Markets Sink On Good News

Opening Market Commentary For 07-31-2012

Premarket was actually up several points from yesterday’s close. The financial news was mixed as the July Chicago Purchasing Manager Index rose to 53.7 in July from 52.9, vs. 52.5 expected. The May SP500/Case-Shiller home prices fell 0.7% in May from a year ago vs. 1.4% drop expected by economists. The prior decline was, as expected, revised down to 1.8% from 1.9%.

The opening session volume was green and light but the net result was a slight bearish down market place as it drifts sideways as it did yesterday. By 9:55 am the volume remained light and red as the market looks for direction.

At 10 am the high rated Consumer Confidence (JUL) rises to 65.9 from the expected 61.5. The prior reporting was 62. The markets reaction was negative as Zerohedge reports. “[This] was one thing the market did not nead 24 hours ahead of the FOMC in the aftermath of the better than expected Case Shiller May print (yes, 2 months ago) it was a follow up beat by the Chicago PMI, as this would only make any further forceful QE tomorrow less than likely.

@telegraph:

Consumer spending was flat in June, as Americans chose to squirrel away a boost to their incomes rather than increase household spending.

Household purchases, which account for around 70pc of US GDP, remained flat in June, the Commerce Department reported, as incomes rose 0.5pc.

Personal savings climbed to 4.4pc of disposable income, from 4pc in May – the highest in a year.

The DOW at 10:15 is at 13044 down 27.10 or -0.21%.

The 500 is at 1383 down 1.92 or -0.13%.

The $RUT is at 791.78 up 0.20 or 0.03%.

SPY is at 138.45 down 0.21 or -0.16%.

The trend is neutral and the current bias is down.

WTI oil is at 89.51 trading between 90.30 and 89.30 and the bias is negative.

Brent crude is at 105.96 trading between 105 and 106 and the bias is negative.

Gold is mixed today at 1622 trading between 1618 and 1627 with a neutral bias.

Dr. Copper is steady at 3.43.

Earlier the USD climbed from 82.72 to 82.94 fell again to 82.66 and recovered to 82.86.

@leavitt:

Yesterday was a dud. The market didn’t move up, and volume was very light . . . from a technical standpoint, one big divergence remains in place. That’s the progress of the large caps vs. the small and mid caps.

When the market is healthy, when investors are confident, they buy more speculative stocks which have the potential to rally several hundred percent, not the rock-solid old-school companies which serve as safe-havens.

So far, this isn’t happening. Recently, when the large caps made a higher high, the small and mid caps failed to match the move. This condition must be negated or there will be limited further upside.

@SA

Companies’ guidance turns south. For a brief, shining moment until Friday, the outlook had been for continued growth in earnings, but global weakness is forcing U.S. firms to cut costs and guidance; the ratio of negative-to-positive Q3 forecasts is now the worst since 2001. Analysts expect Q3 profit and revenue for S&P 500 companies to decline 0.4% on year.

Spanish recession worsens. Spain’s preliminary Q2 GDP fell 0.4% on quarter, slightly worse than the -0.3% registered in Q1 but in line with expectations and better than the U.K.’s shock 0.7% decline. The GDP data came after German Finance Minister Wolfgang Schaeuble rejected speculation over the weekend that Spain is about to request that the eurozone’s bailout fund buy its bonds.

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Written by Gary