Market Summary
from Briefing.com[BRIEFING.COM] The stock market followed the script on Friday of making a big statement by doing very little. The major indices held to tight trading ranges and didn't venture that far from where they began the session.
The market's meandering disposition was a function of offsetting considerations that it is due for a pullback after its big run, yet in the midst of a typically favorable period that is causing some angst about the possibility of missing out on further gains.
Accordingly, it was a bit of a chopfest as far as Friday's trading action was concerned, but true to recent form, a closing burst of buying interest materialized that helped the S&P 500 eke out a positive finish.
The energy (+0.8%), technology (+0.6%), and consumer discretionary (+0.4%) sectors were the heavily-weighted sectors showing gains while the health care (-0.8%), consumer staples (-0.6%), and financial (-0.4%) sectors were the heavily-weighted sectors showing offsetting losses. The industrials sector finished up fractionally, the telecom services sector added 0.6%, the materials sector advanced 0.3%, and the utilities sector dipped 0.4%.
Much of the more scintillating trading action took place away from the stock market. To that end, the Treasury market experienced a seesaw day that featured early weakness and later strength. The yield on the 10-yr note swung from a high of 2.38% to a low of 2.32%, where it settled its technically-driven session.
The commodities arena was a focal point throughout the day, primarily because oil prices bounced back to the doorstep of $76.00/bbl ($75.98) after dropping below $73.50 in overnight action. The turnaround was helped along presumably by some short-covering activity, yet it proved instrumental in driving the outperformance of the energy sector. On a related note, it was reported that the House of Representatives passed a bill allowing for the construction of the Keystone XL oil pipeline.
The metals, in turn, saw some big gains with gold jumping 2.5% to $1191.00/troy ounce, silver popping 4.5% to $16.33/troy ounce, and copper gaining 1.8% to $3.05/lbs.
Those recovery efforts helped underpin the S&P 500 materials sector, which also benefited from better-than-feared GDP data out of the eurozone, a 0.3% increase in retail sales in the U.S. in October, and the highest reading for consumer sentiment in November (89.4), as measured by the University of Michigan, since July 2007.
Within the stock market, the health care sector was the worst-performing area on Friday thanks in large part to profit-taking efforts in the biotech stocks. Celgene (CELG 104.01, -3.42), Biogen-Idec (BIIB 305.43, -12.55), and Amgen (AMGN 157.68, -3.17) all declined between 2.0% and 4.0%.
There wasn't a single sector, though, that finished up or down at least 1.0%, which fit the template of being a mixed day of trading. Similarly, 16 of the Dow's components ended higher while 14 ended lower. IBM (IBM 164.16, +1.37) led the winners while Visa (V 248.84, -2.08) paced the decliners.
Economic Data
Technical Update
Under Construction
Market Internals
NYSE :
Lower than prev day volume @ 704.8M vs 708.1M
Advancers outpaced Decliners(adv/dec): 1627M/1465M
New highs outpaced low(high/low): 124/45
NASDAQ :
Lower than prev day volume @ 1728.2M vs 1843.1M
Decliners outpaced Advancers(adv/dec): 1310M/1394M
New highs outpaced low(high/low): 69/59
VOLATILITY S&P500 (VIX)
13.31 -0.48(-3.48%)
Advancers outpaced Decliners by an average 1.03 to 1 on lower volumes than prev day (-118.2 -4.63%)
Bonds, Currencies & Commodities
from Briefing.comBonds
The Week in Review: Yields Range Bound Amid Choppy Trade
- Treasuries endured a relatively quiet holiday-shortened week.
- Macro data pointed to a continued weakening of the global economy as China's industrial production and new loans missed and the Bank of England warned inflation was likely to dip below 1% by mid-2015, pushing back rate hike expectations. Possible early elections and a potential delay to the consumption tax hike in Japan provided further uncertainty.
- A choppy trade in Treasuries kept yields in tight ranges as they tested resistance, but were unable to breakout.
- Economic data was mixed.
- Wholesale (0.3% actual v. 0.2% expected) and business (0.3% actual v. 0.2% expected) inventories posted slightly larger than expected builds while Michigan Sentiment (89.4 actual v. 87.5 expected) outpaced estimates. Retail sales (0.3%) matched expectations and both initial (290K actual v. 280K expected) and continuing (2392K actual v. 2353K expected) claims disappointed.
- This week's auctions were disappointing.
- Monday's $26B 3Y note auction drew 0.998% and a weak 3.18x bid/cover. A solid showing from indirect bids (37.7%) helped offset the weak direct (15.1%) demand. Primary dealers took in 47.2% of the supply.
- Wednesday's $24B 10Y note auction drew 2.365% and a light 2.52x bid/cover. Indirect (44.7%) and direct (13.4%) bids missed their 12-auction averages, but primary dealers ended up with just 41.9% of the supply.
- Thursday's $16 bln 30Y bond auction was tepid, drawing 3.092% (WI 3.078%) and a weak 2.29x bid/cover. Indirect (43.8%) and direct (13.8%) bids were short of their 12-auction averages, but primary dealers were left with just 42.4% of the supply.
- Up front, the 2Y ticked up +1bp to 0.512%. The yield spent the entire week between 0.500%/0.550% as action tested resistance dating back to the beginning of October.
- In the belly, the 5Y added +2bps to 1.604%. Action flirted with 1.650% resistance, but the 50, 100, and 200 dma offered a headwind.
- The 10Y gained +2bps to 2.320%. The benchmark yield has spent the past two weeks locked between 2.300% and 2.400%.
- Light selling at the long end caused the 30Y to edge up +1bp to 3.042%. A torturous trade over the past three weeks has kept action between 3.000% and 3.100%.
- Little change along the yield curve saw the 2-10-yr spread hold @ 181bps.
Currencies
Dollar Fails to Hold 88.00:
- The Dollar Index dove into the red around the lunchtime hour, and now holds small losses near 87.50.
- Early strength had the greenback testing the 88.20 level and on track for its best close in since October 2010.
- EURUSD is +50 pips @ 1.2525 as action holds near session highs. The single currency tested the 1.2400 level in response to this morning's better than expected U.S. economic data, but it was able to hold as buyers defended key support. A move back above 1.2600 would be welcoming to the bull case. On Monday, Germany's Bundesbank will issue its monthly report and ECB President Mario Draghi will speak in Brussels.
- GBPUSD is -25 pips @ 1.5685 as trade looks likely to close at a fresh 14-month low. Sterling saw early selling after construction output missed estimates and tumbled to a low of 1.5595 following the strong U.S. data. However, buying over the remainder of the session has wiped away most of those losses. The 1.5900/1.6000 area is setting up as an important level.
- USDCHF is -45 pips @ .9585 as trade presses to a two-week low. EURCHF is garnering some attention as it holds @ 1.2010, just above the Swiss National Bank's 1.2000 floor.
- USDJPY is +40 pips @ 116.15 as action readies for its best close in seven years. Trade has been whipped around in recent days amid confusion over the possibility of early elections and a delay to the consumption tax hike. Japan's Q3 preliminary GDP is due out Sunday evening.
- AUDUSD is +30 pips @ .8750 after reversing its early losses. The hard currency saw overnight selling after China's new loans missed estimates, but has seen a steady bid over the course of U.S. trade. Today's advance has the Aussie higher for the fifth time in six days and testing resistance in the .8750/.8800 area. Australia's new motor vehicle sales will be released Sunday night.
- USDCAD is -90 pips @ 1.1275 as trade flushes to a two-week low. A move into meaningful support and the 50 dma near 1.1200 cannot be ruled out. Canada's foreign securities purchases will cross the wires on Monday.
Commodities
- In afternoon trading, WTI crude oil, gold and silver all hits new highs for the day as dollar index remained near LoD
- In electronic trade, this continues to be the case
- Dec crude oil closed the day +2.4% at $75.90/barrel, but temporarily rose above $76
- Dec natural gas rose modestly, ending +1.3% at $4.02/MMBtu
- Dec gold rally big, closing 2.1% higher at $1186.20/oz, while Dec silver +2.1% at $16.28/oz
- Dec copper gained +1.7% at $3.05/lb
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