Dow -179.85 at 17730.48, Nasdaq -51.82 at 5095.30, S&P -20.62 at 2078.58
Market simply sell-off at the opening as we continue to see more weakness. I reckon market is getting defensive at the moment. Now as we see more sellers coming in, I think we should expect a temporary correction in the market from the overbought state previously.
Asia markets continue to follow through from last week gain while Europe side were getting some knocks off.
Market Summary
Industry Watch
Strong: Utilities
Weak: Consumer Discretionary, Energy, Industrials, Health Care, Telecom Services, Materials
Other Market Moving Factor:
- China's trade balance ($61.64 billion; expected $64.75 billion) shows fourth consecutive decline in exports (-6.9%; consensus -3.0%)
[BRIEFING.COM] The stock market began the trading week on a cautious note as persistent global growth concerns weighed on investor sentiment. The S&P 500 surrendered 1.0% while the Dow and Nasdaq posted comparable losses.
Equities retreated through the first half of the Monday session and remained near their lows into the afternoon, which kept dip-buyers on the sidelines. The cautious posture in the market took place after the weekend featured the release of China's trade data, which showed a 10-yr high in the trade surplus, but exports fell 6.9% in October, representing the fourth consecutive monthly drop.
Nine sectors ended the day in negative territory with losses between 0.7% (consumer staples) and 1.5% (energy) while the utilities space climbed 0.3%. The rate-sensitive sector eked out a modest gain thanks to higher Treasury yields; however, intraday demand lifted the 10-yr note off its low as the session wore on. As a result, the 10-yr returned to its early-morning low with the 10-yr yield rising two basis points to 2.35%.
Generally speaking, today's retreat was broad based with cyclical sectors leading the decline. Heavily-weighted consumer discretionary (-1.3%) and financials (-1.2%) ended behind seven of the remaining eight groups with the financial sector trimming its November gain to 1.5%. As for the consumer discretionary sector, the group was weighed down by a 9.6% slide in Priceline (PCLN 1311.39, -138.51) after its below-consensus guidance overshadowed better than expected results.
Elsewhere among cyclical sectors, energy (-1.5%) represented an early pocket of strength, but the group retreated alongside the broader market while crude oil lost 1.0%, sliding to $43.87/bbl. The energy sector narrowed its November gain to 0.9%, masking a 13.2% surge in Apache (APA 53.94, +6.27) after Bloomberg reported that the company received and rejected an unsolicited $18-billion takeover offer.
Also of note, industrials (-0.8%) traded among the laggards into the afternoon, but the sector was lifted ahead of the broader market during the afternoon amid reports Canadian Pacific (CP 142.18, +7.87) is interested in Norfolk Southern (NSC 88.67, +8.80). Shares of NSC soared 11.0% while the Dow Jones Transportation Average narrowed its loss to 0.3% after being down more than 2.0%.
Today's participation was a bit ahead of average with more than 900 million shares changing hands at the NYSE floor.
Tomorrow, October Import/Export Prices will be reported at 8:30 ET while the September Wholesale Inventories report will cross the wires at 10:00 ET (Briefing.com consensus 0.1%).
Global Market (temporarily unavailable)
Macroeconomic Data
Economic Data
from Briefing.com
- No Economic Data
Market Internals
NYSE:
Lower Volumes than the day before – 973.8M vs 1006.3M
Decliners outpaced Advancers (adv/dec): 631 / 2474
New Lows outpaced New Highs (highs/lows): 25 / 83
NASDAQ:
Lower Volumes than the day before – 1843.9M vs 2059.2M
Decliners outpaced Advancers (adv/dec): 886 / 1990
New Highs outpaced New Lows (highs/lows): 96 / 76
VOLATILITY S&P500 (VIX)
16.52 +2.19 (+15.28%)
Technical Updates
Volume: 121,206,957 (above average of 116,757,648)
Range: 17,667.78 - 17,900.78
Range: 17,667.78 - 17,900.78
5,095.30 -51.82 (-1.01%)
Volume: 436,179,750 (below average of 468,508,088)
Volume: 436,179,750 (below average of 468,508,088)
Range: 5,066.10 - 5,133.44
2,078.58 -20.62 (-0.98%)
Volume: 664,847,000 (above average of 654,409,286)
Range: 2,068.24 - 2,096.56
Finally we are seeing more pullback in the market. DOW broke below its support level at 17,750 and the 200MA is going to be a crucial support for the index. NASDAQ closed below 5,100 as it continues to go lower. While S&P also broke lower but it still went back to test at 2,080 level. Market has come down to retest the breakout level and we might continue to see more downside.
Currencies
Dollar Falls Against Majors
- The U.S. Dollar Index fell 0.20% today as the pound sterling staged a relief rally and dollar bulls took profits following a five-point run since the middle of October
- EUR/USD: +0.16% to $1.0760
- Portuguese sovereign debt sold off sharply today as the country's Socialist Party agreed to join with three other leftist parties to oust the administration of the current prime minister, Pedro Passos Coelho
- The political turmoil means that Portugal could lose its last investment grade credit rating (currently from DBRS), which would disqualify the country's debt from the ECB's EUR 1.1 tln asset purchase program (the ECB requires an investment grade rating from DBRS, Fitch, Moody's, or Standard & Poor's
- Two members of the ECB's Governing Council said that the bank should reduce the deposit rate by more than the 10 basis points already priced into the market
- Sentix's Investor Confidence Index for the eurozone jumped to 15.1 in November from 11.7 in October
- Germany's trade surplus unexpectedly narrowed to EUR 19.4 bln in September from EUR 19.6 bln in August
- Portuguese sovereign debt sold off sharply today as the country's Socialist Party agreed to join with three other leftist parties to oust the administration of the current prime minister, Pedro Passos Coelho
- GBP/USD: +0.44% to $1.5115
- USD/CHF: -0.23% to 1.0033
- USD/JPY: -0.05% to 123.10
- In Japan, average cash earnings grew 0.6% in the year to September after rising 0.4% in August
- USD/CAD: -0.28% to 1.3273
- Canadian housing starts fell more than expected in October to 198.1K versus 231.3K in September
- AUD/USD: +0.09% to $0.7051
- NZD/USD: +0.30% to $0.6545
Bonds
Treasuries End in Red
- The yield curve steepened with a bearish bias today as 10 and 30-year Treasuries struggled to find buyers despite a sharp pullback in U.S. equities. Despite weakness in the U.S., European sovereign debt rallied this morning as some members of the European Central Bank's Governing Council told Reuters that consensus is building around a deposit rate cut. Some members reportedly support more than the 10-basis point reduction already priced into the market. The $26 bln 3-year note auction was poorly received, drawing the lowest bid-to-cover ratio in years
- Yield Check:
- 2-yr: -1 bp to 0.88%
- 5-yr: +1 bp to 1.74%
- 10-yr: +1 bp to 2.35%
- 30-yr: +3 bps to 3.12%
- News:
- The president of the Boston Federal Reserve Bank, Eric Rosengren, said that the U.S. economy has mostly avoided collateral damage from the emerging market slowdown and the coinciding commodity price slump. He does not vote on the FOMC this year but will be voting in 2016. He is widely considered an inflation dove
- He went on to note that near-zero interest rates create financial stability risks, noting that "When the number of cranes observed on a short walk in a city such as Boston reaches double digits, as is the case today, it is worth reflecting on the sustainability of such growth"
- The $24 bln 3-year note auction was met with very weak demand, drawing the lowest bid-to-cover ratio in several years. The indirect bid of 40.8% was the lowest in a year and the auction stopped through by 0.4 bps:
- High yield: 1.271%
- Bid-to-cover: 2.82
- Indirect bid: 40.8%
- Direct bid: 15.1%
- Reuters reported this morning that the European Central Bank's Governing Council is likely to cut the deposit rate
- Four members of the European Central Bank's Governing Council said that a consensus is building at the ECB for a cut in the ECB's deposit rate below its current level of -0.2%. Before the ECB's October 22nd meeting, this had generally been considered a low-probability event. Most analysts were only looking for an expansion/6-month extension of the EUR 1.1 tln asset purchase program because Mario Draghi had previously said that the deposit rate had likely hit a floor. At the October meeting, however, Draghi said that the experience of other central bankers (the Swiss and Danish central banks have cut to -0.75%) has shown that overnight lending rates could potentially be cut further from the the deposit rate's current level of -0.2%. Now, it appears that a deposit rate cut will become a base-case scenario for many banks
- Portuguese sovereign debt sold off sharply today as the country's Socialist Party agreed to join with three other leftist parties to oust the administration of the current prime minister, Pedro Passos Coelho
- The president of the Boston Federal Reserve Bank, Eric Rosengren, said that the U.S. economy has mostly avoided collateral damage from the emerging market slowdown and the coinciding commodity price slump. He does not vote on the FOMC this year but will be voting in 2016. He is widely considered an inflation dove
- Commodities:
- WTI crude: -0.70% to $43.98/bbl.
- Gold: +0.27% to $1,090.60/troy oz.
- Copper: -0.65% to $2.2275/lb.
- Currencies:
- EUR/USD: +0.14% to $1.0756
- USD/JPY: -0.05% to 123.10
- Data out Tuesday:
- October Export Prices ex-ag. and Import Prices ex-oil (08:30 ET)
- September Wholesale Inventories (10:00 ET)
- Treasury Auction:
- $24 bln 10-year note auction
- Fed Speaker:
- Chicago Fed President Evans (FOMC voter) speaks on managing the U.S. government’s debt (14:30 ET)
Treasury Yields:
- 2 Year Note 0.89% -0.01
- 5 Year Note 1.75% +0.02
- 10 Year Note 2.36% +0.02
- 30 Year Bond 3.12% +0.03
2/30 Spread: 223 bps ( +4 ) … 2/10 Spread: 147 bps ( +3 )
Preview for Tuesday 10 Nov, 2015
Economic Data
Tuesday (10 Nov) :
- Export Price ex-agri : (Prior -0.6%)
- Import Prices ex-oil : (Prior -0.3%)
- Wholesale Inventories : 0.1% (Prior 0.1%)
Earnings Highlights
Tuesday (10 Nov) :
BMO - ACM AER AFMD ARES ATRO BZH CSIQ CGIX DCIX DHI IGT MRKT QIWI ROK MCRB SRDX GLBL TRCO W ZAYO ZBRA
AMC - ALRM DOX ARNA BOOT HTHT CTRP EVDY EXEL GKOS HCKT HIL INGN JUNO KGC LXFT NVGS OPWR PNNT FENG UPLD WPRT ZFGN
AMC - ALRM DOX ARNA BOOT HTHT CTRP EVDY EXEL GKOS HCKT HIL INGN JUNO KGC LXFT NVGS OPWR PNNT FENG UPLD WPRT ZFGN
Summary
Amid the lack of economic data on Monday, the sellers took over the market by putting up some offers. As I mentioned at the start that the market is getting defensive, I think we might still see more correction especially after the strong rally since early October. However it is only matter of time and where the support is going to get the buyers back in the game.
Amid the lack of economic data on Monday, the sellers took over the market by putting up some offers. As I mentioned at the start that the market is getting defensive, I think we might still see more correction especially after the strong rally since early October. However it is only matter of time and where the support is going to get the buyers back in the game.
Direction for Tuesday 10 Nov, 2015: Down
2015 Daily Directional Accuracy: 114/177 (64.41%)
2015 Weekly Directional Accuracy: 25/41 (60.98%)
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