Dow +122.10 at 16912.29, Nasdaq +42.79 at 4791.15, S&P +15.91 at 1995.83
Market continue to push higher at the opening but we saw a quick selling shortly after. On top of that there were some buyers came in at the support level. Overall I would say it was a pretty volatile session.
Both Europe and Asia markets also ended up with some gains and I suppose that is a good recovery we are seeing.
Market Summary
Industry Watch
Strong: Energy, Financials, Industrials, Materials, Health Care
Weak: Consumer Discretionary, Technology, Telecom Services, Utilities
Other Market Moving Factor:
- European markets rally despite more disappointing data from Germany (August Industrial Production -1.2% month-over-month; expected +0.2%)
- Biotechnology outperforms after showing early volatility
[BRIEFING.COM] The stock market ended the Wednesday session on a higher note with the S&P 500 climbing 0.8% while the Nasdaq Composite (+0.9%) settled a bit ahead despite showing relative weakness in the early going.
Overall, the midweek session was very quiet, but there was some volatility present in the market as stocks surrendered their opening gains going into the afternoon, but returned into the middle of their ranges by the closing bell. It is worth noting that the pullback from opening highs occurred after the S&P 500 made a brief appearance above its 50-day moving average (1,997), which also served as resistance during afternoon action.
Similar to yesterday, commodity-sensitive energy (+1.3%) and materials (+1.3%) paced the opening move higher, but both sectors surrendered a portion of their gains as the session wore on. The energy sector was up nearly 2.5% at the start, but retreated from its high as crude oil erased its intraday gain. The energy component settled lower by 1.5% at $47.81/bbl after sliding from its intraday high in reaction to the latest Energy Information Administration's inventory report, which showed a 3.07 million barrel build.
Staying on the cyclical side, the largest sector by weight—technology (+0.4%)—underperformed throughout the day, but was able to climb off its low into the close. Large sector components like Apple (AAPL 110.67, -0.64), Alphabet (GOOGL 670.00, -1.64), and Oracle (ORCL 37.66, -0.07) lost between 0.2% and 0.6% while high-beta chipmakers outperformed, sending the PHLX Semiconductor Index higher by 1.5%.
The afternoon rebound in technology helped the Nasdaq overtake the S&P 500 while biotechnology also contributed to the late strength in the tech-heavy index. The iShares Nasdaq Biotechnology ETF (IBB 307.81, +5.90) climbed 2.0%, snapping its two-day skid, while the health care sector (+1.5%) settled in the lead.
Also of note, the consumer discretionary sector (+0.3%) struggled in the early going, but ended the day in the green despite an 18.8% plunge in the shares of Yum! Brands (YUM 67.70, -15.72) after the company reported disappointing results and guided below analyst expectations.
Unlike stocks, Treasuries spent the day in negative territory, ending the day with modest losses. Accordingly, the benchmark 10-yr yield rose three basis points to 2.07%.
Today's participation was well above average with more than 1.15 billion shares changing hands at the NYSE floor.
Economic data included Consumer Credit and MBA Mortgage Index:
- The consumer credit report for August showed an increase of $16.00 billion, which was lower than the Briefing.com consensus estimate of $19.50 billion
- The prior month's credit growth was revised down to $18.90 billion from $19.10 billion
- The weekly MBA Mortgage Index surged 25.5% to follow last week's 6.7% decline
Tomorrow, weekly Initial Claims will be reported at 8:30 ET (Briefing.com consensus 275,000) while the September FOMC Minutes will be released at 14:00 ET.
Global Market
ASIA
Markets in the Asia-Pacific region stayed on their rally track Wednesday, bolstered by the rebound in oil prices, which lifted energy stocks, and continued enthusiasm over the idea that the Federal Reserve will not raise rates in the near term. On a related note, the Bank of Japan kept its key policy rate unchanged at 0.10%, as expected. Japan’s Nikkei faltered early Wednesday, but rallied late to finish with a 0.8% gain. China’s stock market remained closed for holiday, but will re-open Thursday after a seven-day closure.
Economic data
- Japan
- Bank of Japan leaves policy rate unchanged at 0.10%, as expected
- August Leading Index -1.5% month-over-month (prior -1.7%)
- Coincident Indicator -0.6% (prior -0.2%)
- Australia
- September AIG Construction Index 51.9 (prior 53.8)
Equity Markets
- Japan’s Nikkei increased 0.8%, having rallied 1.6% over the final two hours of trading. Wednesday’s gains were forged in the wake of the BOJ’s expected decision to leave its key policy rate unchanged at 0.10%. Pacing the gains were the industrials (+2.2%), materials (+1.9%), and financials (+1.4%) sectors. OKUMA Corp (+8.7%), Mitsubishi Corp (+7.3%), and Inpex Corp (+7.2%) were the top-performing issues. Alps Electric (-3.7%), Toray Industries (-2.7%), and Chugai Pharmaceutical (-2.7%) were the biggest laggards. Out of the 225 index members, 178 ended higher, 44 finished lower, and 3 were unchanged.
- Hong Kong’s Hang Seng surged 3.1% and finished at its highs for the day. A huge boost in energy shares, which followed the spike in oil prices, helped power the advance. CNOOC (+13.7%), China Shenhua Energy (+9.3%), PetroChina (+9.2%), and Kunlun Energy (+8.5%) topped the list of Wednesday’s winners. Sands China (-0.5%) led a very small group of losers. Out of the 50 index members, 46 ended higher and 4 finished lower.
- China’s Shanghai Composite: closed for holiday (National Day)
- India’s Sensex increased 0.4% in a seesaw session that ended on an upswing. The modest gains were underpinned by the materials (+5.0%), energy (+2.3%), and consumer discretionary (+1.2%) sectors. Hindalco Industries (+9.1%), Vedanta (+5.9%), and Oil & Natural Gas Co. (+4.2%) led individual gainers while Wipro (-2.0%), Infosys (-1.9%), and Bharti Airtel (-1.6%) brought up the rear. Out of the 30 index members, 21 ended higher and 9 finished lower.
- Australia’s S&P/ASX 200 increased 0.6% and ended at its highs for the day, led by strength in the energy sector. Out of the 200 index members, 100 ended higher, 83 finished lower, and 17 were unchanged.
- Regional advancers: South Korea +0.8%, Taiwan +1.2%, Malaysia +1.6%, Indonesia +0.9%, Singapore +2.2%, Thailand +2.3%, Philippines +0.8%
- Regional decliners: Vietnam -0.3%
FX
- USD/CNY -0.02% at 6.3561
- USD/INR -0.6% at 65.0300
- USD/JPY -0.2% at 120.03
EUROPE
Major European indices trade higher across the board despite the release of more disappointing economic news. For the second day in a row, manufacturing data from Germany has disappointed with Industrial Production coming in below estimates following yesterday’s below-consensus Factory Orders report.
- Germany’s August Industrial Production -1.2% month-over-month (expected 0.2%; prior 1.2%)
- UK’s August Industrial Production +1.0% month-over-month (consensus 0.3%; last -0.3%); +1.9% year-over-year (expected 1.2%; prior 0.7%). Separately, August Manufacturing Production +0.5% month-over-month (consensus 0.3%; prior -0.7%); -0.8% year-over-year (expected -0.1%; last -1.2%)
- France’s August Trade Deficit narrowed to EUR3.00 billion from EUR3.20 billion (expected deficit of EUR3.50 billion)
- Spain’s August Industrial Production +2.7% year-over-year (expected 4.6%; last 5.2%)
Closing Prices
- UK’s FTSE: + 0.2%
- Germany’s DAX: + 0.7%
- France’s CAC: + 0.1%
- Spain’s IBEX: + 0.5%
- Portugal’s PSI: + 0.6%
- Italy’s MIB Index: -0.8%
- Irish Ovrl Index: -1.7%
- Greece ASE General Index: + 1.4%
Macroeconomic Data
Economic Data
from Briefing.com
- MBA Mortgage Index : 25.5% (Prior -6.7%)
- Crude Inventories : 3.073M (Prior 3.995M)
- Consumer Credit : $16.0B vs $19.5B (Prior $18.9B - Down)
CONSUMER CREDIT
Highlights
- Consumer credit increased by $16.0 bln in August, down from a downwardly revised $18.9 bln (from $19.1 bln) in July. The Briefing.com Consensus expected consumer credit to increase by $19.5 bln.
Key Factors
- There are generally several months of large revisions to the data. However, the overall growth trends are likely to remain intact even after the revisions are released.
- Revolving credit increased by $4.0 bln in August, from $914.5 bln in July to $918.5 bln in August. That was the sixth consecutive monthly increase in revolving credit.
- Nonrevolving credit increased to $2,551.2 bln in August from $2,539.2 bln in July, a gain of $12.0 bln. That was the smallest increase in nonrevolving credit since November 2013.
Big Picture
- Consumer credit has increased by an average of $18.4 bln each month over the past 12 months.
Market Internals
NYSE:
Higher Volumes than the day before – 1178.6M vs 1007.2M
Advancers outpaced Decliners (adv/dec): 2397 / 681
New Highs outpaced New Lows (highs/lows): 37 / 10
NASDAQ:
Higher Volumes than the day before – 2141.2M vs 2065.8M
Advancers outpaced Decliners (adv/dec): 2093 / 795
New Highs outpaced New Lows (highs/lows): 45 / 38
VOLATILITY S&P500 (VIX)
18.40 -1.00 (-5.15%)
Technical Updates
Volume: 115,692,238 (above average of 110,920,188)
Range: 16,765.00 - 16,963.30
Range: 16,765.00 - 16,963.30
4,791.15 +42.79 (+0.90%)
Volume: 522.6M (above average of 466,824,487)
Volume: 522.6M (above average of 466,824,487)
Range: 4,728.71 - 4,791.15
1,995.83 +15.91 (+0.80%)
Volume: 735,394,000 (above average of 621,370,641)
Range: 1,976.44 - 1,999.31
Out of the 3 indices, DOW has the strongest retracement. DOW got rejected at 16,950 initially and looking to re-test the resistance level again while it continues to sit on its 50MA as support. But I did mention the volume is decreasing as DOW went higher, so the rally is not really convincing. NASDAQ formed a bullish candlestick pattern and it is approaching a resistance at around 4,800. S&P managed to close above 1,990 level but it is still held under the 50MA. Right now, it looks like the buyers have the complete control of the market.
Commodities
- WTI crude oil futures were running strong today until the weekly EIA storage data came out at 10:30am ET.
- Front-month Nov crude oil ran as high as $49.59/barrel, but ended the day -1.4% at $47.85/barrel
- In other energy, Nov natural gas closed unchanged at $2.47/MMBtu.
- Both RBOB and heating oil finished lower
- Metals gained some steam, but posted modest to decent gains
- Dec silver ran +0.8% today to $16.07/oz, while Dec gold rose +0.2% at $1148.70/oz
- Dec copper climbed one cent to $2.37/lb
Energy Closing Prices
- November crude oil futures fell $0.68 (-1.4%) to $47.85/barrel
- November natural gas closed flat at $2.47/MMBtu
- RBOB Gasoline closed $0.04 lower at $1.39/gallon
- Heating oil futures closed $0.03 lower at $1.58/gallon
Agriculture Closing Prices
- December corn closed $0.03 lower at $3.95/bushel
- December wheat closed $0.09 lower at $5.17/bushel
- November soybeans closed $0.02 higher at $8.90/bushel
- Sugar #11 closed $0.35 cents higher at 13.98 cents/lb
Metals Closing Prices
- December gold ended today’s session $2.40 higher (+0.2%) at $1148.70/oz
- December silver closed today’s session $0.13 higher (+0.8%) at $16.07/oz
- December copper closed $0.01 higher (+0.4%) at $2.37/lb
Currencies
Euro and Swissy Drop
- U.S. Dollar Index: +0.08% to 95.53
- The MBA reported that mortgage applications jumped by 25.5% for the week ending October 3rd after falling 6.7% in the previous week
- EUR/USD: -0.18% to $1.1247
- German industrial output fell 1.2% m/m in August versus consensus expectations for a small gain. Industrial output saw an upwardly-revised gain of 1.2% in July
- As with the weaker-than-expected factory order data released on Tuesday, the German Economy Ministry cited summer holidays as a factor in the miss
- Spanish industrial production fell 1.4% m/m, worse than expectations
- German industrial output fell 1.2% m/m in August versus consensus expectations for a small gain. Industrial output saw an upwardly-revised gain of 1.2% in July
- GBP/USD: +0.59% to $1.5316
- Industrial production growth in Britain cruised past expectations, hitting 1% m/m in August after declining an upwardly-revised 0.3% in July
- The U.K.'s manufacturing output, a more narrow measure than industrial production, grew by 0.5% m/m in August after falling an upwardly-revised 0.7% in July
- Industrial production growth in Britain cruised past expectations, hitting 1% m/m in August after declining an upwardly-revised 0.3% in July
- USD/CHF: +0.44% to 0.9719
- USD/JPY: -0.26% to 119.94
- The Bank of Japan met and maintained its current JPY 80 tln/year asset purchase program as well as its benchmark interest rate at 0.10%
- The accompanying statement said that the Japanese economy continues to recover "moderately, although exports and production are affected by the slowdown in emerging economies."
- The Bank of Japan met and maintained its current JPY 80 tln/year asset purchase program as well as its benchmark interest rate at 0.10%
- USD/CAD: +0.24% to 1.3070
- AUD/USD: +0.66% to $0.7206
- The AIG Construction Index fell to 51.9 in September from 53.8 in August
- NZD/USD: +0.98% to $0.6607
Bonds
Treasury Yields Rise
- U.S. Treasuries sold off today with the 5-year note leading the way down. Equities traded higher and that served to sap demand for safe haven assets. Tuesday afternoon, San Francisco Fed President Williams said that he thought a rate hike would still be appropriate by the end of 2015. Market expectations have the first hike in March of 2016. WTI crude started the day higher, following through on Tuesday's gains, but fell back after a larger-than-expected supply build
- Yield Check:
- 2-yr: +2 bps to 0.62%
- 5-yr: +5 bps to 1.37%
- 10-yr: +4 bps to 2.07%
- 30-yr: +3 bps to 2.90%
- News:
- U.S. mortgage applications surged 25.5% on an adjusted basis in the week ending 10/03 after declining 25.5% in the prior week
- Applications for refinancing mortgages grew 24% while those for home purchases jumped 27%
- Mortgage rate volatility and a looming Consumer Financial Protection Bureau regulatory change were cited for causing the huge growth
- Crude oil inventories grew 3.1 mln barrels in the week ending 10/03 versus expectations for a build of 2.2 mln barrels
- U.S. consumer credit expanded by $16.0 bln in August versus the Briefing.com consensus of $19.5 bln. Consumer credit grew by $18.9 bln in the prior week
- The $21 bln 10-year Treasury auction was met with the second-highest indirect bid in history
- High yield 2.066%
- Bid-to-cover 2.59
- Indirect bid 62.2%
- Direct bid 10.3%
- U.S. mortgage applications surged 25.5% on an adjusted basis in the week ending 10/03 after declining 25.5% in the prior week
- Commodities:
- WTI crude: -1.32% to 47.89/bbl.
- Gold: -0.07% to $1,145.60/troy oz.
- Copper: +0.49% to $2.3665/lb.
- Currencies:
- EUR/USD: -0.18% to $1.1248
- USD/JPY: -0.26% to 119.94
- Data Out Thursday:
- Initial Jobless Claims for the week ending 10/03 and Continuing Jobless Claims for the week ending 9/26 (08:30 ET)
- Natural Gas Inventories for the week ending 10/03 (10:30 ET)
- FOMC Minutes for the 9/17 meeting (14:00 ET)
- Treasury Auction:
- $13 bln 30-year auction – reopening (results at 13:00 ET)
- Fed Speakers:
- St. Louis Fed President Bullard (non-FOMC voter) (9:30 ET)
- Minneapolis Fed President Kocherlakota (non-FOMC voter) gives welcome remarks (13:00 ET)
- San Francisco Fed President Williams (FOMC voter) (15:30 ET)
Treasury Yields:
- 2 Year Note 0.65% +0.04
- 5 Year Note 1.37% +0.03
- 10 Year Note 2.08% +0.03
- 30 Year Bond 2.89% +0.01
2/30 Spread: 224 bps ( -3 ) … 2/10 Spread: 143 bps ( -1 )
Preview for Thursday 8 Oct, 2015
Economic Data
Thursday (8 Oct) :
- Initial Claims : 275K (Prior 277K)
- Continuing Claims : 2205K (Prior 2191K)
- Natural Gas Inventories : (Prior 98 bcf)
- FOMC Minutes
Earnings Highlights
Thursday (8 Oct) :
BMO - DPZ ISCA
AMC - AA ANGO HELE RT VOXX
AMC - AA ANGO HELE RT VOXX
Summary
The market is really looking neutral right now. I think we are very likely to see some profit taking on Thursday as the market is facing a crucial resistance level.
Moving forward to Thursday, we are expecting the release of FOMC minutes, BoE monetary policy summary and ECB meeting accounts. In addition, the quarterly earnings report from Alcoa will commence the start of Q4 earnings season. Huge day ahead and be prepare for a rough session.
The market is really looking neutral right now. I think we are very likely to see some profit taking on Thursday as the market is facing a crucial resistance level.
Moving forward to Thursday, we are expecting the release of FOMC minutes, BoE monetary policy summary and ECB meeting accounts. In addition, the quarterly earnings report from Alcoa will commence the start of Q4 earnings season. Huge day ahead and be prepare for a rough session.
Direction for Thursday 8 Oct, 2015: Down
2015 Daily Directional Accuracy: 101/158 (63.92%)
2015 Weekly Directional Accuracy: 23/37 (62.16%)
No comments:
Post a Comment