Opening Market Commentary For 07-25-2013
Premarkets were down earlier and this mornings so-so financial reporting didn't effect the futures one way or another. After the markets opened there was a moderate burst of red volume that melted the averages down some -0.25%. The BTFDers jumped in and kept the indices from descending further, but the large caps generally remained in the red while the NASDAQ, like yesterday, was up 0.12%.
By 10 am the session trend was steadily moving upwards where everything except the DOW was in the green. Because of the unsteady nature of the averages I would exercise caution in contemplating trading today.
The USD apparently is unfazed by the strong Durable Goods and Steady Claims but is not enough to support the US dollar as it continues to slide. My near term indicators are hovering around 75% to 85% sell.
The number of people filing for first-time jobless benefits last week rose to 343,000 from an upwardly revised 336,000 the week prior. Economists expected the number to rise to 340,000 from an initially reported 334,000.
Another week, another prior revision down and rise week-over-week in the initial claims data but the print was a modest beat. The smoother 4-week average has now hovered around 345k for 9 weeks as the down-trend of the year-to-date appears to have stalled (for now).
Continuing claims dropped back from its July 4th aberration. We worry that with top-line revenues missing significantly in the most recent earnings season, firms will be left once again with only one option to meet Wall Street's EPS demands and wonder if the flat trend in claims for over 2 months now reflects that wait-and-see mode for layoffs (or hiring).
The Commerce Department reports orders for long-lasting goods rose by 4.2% in June, compared to expectations of a gain of 1.3%. Excluding the transportation component, orders were unchanged, shy of forecasts of a 0.5% increase.
3M posted second-quarter earnings of $1.71 a share, topping estimates by a penny. Sales of $7.8 billion also came in ahead of the Street’s forecast of $7.77 billion. Shares of the Dow component fell slightly in pre-market trading.
One look at the June headline Durable Goods number today would have been enough to send algos into a buying spasm: printing at 4.2% it was three times greater than the forecast 1.4%, and followed an upward revised 5.2% (previously 3.6%).
However, as always, there was a footnote: the entire Durable goods number was due to one thing: Boeing aircraft orders and other transportation equipment which have risen by a whopping $20 billion in the past two months, from $67 to $87 billion, or growth rates of 14.8% and 12.8%.
Put another way, of the $21 billion increase in overall Durable Goods since April (from $223 billion to $244 billion), $20 billion is due to transportation equipment (from $67 billion to $87 billion).
Sure enough, the June Durable Goods order ex-transports missed expectations of a 0.5% increase and was flat compared to May.
The DOW at 10:15 is at 15508 down 35 or -0.22%.
The SP500 is at 1686 up 0.81 or 0.05%.
SPY is at 168.64 up 0.12 or 0.07%.
The $RUT is at 1047 up 3.50 or 0.34%.
NASDAQ is at 3595 up 16 or 0.45%.
NASDAQ 100 is at 3056 up 15 or 0.50%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been neutral and the current bias is bullish.
WTI oil is trading between 105.41 and 104.14 today. The session bias is bearish and is currently trading down at 104.14.
Brent crude is trading between 107.88 and 106.55 today. The session bias is negative and is currently trading down at 106.73.
Gold rose from 1308.23 earlier to 1326.96 and is currently trading cccccc at 1325.55.
Dr. Copper is at 3.170 falling from 3.194 earlier.
The US dollar is trading between 82.49 and 82.09 and is currently trading down at 82.19, the bias is currently bearish.
** RRR = Risk Reward Ratio
To contact me with questions, comments or constructive criticism is always encouraged and appreciated:
Written by Gary