A Flat Trading Day

[Excerpted from Bill Cara's Daily Report]

Thursday’s trading opened with a small pop and then traded sideways in a narrow range. By the close, the NASDAQ was flat (1,807.72 -0.34 -0.02%), almost unchanged each day this week, while the DJIA (8,555.60 +58.42 +0.69%) and S&P 500 (918.37 +7.66 +0.84%) were up less than one percent on the day, but still down a bit on the week.

The Toronto Composite (10,121.50 +55.39 +0.55%) and Toronto Venture Board (1,114.31 -1.06 -0.10%) traded quietly, both down on the week.

But Friday is a new day, and prices are looking like ‘green shoots’. Earlier, Austral-Asian markets were moderately higher. Japan’s Nikkei 225 (9,786.3 +0.85%), Shanghai (2,880.5 +0.93%), Hong Kong (17,920.9 +0.81%), Aussie All Ordinaries (3,894.4 +0.18%), and India’s BSE 30 (14,521.9 +1.80%) all closed up on the day, but, with the exception of Shanghai, these too are down on the week.

In late morning trading, the European equity bourses are fairly strong. The French CAC (3,228.6 6:51AM ET +1.08%), German DAX (4,842.1 6:36AM ET +0.10%) and UK FTSE 100 (4,351.5 6:36AM ET +1.65%) were up, but the gain in the DAX was marginal.

In US trading Thursday, the sectors that led were Financial ([XLF]]+2.4%), Utilities (XLU+2.3%), Healthcare (XLV+1.9%), and Consumer Staples (XLP+1.8%). The three sectors that lead most sustainable rallies were lower: Energy (XLE-0.4%), Technology (XLT-0.4%), and Consumer Discretionary (XLY -0.3%), although marginally so. But the rotation is noticeable.

The leading industry groups were Hospitals and Banks ($RXH+3.9%, and $BKX+3.0%), while the weakest were Semiconductors ($SOX -1.8%), Goldminers ($XAU -1.6%), and Retailers ($RLX -1.3%).

Cara 100s that lifted most were Carnival Cruise, Teck Corp, Aetna, Exelon, and Tata Motors (CCL+7.5%, TCK+6.3%, AET+6%, EXC+4.2%,and TTM+4.1%), an eclectic group. Leading on the downside were SanDisk, Silver Wheaton, Best Buy, and JC Penny (SNDK-6.1%, SLW-5.7%, BBY-5%, and JCP-4.3%), which was consistent with the losing industry groups.

The $USD was stronger against all the major currencies Thursday (80.59 +0.36 +0.45%). The Cdn Dollar (88.30 -0.05 -0.06%) was quiet, but the Yen (103.56 -0.84 -0.80%), Euro (139.06 -0.45 -0.32%), and British Pound (163.38 -0.64 -0.39%) were weak.

In active US bond market trading, the US Treasuries turned south as traders are beginning to ask if a USD collapse is being set up. Next week’s calendar of substantial offerings of notes in the 2- to 7-year range is very heavy and traders are figuring prices might fall, or else the Fed will have to buy the majority, which could elevate gold in the days following. The US long Bond fell hard ($USB 115.67 -2.11 -1.79%). The yields for 30-year (4.624 +1.59 +3.56%), 10-year (3.834 +1.87 +5.13%), and 5-year (2.838 +1.80 +6.77%) lifted sharply. Treasury bill yields were a tad stronger (0.170 +0.05 +3.03%), but have been trading in a tight range for an extended period.

$GOLD gave back the previous day’s gains (933.00 -5.40 -0.58%). Thursday, early, when silver appeared to be breaking out, we bought stock, but later the market settled back. There is a good tone Friday morning with higher prices anticipated.

Crude Oil (71.91 +0.21 +0.29%) was a tad stronger Thursday, but has traded in a narrow range all week. Earlier today, though, June Oil was lifting (72.200 +0.830 +1.16% 06:41am ET).

Dollar futures were flat earlier Friday morning, while the Euro was a tad stronger (1.3916 +0.0024 +0.17% 06:41am ET).

US equity futures for the DJIA were looking higher earlier today as well (8614 +64 +0.75% 06:41am ET), although June was stronger than July, showing trader’s caution at rising prices.

Following options expiry on the weekend, traders still think there could be a waterfall event in equity markets next week.

RIM (RIMM) took a significant hit immediately after Thursday’s close, after reporting solid earnings, but muted expectations going forward by analysts who see a lot of competition coming from Google (GOOG) and Microsoft (MSFT) as well as the usual suspects Apple (AAPL) and Palm (PALM).

Comments

[Steve Soden:]

Get ready to get shelled!
There will be a news item that will start it all.
President Obama will hide in The White House with his Narcissistic Ways, look for him under the covers when the crap hits the fan.
He won't know what to do along with the rest of us while McDonald's continues to sell coffee on TV.
This will be another kind of SHOCK AND AWE!!!!!!!!!!!!!!!!!!!...
460 Trillion in Derivatives World Wide, how can I get some?
NOT!
NOT!

Jun 20 07:56 PM