Dow -49.97 at 17081.89, Nasdaq -42.03 at 4796.61, S&P -13.77 at 2003.69
Market started off pretty strongly after we saw a gap down opening. But it certainly lost the steam afterwards as market tumbled down. Can't really put Tuesday as a bullish session.
Both Europe and Asia markets were also mostly on the down sides. I suppose we are going to see some weakness creeping back to the market after the strong rally previously.
Market Summary
Industry Watch
Strong: Technology, Telecom Services, Materials, Utilities
Weak: Consumer Staples, Health Care, Industrials
Other Market Moving Factor:
- China's trade balance ($60.34 billion; expected $46.79 billion) shows 11th consecutive decline in imports
[BRIEFING.COM] The stock market ended Tuesday on a lower note after the major averages failed to hold their slim intraday gains. The S&P 500 settled lower by 0.7% while the Nasdaq Composite (-0.9%) underperformed.
Overall, today's affair was relatively quiet with trading volume surpassing yesterday's total by a relatively slim margin. To that point, fewer than 850 million shares changed hands at the NYSE floor.
Equity indices faced some selling pressure after China's September trade balance ($60.34 billion; expected $46.79 billion) showed a 20.4% decline in imports (expected -15.0%), which was the 11th consecutive drop in that category, stirring up concerns about China's demand for goods and services from its neighbors. Accordingly, most Asian markets posted losses on Tuesday and the defensive sentiment infiltrated the European session.
However, once the opening bell rang on Wall Street, stocks spent the first two hours of the day in a steady climb off their opening lows. That rally lifted the major averages above their flat lines, but the key indices could not build on their slim gains, instead sliding back to their lows during the afternoon.
All ten sectors finished the day in negative territory with industrials (-1.0%) occupying the bottom of the leaderboard throughout the day. Transport stocks were largely responsible for the underperformance, evidenced by a 2.2% dive in the Dow Jones Transportation Average. Only one index component settled in the green while Ryder Systems (R 68.63, -7.02) and JetBlue Airways (JBLU 24.75, -2.11) paced the decline with respective losses of 9.3% and 7.9%. Shares of Ryder slumped after the company lowered its guidance while JetBlue was downgraded at JP Morgan.
Staying on the cyclical side, financials (-0.7%) and energy (-0.9%) settled near the broader market while the technology sector (-0.3%) outperformed throughout the day with Apple (AAPL 111.79, +0.19) and Alphabet (GOOGL 683.17, +6.74) climbing 0.2% and 1.0%, respectively, while SAP (SAP 72.30, +3.85) spiked 5.6% in reaction to better than expected results. Also of note, Twitter (TWTR 29.05, +0.30) rose 1.1% after increasing its revenue guidance and announcing plans to reduce its global workforce by up to 8.0%.
Over on the countercyclical side, the health care sector (-1.2%) ended among the laggards due to an afternoon retreat in biotechnology. To that point, the iShares Nasdaq Biotechnology ETF (IBB 298.76, -9.78) lost 3.2%. Elsewhere in the health care space, Johnson & Johnson (JNJ 95.45, -0.54) fell 0.6% after reporting a bottom-line beat on below-consensus revenue.
Treasuries ended the day near their overnight highs with the 10-yr yield down four basis points at 2.05%.
The Treasury Budget for September (Briefing.com consensus $95.00 billion) was originally on today's economic schedule, but the report did not cross the wires during the expected release time.
Tomorrow, the weekly MBA Mortgage Index will be reported at 7:00 ET while September PPI (Briefing.com consensus -0.3%) and Retail Sales (consensus 0.2%) will both be reported at 8:30 ET. Also of note, August Business Inventories will be reported at 10:00 ET (expected 0.1%) while the October Beige Book will cross the wires at 14:00 ET.
Global Market
ASIA
It was a turnaround Tuesday in that most markets in the Asia-Pacific region finished lower. The broad-based weakness flowed from some disappointing trade data out of China, only this time it was the country’s weak imports (-20.4%) in September that drove selling interest more so than its exports (-3.7%). The sharp decline in imports was viewed as a distinct negative for the prospects of surrounding economies.
Economic data
- China
- September Trade Balance $60.34 bln year-over-year (expected $46.79 bln; prior $60.24 bln)
- Imports -20.4% (expected -15.0%; prior -13.8%)
- Exports -3.7% year-over-year (expected -6.3%; prior -5.5%)
- Japan
- September Household Confidence 40.6 (expected 41.6; prior 41.7)
- Preliminary Machine Tool Orders -19.1% (prior -16.5%)
- South Korea
- September Export Price Index -1.9% year-over-year (prior -1.6%)
- September Import Price Index -13.0% (prior -13.6%)
- Australia
- September NAB Business Confidence 5.0 (expected 4.0; prior 1.0)
- India
- September CPI +4.41% year-over-year (expected +4.30%; prior +3.66%)
- August Industrial Production +6.4% year-over-year (expected +4.8%; prior +4.2%)
Equity Markets
- Japan’s Nikkei declined 1.1% coming off its Monday holiday and ended near its low for the session. The losses were paced by weakness in the financials (-1.9%), materials (-1.5%), and consumer discretionary (-1.1%) sectors. Chiba Bank (-4.6%), Chiyoda Corp (-4.5%), and Kubota Corp (-4.0%) were the worst-performing issues. Pioneer Corp (+8.8%), Sharp Corp (+6.5%), and ANA Holdings (+3.3%) topped the list of winners. Out of the 225 index members, 91 ended higher, 126 finished lower, and 8 were unchanged.
- Hong Kong’s Hang Seng declined 0.6%, feeling the weight of China’s disappointing trade data and falling oil prices. CNOOC (-3.3%), PetroChina (-2.0%), and Bank of Communications (-1.9%) were the biggest laggards. Galaxy Entertainment (+6.1%), China Unicom Hong Kong (+3.9%), and China Resources Enterprise (+3.6%) were the best-performing issues. Out of the 50 index members, 19 ended higher, 28 finished lower, and 3 were unchanged.
- China’s Shanghai Composite was down 1.1% in early action after official trade data showed a halting 20.4% decline in imports in September. It got itself turned around, though, and rallied in the afternoon session to finish with a 0.2% gain.
- India’s Sensex declined 0.2%, paring a larger 0.7% loss with a final hour rally effort. The modest decline followed the receipt of some otherwise pleasing inflation and industrial production data. Losses were paced by the materials (-2.6%) and utilities (-0.8%) sectors. Oil & Natural Gas Co (-3.6%), Vedanta (-2.8%), and Hindalco Industries (-2.8%) led individual decliners. Coal India (+1.8%), Bajaj Auto (+1.7%), and Bharat Heavy Electricals (+1.4%) were the best-performing issues. Out of the 30 index members, 15 ended higher and 15 finished lower.
- Australia’s S&P/ASX 200 declined 0.6%, driven lower by weakness in the energy (-2.8%), resources (-2.6%), and metals and mining (-2.5%) sectors. Out of the 200 index members, 49 ended higher, 138 finished lower, and 13 were unchanged.
- Regional advancers: Malaysia +0.1%
- Regional decliners: South Korea -0.1%, Taiwan -0.1%, Indonesia -3.2%, Singapore -1.6%, Thailand -0.5%, Vietnam -0.2%, Philippines -1.9%
FX
- USD/CNY +0.3% at 6.3410
- USD/INR +0.6% at 65.1613
- USD/JPY -0.2% at 119.75
EUROPE
Major European indices trade lower across the board with France’s CAC (-1.5%) showing relative weakness. Elsewhere, the British pound has tumbled 0.8%, falling to 1.5225 against the dollar in reaction to the soft UK inflation data released earlier today.
- Eurozone ZEW Economic Sentiment 30.1, as expected (prior 33.3)
- Germany’s September CPI -0.2% month-over-month, as expected; 0.0% year-over-year, as expected. Separately, September Wholesale Price Index -0.6% month-over-month (expected -0.3%; prior -0.8%); -1.8% year-over-year (prior -1.1%). Also of note, October ZEW Economic Sentiment 1.9 (consensus 6.0; prior 12.1) and ZEW Current Conditions 55.2 (prior 64.7; last 67.5)
- UK’s September CPI -0.1% month-over-month (expected 0.0%; prior 0.2%); -0.1% year-over-year (consensus 0.0%; last 0.0%). Separately, Core CPI +1.0% year-over-year (consensus 1.1%; previous 1.0%) and House Price Index +5.2% year-over-year (expected 5.5%; prior 5.2%)
- Swiss September PPI -0.1% month-over-month, as expected (prior -0.7%); -6.8% year-over-year, as expected (last -6.8%)
Closing Prices
- UK’s FTSE: -0.5%
- Germany’s DAX: -0.9%
- France’s CAC: -1.0%
- Spain’s IBEX: -1.4%
- Portugal’s PSI: -1.4%
- Italy’s MIB Index: -0.2%
- Irish Ovrl Index: + 0.3%
- Greece ASE General Index: -0.4%
Macroeconomic Data
Economic Data
from Briefing.com
- Treasury Budget : $95.0 (Prior $105.8B)
Market Internals
NYSE:
Higher Volumes than the day before – 858.2M vs 716.4M
Decliners outpaced Advancers (adv/dec): 847 / 2228
New Highs outpaced New Lows (highs/lows): 47 / 15
NASDAQ:
Higher Volumes than the day before – 1536.1M vs 1336.8M
Decliners outpaced Advancers (adv/dec): 799 / 2071
New Highs outpaced New Lows (highs/lows): 63 / 44
VOLATILITY S&P500 (VIX)
17.67 +1.50 (+9.28%)
Technical Updates
Volume: 99,396,774 (below average of 113,869,879)
Range: 17,034.45 - 17,172.81
Range: 17,034.45 - 17,172.81
4,796.61 -42.03 (-0.87%)
Volume: 354,137,651 (below average of 475,974,198)
Volume: 354,137,651 (below average of 475,974,198)
Range: 4,793.92 - 4,858.28
2,003.69 -13.77 (-0.68%)
Volume: 567,343,000 (below average of 639,731,231)
Range: 2,001.78 - 2,022.34
The 3 indices are showing a reversal in the market. DOW was rejected at 17,150 resistance level and support is likely to be around 16,950 level. NASDAQ formed a bearish candlestick as it broke below its support at 4,820. Meanwhile it continue to be held under by the 50MA. S&P got rejected by its resistance at 2,020 and plunge lower. Next support would be 1,990.
Commodities
- In commodities, oil prices slid lower today following this morning’s monthly IEA oil market report, which said that the global oil supply glut will extend into 2016
- By the end of floor trading, Nov crude oil closed the day -0.8% at $46.70/barrel
- Shortly after the close, the America Petroleum Institute (API) will release its weekly oil storage data, which is a notable catalyst for oil prices
- Also, tomorrow morning at 10:30am ET, the EIA will release its own weekly oil storage data, which usually moves oil more than the API data
- In other energy, Nov natural gas slipped 1.6% to $2.50/MMBtu
- Metals were mixed today… Dec gold rose $1 to $1165.50/oz, while Dec silver rose 0.3% to $15.92/oz
- Dec copper slipped 0.4% to $2.40/lb
Energy Closing Prices
- November crude oil futures fell $0.39 (-0.8%) to $46.70/barrel
- November natural gas closed $0.04 lower (-1.6%) at $2.50/MMBtu
- RBOB Gasoline closed flat at $1.34/gallon
- Heating oil futures closed $0.03 lower at $1.47/gallon
Agriculture Closing Prices
- December corn closed $0.03 higher at $3.84/bushel
- December wheat closed $0.11 higher at $5.19/bushel
- November soybeans closed $0.25 higher at $9.12/bushel
- Sugar #11 closed $0.41 cents lower at 13.83 cents/lb
Metals Closing Prices
- December gold ended today’s session $1.00 higher at $1165.50/oz
- December silver closed today’s session $0.05 higher (+0.3%) at $15.92/oz
- December copper closed $0.01 lower (-0.4%) at $2.40/lb
Currencies
Commodity Currencies Retreat
- Commodity currencies pulled back today after very strong starts to October as copper and energy prices gave back recent gains. The greenback continued to slide as it has been doing since the release of the September employment report and the resulting rally in risky assets. The British pound fell sharply as the U.K.'s CPI showed the country to still be in deflation and the euro remained strong, as it has been since the start of the month
- U.S. Dollar Index: -0.08% to 94.76
- EUR/USD: +0.24% to $1.1383
- The ZEW economic sentiment index for the whole eurozone fell to 30.1 in October from the prior reading of 33.3, as expected
- Germany's ZEW index of current economic sentiment fell a larger-than-expected 12.3 points to 55.2 in October
- The expectations index also dropped more than expected to 1.9 in October from 12.1 in September
- The German consumer price index fell 0.2% m/m in September, in line with expectations and the prior reading
- GBP/USD: -0.59% to $1.5252
- The U.K.'s consumer price index fell 0.1% y/y in September,versus economists' expectations for no change
- Slower growth in clothing prices and falling costs for petrol and natural gas contributed to the CPI miss
- The CPI report sent the pound sterling down sharply and it now trades 0.89% lower to $1.5205
- The British Retail Consortium's Retail Sales Monitor rose 2.6% in the year to September, surpassing analyst expectations and reversing a 1.0% y/y decline in August
- The U.K.'s consumer price index fell 0.1% y/y in September,versus economists' expectations for no change
- USD/CHF: -0.53% to 0.9577
- Producer prices in Switzerland fell 0.1% m/m in September, as expected. The producer price index declined 0.7% in August
- USD/JPY: -0.19% to 119.82
- The Bank of Japan released the minutes from its September 14-15 meeting, blaming slowing exports and industrial production on weakness in emerging markets
- More importantly, BoJ Governor Kuroda said at the IMF meeting in Peru on Monday that the central bank's current policy is working and that it will likely result in 1% inflation once oil prices stabilize
- His comments have dampened speculation of the BoJ expanding its asset purchase program
- USD/CAD: +0.04% to 1.3007
- AUD/USD: -1.22% to $0.7271
- The National Australian Bank business conditions index remained at 9 in September after August's reading was revised down to 9 from 11
- NZD/USD: -0.49% to $0.6678
- New Zealand's Food Price Index fell 0.5% m/m in September, in line with expectations and the 0.5% decline in August
Bonds
Treasuries Rally into Close
- The U.S. Treasury complex rallied today with the 5-year note leading the way higher as crude oil reversed last week's rally and the major U.S. equity indices turned lower. Over the past 24 hours, Fed governors Brainard and Tarullo made some very dovish public remarks, suggesting that they would oppose rate hikes before the end of 2015 without more evidence that the inflation half of the Fed's dual mandate is going to be satisfied soon. Today's session was light on economic data, but tomorrow we will receive the retail sales data and the producer price index (PPI) from September
- Yield Check:
- 2-yr: -2 bps to 0.62%
- 5-yr: -5 bps to 1.35%
- 10-yr: -4 bps to 2.05%
- 30-yr: -3 bps to 2.89%
- News:
- Fed Governor Tarullo (FOMC voter) said that he "would expect it would be appropriate to raise rates" by the end of 2015, in an interview with CNBC
- Fed Governor Lael Brainard (FOMC voter) said after Monday's close that she saw the risks to the economic and inflation outlooks as "tilted to the downside"
- She said that wage inflation is not accelerating from a steady pace of 2-2.25%
- St. Louis Fed President Bullard, who is not currently an FOMC voter but will begin voting in January 2016, said that policy normalization goals have arguably been met and that ultra-low rates may produce financial excesses
- The Small Business Optimism survey conducted by the National Federation of Independent Businesses showed a composite index that rose to a better-than-expected 96.1 in September from 95.9 in August. Sales expectations fell sharply, inventories were judged to be too high, and capital spending was soft. The survey has shown little volatility this year
- Commodities:
- WTI crude: -1.19% to $46.54/bbl.
- Gold: +0.09% to $1,165.60/troy oz.
- Copper: -1.32% to $2.3835/lb.
- Currencies:
- EUR/USD: +0.25% to $1.1385
- USD/JPY: -0.24% to 119.75
- Data Out Wednesday:
- MBA Mortgage Index for the week ending 10/10 (07:00 ET)
- September PPI and core PPI (08:30 ET)
- September Retail Sales and Retail Sales ex-auto (08:30 ET)
- August Business Inventories (10:00 ET)
- Fed’s Beige Book for October (14:00 ET)
Treasury Yields:
- 2 Year Note 0.64% -0.01
- 5 Year Note 1.36% -0.05
- 10 Year Note 2.06% -0.06
- 30 Year Bond 2.89% -0.05
2/30 Spread: 225 bps ( -4 ) … 2/10 Spread: 142 bps ( -5 )
Preview for Wednesday 14 Oct, 2015
Wednesday (14 Oct) :
- MBA Mortgage Index : (Prior 25.5%)
- PPI : -0.3% (Prior 0.0%)
- Core PPI : 0.1% (Prior 0.3%)
- Retail Sales : 0.2% (Prior 0.2%)
- Retail Sales ex-auto : -0.1% (Prior 0.1%)
- Business Inventories : 0.1% (Prior 0.1%)
- Fed's Beige Book
Earnings Highlights
Wednesday (14 Oct) :
BMO - BAC BLK CBSH DAL JBHT LRN PNC WFC
During Mkt Hours - WABC
AMC - CNS DRWI NFLX SURG UFPI WTFC XLNX
During Mkt Hours - WABC
AMC - CNS DRWI NFLX SURG UFPI WTFC XLNX
Summary
I think the bulls are running out of energy. I suppose it would take a while before the bulls are fully recovered and it is a good time to see some profit taking along the way.
We are going to expect Fed's Beige book released on Wednesday together with PPI and retail sales. Traders are possibly going to digest on the data to provide some reason to position themselves. Time to take cover.
I think the bulls are running out of energy. I suppose it would take a while before the bulls are fully recovered and it is a good time to see some profit taking along the way.
We are going to expect Fed's Beige book released on Wednesday together with PPI and retail sales. Traders are possibly going to digest on the data to provide some reason to position themselves. Time to take cover.
Direction for Wednesday 14 Oct, 2015: Down
2015 Daily Directional Accuracy: 103/162 (63.58%)
2015 Weekly Directional Accuracy: 23/37 (60.53%)
No comments:
Post a Comment