May 30th 2014 – Dow, S&P 500 End Month At Record Highs

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Market View:

Well, well, well, and so it marches on.  I don’t act in the market on gut feelings, but expectations at this point must be for a pullback to at least the 1900 or 1890 region.  This march up at the end of the month has been very impressive.

I am starting to hear more people talk in the news about a secular bull market over the next 10-15 years.  After flatlining for the last 15 years who’s to say they are wrong…certainly if history repeats itself, that should be the case.

Market News:

U.S. stocks turned mostly higher on Friday, with the S&P 500 and the Dow Jones Industrial Average closing at records, after the government reported an unexpected slowdown in consumer spending in April.

The Reuters/University of Michigan survey of consumer sentiment came in at 81.9 in May, lower than the consensus estimate of 82.4.

The figures from the Commerce Department had household purchases falling 0.1 percent last month in the first decline in a year, following a revised 1 percent rise the prior month, the strongest since 2009. Incomes increased 0.3 percent, as expected.

The Chicago Purchasing Managers Index hit 65.5 in May, versus expectations of 61.

Posting a 0.8 percent gain in May, the Dow Jones Industrial Average added 18.43 points, or 0.1 percent, to 16,717.17, topping its May 13 record.

After rising to an all-time high for a fourth session, the S&P 500 climbed 3.54 points, or 0.2 percent, to 1,923.57, also a record. The index rose 2.1 percent for the month, with both the Dow and the S&P tallying a fourth monthly gain.

After an initial rise, the Nasdaq dropped 5.33 points, or 0.1 percent, to 4,242.62, leaving it up 3.1 percent for May.

Advancers moved just passed decliners on the New York Stock Exchange, where nearly 916 million shares traded. Composite volume approached 3.2 billion.

International action: European markets finished mostly lower, with shares of BNP Paribas (BNPQF) off by more than 2%. The Wall Street Journal reported that U.S. authorities were pushing the bank to pay more than $10 billion to settle a criminal probe of alleged sanctions violations.

Asian markets ended with mixed results

News Sources:  CNBC and CNN Money


May 29th 2014 – S&P 500 Hits Yet Another New Record

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Market View:

My thinking here is that the market has finally run out of steam on this rally.  It has come a long way without much of a pullback.  Nothing goes up forever.  However, trying to time the exact turning point always remains a mystery, as despite what some talking heads on CNBC think, as the saying goes, the market can remain irrational longer than you can remain solvent.  So, best to flow with it.

I have no idea why it is continually pushing record territory every day bar yesterday, but I am happy to let it run as far up as it wants.  1925 would be the next zone should it march higher.  But alas I think it will turn tomorrow.  We’ll see…

Market News:

U.S. stocks advanced for a fifth day in six on Thursday, pushing the S&P 500 to an all-time high, as Wall Street tracked falling Treasury yields while betting the U.S. economy would rebound from its first contraction in three years.

The Commerce Department found gross domestic product declined at a 1 percent annualized rate in the first quarter. Analysts had estimated a 0.4 percent contraction.

Another report had initial jobless claims falling by 27,000 to 300,000 last week, compared to estimates of 326,000. The latest number is “a positive,” and brings the four-week average to 311,500, the lowest since August 2007, offered Peter Boockvar, chief market analyst at the Lindsey Group.

Separate data had pending home sales up 0.4 percent in April, below expectations.

fter a 12-point fall, the Dow Jones Industrial Average gained 0.4 percent, with Merck & Co. leading blue-chip gains.

The S&P 500 hit an intraday record for a third straight session, and closed at an all-time high, up 0.5 percent, with materials and consumer staples faring best and telecommunications the leading laggards among its 10 major industry groups.

The Nasdaq gained 0.5 percent.

For every stock declining, nearly two gained on the New York Stock Exchange, where 394 million shares traded as of 3:50 p.m. Eastern. Composite volume surpassed 2.3 billion.

FRIDAY: Personal income & outlays, consumer sentiment, farm prices

News Sources:  CNBC and CNN Money


May 27th 2014 – S&P 500 Hits Another New Record

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Market View:

This is quite  a broad rally, with the S&P 500 closing higher for it’s 4th day in a row.  But will it last?  I think we may see a breather tomorrow, profit taking of some sort is bound to come in.

However, the trend is up, therefore any selling may not last.

Market News:

Stocks finished broadly higher today, with the S&P 500 setting a new record, as investors cheered a batch of better-than-expected economic reports and merger activity.

On the economic front, durable goods unexpectedly rose 0.8 percent in April, according to the Commerce Department, exceeding expectation for a loss of 0.7 percent.

Adding to positive news, S&P/Case-Shiller’s composite index of 20 metropolitan areas rose 0.9 percent in March, edging past expectations for a gain of 0.7 percent.

Meanwhile, consumer confidence hit 83 in May, in line with expectations.

Gold prices slipped 2 percent to a 3-1/2 month low, extending losses after strong data lifted optimism about the economy. Gold miners including Barrick Gold, Newmont and Goldcorp were trading lower.

Adding to gains, European Central Bank chief Mario Draghi said Monday the bank must be “particularly watchful” for any negative price spiral in the euro zone. That added to suggestions from other ECB policymakers that the bank was ready to cut rates next week to counter low inflation and weak lending in the euro zone, keeping asset purchases as an option. European shares rallied.

European markets had an eventful session Monday – with some key markets up by over 1%. They were still positive Tuesday, but less enthusiastic.

Investors brushed off European Union election results that showed far-right and far-left parties had gained additional traction. A majority of voters still supported traditional parties in the European Parliament.

Investors were also pleased that Ukrainian elections were completed without too many complications.

European markets have also been boosted by dovish hints emerging from the European Central Bank, which may be poised to inject new stimulus measures when it meets next month.

Asian markets were mixed Tuesday. The Nikkei closed higher, but many other indexes were down.

WEDNESDAY: Mortgage applications, 5-yr note auction; Earnings from Michael Kors, Toll Brothers

News Sources:  CNBC and CNN Money


May 23rd 2014 – S&P 500 Hits New Record of 1,900.5

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Market View:

An end to the week on a high note.  I have been calling for a new All-time high close and here it is.  Now what?  Well. After 3 days of strong upwards movement, a new Alt-time high close in the S&P came faster than I expected.  Therefore, I expect to see some weakness on Tuesday as we test this new no-man’s land.  It is still not an intraday high as it went a point higher before, but it’s the highest close.

It’s very hard to judge what happens next when it reaches white space, so my only conclusion is that we may go a little higher, but there is bound to be some selling early next week.  Just hopefully not too much to shake me out of my positions.  The larger trend is still clearly up.

It’s Memorial Day in the US, so no need to check your positions on Monday! Market is closed.

Market News:

U.S. stocks gained for a third day on Friday, lifting the S&P 500 to a record finish, as Hewlett-Packard surged and after a better-than-expected report on the sale of new homes in April.

Home builders including Lennar, D.R. Horton and Pulte Group advanced after the Commerce Department reported sales of new homes rose 6.4 percent in April, halting two months of declines.

At an economic summit in St. Petersburg, Russian President Vladimir Putin argued that his nation was not at fault in its current stand-off with Ukraine.  Saying about Obama – “Who is he to judge”…Interesting!  Putin also warned of a “dangerous civil war” in Ukraine as fresh violence erupted ahead of this weekend’s presidential election.

In the broad market, rising 0.7 percent from the week-ago close, the Dow Jones Industrial Average gained 63.19 points, or 0.4 percent, to 16,606.27, with Nike front-running gains that extended to 20 of its 30 components.

Advancing to a session high of 1,901.26, above its record close hit on May 13 and less than a point from its intraday record, the S&P 500 ended up 8.04 points, or 0.4 percent, at 1,900.53. Technology led sector gains and utilities led sector losses. The S&P rose 1.2 percent for the week, its first weekly gain in three.

After a brief and early dip, the Nasdaq rose 31.47 points, or 0.8 percent, to 4,185.81, leaving the technology-laden index 2.3 percent higher for the week.

Volume was slim Friday with many traders breaking early ahead of the three-day holiday weekend, with Wall Street closed on Monday for Memorial Day.

Still, European markets mostly finished in positive territory.

News Sources:  CNBC and CNN Money


May 22nd 2014 – Stocks End Higher; S&P 500 Near Record

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Market View:

At last some good news for the retailers.  Great report from Dollar Tree in particular.  The stock rallied over 6% today.  We are approaching the All-Time high, which seems likely to be a double top at least.  I think we will see it stumble tomorrow after two great moves up, but it will only a small down move if it happens before we climb up again.

Market News:

U.S. stocks rose modestly on Thursday, extending the prior day’s rally, as investors weighed varied economic reports a day after the Federal Reserve signaled interest rates would remain low for the foreseeable future.

Hewlett-Packard fell after provider of computer hardware and services tallied second-quarter earnings per share of 88 cents, excluding items, on $27.3 billion in revenue, versus estimates of EPS of 88 cents on $27.4 billion in sales.

Chinese retailer JD.com rose in its first day of trading on the Nasdaq; Best Buy gained after the electronics retailer reported first-quarter earnings that beat estimates; Dollar Tree rallied after the discount retailer reported a rise in first-quarter profit; Sears Holdings fell after the retailer reported a larger loss for the first quarter and Hess advanced after refiner Marathon Petroleum said it would pay about $2.87 billion for the oil and gas producer’s retail business. Apple rose to a 52-week high.

Thursday’s data included the Markit Economics preliminary index of U.S. manufacturing, which rose to 56.2 this month from 55.4 in April. And, an initial purchasing managers’ index in China climbed to a five-month high.

Other reports had sales of previously owned homes rising last month; the Conference Board’s index of leading economic indicators gaining in April and more Americans than estimated filing claims for jobless benefits last week.

After a 43-point fall and 32-point gain, the Dow Jones Industrial Average rose 10.02 points, or nearly 0.1 percent, to 16,543.08, with Nike leading blue-chip gains.

After rising within 2 points of its record close, the S&P 500 added 4.46 points, or 0.2 percent, to 1,892.49, with utilities and health care the best performing and consumer staples and energy faring the worst of its 10 major industry groups.

The Nasdaq rose 22.80 points, or 0.6 percent, to 4,154.34

The Chicago Board Options Exchange Volatility Index, a measure of investor uncertainty known as the VIX, ended at 11.98, its second lowest close this year.

European markets ended modestly higher. Asian markets closed mostly higher, buoyed by better-than-expected manufacturing data from China. Stocks in Thailand were little changed despite news that military officials had taken control of the government, marking the latest in a string of coups in the past few decades.

FRIDAY: New home sales; Earnings from Foot Locke

News Sources:  CNBC and CNN Money


May 21st 2014 – All Smiles on Wall Street As Fed Signals No Rate Hike Soon

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Market View:

No shocks from the Fed then, and with fed forward guidance still being painted in a positive manner backed by some strength in the labour markets we may yet see a new all time high again in the S&P.  Possibly this week.

Good news from Russia as Putin elected to withdraw his troops from the Ukranian Border ahead of the election in the country.  Hopefull stability will come out of those elections and democracy will win through as lead to peace.

I expect some short term weakness tomorrow after such a gangbuster of a day, but just a pause as the trend is still bullish.  And the trend is our friend.

Market News:

U.S. stocks jumped on Wednesday, bouncing back from the prior day’s sharp fall, after minutes from the Federal Reserve’s last meeting had central bankers discussing ways to normalize interest rates.

“The conversation is clearly shifting from this unprecedented accommodation to policy firming. For equity markets, this is a positive signal, because the economic momentum is more upbeat, but at the same time tightening is not imminent,” said Anastasia Amoroso, a Houston-based global market strategist at J.P. Morgan Funds.

The central bank last month trimmed its monthly asset buying to $45 billion, its fourth consecutive $10 billion reduction. Fed officials also said the economy was picking up steam and the labor market improving.

Tiffany climbed after the high-end jeweler posted quarterly profit that topped expectations; Netflix gained after saying it would broaden its online-video offerings in Europe. Target gained after the discount retailer reported a 0.3 percent decline in U.S. same-store sales, better than the 1.1 percent drop expected by analysts polled by Consensus Metrix. Lorillard rallied after Reuters reported Reynolds American was in advanced talks to acquire the cigarette company.

Also rebounding after its recent battering, the Russell 2000 climbed 0.6 percent, but the gauge of small companies still remained roughly 9 percent from its all-time high.

Benchmark indices spiked to session highs in the immediate aftermath of the Fed release.

The Dow Jones Industrial Average leaped as much as 170 points, and ended up 158.75 points, or 1 percent, to 16,533.06, with Goldman Sachs Group leading gains that included 28 of its 30 components.

The S&P 500 added 15.20 points, or 0.8 percent, to 1,888.03, with consumer discretionary and energy pacing gains in a broad market surge that included all of its 10 major industry groups.

The Nasdaq climbed 34.65 points, or 0.9 percent, to 4,131.54.

Lower interest rates pushed mortgage applications to refinance higher by 4 percent last week from the week before, but failed to bring potential home buyers into the market, according to data released by the Mortgage Bankers Association.

European stocks closed slightly higher, with Italian shares up more than 1%.

Asian marked ended the day mixed, with Thailand’s SET up around 0.6%. The Thai military announced the imposition of martial law, but this morning said that it would hold meetings with opposition leaders.

THURSDAY: Jobless claims, Chicago Fed nat’l activity index, PMI mfg index flash, existing home sales, leading indicators, Kansas City Fed mfg index, Fed’s Williams speaks, Facebook annual mtg, Intel shareholder mtg; Earnings from Best Buy, Dollar Tree, Hewlett-Packard, Gap, Marvel Tech, Ross Stores, Aeropostale, Gamestop, TiVo

News Sources:  CNBC and CNN Money


May 20th 2014 – Retailers Disappoint Dragging The Market Down

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Market View:

Caterpillar and the big retailer numbers fell short causing the market to let off some steam from a three day rally.  I am not sure what the influence will be tomorrow, but y gut says we climb back higher tomorrow.  Janet Yellen is speaking tomorrow and we have the mortgage applications report as well as another slough of eanings reports.  The Dow Jones technically is at a previous low, so odds of a rebound have a strong edge.

Market News:

U.S. stocks fell sharply on Tuesday after a Federal Reserve official said rate hikes might come sooner than expected and Staples and other retailers offered disappointing quarterly results.

Equities fell to session lows after the Fed’s Bank of Philadelphia President Charles Plosser said the central bank’s current taper pace could be too slow if the economy improves as forecast.

The Russell 2000 Index dropped nearly 10 percent from its March record and the Chicago Board Options Exchange Volatility Index, a measure of investor uncertainty known as the VIX, rose 3.1 percent.

Staples projected a drop in sales in the current quarter, with shares of the office supply retailer falling sharply. Urban Outfitters also fell after its quarterly report, along with Dick’s Sporting Goods.

Home Depot reported first-quarter earnings below estimates, with the home improvement chain’s spring selling season off to a slow start after a harsh winter in many parts of the nation. Shares of the company gained, however, as it hiked its full-year earnings forecast and said it intends to buy back as much as $3.75 billion additional shares this year.

Stocks started in the red as Wall Street reacted to quarterly reports from a number of retailers, and disappointing numbers from Caterpillar, which led blue-chip declines after the maker of construction and mining equipment disclosed in a regulatory filing that total retail sales of machines in the three-month rolling period that ended in April were off 13 percent.

European markets closed mostly lower. Vodafone (VOD) shares slumped 5% following quarterly results. Credit Suisse (CS)rose 1% after the bank pleaded guilty to charges related to U.S. tax evasion. The Swiss lender agreed to pay $2.6 billion to settle a long-running probe.

Asian markets ended the day on a positive note, though gains were small. Thailand’s stock market retreated 1.2% and the country’s currency dropped after the Thai army surprised the country by declaring martial law

WEDNESDAY: Mortgage applications, Fed’s Dudley speaks, Fed’s Yellen speaks, oil inventories, Fed’s George speaks, Fed’s Kocherlakota speaks, FOMC minutes, Boeing investor conference; Earnings from Lowe’s, Target, Hormel, PetSmart, Tiffany, American Eagle Outfitters, L Brands, NetApp, Williams-Sonoma

News Sources:  CNBC and CNN Money


May 19th 2014 – Internet stocks boost Nasdaq

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Market View:

No major economic news came out on Monday, however, news of mergers and acquisitions as well as a bounce in the oversold small cap sector boosted the market.  It remains to be seen if a new all tie high on the S&P 500 comes this week or if we are destined for a flat to possible down market for the summer.  A lower high in the coming days may signal a change in the intermediate up trend.  We shall see.

Market News:

Stocks eked out gains after hovering around the flatline for much of the session Monday, as investors remained cautious amid recent mixed economic reports. The Nasdaq rallied, thanks to a strong performance in Internet stocks.

Equities have come under selling pressure in recent days, with the S&P 500 logging its first back-to-back losing weeks since January. Small-cap stocks, often seen as the first beneficiary of growth, have tumbled with the Russell 2000 index briefly dipping into correction territory last week.

The small-cap Russell 2000 index led the rally. Internet companies such as Zillo, Pandora, Yelp, and LinkedIn were up more than 3 percent each.

Home Depot, TJX, Lowe’s, Target and Hewlett-Packard are among notable earnings slated to post results throughout the week.

Meanwhile, San Francisco Fed President John Williams said the central bank is moving toward normalizing U.S. monetary policy, and is on track to raise rates probably some time in the next year.

European markets finished mixed. Banking stocks, including Deutsche Bank (DB) and Barclays (BCS), slipped in Europe after Deutsche Bank announced it was raising roughly €8 billion ($11 billion) from investors, including Qatar, to meet regulatory requirements.

Asian markets mostly ended with losses. However, the Mumbai Sensex index continued to rise as investors cheered the election of a new leader, Narendra Modi

TUESDAY: Fed’s Plosser speaks, Fed’s Dudley speaks, Microsoft Surface event; Earnings from Home Depot, Dick’s Sporting Goods, Staples, TJX

News Sources:  CNBC and CNN Money


May 16th 2014 – Dow and S&P Lower for the Week

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Market View:

The expected bounce came today.  A push back towards the All-Time High should happen again next week in my opinion.  Barring political turmoil over the weekend I expect the bounce to continue on Monday.

Strength also came in the Russell 2000, as it reached the 10% correction number.  Great housing starts number, may the good news roll on.

Market News:

Stocks staged a final-hour comeback to close in positive territory in choppy trading, putting an end to two days of sharp declines, but the Dow and S&P 500 still ended lower for the week.

Housing starts jumped 13.2 percent to a seasonally adjusted annual pace of 1.07 million units, according to the Commerce Department. The reading was the best since November 2013. And building permits hit their highest level since 2008.

Meanwhile, consumer sentiment slipped to 81.8 in May, according to the Thomson Reuters/University of Michigan’s preliminary reading. The reading was down from 84.1 from the month before and was also below the expectation of 84.5 among economists polled by Reuters.

St. Louis Federal Reserve President James Bullard said he sees inflation picking up in the near future and approach the central bank’s 2-percent target. He added that he considers the neutral Fed funds rate to be 4 percent, factoring in 2-percent inflation.

So far, 93 percent of S&P 500 companies have posted quarterly results, with 69 percent of firms topping earnings expectations and 22 percent missing estimates.

European shares failed to bounce back after Thursday’s global selling, which was prompted by anxiety over slow growth, low inflation and hefty valuations. U.S. shares fell for a second session on the day, with the Dow Jones down triple digits. The S&P 500 lost 1 percent each while the Nasdaq closed down 0.8 percent. Small-cap stocks weighed on Thursday, as the Russell 2000 briefly hit correction territory before pulling back.

The Russell will continue to be in focus on Monday. While the index is currently 9.3 percent away from its early March record of 1,208.65 – less than the 10 percent decline that marks a correction – it has closed below its 200-day moving average in the past two session, a sign of weakening momentum.

Monday: Fed’s Fisher speaks, Cisco investor day; Earnings from Campbell Soup, Urban Outfitters

News Sources:  CNBC and CNN Money


May 15th 2014 – Stocks end near lows in 2-day selloff

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Market View:

This is just some steam being let off after an all time high in my humble opinion.  So I am expecting a re-bound tomorrow.  The Russell 2000 is down 10% from it’s high again, so a bounce is now overdue.

Janet Yellen’s comments after the market close may influence the direction tomorrow on what is a slow day for economic news and earnings reports.

Market News:

Stocks finished sharply in the red Thursday, with the Dow down triple digits, weighed down by disappointing earnings from a handful of retailers and weak economic reports.

The Dow Jones Industrial Average dropped 167.16 points, or 1.01 percent, to close at 16,446.81. The blue-chip index was down more than 200 points at its session low.

The S&P 500 slumped 17.68 points, or 0.94 percent, to finish at 1,870.85. The S&P 500 earlier broke a key technical level, slipping below its 50-day moving average. And the Nasdaq declined 31.33 points, or 0.76 percent, to end at 4,069.29.

The Russell 2000 index entered correction territory, falling more than 10 percent from its all-time high of 1,212 reached in March.

On the economic front, consumer prices ticked up 0.3 percent in April, as expected, signaling some inflation in the economy. Industrial production slid 0.6 percent, disappointing estimates for a gain of 0.2 percent. Adding to negative news, home builder sentiment weakened slightly in May.

The bad news seemed to outweigh the positives: Jobless claims declined 24,000 to a seasonally adjusted 297,000, according to the Labor Department. That was the lowest reading since May 2007 and brought claims back to their pre-recession level. And New York manufacturers posted a strong growth in activity in May, according to the Federal Reserve Bank of New York’s monthly Empire State Manufacturing Survey.

Among earnings, Dow-listed Wal-Mart and small rival Kohl’s reported first-quarter numbers that disappointed.

Fed Chair Janet Yellen is scheduled to address the U.S. Chamber of Commerce after the market closes. Last week, Yellen said the economy is “on track for solid growth” this quarter, but warned that a deterioration in housing or financial markets could alter that scenario.

FRIDAY: Housing starts, consumer sentiment, Fed’s Bullard speaks

News Sources:  CNBC and CNN Money