Posted on 04/02/2013 11:38:12 PM PDT by dennisw
Daily finance & investment thread (4-3-13 edition)
Trying to focus on the markets for today and each day and the economic news
This is where you can impart some investment wisdom to your fellow freepers. You can vent about the big one that got away. You can
chime in how Obama is out to wreck American capitalism.
If you see another FR economic thread you like and want to link to it here, please do
Post your favorite economic site links. Your favorite economic blogs and precious metals blogs and sites
Apmex.com is a solid place with good reputation to buy precious metals and has great presence on ebay for easy quick impulse buys
such as a gift for a college boy's graduation. College Girls too! Even high scoool.
Kitco is the best site for gold and silver charts and other precious metals information
Ping list -- on or off let me know here or via freep-mail. If I missed you then Freep-mail me
ping
For the UK, not so much - housing prices came in under expectations and PMI (Construction) will probably do the same. Be sure to read the Bank of England's Credit Conditions Survey for Q1. IMO. this pub gives you some good read through into Europe.
The US has Services ISM. Manuf ISM crapped out (51.4 vs Expect of 54), payroll tax drag may cane this as well.
Big Deal of the Day (BDD): Bank of Japan's mtg. We get to see what plans Kuroda has to delay Japan's eventual financial supernova.
Good luck to all!
NYSE Morning Update:
Ahead of the Bell: Dow futures are trading up 12 points and S&P futures are trading up 2 points as investors look ahead to the ADP March employment report for clues as to how the U.S. jobs market fared as deep government spending cuts kicked in. Investor confidence was also lifted after the IMF said it will contribute about 1 billion euros ($1.3 billion) as part of a rescue program for Cyprus that aims to stabilize the nation’s banks and reduce public spending. One of the Federal Reserve’s most hawkish officials, Jeffrey Lacker confronted one of the institution’s most dovish policymakers, Charles Evans on Tuesday in a rare joint public debate over the risks posed to inflation by the U.S. central bank’s bold steps to spur growth.
• On the economic calendar today, ADP employment report for March will be out before the opening bell, 205K is forecasted compared with 198K for February. ISM Non-manufacturing index will be out after the market opens 56.0 is expected, versus the same reading for the month prior.
• The dollar is up against the euro and down against the British pound and the Japanese yen. Gold is trading at $1,571. Crude oil is currently trading at $96 a barrel.
• Yesterday, stocks rebounded after a report from the Commerce Department showed orders placed with factories rose more than forecasted, which was boosted by a pickup in demand for motor vehicles and commercial aircraft.
• On CNBC today, Christie Hefner, former CEO of Playboy Enterprises, talked about CEO compensation tied to performance. Hefner said with all the talk and moves towards transparency, we still don’t have the tools, including the Black-Scholes model to evaluate the right mix of performance versus compensation. Hefner touched on the fact that JCPenny’s CEO, Ron Johnson did not receive a bonus or stock option after the company had a disappointing year. Hefner is more concerned with how patient shareholders will be with management in turning around a company. She suggested that boards may have to reset the matrix that evaluates management’s performance during the turnaround period that fits each company’s model.
Tuesday’s Close
DJIA up 89.16 pts/+0.61%/ 14,662.01
S&P up 8.08 pts/+0.52%/ 1,570.25
Nasdaq up 15.69 pts/+0.48%/ 3,254.86
Wednesday’s Futures
Dow Futures up 12.50 pts/+0.08%
S&P Futures up 2.25 pts/+0.14%
Nasdaq Futures up 4.25 pts/+0.14%
Overseas Markets
FTSE -0.47%
CAC 40 -0.40%
NIKKEI 225 +2.99%
HANG SENG -0.14%
Overseas: World stock markets are mixed today. European markets are trading down today ahead of the US employment report and Asian stocks rose, with the regional benchmark climbing for the first time in three days, as Japan’s central bank began a two-day policy meeting and better-than- estimated U.S. factory orders buoyed exporters.
Top Headlines:
• Reports indicate Thermo Fisher Scientific (TMO) is emerging as the lead contender in an auction for Life Technologies Corp , a genetic testing maker with a market value of more than $11 billion
• According to sources, at least three of the world’s top drugmakers - Pfizer (PFE) Novartis AG and Abbott Laboratories (ABT) - are bidding for Brazil’s Ache Laboratorios Farmaceuticos in an auction that may value the group at more than $5 billion.
• J.C. Penney (JCP) Chief Executive Ron Johnson received total compensation of $1.9 million in 2012, according to a regulatory filing on Tuesday, a sharp decline after a year that saw the department store chain’s sales fall perilously
Commodities/Currency:
Gold: down $4.40 to $1,571.50
Oil: down 0.46 to $96.73
EUR/USD 1.2823 -0.0001
USD/JPY 93.4750 +0.1055
GBP/USD 1.5121 +0.0017
Volatility Index (VIX): As of the close of business Tuesday, April 2, the VIX is down 0.80 at 12.78
Companies Reporting Quarterly Earnings:
ConAgra reports Q3 adjusted EPS 55c, vs. Est. 56c and reports Q3 revenue $3.85B, vs. Est. $3.87B.
Today’s Opening and Closing Bells:
PROS Holdings, Inc. Andres Reiner, President, Chief Executive Officer and Director will ring the opening bell.
The Closing Bell-TBA.
I’m not familiar with the BOE’s Credit Conditions Survey but I will find out today. Maybe it’s time I realize we’re in a global economy??
Some are saying that the professionals are moving money out of small caps (Russell 2000) into larger caps like Dow and S&P. Not in a big way, but somewhat; suggesting the R2K has limited upside in the near term.
Underneath The Surface, People Are Seeing Signs That The Stock Market Is Breaking Down
Matthew Boesler | 4 minutes ago | 2 |
For months now, the question has been when the stock market rally that began in November would finally face a downward correction.
Now, everyone is starting to talk about market “internals” breaking down – various technical factors that are warning of a pullback.
In a note this morning, Miller Tabak Chief Technical Market Analyst Jonathan Krinsky says “the cracks in the market appear to be growing, with the small-caps and transports severely underperforming.”
Doug Kass says the same thing today, pointing to “subsurface weakness” in the market.
Here are a few points Kass highlights in his note:
The Russell 2000 underperformed on Monday (-1.3%) and was down (-0.5%) on an up day on Tuesday.
The advance/decline line is eroding as the market’s rise narrows.
Breadth disappointed – yesterday, NYSE decliners eclipsed advancing issues by over 200, excluding ETFs and fixed-income closed-end funds.
The number of new 52-week highs is narrowing.
The bank stocks/brokerages are lagging.
Transports trailed, down 1.5% and 1.2% on the first two days of the week, respectively — check out the chart of FedEx (FDX).
Semis got schmeissed (-2.0% on Monday and -0.8% on Tuesday).
The cyclical index dropped by -0.7% on Tuesday, following a 1.2% decline on Monday — check out the chart of Caterpillar (CAT).
The yield on the 10-year U.S. note remains low (1.86%) and is signaling slowing domestic economic growth — speaking of the bond market, this week brought a continued disconnect between Treasury note and bond yields (lower by 3 to 4 basis points) compared to the market averages (slightly higher in price).
“It is an unusual market feature when defensive stocks are among the leading groups in a market moving to new highs,” says Kass.
On the other hand, Phoenix Partners Group Chief Equities Strategist Michael Block doesn’t think these signals are necessarily anything to worry about.
“As for the argument that defensives have led, my advice is to think about what quant factors might be leading those stocks higher here,” says Block. “There are style, size, and fundamental factors there that are likely the cause... and it has nothing to do with them being hiding places.”
Block points out that Russell 2000 outperformance is still trending up despite recent weakness, and that he considers these technical factors “an early warning sign and nothing to jump in against with both feet.”
Read more: http://www.businessinsider.com/stock-market-internals-breaking-down-2013-4#ixzz2PPIteVbm
Just got this client report fromISI:
ISI Company Surveys Stalling a Bit
ISI’s company surveys, although up and down, are on track to be where they were four weeks ago. So far this week, homebuilders and airlines are down, while truckers, which have the highest correlation with GDP, bounced back above 50.0. Weather last week and holidays this week have been cited by our contacts.
Another Repeating Pattern Repeating?
Observers around the world are well aware of the repeating economic patterns of 2010/11/12, with strength in 1Q followed by Growth Problems each summer. We do not expect another Growth Problem this year, but in light of the previous patterns, this flattening out in vehicle sales creates concern.
Since today is neither Tuesday, nor Friday... I assume the market will be slightly DOWN.
This rule has been working for the past 3 months.
The ISM index, which is the purchasing managers survey, dropped unexpected for both manufacturing and services. ADP employment retracted too, which signals the same for Friday’s unemployment report. As of right now I’d call our economy stagnant.
All I can say kids is be smart and nimble. Stocks look very, very toppy, but with the Fed always pumping in money that’s no guarantee that it will drop. Even so, when it does I expect it to be quick, and play off some shock like a Cyprus event or similar.
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