A Slow Motion 'Melt-Up' in Equities

[Excerpted from Bill Cara's Daily Report]A slow motion melt-up in US and European equities, driven byovernight gains in India (IFN +21.54 %) and persistent buying in thefinancial sector (XLF +6.59%) propelled equities broadly higher, themarket closing at session highs.

At the close, the DJIA (8,504.08 +235.44 +2.85%), S&P 500 (909.71 +26.83 +3.04%) and NASDAQ Composite (1,732.36 +52.22 +3.11%) all were soaring.

The Toronto Composite and Toronto Venture Board were closed for the holiday, which partially accounted for the low volume.

Speaking of volume, the only volume of the market that was huge came from the day’s only story, India. Five of the top six Cara 100 stock volume leaders, all up massively on huge increases in volume, were companies from India: ICICI Bank (IBN); Tata Motors (TTM); HDFC Bank (HDB); InfoSys (INFY) and Cognizant Technology (CTSH). Volume in the shares of American companies was anemic.

In NY, the sector winners were Financial (XLF +6.6%), with REITs ($DJR +8.7%) and Banks ($BKX +7.5%) taking the lead, and Consumer Discretionary (XLY +4.9%).

There were 95 Cara 100 company stocks that lifted, and the leaders were ICICI Bank (IBN +25.2%), Tata Motors (TTM +19.3%) and HDFC Bank (HDB +19.3%). The losers were US companies, power utility Exelon (EXC -2.4%) and techie Garmin (GRMN -2.2%).

Earlier Tuesday, prices were significantly higher across the markets in Asia Pacific and Europe, but lower than in the US Monday. Japan’s Nikkei 225 (9,290.3 +2.78%), Aussie All Ordinaries (3,800.6 +2.12%), Hong Kong Hang Seng (17,544.0 +3.06%), Shanghai Composite (2,676.7 +0.90%) and India’s BSE 30 (14,302.0 +0.12%) all closed higher. Later in the day, European equity bourses were tracking positive US futures: the French CAC (3,272.5 7:38AM ET +0.83%), German DAX (4,950.9 7:23AM ET +2.04%) and UK FTSE 100 (4,483.8 7:23AM ET +0.84%) were all higher.

Like Friday, the US long Bond ($USB 121.78 -1.14 -0.93%) closed down. The 30-year (4.176 +0.93 +2.28%), 10-year (3.211 +0.88 +2.82%), and 5-year (2.079 +0.96 +4.84%) Treasury yields (0.160 +0.05 +3.23%) were up a tad.

The $USD (82.60 -0.37 -0.45%) and Yen (103.85 -1.25 -1.19%) reversed the previous day’s gains. The Euro (135.62 +0.61 +0.45%), Pound (153.48 +1.88 +1.24%), and Cdn Loonie (85.97 +0.92 +1.08%) were all stronger against the USD. Each day for over a week has been a reversal day, with the losses in the $USD needed to push US equity prices higher.

Crude Oil ($WTIC 59.59 +2.59 +4.54%) recouped Friday’s loss and then some.

$GOLD futures, consistent with these reversal days, were weaker (918.30 -13.00 -1.40%).

Spot (cash) market prices earlier Tuesday were as follows: Gold (923.02 +2.47 +0.27% 07:38am ET), Palladium (230.0 +4.0 +1.77% 07:20am ET), Platinum (1138 +9 +0.80% 07:38am ET), and Silver (13.90 +0.09 +0.65% 07:38), with a slight lift in the past hour as the Euro strengthened.

Tuesday morning, the Euro futures were stronger (1.3629 +0.0096 +0.71% 07:27am ET). So were the Crude Oil futures (60.47 +0.88 +1.48% 07:12am ET), which were up almost a dollar.

Stock futures for the DJIA were stronger early Tuesday morning (8527 +57 +0.68% 07:26).

Comments

[Prudent Man...:]

Buyers averaging down do not create a positive economy. Neither do traders where it takes several losers to make a winner.

If we are having a market disconnect, which happens more frequently than Wall Street wants to admit, we have opportunities. The direction?

May 19 12:54 PM

[user41653:]

Where are Those Good Green jobs , ??? my Nephew graduated a year ago from college ,finaly got a job . He works for a ou fit that installs solar panels , there s about a dozen people working there , they work part time usually not enough work most weeks to work full time , they get $9 a hour when they work , No benifits thats it .
Now I guess thats a Ok job for a 23 year old living at home , with no rent or food bills to pay all he pays is his gas and car insurance. But theres NO Future in that job at least no financial future and its not like hes learning a trade he said after a week on the job he as good at it as any of the older guys . Is this what Obama is talking about ?? When he talks about green jobs , ?One of his task force was on TV this morning talking about jobs for people insulating homes , they consider those "green jobs " I wouldnt guess theres much of a future in a job like that either . So were exactly Where are ALL these MILLIONS of GOOD GREEN JOBS going to come from ??? Will they Pay $50K Year , thats just a living wage these days , Well they Have Benifits , Retirement programs I guess We know the answer dont we.
Turns out All Those Good Green Jobs well there Kinda like Hope and Change sound great but really don't happen much in the REAL WORLD

May 20 12:28 PM