July 31st 2014 – First Monthly Drop In Six For Dow & S&P 500

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Market View:

Carnage in the markets today.  Worries from an Argentenian default and fallout from the Ukraine Crisis.  Add in the fact that markets were getting overcooked and this is what happens.

The best thing to do is just get out of the way of it and move to cash and wait for strength.  That’s what I’ll be doing!

I really thought we would get another pop towards 2000 this week, but alas it wasn’t to be.  I’ve been wrong before, I’ll be wrong again somewhere down the line…NEXT!

Market News:

Stocks tumbled on Thursday, with the Dow and S&P 500 posting their first monthly drop since January, as investors worried about Europe’s economy, an Argentine default and a jump in U.S. labour costs prompted concerns about corporate margins.

Argentina’s default came as international banks sought a deal that would let the country restart servicing its securities. Argentinian stocks traded in the U.S. were hit, including Pampa Energy.

The Labour Department reported U.S. labour costs rose the most in more than five years in the second quarter, with the ECI climbing 0.7 percent, the biggest jump since the third quarter of 2008.

Euro-zone inflation unexpectedly declined this month, highlighting the European Central Bank’s worries that the region’s economy is not healthy enough to support increased prices.

Hitting its highest level since the middle April, the CBOE Volatility Index, a gauge of investor uncertainty, jumped 22 percent to 16.30.

Market strategists offered differing views on whether a Fed move towards a normalization in monetary policy in the earlier part of 2015 rather than the middle part of the year was a positive or negative for U.S. equities.

Friday

Earnings: Procter and Gamble, Chevron, CBOE, Axa, Calpine, Clorox, ArcelorMittal, Weyerhaeuser

Monthly vehicle sales

8:30 a.m. Employment report

8:30 a.m. Personal income and spending

9:55 a.m. Consumer sentiment

10:00 a.m. ISM Manufacturing

10:00 a.m. Construction spending

News Sources:  CNN Money & CNBC


July 30th 2014 – Weak Market Despite GDP Uptick

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Market View:

Despite strong economic growth and no major surprises from the Federal Reserve, the bulls couldn’t quite get it together Wednesday.  After a nice uptick at the open the market slowly sold off.

It seems that my feeling for a recovery from the selling that started last week was a little premature.  But there is a short term bottom here somewhere, today could be that marker.

Market News:

U.S. stocks wavered on Wednesday after a report had the economy growing more than expected in the second quarter and the Federal Reserve continued tapering asset purchases and its ultra-easy monetary policy.

Voting to cut another $10 billion from its monthly bond buys, the central bank left its short-term interest rate target near zero and signalled minimal cheer about growth.

Fed Bank of Philadelphia President Charles Plosser was the sole dissenter, objecting to the “considerable time” phrasing as related to the window of how long the central bank would wait until it begins raising the Fed funds rate.

Stocks had mostly fallen on Wednesday after the Commerce Department reported the economy grew 4 percent in the second quarter, with the faster-than-estimated pace fuelling speculation that the Federal Reserve could move on rates more quickly than anticipated.

Russian market mystery: Trading on Moscow’s main stock market was halted for a lengthy period earlier Wednesday. But the MICEX added 2% once trading resumed as investors were relieved that new European and U.S. sanctions against Russia were not as bad as feared.

European markets ended lower, with stocks in Paris falling more than 1%. Asian markets mostly closed with small gains.

Thursday:

Earnings: Exxon Mobil, Conoco Phillips, Diageo, Occidental Petroleum, Royal Dutch Shell, Public Storage, Siemens, MasterCard. A-B InBev, AstraZeneca, Sanofi, Tesla, Expedia, GoPro, LinkedIn, Time Warner Cable, Alcatel-Lucent, Apache, Teva, Delphi Automotive, Ball Corp, Becton Dickinson, CME Group, Hyatt, Colgate-Palmolive, Kellogg, Marathon Petroleum, Mosaic, Newell Rubbermaid, McKesson, PG&E, Sony, Avon Products, Beazer Homes, Fortress Investments, Scana, Generac, DirecTV, 3-D Systems, SunPower, Seattle Genetics

8:30 a.m. Jobless claims

8:30 a.m. Employment cost index, 2Q

9:45 a.m. Chicago PMI

New Sources:  CNN Money & CNBC


July 29th 2014 – Ukraine Concerns Overtake Positive Earnings

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Market View:

Another small leg down in what I expect to be a move higher soon.  There are of course obstacles to that outcome, particularly with a fed statement tomorrow at 2pm, that usually causes some volatility.

I just think there has been enough selling to get rid of the weak hands allowing for another shot at 2000 on the S&P 500.  This is still a trending market, so best not to fight the trend.

Market News:

U.S. stocks declined on Tuesday, pulling the Dow under 17,000, as the United States and European Union joined in expanding sanctions against Russia, highlighting a geopolitical crisis that overrode investor enthusiasm for earnings from corporations including Merck & Co.

In a statement televised live Tuesday afternoon, President Barack Obama said the United States was expanding on measures announced two weeks, targeting Russian energy, defense and financial sectors as Russia has continued to support separatists in the Ukraine, and was still building up forces on its own border with Ukraine.

Obama’s statement followed European Union governments that announced sanctions earlier in the day to reduce Russia’s ability to tap into bank financing and advanced technology.

The EU sanctions, the most expansive so far over Russia’s support of rebels fighting in Eastern Ukraine, triggered what Greenhaus called a “knee-jerk” reaction to headlines related to the crisis in the Ukraine, with Wall Street erasing gains that came with another round of largely better-than-expected corporate results.

The Conference Board’s measure of consumer confidence came in Tuesday at 90.9 in July, the highest reading since October 2007.

U.S. single-family home prices climbed more than expected in May, although the pace of monthly increases showed signs of slowing, according to the S&P/Case-Shiller composite index of 20 metropolitan cities.

The Fed’s regular monetary policy announcement is due on Wednesday, with the central bank expected to cut monthly asset purchases by another $10 billion to $25 billion. U.S. second-quarter gross domestic product figures will also be announced during the day.

International markets: European stocks were doing well, with the Eurostoxx 50 index about 0.6% higher. Russia’s MICEX index, despite the impending arrival of new sanctions, also finished 0.6% higher. Asian stocks ended the day mostly higher, with Chinese stocks doing very well. Taiwan sticks out as an exception, finishing 0.3% lower.

Wednesday:

Earnings: Barclays, British American Tobacco, Goodyear Tire, SodaStream, Southern Co, Phillips 66, Thomson Reuters, Nextel, Valero Energy, Tesoro, Hess, Humana, AllianceBernstein, Booz Allen Hamilton, Carlyle Group, Samsung, Kraft Foods, Whole Foods, MetLife, Yelp, Weight Watchers, Shutterfly, Taubman Centers, AMC Entertainment, Boston Beer, Murphy Oil, Cabot, Western Digital, Whiting Petroleum, Agnico Eagle Mines, Allstate, Akamai, Hartford Financial

7:00 a.m. Mortgage applications

8:15 a.m. ADP

8:30 a.m. Q2 GDP

8:30 a.m. PCE Q2

11:30 a.m. 2-year floating rate note auction

1:00 p.m. $29 billion 7-year note auction

2:00 p.m. Fed statement

New Sources:  CNN Money & CNBC


July 28th 2014 – Stocks little changed After Volatile Day

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Market View:

What started ugly turned into a pretty good day.  I was fearing the worst and expecting a move to cash with the possibility that a short term top had been put in place.  However, given the strength of the buy the dip crowd today, I still think we will see above 2000 in the S&P before we will see another dip between now and back to school.

Certainly the sell in May has been de-bunked again this year.  So an New All Time High is on its way.

Earnings and data have started to wane a little from previous weeks, so hopefully this week we will have better news as a lot of companies are in the midst of reporting.  Historically revenues and earnings are higher in this quarter than they have been since 2011.

Market News:

U.S. stocks held little moved on Monday, with the Dow industrials coming back from a one-month low, as investors looked to economic reports, earnings and the Federal Reserve’s mid-week policy decision.

Stocks finished well off session lows that had the Dow down as much as 82 points.

The Fed’s next policy move comes at the end of a two-day session on Wednesday, with the central bank expected to cut its monthly asset purchases another $10 billion to $25 billion.

Financial-data firm Markit reported activity in the U.S. services sector held at its highest level in four-and-a-half years in July, although readings for new business and employment growth softened.

International markets: Most European markets ended in the red.

Russia’s Micex index was lower after an arbitration panel in the Hague ruled against the state, finding the government had illegally sold off the assets of oil company Yukos. Former major shareholders were awarded $50 billion in damages.

Most Asian markets advanced, led by a 2.4% surge on China’s benchmark Shanghai Composite.

Tuesday:

Earnings: Merck, Pfizer, American Express, Twitter, Amgen, BP, UBS, Deutsche Bank, Aetna, UPS, Panera, Dreamworks, US Steel, Anadarko, Marriott, Express Scripts, Newmont Mining, Buffalo Wild Wings, Ruby Tuesday, Corning, Eaton, Illinois Tool Works, March and McLennan, Sirius XM, NY Times, AK Steel, Owens-Illinois

FOMC meeting begins

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

10:00 a.m. Consumer confidence

10:00 a.m. Housing vacancies

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

New Sources:  CNN Money & CNBC


July 25th 2014 – No TGIF, Stocks Fall On Earnings

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Market View:

Today was about an earning hangover from Amazon.  In their conference call, they noted that they have not seen any substantial uptick in the economy and as a result of their earnings miss they plunged almost 10%!

There was good news fron Japan with a move towards growth led inflation.  Their markets closed up significantly.

I expect to see a bounce back on Monday, however, we may see one more down day creating a higher low on the charts before we start waving back up again.

Market News:

U.S. stocks finished lower on Friday weighed by Amazon’s weak earnings and Visa’s disappointing outlook, in addition to ongoing worries over geopolitical unrest.

In the final hour of trading, markets briefly ticked lower after Goldman Sachs released a note saying they are “neutral” on equities over three months as it sees a slide in bonds leading to a temporary selloff in stocks.

Amazon shares dropped as much as 11 percent on Friday. On the Dow, Visa fell more than 4 percent on its lowered full-year revenue forecast.

So far, just under one half of companies in the S&P 500 have posted quarterly results, with 69 percent of firms topping earnings estimates and 63 percent beating revenue expectations.

Orders for long-lasting U.S. manufactured goods rose more than expected in June, pointing to momentum in the economy at the end of the second quarter. The report did not move stocks much in pre-market trading.

No major companies are reporting earnings on Friday, except for Xerox, which reported before the bell a profit that fell 1.9 percent in its second quarter and beat analysts’ expectations.

The Federal Open Market Committee meets next week, and economic data reports include second-quarter GDP and U.S. employment figures.

U.S. intelligence indicated that Russia could provide heavier and more sophisticated weaponry to Ukrainian separatists at any moment, a Pentagon spokesman said on Friday.

The European Union is mulling measures to curb Russia access to the capital markets, after the downing of the Malaysia Airlines passenger jet over eastern Ukraine last week. Adding to tensions, Ukrainian Prime Minister Arseniy Yatsenyuk announced his resignation on Thursday, after two parties pulled out of the governing coalition.

In the Middle East, authorities in Gaza reported that 15 people were killed on Thursday after Israeli forces shelled a shelter at a United Nations (UN)-run school, bringing the civilian death toll above 800. The UN warned that Israel may have committed war crimes in its near three-week offensive in Gaza.

International Markets: The Russian central bank had to raise interest rates to lure foreign investors amid sanctions related to its aggression around Ukraine and high inflation. The main RTS index closed down more than 1.6%.

Asian markets ended the day mixed, but Japanese stocks surged 1.13% after data shows inflation may finally be returning to the long-dormant economy. European stocks ended the day broadly down, with the FTSE 100 closing about 0.4% lower.

News Sources:  CNBC and CNN Money


July 24th 2014 – Can the S&P 500 top 2,000?

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Market View:

The big risk for Europe’s recovery and continued growth in the US markets remains an escalation in the dispute with Russia over Ukraine.  2 military planes being shot down yesterday emphasised the rebels ability to shoot down anything including commercial airlines.

The west seem to think that Putin is not doing enough to quell the unrest.  Whatever the outcome in the coming days and weeks, there is certainly more and more pressure being applied to the Russian Leadership.  Something has to give.

I would not be surprised to see another flat day tomorrow, which will still see another weekly gain for the overall market.  But as the Title of this post suggest, I think it is inevitable that 2000 will come and go.

Market News:

U.S. stocks closed little changed on Thursday, with the S&P 500 touching its record high, as investors considered mostly upbeat earnings from companies including Ford Motor and Facebook and mixed economic reports.

Facebook climbed to a record after the social network trounced estimates for quarterly profit and revenue; Ford shares rose after the auto manufacturer reported second-quarter results. Caterpillar shares fell after the maker of earth-moving machinery reported a second-quarter earnings beat, but fell short on revenue.

General Motors shares fell after the car maker reported a lower-than-expected second-quarter profit, and Wal-Mart Stores slid after the discount retailer said CEO Bill Simon would leave the company.

Thursday’s economic reports included Commerce Department figures showing sales of new homes fell 8.1 percent in June.

A separate government report had jobless claims coming in at 284,000 last week, less than the 308,000 estimated by analysts.

European markets were mainly firmer, as were most Asian markets, although Japan’s Nikkei slipped.

Friday:

Earnings: Aon, Xerox, Statoil, Black and Decker,Tyco,AveryDennison,Moody’s, Covidien

8:30 a.m.: Durable goods

News Sources:  CNBC and CNN Money


July 23rd 2014 – Record Close For S&P 500

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Market View:

Technology is the hot ticket right now.  The Nasdaq got another boost from Apple earnings.  Tomorrow could be more of the same as Facebook reported a big spike in advertising sales from mobile ads.

As I had mentioned yesterday, a New all time high was looking inevitable and so here t is.  Back to no mans land again.  I think we may go higher again tomorrow, but after that who knows?  On the positive side, earnings are coming in very healthy for some of the biggest companies.  We have another slough of them tomorrow.

Market News:

U.S. stocks mostly rose on Wednesday, with the S&P 500 finishing at a record for the 26th time this year, as investors weighed earnings from companies including Boeing and Apple.

Shares of Facebook wavered in after-hours trading as the social media site reported revenue increased 61 percent in the second quarter on demand for its mobile ads.

Apple shares rose, a day after the iPhone maker posted profits that beat expectations. Microsoft shares rose after the software giant reported better-than-expected revenue.

Boeing turned lower after the aerospace giant reported quarterly profit and hiked its full-year forecast. PepsiCo rose after the beverage maker reported revenue that topped expectations.

The only economic data expected for the day came before the bell, with applications for mortgage refinancing jumping 4 percent, the Mortgage Bankers Association said. However, the report showed that home purchase loan applications were down 15 percent from a year ago.

Thursday:

Earnings: Caterpillar, MMM, General Motors, Ford, Amazon.com,Visa, Starbucks, Bristol Myers Squibb, Eli Lilly, Roche Holdings,Hershey,Dr.Pepper Snapple, Pulte Group, Union Pacific, T. Rowe Price, KKR,Nasdaq Group, Altera, Chubb, Federated, Imax, JetBlue,Pandora,Decker’s Outdoor, Kla-Tencor, Baidu, Brunswick, Dunkin Brands,Scholastic, Supervalu, Grubhub, Cabela’s,Under Armour,Wyndham Worldwide, Imax, Flextronics, Freescale Semi, Maxim,SolarWinds,Mettler-Toledo

8:30 a.m.: Initial claims

8:58 a.m.: Manufacturing PMI

10:00 a.m.: New home sales

News Sources:  CNBC and CNN Money


July 21st 2014 – Ukraine and Gaza Bring Volatility

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Market View:

It has been an interesting few days in the markets, down then up, then down again today.  My overall feeling is that we will be sideways for a short while as the market decides if the risks in the Ukraine and Gaza escalate and become bigger economic obstacles.

I feel uncomfortable talking about the recent troubles as being contained, however, from a markets point of view the buyers are not yet exhausted, even in the face of what has happened in the last few trading days around the world.  It was a good recovery today after President Obama outlined his position on Russia, once again showing the buoyancy that is still present.

Market News:

U.S. stocks fell on Monday as global disapproval of Russian President Vladimir Putin increased after the downing of a passenger plane in Ukraine and amid international calls for a truce in the Israeli-Palestinian conflict.

In eastern Ukraine, a train carrying the remains of most of the 298 victims of the Malaysia Airlines disaster left the site after Malaysia’s prime minister reached an accord with the pro-Russian separatists controlling the area.

In the Gaza Strip, the Palestinian death toll reportedly climbed above 500 and seven Israeli soldiers died on Monday, following the deaths of 13 soldiers on Sunday, with the fighting continuing despite appeals for a ceasefire.

Stocks came off session lows, however, with the Dow regaining its footing above 17,000, after President Barack Obama said in a nationally televised statement that the costs to Russia would increase should it fail to find a diplomatic solution to the crisis in Ukraine, but stopped short of further sanctions.

Exports represent about 40 percent of the German economy, and 10 percent of German export companies sell to Russia, while three-quarters of those companies have 25 percent of their exports going to Russia, Peter Boockvar, chief market analyst at the Lindsey Group, calculated in emailed research.

Russia is the largest oil, gas, uranium and coal importer to the European Union, according to the European Commission.

Tuesday:

Earnings: Apple, Coca-Cola, McDonald’s, Microsoft, United Technologies, Verizon, Comcast, Travelers, Dupont, Credit Suisse, Lockheed Martin, Electronic Arts, Xilinx, State Street, Domino’s Pizza, Kimberly Clark, VMWare, Juniper Networks, Harley Davidson

8:30 a.m. CPI

9:00 a.m. FHFA HPI

10:00 a.m. Existing-home sales

News Sources:  CNBC and CNN Money


July 17th 2014 – Stocks End Sharply Lower

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Market View:

A dark day for humanity.  Possibly a mistaken rocket launched against a commercial airline, with hundreds losing their lives and devastating families.  Then later in the day news of Israel sending in ground troups to gazza caused the already fragile market to nose dive some more.  Nothing more to say really, thoughts are with the families of those affected with this great tragedy as well as a hope for a cease fire in Gazza and the Ukraine.

Market News:

U.S. stocks tumbled on Thursday, with the Dow falling back below 17,000, as investors fled equities and other risky assets after the crash of a passenger plane in Ukraine and as Israel launched a ground offensive in Gaza.

The crash of a Malaysia Airlines Boeing 777 with 295 people aboard near the Russian border followed new U.S. and European Union sanctions on Russia.

In Israel, Prime Minster Benjamin Netanyahu said he had instructed the nation’s military to begin a ground offensive in Gaza.

After wavering near unchanged, stock indexes turned decisively lower after the reports involving Malaysia Airlines Flight 17. The price of gold and crude surged and Treasury yields fell.

Mayalysia Airlines said it had lost contact with the MH17, while the Associated Press quoted a Ukraine government minister as saying a plane had been shot down.

Microsoft shares rose after the software giant said it would cut 18,000 jobs in the next year. Morgan Stanley turned lower after the brokerage reported quarterly results, and UnitedHealth Group gained after its earnings beat estimates.

Equities began the session in the red after the United States and European Union imposed sanctions on Russian banks, energy companies and defense companies in another try at getting Russia to stop its backing of Ukrainian rebels.

Economic reports offered differing messages on the housing and labor markets, with housing starts unexpectedly falling in June, applications for jobless benefits declining last week and a gauge of manufacturing activity in the Philadelphia region expanding in July.

Overseas markets: Russian sanctions and worries about the crash are fueling a sell-off in European stocks. The FTSE 100 closed about 0.7% lower, and the German Dax was off more than 1%. The Russian RTS index finished just under 4% lower.

Asian stocks ended the day mixed, though Taiwanese stocks fell more than 0.8%.

Friday

Earnings: General Electric, Honeywell, Kansas City Southern, Bank of NY Mellon, Ericsson, VF Corp, Interpublic

9:55 a.m.: Consumer sentiment

10:00 a.m.: Leading indicators

News Sources:  CNBC and CNN Money


July 16th 2014 – Dow Reaches 15th Record-High Close Of The Year

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Market View:

With great reports and the Fed being pleased with the moderate growth of the economy we had a bounce today.  It did get a kick up at the open after a positive overnight report on growth from China.

So, technology rebounded after yesterdays dip caused by Janet Yellen’s comments.  News of mergers and deals between some of the biggest companies is always cheered on Wall Street.

The market is making another wave up yet the S&P 500 has yet to make a new all time high unlike the Dow and the Nasdaq.  I suspect that the S&P will reach it either this week or next.  Where the next intermediate top it no one knows.

Market News:

U.S. stocks climbed on Wednesday, again lifting the Dow industrials into uncharted terrain, with investor sentiment lifted by corporate earnings and deals.

Equities maintained near session highs with the release of the Federal Reserve’s Beige Book, which found the economy expanding at a modest to moderate pace, with consumer spending up in all of the Fed’s districts.

Technology shares rallied in the wake of earnings from Intel, with the chip maker forecasting third-quarter revenue above Wall Street’s estimates late Tuesday.

Time Warner shares shot higher after CNBC reported it had rejected a $80 billion takeover bid by 21st Century Fox, which confirmed making an offer for Time Warner, but also said the companies were not currently in discussions.

Apple and International Business Machines gained after saying they would jointly develop applications for business users and mobile devices.

After a 78-point jump to an intraday record 17,139.35, the Dow Jones Industrial Average rose 77.52 points, or 0.5 percent, to 17,138.20, a record close, with technology giants Intel, Microsoft, IBM and Cisco Systems leading blue-chip gains.

Not far from its record high, the S&P 500 advanced 8.29 points, or 0.4 percent, to 1,981.57, with energy and technology pacing gains and health care and financials the largest laggards among its 10 major sectors.

The Nasdaq rose 9.58 points, or 0.2 percent, to 4,425.97.

On Capitol Hill, U.S. Federal Reserve Chair Janet Yellen concluded a second day of congressional testimony, where she faced a barrage of questions from Republican lawmakers about legislation to make the Fed more accountable.

Dallas Fed President Richard Fisher on Wednesday said the Fed would likely start hiking interest rates early next year, if not sooner.

Ahead of Wednesday’s open, stock futures gained after a report showed China’s second-quarter economic growth coming in above expectations; with futures retaining gains after the government reported U.S. producer prices rose 0.4 percent in June, versus expectations of a 0.2 percent increase.

Another report had U.S. factory output increasing for a fifth month in June as manufacturers cranked out more aircraft, chemicals and furniture.

And, a monthly survey from the national Association of Home Builders rose 4 points in July to 53, crossing the line into positive territory.

The financial sector on Wednesday was among those declining, hit by Bank of America, which fell after reporting a drop of 43 percent in second-quarter profit and a 10-cent miss on earnings per share. The Wall Street Journal citing people familiar with the matter in reporting the bank had offered $13 billion to settle a Justice Department probe into mortgage securities it sold.

Global market overview: European markets bounced about 1% higher, encouraged by China’s growth figures. Asian markets also largely closed higher.

Thursday:

Earnings: IBM, Google, Morgan Stanley,Blackstone,KeyCorp,AutoNation, Novartis, SAP, Philip Morris,UnitedHealth,Baker Hughes,Capital One, Celanese, Cypress Semi,Sherwin-Williams, Danaher,Canadian Pacific Railway, Seagate Technologies

830 a.m.: Initial claims

8:30 a.m.: Housing starts

10:00 a.m.: Philadelphia Fed survey

News Sources:  CNBC and CNN Money