- Japan’s Nikkei: closed for national holiday
- Hong Kong’s Hang Seng increased 0.2% after being up as much as 2.1% in the final hour of trading. A late rush of selling interest, which lacked a specific news catalyst, undid the rally effort. Li & Fung (+10.4%), China Mobile (+4.1%), and Kunlun Energy (+2.8%) topped the list of winners while Galaxy Entertainment Group (-3.4%), Cheung Kong Property Holdings (-2.7%), and Sands China (-2.3%) brought up the rear. Out of the 50 index members, 33 ended higher, 14 finished lower, and 3 were unchanged.
- China’s Shanghai Composite increased 0.9%, but saw its gains cuts in half in the final hour when selling pressure emerged. Brokerages were reportedly among the better performers following reports that Shanghai and London are exploring the possibility of a market link-up. The late selling activity was attributed to angst ahead of Wednesday’s release of the flash Caixin PMI report for September.
- India’s Sensex declined 2.1% with losses accelerating over the latter half of the session as European markets turned sharply lower. Including Tuesday’s loss, the Sensex is down 6.3% over the last month.
- Australia’s S&P/ASX 200 increased 0.7%, helped by gains in the energy (+2.7%), telecom services (+1.6%), and industrials (+1.6%) sectors. TPG Telecom (-4.6%) bucked the trend and was the worst-performing stock for the session. Out of the 200 index members, 140 ended higher, 42 finished lower, and 18 were unchanged.
- Regional advancers: South Korea +0.9%, Taiwan +0.7%, Vietnam +0.2%
- Regional decliners: Malaysia -0.3%, Indonesia -0.7%, Singapore -0.5%, Thailand -1.2%, Philippines -0.6%
FX
- USD/CNY +0.1% at 6.3760
- USD/INR +0.3% at 65.923
- USD/JPY -0.5% at 119.90
EUROPE
Major European indices trade lower across the board with Germany’s DAX (-3.1%) and France’s CAC (-3.2%) trailing the region.
- UK’s August Public Sector Net Borrowing GBP11.31 billion (expected GBP8.65 billion; prior -GBP70 million) while September CBI Industrial Trends Orders -7 (expected 0; prior -1)
- Swiss August Trade Surplus narrowed to CHF2.87 billion from CHF3.58 billion (expected surplus of CHF2.97 billion)
Closing Prices
- UK’s FTSE: -2.8%
- Germany’s DAX: -3.8%
- France’s CAC: -3.4%
- Spain’s IBEX: -3.1%
- Portugal’s PSI: -2.4%
- Italy’s MIB Index: -3.3%
- Irish Ovrl Index: -2.3%
- Greece ASE General Index: -2.3%
Macroeconomic Data
Economic Data
from Briefing.com
- FHFA Housing Price Index : 0.6% (Prior 0.2%)
Market Internals
NYSE:
Higher Volumes than the day before – 962.0M vs 821.9M
Decliners outpaced Advancers (adv/dec): 626 / 2460
New Lows outpaced New Highs (highs/lows): 3 / 205
NASDAQ:
Higher Volumes than the day before – 2022.6M vs 2013.7M
Decliners outpaced Advancers (adv/dec): 670 / 2198
New Lows outpaced New Highs (highs/lows): 14 / 132
VOLATILITY S&P500 (VIX)
22.44 +2.30 (+11.42%)
Technical Updates
Volume: 119,009,737 (above average of 112,573,141)
Range: 16,221.73 - 16,477.45
Range: 16,221.73 - 16,477.45
4,756.72 -72.23 (-1.50%)
Volume: 477,773,268 (above average of 468,390,318)
Volume: 477,773,268 (above average of 468,390,318)
Range: 4,716.91 - 4,776.28
1,942.74 -24.23 (-1.23%)
Volume: 692.6M (below average of 629,220,391)
Range: 1,929.22 - 1,961.39
DOW is still somewhat held up by its support while S&P and NASDAQ broke below their respective support trend line. NASDAQ gap down and went under its 20MA. Next important support for DOW, NASDAQ and S&P would still be 16,000, 4,750 and 1,925 respectively. Before then I think the market is likely to continue sliding lower.
Commodities
- The dollar index traded higher today, which weighed on commodities
- Copper futures took a real hit, falling 4% today. Front-month Dec copper closed the session -3.8% at $2.30/lb
- Gold and silver sold off this morning and largely held today’s losses
- Dec gold closed pit trading -0.7% at $1124.70/oz, while Dec silver -2.9% at $14.77/oz
- Nov WTI crude oil sold off today, falling as low as $45.39/barrel
- However, oil put in a nice little rally off that LoD, but still closing the day in the red at $46.31/barrel, down -1.3%.
- Oct natural gas rose 0.3% to $2.58/MMBtu today.
Metals
- December gold ended today’s session $8.20 lower (-0.7%) at $1124.70/oz
- December silver closed today’s session $0.44 lower (-2.9%) at $14.77/oz
- December copper closed $0.09 lower (-3.8%) at $2.30/lb
Agriculture
- December corn closed $0.06 lower at $3.81/bushel
- December wheat closed $0.02 lower at $4.95/bushel
- November soybeans closed $0.11 lower at $8.62/bushel
- Sugar #11 closed $0.05 cents lower at 10.88 cents/lb
Energy
- November crude oil futures fell $0.63 (-1.3%) to $46.31/barrel
- October natural gas closed $0.01 higher (+0.3%) at $2.58/MMBtu
- RBOB Gasoline closed flat at $1.40/gallon
- Heating oil futures closed $0.01 higher at $1.55/gallon
Currencies
Yen and Greenback Gain on Risk Aversion
- The U.S. Dollar Index rose 0.48% to 96.35 as investors sought safe havens from the downdraft in equity and commodity markets
- The FHFA Housing Price Index rose 0.6% m/m in July versus a 0.2% rise in June
- The Richmond Manufacturing Index fell to -5 in September from 0 in August
- EUR/USD: -0.59% to $1.1121
- Eurozone consumer confidence fell to -7.1 in September according to the preliminary reading, worse than forecast. Consumer confidence was at -6.9 in August
- GBP/USD: -0.93% to $1.5362
- In the U.K., public-sector net borrowing (excluding that of banks) jumped to a higher-than-expected GBP 12.1 bln in August compared to GBP 10.7 bln in August 2014
- The Confederation of British Industry reported that the monthly total order book balance from its industrial trends survey fell to -7 in September from -1 in August
- USD/JPY: -0.42% to 119.98
- USD/CHF: +0.20% to 0.9740
- Switzerland's trade surplus narrowed more than expected to CHF 2.87 bln in August from CHF 3.58 bln in July
- USD/CAD: +0.14% to 1.3269
- At the end of yesterday's trading session, Bank of Canada Governor Stephen Poloz denied that the Canadian economy is overly dependent upon natural resource extraction in a question-and-answer session. He went on to say that inflation remains below the BoC's target of 2% but that the bank sees lower energy prices as a transitory factor in disinflation
- AUD/USD: -0.73% to $0.7082
- Australia's House Price Index rose a greater-than-expected 4.7% q/q in the second quarter, beating the 1.6% jump in June
- NZD/USD: -0.50% to $0.6295
Bonds
Treasuries Rally on Flight to Quality
- The Treasury market ripped higher today in a curve-flattening trade as stock and commodity prices declined. Safe-haven currencies rallied, with the U.S. Dollar Index adding 0.40% to 96.27. In a session light on data, the news flow was dominated by Volkswagen's legal troubles and Democratic Candidate Hillary Clinton's proposal to more strictly regulate drug prices. These stories justified the selling in stocks and therefore the rally in government debt. Investors await Janet Yellen's public remarks on Thursday
- Yield Check:
- 2-yr: -4 bps to 0.67%
- 5-yr: -7 bps to 1.43%
- 10-yr: -8 bps to 2.13%
- 30-yr: -8 bps to 2.94%
- News:
- The Federal Housing Finance Agency's Housing Price Index rose 0.6% m/m in July after increasing by 0.2% in June
- Redbook Research reported that national chain-store sales dropped a smaller-than-expected 1.4% m/m in the first three weeks of September
- The Richmond Fed's manufacturing index fell to -5 in September from 0 in August, below estimates
- The wages component improved, but new orders, order backlogs, and shipments all declined
- $26 bln 2-year note auction:
- High yield: 0.699%
- Bid-to-cover: 3.27
- Indirect bid: 43.8%
- Direct bid: 13.3%
- Commodities:
- WTI crude: -1.34% to $46.33/bbl.
- Gold: -0.76% to $1,124.20/troy oz.
- Copper: -3.62% to $2.302/lb.
- Currencies:
- EUR/USD: -0.50% to $1.1131
- USD/JPY: -0.33% to 120.09
- Data Out Wednesday:
- MBA Mortgage Index for the week ending 9/19 (07:00 ET)
- Crude Inventories for the week ending 9/19 (10:30 ET)
- Treasury Auction:
- $35 bln 5-year note auction (results at 13:00 ET)
- Fed Speaker:
- Atlanta Fed President Lockhart (FOMC voter) (12:30 ET)
Treasury Yields:
- 2 Year Note 0.69% -0.03
- 5 Year Note 1.44% -0.07
- 10 Year Note 2.14% -0.06
- 30 Year Bond 2.94% -0.08
2/30 Spread: 225 bps ( -5 ) … 2/10 Spread: 145 bps ( -3 )
Preview for Wednesday 23 Sept, 2015
Economic Data
Wednesday (23 Sept) :
- MBA Mortgage Index : (Prior -7.0%)
- Crude Inventories : (Prior -2.104M)
Earnings Highlights
Wednesday (23 Sept) :
BMO - WMS
AMC - AVNW FUL JBL SCS WOR
BMO - WMS
AMC - AVNW FUL JBL SCS WOR
Summary
We have seen a drop in the market since the start of the week but I won't say that we are in a bearish market yet. Market has been rather quiet due to the lack of economic data. I suppose the bears are still in control of the market, so I reckon we should likely to see some downside for the next few sessions.
We have seen a drop in the market since the start of the week but I won't say that we are in a bearish market yet. Market has been rather quiet due to the lack of economic data. I suppose the bears are still in control of the market, so I reckon we should likely to see some downside for the next few sessions.
Direction for Wednesday 23 Sept, 2015: Down
2015 Daily Directional Accuracy: 93/148 (62.84%)
2015 Weekly Directional Accuracy: 22/35 (62.86%)
No comments:
Post a Comment