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28Apr2015 Market Update: Markets Recover Smartly From Morning Losses, WTI Oil Rises Fractionally As The U.S Dollar Sinks

Written by Gary

The morning losses were significant and after the 'Consumer Confidence' report came in, the Averages zoomed back up past unchanged line to post some green where they have been trading in a sea-saw fashion, trending slightly higher.

The gauge of consumer confidence fell to 95.2 in April, from 101.3 the month prior. The reading came in below Wall Street expectations for an increase to 102.5 and yes this bad news pushed the markets higher on moderate to low volume. The small caps have remained in the red, but near the unchanged line.


Here is the current market situation from CNN Money

North and South American markets are mixed. The S&P 500 is higher by 0.16%, while the Bovespa is leading the IPC lower. They are down 0.42% and 0.41% respectively.

Traders Corner - Health of the Market

What Is Moving the Markets

Index

Description

Current Value

Investors.com Members Sentiment:

% Bullish (the balance is Bearish)

60%

CNN's Fear & Greed Index

Above 50 = greed, below 50 = fear

59

Investors Intelligence sets the breath

Above 50 bullish

62.3%

StockChart.com Overbought / Oversold Index ($NYMO)

anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold.

-4.70

StockChart.com NYSE % of stocks above 200 DMA Index ($NYA200R)

$NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages.

63.50%

StockChart.com NYSE Bullish Percent Index ($BPNYA)

Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash.

67.69%

StockChart.com S&P 500 Bullish Percent Index ($BPSPX)

In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction.

73.40%

StockChart.com 10 Year Treasury Note Yield Index ($TNX)

ten year note index value

19.52

StockChart.com Consumer Discretionary ETF (XLY)

As long as the consumer discretionary holds above [66.88], all things being equal, it is a good sign for stocks and the U.S. economy

76.74

StockChart.com NYSE Composite (Liquidity) Index ($NYA)

Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors

11,17


Here are the headlines moving the markets.

Cummins misses 1Q earnings expectations, tops revenue forecasts

COLUMBUS, Ind. (AP) _ Cummins Inc. (CMI) on Tuesday reported first-quarter earnings of $387 million. On a per-share basis, the Columbus, Indiana-based company said it had net income of $2.14. Earnings, adjusted for pretax gains, were $2.04 per share. The results did not meet Wall Street expectations. The average estimate of 14 analysts surveyed by Zacks Investment Research was for earnings of $2.12 per share. The engine maker posted revenue of $4.71 billion in the period, which beat Street forecasts. Eight analysts surveyed by Zacks expected $4.61 billion. Cummins shares have decreased slightly more than 3 percent since the beginning of the year, while the Standard & Poor's 500 index has risen slightly more than 2 percent. The stock has dropped slightly more than 5 percent in the last 12 months.

CIT Misses Profit, Sales Expectations

CIT said its profit fell in the first quarter because of a new drop in new commercial loans and financial problems at three airline customers.

Stocks Soar On Non-War, Bad-News-Is-Good-News V-Shaped Recovery

US equity markets have v-shape-recovered this morning after plunging on a combination of good housing data (that's bad news), weak manufacturing data and dismal consumer confidence which then was accelerated as Iran headlines smashed oil higher. All that was quickly forgiven and stocks have soared... Small Caps are now 1.5% as 'investors' panic-buy back to the highs of the day... VIX was monkey-hammered from 14.25 to back under 13.

as it seems someone decided - long before the headlines hit that this was a non-US Ship - that VIX was to sold hard...

Talks on EU-U.S. trade deal to stretch into 2016: EU says

BERLIN (Reuters) - Talks between the European Union and United States on a transatlantic trade accord will stretch into 2016, the EU's chief negotiator said on Tuesday, adding that the discussions were about to enter a "more difficult" and "intense" stage.

Track The Real-Time Position Of Ship Which Pentagon Says Was Seized By Iran

Following initial confusion about which ship was shot at, seized and confiscated by Iran, with Arabiya and Farsnews reporting it was a US ship with 34 soldiers on board, while the Pentagon subsequently stating there were no US personnel on the cargo ship which was a Marshall Island-flagged cargo vessel, the Maersk Tigris, the situation still remains fluid, especially considering the latest news out of the Pentagon:


U.S. SENT DESTROYER AND AIRCRAFT TO MONITOR SHIP, WARREN SAYS

But why if it isn't a US ship? And how will Iran react when the US naval "cavalry" arrives in its territorial waters?

Meanwhile, those curious can track the ship alleged confiscated ship, the Tigris, in real time courtesy of Marine Traffic (link). One thing is clear: there are no US cargo ships anywhere in the vicinity of the Tigris...

... There may be some military ones soon, but that's a different story.

Ford first-quarter profit misses expectations, 2015 profit outlook affirmed

DEARBORN, Mich. (Reuters) - Ford Motor Co reported a first-quarter profit that was less than analysts expected, selling fewer vehicles in North America as it worked to increase production of the redesigned F-150 pickup truck, and losing money in South America.

Leading Index Review: March 2015 Philly Fed Leading Index Projects Economic Growth at Only 1%

Econintersect: This leading index is now forecasting growth at 1.0% over the next 6 months - and significantly revised downward the index values in 2015. A review of all major leading indicators follows - and no leading index is particularily strong.

Read more ...

JetBlue Airways tops 1Q net income expectations, meets revenue forecasts

LONG ISLAND CITY, N.Y. (AP) _ JetBlue Airways Corp. (JBLU) on Tuesday reported first-quarter earnings of $137 million. On a per-share basis, the Long Island City, New York-based company said it had net income of 40 cents. The results topped Wall Street expectations. The average estimate of 10 analysts surveyed by Zacks Investment Research was for earnings of 39 cents per share. The airline posted revenue of $1.52 billion in the period, matching Street forecasts. JetBlue shares have climbed 24 percent since the beginning of the year. The stock has more than doubled in the last 12 months.

Contract cancellations to drive more weakness in offshore drillers, analyst says

  • Contract cancellations are the biggest risk for offshore drillers, according to Cowen analysts, who expect backlog quality will comprise the sector's main focus this earnings season.
  • With operators cancelling contracts for convenience or by using an unforeseen event to eliminate backlog from the end of contracts, even signed contracts have been shown to be at risk to cancellation, and Cowen expects operators will continue to seek ways to get out of existing contracts or amend current contracts to more favorable terms wherever possible.
  • "The incremental, unforeseen loss of backlog from existing contracts will likely drive further estimate reductions and share price weakness across the group," the firm says.
  • Relevant tickers: SDRL, ATW, ESV, RIG, RDC, DO, NE, PACD, PKD.

BP and Total Report Earnings Declines as Falling Oil Prices Hurt Profits

Adjusted earnings fell 20 percent at BP and 22 percent at Total, but the results were offset by strong performances at their marketing and refining businesses.

Tsipras presses for May debt deal, says referendum possible

ATHENS (Reuters) - Greek Prime Minister Alexis Tsipras said on Tuesday he was confident of an outline deal with international creditors within two weeks, after shaking up his negotiating team and sidelining his finance minister who has infuriated euro zone partners.

Rise in Home Prices Accelerates

U.S. home prices climbed at a faster pace in February than the previous month, driven by higher sales and a limited supply of available houses.

Higher rates help UPS boost 1Q profit 14 percent to $1.03 billion; revenue less than expected

DALLAS (AP) — UPS boosted first-quarter earnings by 14 percent as things like charging more for bulky but lightweight boxes helped increase U.S. revenue. The domestic growth offset international revenue that was hurt because sales were less valuable when converted into the strong U.S. dollar. The $1.03 billion profit beat Wall Street forecasts, although revenue was less than expected. The company stood by its forecast for full-year earnings. The shares rose more than 3 percent in morning trading. United Parcel Service Inc. said Tuesday that its net income equaled $1.12 per share and compared with profit of $911 million, or 98 cents per share, a year earlier. The average estimate of 15 analysts surveyed by Zacks Investment Research was for earnings of $1.09 per share.

The Baltimore Riots: The Stunning Comments By Orioles Owner's Son

The day after violent protests left Baltimore burning in the wake of a funeral held for Freddie Gray who died after sustaining a spinal injury while being taken into policy custody, Americans are struggling to explain how the events that transpired on Monday evening are possible in modern day America. While most are united in their condemnation of indiscriminant violence, many still feel a palpable sense of injustice after witnessing multiple instances of alleged police misconduct over the past year.

In this context we present the following culled from Twitter messages posted by Orioles Executive Vice President John Angelos, son of majority owner Peter Angelos:

"Brett, speaking only for myself, I agree with your point that the principle of peaceful, non-violent protest and the observance of the rule of law is of utmost importance in any society. MLK, Gandhi, Mandela, and all great opposition leaders throughout history have always preached this precept. Further, it is critical that in any democracy investigation must be completed and due process must be honored before any government or police members are judged responsible.

That said, my greater source of personal concern, outrage and sympathy beyond this particular case is focused neither upon one night's property damage nor upon the acts, but is focused rather upon the past four-decade period during which an American political elite have shipped middle class and working class jobs away from Baltimore and cities and towns around the U.S. to th ...

BP Strength May Lack Total Staying Power

Both BP and Total are suffering from low oil prices but found similar sources of strength in the first quarter. But the French company has certain advantages this year.

Wall St. Moves Lower, Though Health Care Sector Rebounds

Merck shares were up substantially after the drugmaker posted earnings well above expectations.

US stocks shift between gains and losses as earnings reports pour in; Merck jumps on results

NEW YORK (AP) — U.S. stocks fluctuated between gains and losses Tuesday as investors worked through the latest round of earnings reports. Pharmaceutical stocks rose after drug giant Merck reported better-than-expected results. Investors also reacted negatively to a report that showed U.S. consumer confidence at a four-month low. KEEPING SCORE: The Dow Jones industrial average was up 27 points, or 0.2 percent, to 18,063 as of 11:10 a.m. Eastern. It was down 120 points earlier. The Standard & Poor's 500 index rose a point to 2,110 and the Nasdaq composite was unchanged at 5,060. HEALTHY: Merck rose $2.94, or 5 percent, to $60.03. While the company's profits fell 44 percent from a year ago, the results still handily beat analysts' estimates. Adjusted earnings for the maker of diabetes drugs Januvia and Janumet were 85 cents a share versus the 75 cents expected by analysts.

Richmond Fed Manufacturing Survey Shows Contraction Continues in April 2015

Of the five regional Federal Reserve surveys released to date, one shows manufacturing expanding weakly and four are in contraction. The market expected this survey index at -3 to +2 (consensus -2.0) versus the -3.0 actual [note that values above zero represent expansion].

Read more ...

Biotech Bubble Breaking Bad: 10% "Correction" To 1-Month Lows

It took 25 days to recover, and 2 days to lose all the exuberance that was 'well-deserved' and M&A-boom-driven, according to analysts.

h/t @StockCats

But with a drop of over 10%, Biotechs are officialy in 'correction' and falling on heavy volume...

U.S. home prices rise in February: S&P/Case-Shiller

NEW YORK (Reuters) - U.S. single-family home prices rose in February from a year earlier, led by strong increases in the western half of the United States, a closely watched survey said on Tuesday.

Wall Street fall as earnings disappoint

(Reuters) - U.S. stocks fell in volatile early trading on Tuesday as strong results from Merck and better-than-expected housing data helped offset disappointing earnings and profit-taking in Apple.

Iran Forces Open Fire On, Seize "Trespassing"US Cargo Ship With 34 People On Board, Arabiya Reports

Update 3: Turns out Iran did seize a ship, just not a US ship:


PENTAGON SAYS NO US SHIP WAS SEIZED BY IRAN

NON-U.S. SHIP MAY HAVE BEEN SEIZED BY IRAN, U.S. OFFICIAL SAYS

IRANIAN MILITARY BOARDED MARSHALL ISLANDS-FLAGGED CARGO SHIP

IRANIANS BOARDED MV MAERSK TIGRIS CARGO SHIP: PENTAGON

Update 2: Curiously, while we were confident Iran would deny the report first, it was in fact the US: US NAVY DENIES CONFRONTATION WITH IRANIAN MILITARY: CNBC

The good news is that it will be very easy to confirm who is lying and who is telling the truth, in a matter of hours.

* * *

Update: WHITE HOUSE REFERS COMMENT ON IRAN SHIP CAPTURE TO DEFENSE DEPT

April 2015 Conference Board Consumer Confidence Gives Back All of Last Month's Gain and More

Written by Doug Short and Steven Hansen

The Conference Board Consumer Confidence Index declined. The market expected this index to come in at 100.5 to 104.0 (consensus 103.0) versus the 101.4 reported.

Read more ...

Merck Earnings Beat Forecasts

Drugmaker Merck & Co. easily beat Wall Street expectations despite first-quarter profit plunging 44 percent, hurt by the sale of its consumer health business, unfavorable currency exchange rates and competition to some drugs.

U.S. Consumer Confidence Sinks

U.S. consumer confidence unexpectedly slumped in April, according to a private sector report released on Tuesday.

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To contact me with questions, comments or constructive criticism is always encouraged and appreciated:

gary@econintersect.com

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