April 13th, 2012
in Gary's blogging
After The Close: (Friday The 13th. Unlucky For Some.)
The markets closed down effectively losing half of it gains from yesterday. The DOW closed down at 12849 or -136.99 points (-1.05%), the $RUT closed down at 796 or -12.30 points (-1.52%), The SP500 closed down at 1370 or -17.31 points (-1.25%) and $MID closed down at 964.41 or -12.77 points (-1.31%).
Gold closed at 1657 recovering this morning lows of 1653, GLD closed at 161.01 and SLV closed at 30.61. SPY closed down at 38.71, SSO closed down at 55.18, WTI oil closed down at 102.86 from 103.62 earlier in the day and Brent closed at 121.25 trading in a narrow range all day. The USD moved from its low today of 78.78 to a high of 80.36 (+1.58) closing closing at 80.03.
The markets have logged their worst week in 2012 during the BEST month historically, April: DJIA averages +2% since 1950. The volume this week has also been the highest so far this year.
The EURUSD turn occurred at the 50% retracement of the decline from 13380, 4/3 low and 20 day average. In other words, 13200 is well defended.
USD Rebounds as China GDP, Weak US Data Weigh on Sentiment- CHF Heavy
US Dollar mounts counter-offensive as risk appetite tumbles
Swissie heavy as euro declines weigh
Yen holds its ground as risk off flows support
Detailed expandable daily & scalp charts on USDJPY USDCHF
“Market recap: Stocks capped their worst week of the year on disappointing GDP growth from China and increased concern about Spain. Financials were hit especially hard, with BAC -5.3%, MS -5.2%; JPM -3.6%, WFC -3.5% despite solid "but not thesis changing" earnings. Crude oil prices eased; 10-year Treasury yields fell below 2%. NYSE losers topped winners four to one. “
European markets finished sharply lower today with shares in France leading the region. The CAC 40 is down 2.47% while Germany's DAX is off 2.36% and London's FTSE 100 is lower by 1.03%.
The 500 at the close.
The $RUTat the close.
The DOW at the close.
The Indexes at the close.
Midday Market Notes: ( Buckle Your Seat Belts, News Doesn't Look Good)
Again another day of low volume pushing the markets up and down by DaBoyz – go figure. But that isn't going to last as the trend is looking towards the downside as the opening red heavy volume signals. The upper resistances that were within reach fell away as the rally of yesterday fizzles – another sign.
Speaking ahead of the close, Angus Campbell at Capital Spreads, said:
“The risk aversion that’s been building in the last few weeks means that the FTSE is about to record it fourth weekly decline on the trot, racking up over 5% of losses and investors are running scared. If China really is heading for a hard landing then we’re all in trouble due to our reliance on them buying all the products that we make. The hope for the bulls though is that China will remain vigilant in respect of their economic growth and add more stimulus if needs be in order to avoid a hard landing. If this proves to be the case then this recent bout of weakness could prove short lived and hopefully we won’t see a sixth week of declines.“
“After rallying on Thursday, the markets are once again coming under heavy selling pressure as traders react to weak U.S. and Asian economic data and renewed concerns about the eurozone debt crisis. Bourses across Europe are getting pounded, with Spain’s IBEX plunging 3.2%. In the U.S., the Dow is down 86 points or -0.66%, while the S&P 500 is down 11.98 points or -0.86%.”
The Russell 2000 small cap is doing much worse being down 10.85 points or -1.84%
More on the miss of China's GDP.
The number the market has been waiting for with bated breath arrives:
CHINA 1Q GDP GROWS 8.1% ON YEAR, EXPECTED 8.4%, and whispered at 9.0%
CHINA STATISTICS BUREAU SAYS PROBLEMS REMAIN IN THE ECONOMY
NBS: CHINA STILL FACES UPWARD PRESSURE ON INFLATION
NBS: CHINA FACES DIFFICULTY STABILIZING EXPORTS
And so the rumor mill, which was expecting some ridiculous GDP print of 9.0% based on a third-rate research report released overnight, despite China posting some epic budget surpluses in the past few months, is stuck dumping risk in this late hour. Everything selling off as China's GDP posts the biggest sequential drop since March 2009 and the lowest sequential GDP rise since September 2009.
Opening Market analysis:
Markets opened melting slightly down. The DOW opened at 12986, also its close yesterday to 12922 in the opening moments. The $RUT, which we are following closely opened at 806, down for yesterday's close of 808 and is currently at 804. The 500 also opened down and is currently at 1382.
No real surprises here except the red volume is very heavy and red. Probably the selling consists of those traders that bought into the rumor that the Chinese GDP was going to be better than was reported this morning. The trend for the day appears to be a negative one.
U.S. April Reuters/Michigan Consumer Sentiment index prints at 75.7, lower than 76.2 predicted and 76.2 previous. That should send the markets lower as the day progresses.
For now in light premarket action it first appears that the resistance that lies just above most indexes is going to hold until the USD U. of Michigan Confidence (April) is announced at 9:55 this morning. Several large institutions reported better than expected earnings and the premarket didn't pay any attention. The reporting financial numbers reported this morning at 8:30 also didn't move the futures much either. The markets must be subdued a bit after China's poor GDP report from this morning
As yesterday, the big thing to notice in the premarket action is that it isn't down all that much. This tells me that we are not going to see record breaking moves in today's session one way or the other. That is until the U of M data comes out later this morning.
The DOW in premarket action is down -38.00 / -0.29%, NASDAQ down -6.75 / -0.25% and the SP500 down -5.10 / -0.32%. This indicates Mr. Market does not care about Wells Fargo or JP Morgan good earnings, and, again, the 'original' World financial weakness is STILL with us!
Copper is up at 3.71 and that is a positive note, the oils are up slightly with Brent trading at 121. Gold is down at 1671 below yesterday's close and further direction today remain elusive for now.
SA has an interesting analysis on yesterday's market enthusiasm.
“The fact that stocks surged yesterday on the flimsy rumor of hot Chinese GDP growth - since disproved - is a sign the market's wild, unexplainable behavior could be making a comeback. “We’re not going to be buying quickly into a rally like this,” KeyCorp's Bruce McCain says. “We think there’s greater potential for downside than more gains from these levels. “
“S&P futures -0.4% as China's GDP grew less than expected in Q1, trumping earnings beats from Google, JPMorgan Chase and Wells Fargo. JPM +0.6% as Q1 profit fell but revenue rose; the bank raised its dividend and unveiled a $15B stock buyback. European markets are broadly lower on increased worries about Spain. Later: consumer sentiment, Bernanke speaks. “
Chinese GDP as reported early this morning fell to 1.8, analysis were expecting 1.9 and the previous reporting was 2.0.
As mentioned before, this morning the markets are down and flat. As yesterday, I seriously won't be surprised to see the markets move either way. To move down (or up) convincingly, more volume is necessary.
Typically, as the premarket moves toward the opening, up or down, one way or the other, it will solidify a bearish or bullish slant for the day. This morning it is very slightly negative and I am unable to see a opening market trend as the premarket moves sideways.
Wells Fargo revealed a first-quarter EPS of 75 cents on revenue of $21.6 billion, beating analysts’ expectations of 73 cents on $20.51 billion.
JPMorgan Chase posted a first-quarter profit of $1.31 a share on revenue of $27.4 billion. Analysts were expecting the biggest U.S. bank by assets to earn $1.18 on $24.68 billion. Shares climbed in pre-market action.
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Written by Gary