The market had no idea what it wanted to do yesterday. The S&P 500m traded in a narrow range between 888 and 898 all day. The news of the day; May existing home sales displayed some improvement at 4.7 mm, but of course the inevitable chatter started that the housing sector had finally bottomed out. Yeah…right. Sometimes there seems no limit on self delusion. Good though the news might have been, it failed to lift spirits, due in part at least to Monday’s World Bank bombshell. The biggest winners on the day were: Potash (POT), Research In Motion (RIMM), Goldman Sachs (GS), and Rio Tinto (RTP). The biggest losers: Apple (AAPL), Amazon (AMZN), and Boeing (BA). Boeing was down on news that the company had postponed the first test flight of the 787 Dreamliner, which weighed on the Dow all day.
Talk that tomorrow’s FOMC statement will stress the need for future stimulus, not the need to remove it, pulled the dollar index down 1.2 percent to just under 80.00. The dip increased demand for commodities which regained some of yesterday’s losses with oil ending $2-1/2 higher at $69.50. Money moved into Treasuries especially following a very strong auction of 2-year notes. The 2-year yield ended at 1.10 percent — 5 basis points lower than the auction’s high yield and 8 basis points from the 1:00 bid.
The three monitored indices had a flat day. The S&P 500 recorded a marginal gain of 0.23% to close at 895.10 and was – srictly speaking – the only index to gain on the day. NASDAQ recorded a slight dip of 0.07% to close at 1764.92 and the Dow slipped 0.19% to end the session at 8322.91.
Today’s Focus
“Turnaround Tuesday” lived up to its name I suppose, in that the market went sideways, and didn’t retreat for a second day. Today is “Wild Wednesday” so I guess anything goes. A strong or weak durable goods report could give the markets a jolt, but only a small one since at mid-afternoon the FOMC statement follows, and is not expected to be especially hawkish.
Economic Data Releases
All times are EST, consensus numbers, (where available/relevant) are indicated in bracket
It was supposed to be a quiet day—no major economic indicators were out in the U.S. But the World Bank gatecrashed the party and announced that it believed the world recession will be deeper than previously forecast (those darned bankers eh?). This sent equities and commodities into a tailspin while flight to safety boosted Treasuries significantly. Techs, small caps, and mid-caps pulled down the overall equity market even more sharply as the S&P 500 dropped below the psychologically significant 900.
Treasury yields fell with the 2-year note and 10-year note decreasing 7 basis points and 9 basis points to 1.14 percent and 3.69 percent, respectively. The dollar generally firmed, up about a cent against the euro at 1.3861 and up about 1-1/2 cents against the pound sterling at 1.6347. Commodities fell sharply with oil ending at $66.93, down $2.62.
The three monitored indices all got pounded, led by NASDAQ which shed 3.35% to close at 1766.19, followed by the S&P 500 as I mentioned above which lost 3.06% to finish at 893.04. The Dow ended the session off 2.35% at 8339.01.
Today’s Focus
Well, we had “Mad Monday” and everyone agreed that it wasn’t fun (unless you’re a bear who emerged from the bear cave to play for the day). Has the anticipated selloff begun? One day of declines doth not a correction make. Today is “turnaround Tuesday” however, and a 3% decline yesterday means there is headroom for some buying on the dip. Personally I would be watching large caps today for evidence of further downside action. Market participants will be watching for a pickup in existing home sales for further signs of housing improvement. But traders will be – albeit cautiously – taking positions ahead of tomorrow’s FOMC announcement. One fact appears reasonably certain, and that is that – if not now, then soon – the Fed has to begin executing on its “easy money” policy exit strategy. To tame inflation fears, some observers suggest, that it may be time to begin draining some liquidity from the system.
Afficionados of ‘tech will note that Orace is due to release earnings after the bell.
Economic Data Releases
All times are EST, consensus numbers, (where available/relevant) are indicated in bracket
There were no economic data releases on Friday, so Mr. Market focused on company news and getting through quadruple witching. Participants in general displayed little conviction, resulting in equities having a flat day – as has been the trend of late.
Treasury yields fell back after the sell-off on Thursday, the 2-year note and 10-year note both slipped 3 basis points to 1.21 percent and 3.78 percent, respectively. The dollar generally weakened marginally, down about half a cent against the euro at 1.3946 and down a little over 2 cents against the pound sterling at 1.650. Commodities declined with oil ending at $69.55, down $1.82 and the first time below $70 in almost two weeks.
The Dow slipped 0.2% to 8,539.73 while the S&P rose 0.31% to 921.23. Both indices were down for the week for the first time in five weeks. The NASDAQ was up a sharp 1.09 percent for the day on favorable company news from Research in Motion, ending the session at 1827.47.
Today’s Focus
There is no economic news scheduled for release, today but plenty later this week, notably the FOMC announcement on Wednesday. Mr. Market will start to take positions ahead of possible news on changes in Fed views on the economy.
With ongoing grateful thanks to the Wall Street Journal for kindly providing such a neat summary, and so – for Saturday June 20th 2009 – here’s what was hot during the past week, and what……wasn’t;
As this trading week begins its last day, something thought provoking is in order. Considering the strategic pause we believe we’re presently seeing in the market, a reflection on that is a nice way to usher in the weekend.
The present moment is nice but it does not last. Living in it is like waiting in a junction town for the morning limited; the junction may be interesting but some day you will have to leave it and you do not know where the limited will take you.
The economic outlook collective hallucination picked up smartly on Thursday led by declines in jobless claims data and a decline in the insured unemployment rate that points possibly to a top for the overall employment rate, a top that would appear sooner than most expected. Conditions in the Mid-Atlantic manufacturing sector are nearly steady, pointing to a forthcoming 50 reading in the ISM’s national report that would indicate stable month-to-month conditions. The LEI rounded out the good news, jumping for a second month.
The market reacted positively to the news, which is to say it didn’t go into a mad decline. Investors saw less need for the safety of Treasuries where yields rose steeply, up 9 basis points for the 2-year note to 1.25 percent and up 16 basis points for the 10-year to 3.85 percent. The dollar ended firmer, up 0.6 percent on the dollar index to 80.65. Commodities were steady with oil ending at $71.25.
The three monitored indices had, what essentially amounted to another yawning low volume sideways session, and closed – yet again – almost unchanged. For the connoisseurs of pure data; The S&P 500 gained 0.84%, closing at 918.37, The Dow recorded a 0.69% gain to finish at 8555.60, and the NASDAQ trailed the three, slipping 0.02% to end the session at 1807.72.
Today’s Focus
Today is a “quadruple witching” day, which is defined as a day on which stock index futures, stock index options, stock options and single stock futures (SSF’s) all expire. Similar to triple witching, except that SSF’s are also in the mix. Quad witching days occur four times per year, on the third Friday of March, June, September and December. This periodic event has coined a phrase “Freaky Friday” because there can be considerable volatility in the final hour as traders offset their options/futures before the closing bell.
Expiration day is the only thing which is going to alter recent patterns of mostly sideways churning so evident in past weeks. Cumulatively speaking however, the effect illusion of recent economic gains, generated by the news flow of more positive data, will tend to push stocks north – or perhaps better said – act to prevent a southbound migration.
Economic Data Releases
All times are EST, consensus numbers, (where available/relevant) are indicated in brackets.
If you watch no other YouTube video this year, watch this one….
The video is an utterly unhinged rant, and the best I think I’ve ever seen. A “redneck” (which is what he wants us to believe he is anyway) sets up a video camera in his shed, delivers a 10 minute “ignorant” rant, and destroys the contents of his shed. I don’t want to spoil your viewing pleasure, so without further ado…..let’s watch the the thing!
Warning: there is a LOT of EXTREMELY bad language throughout this video. I’m not kidding. You have been warned.
