Despite Earnings Reports, Not Much Action in the Markets

[Excerpted from Bill Cara's Daily Report]

There was not much action for a Friday despite a spate of earnings reports and reporting of economic data to consider.

At the close, the DJIA (+5.90 +0.07% to 8131.33, S&P 500 (+4.30 +0.50% to 869.60), and NASDAQ Composite (+2.63 +0.16% to 1673.07) were all higher, but barely.

The Toronto Composite (+94.28 +1.01% to 9437.65) and the Toronto Venture Board (+7.10 +0.72% to 989.23) were stronger.

Earlier Friday, trading in the major international equity markets was slightly positive, but also uninspiring. Japan’s Nikkei 225 index (+1.74% to 8907.6) was strong. Australia’s All Ordinaries index (+0.07% to 3728.1), Hong Kong (-0.12% to 15601.3), Shanghai (-1.19% to 2503.9) and India (+0.96% to 11052.9) were mixed. India’s previous day had been down -3.0%. In Europe, France (+1.77% to 3092.0), Germany (+1.46% to 4676.8) and UK (+0.98% to 4092.8) showed more optimism.

In NY, there was modest gains in Financials (XLF), Consumer Discretionary (XLY), Energy (XLE), and Heathcare (XLV), with modest losses in Industrials (XLI), Tech (XLK) and Utilities (XLU). But, there was nothing remarkable going on. Among industry groups, the Banks ($BKX +3.4%) were the leaders and Goldminers ($XAU -3.2%) the losers on the day.

For the Cara 100 companies, the big winners were Dow Chemical (DOW +5.8%), Deutsche Bank (DB +5.0%), Whirlpool (WHR +4.2%) and Brunswick Corp (BC +4.1%). The losers were led by Votorantim (VCP -5.8%), Silver Wheaton (SLW -5.0%), Tata Motors (TTM -4.9%), Goldcorp (GG -4.7%) and Embraer (ERJ -4.2%). An eclectic group, signifying little.

US Treasury yields rallied again on the 30-, 10-, and 5-year instruments to 3.785, 2.930, and 1.878 percent respectively as the long bond ($USB -1.29% to 125.34) pulled back to a small week over week loss. The T-Bill yield moved modestly higher to 0.130 percent.

The $USD gained strength for the fourth consecutive day (+0.95% to 85.99), which led to a small gain on the week as the previous week’s close was 85.67.

The Euro (-1.09% to 130.42), the Pound (-0.89% to 147.98), and Cdn Loonie (-0.29% to 82.49) softened again versus the $USD, while the Yen (+0.19% to 100.85) had a second day of strength and fourth gain this week.

Crude Oil ($WTIC +0.77/bbl to 52.47) recovered a bit more after three straight days of losses to start the week, after the inventory glut had become a concern.

Spot (cash) market prices at the close of the week (compared to the prior week’s close) for gold, palladium, platinum and silver were a bit weaker: 867.65 (884.26), 231 (233), 1206 (1206) and 11.85 (12.35), respectively. Certainly this performance is inconsistent with the string and magnitude of losses in the Goldminers ($XAU).

DJIA futures closed the week at 8084, which was a small gain on the week.