Stock Rally Fades on Concerns About Ukraine, but S&P Still Breaks Record

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U.S. stocks were mixed today, with the S&P 500 still managing a record close and equities posting a monthly gain.

Rumours about possible Russian action in the Ukraine were cited as a potential factor in stocks pulling back late in the session.

The Wall Street Journal, quoting Russia’s Interfax news agency, reported Ukraine’s acting president claimed Russia sent troops to Crimea and seized Parliament. This followed unconfirmed reports from the BBC and AFP that Russian troops may have entered Crimea.

Equities had rallied after a final read on consumer sentiment in February came in just above expectations and existing-home sales held steady in January.

Consumer sentiment rose marginally this month even as concerns about the extreme weather persisted, with the Thomson Reuters/University of Michigan’s final read coming in at 81.6, just above the 81.2 in the preliminary estimate and the January reading.

Another report had the economy growing at a slower rate in the last quarter of 2013 than previously estimated.

Revised figures from the Commerce Department had gross domestic product growing at a 2.4 percent annualized pace in the fourth quarter, versus the 3.2 percent gain projected in January. The economy grew 4.1 percent in the third quarter.

And, a measure of economic activity in the Chicago region topped expectations, with the February Chicago Purchasing Managers’ Index at 59.8 versus a 57.0 estimate.

European markets ended mixed. Asian stocks were also mixed. China’s currency was grabbing headlines as it continued its sharp move downwards versus the U.S. dollar.

News Sources:  CNBC and CNN Money

Market Update:

Looks like a rumour of Russian action spooked what was a very nice rally.  There are no confirmations as of yet.  As it cleared that it was just a rumour at this point the market rebounded.  A classic case of fear kicking in without any real news.

Let’s us hope that no further escalations happen between Russia and the Ukraine in the coming days and weeks.

As far as the market is concerned, it was good to see a new high today in the S&P 500 with a record closing price also.  The further away it gets from the old high the better chance it has of keeping momentum.  Many traders probably expected a double top, so I hope it keeps going next week before any inevitable weakness come in.


S&P 500 Sets New Record Close After Yellen Remarks

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U.S. stocks climbed on Thursday, propelling the S&P 500 to a record close, after Federal Reserve Chair Janet Yellen said the central bank would probably continue tapering its asset purchases while tracking data to figure how much recent softness in the economy is due to the weather.

Appearing before the Senate in testimony delayed by a snowstorm, Yellen said the harsh weather could have played a role in the recent spate of tepid economic data.

The Fed has asserted that the economy is steadily improving. As such, it began dialing back, or tapering, the size of its monthly bond purchases in December. It currently is buying $65 billion in bonds per month, down from $85 billion a month last year.

Market strategists expect the Fed to keep scaling back its bond-buying program, but listened in to Yellen for hints about when the central bank may raise interest rates. To that end, Yellen maintained the Fed’s stance that interest rates will stay low for some time. Still, minutes from the Fed’s January meeting showed some internal debate about whether rates should be raised sooner rather than later.

Appetite for equities and other riskier assets started Thursday’s session on shaky ground on military and political unease in Ukraine and Russia.  European markets finished the day mixed as traders fretted about the formation of a new Ukrainian government and its increasingly dire economic situation. Asian markets also ended with mixed results.

News Sources:  CNBC and CNN Money

FRIDAY: GDP, Chicago PMI, consumer sentiment, pending home sales, Fed’s Stein speaks, Fed’s Evans speaks

Market Update:

Janet Yellen was the hero for the bulls today as she said that should the data not be weather related then the fed would consider tapering the taper and slowing the process of fire hosing money into the economy.  More data out tomorrow.

Now the S&P has had a classic breakout new high, prices may not retrace very much in the coming days.  The market may look to shoot for a higher high.  At some point there will be weakness and it is due, but for now, nothing to do.


Stocks Finish Modestly Up in Choppy Trading

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Stocks eked out small gains in volatile trading today, with the Nasdaq briefly hitting a 14-year high.

The S&P 500 and the Nasdaq also squeezed out small gains. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded above 14.

Meanwhile, the Russell 2000 index earlier hit a new high of 1,183.04, topping its previous all-time record of 1,182.04 reached in mid-January.

Stocks were higher for most of the session, lifted by encouraging news on the housing front. New home sales spiked 9.6 percent in January, jumping to a 5-1/2 year high, to a seasonally adjusted annual rate of 468,000 units, according to the Commerce Department. Economists polled by Reuters had forecast new home sales falling to a 400,000-unit pace.

Most housing stocks rallied sharply, led by Ryland, Beazer and Lennar.

Earlier, weekly mortgage applications fell to its lowest level in nearly two decades, according to the Mortgage Bankers Association, pointing to weakness in buyer demand heading into the usually-busy spring housing season.

Meanwhile, Boston Federal Reserve Bank President Eric Rosengren said the recent drop in the unemployment rate overstates the health of the labour market and should not trigger any speedy reduction in the central bank’s easy monetary policy.

Fed Chair Janet Yellen is scheduled to testify before the Senate Banking Committee tomorrow, in her second testimony before Congress this month.

During her testimony before the House Financial Committee, she underscored the Fed would continue on a course to taper back its $65 billion-a-month bond-buying program, unless there was a notable change in the economy. Traders expect another cut of $10 billion when central bankers meet in March.

European markets finished the day with small losses. The FTSE 100 in London was declining by roughly 0.5%.

Asian markets ended with mixed results — the main indexes in Australia and Japan moved slightly lower while other markets posted gains.

News Sources:  CNBC and CNN Money

THURSDAY: Durable goods orders, jobless claims, natural gas inventories, Kansas City Fed mfg index, 7-year note auction, Fed’s Lockhart speaks

Market Update:

New homes sales welcomed at the beginning of the day, however the low mortgage applications dampened the sentiment.  There are no obvious reasons why the rally cooled around 2pm, but perhaps fear of what Ms Yellen may say tomorrow caused people to take profits off the table.  It has been an impressive rally so far, who knows when it will end.  I still think we will see a new All Time High Close soon though.


Markets Take A Breather After Big Gains

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U.S. stocks declined today, with the S&P 500 backing off from a record close, as investors weighed a decline in consumer confidence and better-than-expected earnings from home-improvement retailer Home Depot.

The S&P/Case-Shiller Home Price Index showed that home prices rose 11.3% last year, but it also indicated a cool-down in the fourth quarter. The housing market has been a big driver of the economic recovery, but with mortgage rates creeping up more recently, it’s led to a softening of home loan demand.

Still, Home Depot (HD, Fortune 500) shares gained 4% Tuesday after the retailer said that a recovering housing market drove an increase in quarterly sales.

Today prominent bitcoin exchange Mt.Gox said it had decided to “close all transactions for the time being,” with the move coming after the website halted transactions earlier this month after Mt.Gox detected what it called “unusual activity.”  This has sent a panic wave around the internet as to the feasibility of this new currency.

Wednesday:

10:00 a.m.: New home sales

11:30 p.m.: $12 billion 2-year floating-rate note auction

12:00 p.m.: Boston Fed President Eric Rosengren

1:00 p.m.: $35 billion 5-year note

7:30 p.m.: Cleveland Fed President Sandra Pianalto

Market Update:

The market was looking a little vulnerable this morning before market open.  Futures were down quite a bit before the Home Depot earnings increased positive sentiment.

However, after such a broad based rally yesterday, it was no surprise that the market took a pause here.  Especially with mixed data from the housing report.



There Goes Another Record

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U.S. stocks rallied on today, lifting the S&P 500 to an intraday record and briefly clearing its 2014 loss, as investors embraced activity on the M&A front and continued to disregard lackluster economic data as largely due to winter weather.

Mergers and acquisitions came into play, with RF Micro Devices agreeing to acquire TriQuint Semiconductor for about $1.6 billion, while Men’s Wearhouse hiked its cash tender offer for Jos. A. Bank Clothiers.

In testimony this month, Fed Chair Janet Yellen said the U.S. economy had picked up enough traction to handle reduced monetary stimulus, three rounds of which are viewed as helping propel equities higher. Yellen on Thursday delivers her weather-delayed testimony before the Senate.

No economic data was released today.

Tuesday

9:00 a.m.: S&P/Case-Shiller home prices

9:00 a.m.: FHFA home prices

10:00 a.m.: Consumer confidence

10:00 a.m.: Richmond Fed survey

1:00 p.m.: $32 billion 2-year note auction

New Sources: CNN Money and CNBC

Market Update:

Upwards and onwards.  I think the all-time previous high will soon be in the rear view mirror.  Not that there will not be volatility to come, but even with weak supposedly weather related data, the market is still telling us it wants to go higher.

I think we started to see some short covering today as traders realized that they were on the wrong side of history.  But it will become a stronger higher high should some further good news come from Yellen testimony on Thursday.  If not, a double top is a possibility.


Nasdaq Composite Manages Third Weekly Gain

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U.S. stocks fell today, with the Nasdaq Composite posting a third weekly gain, as investors considered results from companies including Intuit and another downbeat economic report, this one on housing.

Sales of existing homes fell last month to their lowest in more than a year, with the National Association of Realtors reporting sales in January fell 5.1 percent versus expectations for a 3.5 percent drop.

On Friday, the president and opposition leaders in the Ukraine signed a tentative agreement to end violence in which 77 people were killed, but Nolte downplayed the notion that the deal helped propel stock gains, saying that stocks were not in decline while the bloodshed was occurring.

Equities cut their gains after Dallas Fed President Richard Fisher said he would continue to promote the central bank rolling back on its monthly asset purchases.

European markets closed mostly higher, despite unrest in nearby Ukraine, which canceled plans to raise $2 billion by selling bonds to Russia. Asian markets ended mixed.  To top of page

New Sources: CNN Money and CNBC

Market Update:

Well, I guess it followed my script today trading flat in the end.  The market was flirting with a new all-time high before declining to close out the day slightly down.  Option expiration days don’t tend to be particularly eventful days, as the powers that be try and pin the SPY to a particular round number.  Call me a conspiracy theorist, but I have just seen it too many times.

Anyhow, it is still difficult to see were this is going from a technical standpoint.  It probably should dip some more before it can go back up.  But then it can also continue up and cause a buying stampede at the breakout of a new all-time high!  We shall see.


Feb 20th, 2013 – S&P Closes In On Record High

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Stocks drifted higher to close at session highs today, with the S&P nearing its all-time high, as investors seemed to shrug off a mixed bag of economic and earnings reports.

Stocks bobbled along the flatline early in the session, then turned higher midday.

The S&P 500 and the Nasdaq also climbed. The S&P 500 is closing in on its all-time high of 1,850.84. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 15.

On the economic front, jobless claims declined less than expected in the latest week, while consumer prices ticked up 0.1 percent in January, matching expectations.

Meanwhile, data from the Philadelphia Federal Reserve showed manufacturing activity in the Mid-Atlantic region unexpectedly contracted in February as new orders plunged.

Investors have been largely shrugging off lower-than-expected economic data over the last two weeks, pointing to harsh weather as a reason for unexpected weakness in reports.

Natural gas inventories were revised upwards but were still at their lowest for February since 2004. Nat gas futures spiked to settle at a five-year high on Wednesday on forecasts of another arctic air blast descending on North America.

New Federal Reserve Chair Janet Yellen is scheduled to testify before lawmakers on Feb. 27 after a Senate panel previously cancelled the original hearing date due to a snowstorm in DC. Yellen is expected to provide an update on the U.S. central bank’s semi-annual monetary policy report.

European shares slipped after France’s service sector shrank by its most in nine months in February.

FRIDAY: Existing home sales, Fed’s Bullard speaks; Earnings from Dish Networks

Market Update:

So where does the market go from here….who knows.  It’s at a key turning point.  We could have a lower high on the S&P 500 which would mean that prices should come down to test a moving average support, but it could also keep going higher and break a new all-time high.  It’s options expiration day tomorrow, so I don’t expect much of a move, probably sideways.

Asia and Europe should go back up tomorrow after what happened in the US today.


Stocks Close Red After Fed Minutes

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Stocks finished near session lows in volatile trading today, with the Nasdaq snapping an eight-day winning streak, as investors digested minutes from the Fed’s latest policy meeting.

Federal Reserve officials weighed whether it might be time to drop the notion that a 6.5 percent unemployment rate would be enough to consider raising rates, according to the latest meeting minutes.

The Fed Open Market Committee voted at the January meeting to reduce the pace of its monthly bond-buying program by another $10 billion to $65 billion a month.

On the economic front, the Commerce Department said housing starts sank 16 percent to a seasonally adjusted annual rate of 880,000 units. The rate was the lowest since September. It was also the largest percentage drop in three years. The news came a day after home builder sentiment dropped 10 points, according to the National Association of Home Builders’ monthly sentiment index, logging its biggest drop in the history of the survey, which started in 1985.

Separately, U.S. producer prices rose for a second straight month in January, pushed up by an increase in the cost of goods, but there was little sign of a broad pick-up in inflation pressures at the factory gate.

Meanwhile, natural gas futures rose to $6 per million British thermal units, hitting its highest level since December 2008, amid forecasts for continued cold weather across the U.S. that will further drive heating demand and deplete natural gas supplies.

Overseas, investors will be watching developments amid unrest in Ukraine.

The European Union called an extraordinary meeting of its foreign ministers on Thursday as the violence in Ukraine escalates, with the bloc expected to impose sanctions on those responsible for the bloodshed in Kiev. President Barack Obama condemned the violence, warning the government that “there will be consequences” if people step over the line.

Asian markets ended mostly with gains, except for Japan’s Nikkei, which dipped by 0.5%.


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