The market has now fully recovered from its near 10% correction in the beginning of the month. Since the Oct 15 lows, the DJIA is up 9%, S&P 500 10%, Nasdaq-100 12%, Russell 2000 up 12%. The move today solely on the heels of unexpected additional easing measures announced by the Bank of Japan overnight.
The market has now fully recovered from its near 10% correction in the beginning of the month. Since the Oct 15 lows, the DJIA is up 9%, S&P 500 10%, Nasdaq-100 12%, Russell 2000 up 12%. The move today solely on the heels of unexpected additional easing measures announced by the Bank of Japan overnight.
The market has now fully recovered from its near 10% correction in the beginning of the month. Since the Oct 15 lows, the DJIA is up 9%, S&P 500 10%, Nasdaq-100 12%, Russell 2000 up 12%. The move today solely on the heels of unexpected additional easing measures announced by the Bank of Japan overnight.
Index Up/Down % Last DJ Industrials 193.75 1.13% 17,389 S&P 500 23.29 1.17% 2,017 Nasdaq 64.60 1.41% 4,630 Russell 2000 18.10 1.57% 1,173
Equity Market Recap The rally that keeps on giving! The market has now fully recovered from its near 10% correction in the beginning of the month, now up 11% in just 12 trading days! The move today solely on the heels of unexpected additional easing measures announced by the Bank of Japan overnight. The news sent global shares surging (showing the power the central banks have watching ECB?), while lifting the US dollar and send commodity prices reeling. It was also a busy week for earnings, but the BOJ move stole the show this week (watch mid-term elections next Tuesday). The Dow Industrials and S&P 500 both traded above prior closing highs today Bank of Japans policy board voted by a 5-to-4 margin to expand the pace of its quantitative easing to about 80 trillion yen ($727 billion) a year, an increase of 30 trillion from the previous pace. It said it would also buy longer-dated JGBs, seeking an average remaining maturity of 7-10 years and would triple its purchases of exchange-traded funds and real-estate investment trusts. Also out of Japan, its Government Pension Investment Fund (GPIF), which runs 127.3 trillion yen ($1.1 trillion) set allocation targets of 25% each for Japanese and overseas equities (up from 12%), said it would reduce domestic bonds to 35% of assets from 60% Following the BoJ move, the Nikkei 225 closed up nearly 5% to levels not seen since 2007, while the yen fell against the dollar to lowest level in 7-years (USD/JPY trades 112.48 high). For just the 16th time in 114 years the Dow is set to reverse from 6% down to back in the black in one month (as per Yahoo Finance). Since the Oct 15 lows, the DJIA is up 9%, S&P 500 10%, Nasdaq-100 12%, Russell 2000 up 12%...note 68.59% of the S&P500 are above their own 200 day moving averages. The last time the S&P500 was at the highs it was at 81% on September 5 th (peak July 3 rd @ 88%) Quietly, Russias central bank increased its benchmark interest rate more than expected, up to 9.5% from 8%, extending losses for the ruble. The move comes following the ruble's fall this week to an all-time low vs. the dollar Note we saw a 6% pullback in January only to recover and rally 9% in coming weeksfell 4% in April area, only rise 10% by end of summer...in August we fell 4%, but rallied 6%...and now in October, we saw a near 10% drop, followed by an 11% increase markets do not stay down long
Economic Data The Employment Cost Index (ECI) for Q3 rose 0.7% vs. est. 0.5% (prior quarter unrevised at up 0.7%), while wages rose 0.8% q/q after rising 0.6% in June Sept. Personal Income rose 0.2%, slightly below forecasts for a 0.3% increase, while personal spending fell (-0.2%) vs. est. 0.1%; core inflation rose 0.1% MoM (in-line) The Chicago Purchasing Managers Index (PMI) jumped to 65.61 in Oct. from 63.18 in Sept (and above ests for 60.0); New Orders rose to 73.6 vs. 60.0, Employment to 60.2 vs. 56.2 and Production and Backlogs better as well University of Michigan Sentiment rises to 86.9 from 86.4 prior (and ests.)
Commodities Oil prices end lower, but off their worst levels, with WTI oil closing down about 50c to around $80.50 per barrel (well off the lows of $79.55, lowest level in 4-years); Brent ended lower as well. A combination of the rising dollar and general oversupply fears remain an issue for energy prices; note U.S. gasoline prices fell below $3 for the first time since 2010 Precious metals with one of the uglier days in some time, a victim of the surging US dollar, after the Bank of Japan surprise QE announcement overnight. Gold prices ended lower by $27, or 2.3% to $1,171.60 an ounce, closing out the week down over 5% (gold traded as low as 1,160.50 an ounce). Picture for silver equally disturbing, also falling over 2% to $16.11 an ounce
Currencies Extremely volatile moves in the currency space today, with the dollar surging against most rivals, but none more than the Japanese yen after the Bank of Japan announced additional easing measures (QE). The dollar surged to high of 112.48 vs. the yen (from about 109.50 the day prior) trading to new 7-year high. Expectations are for the ECB to provide some additional measures to help its lagging economy, which is why the euro fell against the dollar as well (traded below 1.25, lowest since Aug 2012)the DXY Index up about 0.75 to 86.89
Bond Market Was a fairly quiet week for Treasuries, slightly losing ground, and giving a lift to beaten up yields. The 10-yr ended around the 2.33% level, climbing the last few days, while the 5-yr yield up at 1.61% and the 30-yr above 3%; the week saw several lackluster treasury auctions (5-7 year both disappoint), the FOMC confirming it was ending its QE3 asset purchases, and generally better U.S. databut bonds still not selling-off in a big way
Sector News Breakdown Consumer Staples; CLX shares up after earnings; in beverage are, SAM rises on earnings while ABEV shares little changed; NWL shares fell on earnings; PPC shares up another day after earnings (upgraded by one analyst) shares of SAFM, TSN rise as well (lower grain prices have helped the sector) Restaurants mostly higher outside of SBUX (falls as Q4 revs/comps short of ests and cuts year sales outlook) YUM, BKW rise Homebuilders/Building products; not much in housing space today other than rates lifting for a third day; but product names get better earnings from MHK and MTZ Lodging. Leisure, & Gaming; in gaming; BYD rallies as says considering forming a REIT (Q3 eps missed/revs beat); lodging stocks mostly better earnings this week, as HLT Q3 eps beat and boosts 2014 profit/RevPAR forecasts (comps HOT, H, WYN, MAR)
Energy Oil majors XOM and CVX reported earnings; XOM was a beat on top/bottom line, while CVX EPS topped views, though res fell short; group mixed as oil remains weak; driller weakness still underperforms, E&P names mixed; oil prices fell to $80.54, but off worst levels Refiner TSO upgraded by one analyst citing q3 report/cap-ex cut/excess cash flow returns Coal stocks cant get a lift with markets; WLT cut at BB&T to Underweight as believes Walter will run out of cash in the next 12 months and that the best alternative is to restructure; weakness remains in ANR, ACI, BTU, CNX Utilities pare recent gains after the index (UTY) trades to record highs yesterday(has been helped by lower rates/better earnings); D fell as Q3 operating EPS missed (guidance in-line)
Financials Large cap banks get lift amid spike in interest rates (shares of JPM, MS, GS all higher), but C says legal costs jumped $600M as FX probe accelerates/restated Q3 results lower http://goo.gl/OvKknP UK Banks rallied (BCS), after the Bank of England set a minimum regulatory ratio at a lower-than- expected level and gave firms until 2019 to comply. Britains biggest banks will be hit with a basic leverage ratio of 4.05%, which could rise to as much as 4.95% if the central bank tries to cool excess credit or balance-sheet growth (ests were as high as 7.5%) http://goo.gl/v78mjd
Healthcare Top healthcare news; AVIV agreed to be acquired by OHI for $34.97 in stocks/$3B deal http://goo.gl/bGzeJH ; SRPT rises as FDA said it expects NDA for eteplirsen will qualify for a priority review and did not find any evidence of fraud at clinical site that FDA inspected where dystrophin analyses had been conducted Earnings movers; AEGR plunges as missed Q3 Juxtapid revs by $5M to $44M and decreased guidance significantly (downgraded by several analysts); SGEN rises after Q3 growth (upgraded by one analyst post earnings); STAA fell downgraded by two firms after posting $2.7M loss in Q3; generics maker MYL rises on earnings; MOH warned year EPS may fall short of low end of views; ABBV rises on sales of Humira drug
Industrials & Materials Metals & Mining; another very sharp move lower for gold miners early (earnings havent been strong amid drop in gold prices); todays more than 2% drop in gold weighed on sentiment again for the group (NEM, ABX, GG, KGC, AUY) few names reversed earlier losses (note stocks have gotten crushed over last 2 days a little bottom fishing not surprising); CLF jumped on WSJ report NUE in talks over stake in Canadian iron ore mine http://goo.gl/Z8yPR2 Machinery; UBS upgraded PCAR to Buy as sees an acceleration in its FCF and better North American truck demand; OSK rises as Q4 eps/revs beat and boosts dividend; HON boosted its quarterly dividend Chemical maker EMN said it sees 2014 EPS near the high end of view range after posting better Q3 results; paint co PPG received a favorable ruling from Mexico on Comex purchase (sees adding 65c-75c in 2015/ex costs) Transports; Airlines surge on the day (have more than recovered losses from Ebola fears at beginning of month), as better earnings this week and falling oil support stocks (shares of UAL, AAL, DAL, ALK) rise; YRCW upgraded by one analyst after Q3 loss narrower than expected; GWR issues Q4 eps/rev guidance below views E&C sector; FLR reports in-line results, solid 15 guidance & backlog expansion to $42B
Technology, Media & Telecom Internet; LNKD Q3 eps/revs top views, while Q4 guidance missed (several + analyst comments); MELI jumps on better earnings/upgraded at Bank America with $150 tgt citing improved Brazil outlook; GRPN Q3 beat/cuts forecast but says to explore options for Ticket Monster; EXPE leads online travel stocks higher on earnings/bookings (PCLN, TRIP rpt next week); NFLX spikes Semis movers; MCHP jumps after earnings in-line with recently lowered guidance (almost retraces all losses since outlook cut two-weeks ago); FSL rises on report showing its components Tesla car http://goo.gl/ZxyYBD; ONNN mixed Q3 report (eps miss/revs beat); flash memory maker CODE reverses overnight losses on Q4 miss (stock down into earnings); Semis as a whole leading today, with SOX higher by 3% (led by INTC, which lagged the day prior) GPRO Q3 EPS/revs beat and Q4 above on strong demand for Hero4 product lineup (shares of supplier AMBA rises in sympathy) Tower stocks under pressure (Telecom lags overall market in general), after CCI posts disappointing outlook (despite boosted dividend) shares of AMT, SBAC moved in sympathy Tech names rising on earnings: BCOV, CODE, IMPV, MCHP, OUTR Tech names down on earnings: ADNC, COMM, EPAY, PXLW, TRMB
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