Another Day of Lackluster Trading

[Excerpted from Bill Cara's Daily Report]

After a mid-afternoon lift, the S&P 500 (879.13 -3.55 -0.40%), DJIA (8,146.52 -36.65 -0.45%), and NASDAQ (1,756.03 +3.48 +0.20%) still closed down a bit, in lackluster trading.

There were no remarkable gains or losses in the leading sectors. The winner was Technology (XLK +0.4%), while Financials (XLF -1.3%) reversed the prior day gain, pulled down by the Banks ($BKX -1.3%).

Among the Cara 100 companies, the leading stocks were Brunswick Corp (BC +6.0%), now seeming to be just a hedge play, and a couple India-centric techs, InfoSys (INFY +4.2%) and Cognizant (CTSH +3.7%). The biggest loser and main story of the day was Potash Corp (POT -9.0%). Following reports that a Russian supplier had sold fertilizer to India at significantly lower prices than had been expected, many of the big banks downgraded the fertilizer companies, reducing their price targets. The day’s trading volume on POT was +194% of the average. The previous day also had a significant pullback in commodity prices.

On Friday morning I noted that Commodity prices were getting hammered, with the $USD soaring, but gold closed pretty much flat at 913.00 in the futures and 912.75 spot, and Crude Oil was up +$0.47/bbl to 60.88.

The $USD (80.24 +0.37 +0.46%) was strong, boosted by the deflation play surrounding the reported low-priced sale of fertilizer to India, while the Euro (139.33 -0.93 -0.66%), Pound (162.11 -1.31 -0.80%) and Loonie (85.79 -0.27 -0.31%) were all weak against the dollar.

The Toronto markets were quiet again. The Toronto Composite (9,747.13 -26.79 -0.27%) was a tad lower, while the Toronto Venture bourse (1,045.55 +2.73 +0.26%) went in the opposite direction.

Thursday, I reported fixed income trading results for Wednesday, calling them Thursday’s. I reported that the US long Bond was very strong, when in fact it was weak. On Friday, the US long bond ($USB 120.72 +1.38 +1.15%) was in fact strong. The Treasury yields for 30-year (4.201 -1.17 -2.71%), 10-year (3.295 -1.18 -3.46%), and 5-year (2.211 -1.10 -4.74%) were all down sharply.
http://stockcharts.com/charts/gallery.html?$USB

The Treasury bill yield was quiet at 0.165. In fact there has been a remarkable tight trading range in the T-bills for many weeks, as there also has been in the $USD. Since mid-June, the dollar has traded between 79.65 and 80.75.

Earlier Friday, Austral-Asian markets were soft except for Australia (3,790.6 +0.78%). Japan’s Nikkei 225 (9,287.3 -0.04%), China (3,113.9 -0.29%), Hong Kong (17,708.4 -0.46%) and India (13,504.2 -1.84%) were all down.

The European equity bourses traded weaker as the day went on. The French CAC (2,983.10 Jul 10 -1.42%), German DAX (4,576.31 Jul 10 -1.16%) and UK FTSE 100 (4,127.17 Jul 10 -0.76%) were all down.

Spot gold, palladium, platinum and silver improved a tad during the day despite the stronger $USD, but were still unremarkable: (912.75 -0.75 -0.08% 17:10pm ET); (232 -2 -0.86% 16:38pm ET); (1106.0 +3.0 +0.27% 16:56pm ET); and (12.67 -0.17 -1.32% 17:13pm ET), respectively.

Comments

[Moon Kil Woong:]

Volume remains pathetically low still. We need more than program trading folks. It appears that the market needs a breakout to get volume going again and the bears seem to be winning big time. Be careful. Volume downside is usually very volitile.

Jul 13 03:49 AM