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  • U.S. Futures Fall After GDP Growth Stalls; Asia, Europe Mixed 0 comments
    Apr 30, 2014 9:39 AM

    This morning. U.S. equity futures are moderately lower and off their highs following the 8:30 am release of anemic preliminary 1Q2014 U.S. GDP. In Asia, equity markets closed mixed. In Europe, indexes are mostly lower. The dollar is weaker. Treasury 10-year yields are lower following the poor U.S. GDP report. Commodities are mostly lower. Thursday's Nikkei 225 June 2014 (NKM4) equity futures are up +0.281%.

    Trading desks report uneventful overnight, with no change in Bank of Japan inflation forecasts, while Eurozone inflation leaves the ECB in a wait and see mode. Recent earnings have been more disappointing than encouraging, while M&A activity remains a principal theme. Today, U.S. equity market focus is interpretation of weak GDP, relatively strong ADP, and this afternoons FOMC meeting statement. Yesterday, U.S. markets had a better day, though most activity ended by mid-morning. The weeks-old 1840-1880 trading range continues to hold. Conviction remains low, though the "momentum" complex rallied. Sentiment remains poor, and advances are regarded skeptically as indexes remain near the top of recent trading ranges. Breaks above SPX 1880 appear likely to be sold.

    U.S. economic reporting is heavy, with April ADP employment (moderate positive surprise) and preliminary 1Q2014 GDP was a mere +0.1%, far less than +1.2% survey. Attention focuses on this week's two-day FOMC meeting statement (Wednesday at 2:00, but no news conference) and Friday's April employment report.

    On April 4th, the U.S. equity markets distributed, and the market outlook worsened to "in correction", ending a brief "confirmed uptrend" that began on April 1st. The SPX opens -0.66% below the April 2nd record 1890.90 close.

    Tuesday, on higher and above average volume, major equity indexes opened higher, reversed lower, and then rallied and reversed higher before ending mixed. The S&P 500 (SPX), DJ Industrials (Private:DJI), and NYSE composite rose +0.32%, +0.53%, and +0.20%, respectively, while the NASDAQ ended down -0.03%. The DJ Transports (TRAN) fell -0.02%.

    NYSE volume fell -9.99% to 1.02x its 20-day moving average. The SPX and NYSE composite are now +1.62% and +1.76% higher in 2014, while the DJI and Nasdaq are down -0.25% and -1.75%, respectively.

    Other notable indexes rose, too. The Russell 2000 (RTY), Nasdaq Internet (QNET), and Nasdaq Biotech (NBI) closed up +0.34%, +2.39%, and +2.68%, respectively. The QNET and NBI are in correction, down -17.0% and -16.1%, respectively, from recent highs.

    The 1Q2014 earnings reports began on March 15th, with 310 of 500 SPX companies having now reported, with a +5.99% EPS and +0.90% revenue surprises.

    Price earnings multiples are elevated. With SPX equities trading at a 17.1 (compared to 17.0 the prior day) 2013 earnings multiple, attention focuses on 2014 earnings and valuations (17.1x times survey $117.60 2014 SPX operating earnings suggests a 2005.36 SPX level this year, a +6.76% rise).

    Technicals were little changed. Most SPX market segments closed higher. Market breadth was positive, and up volume led down volume. Volatility fell. Treasury bond markets strengthened. On the day, the U.S. Treasury 10-year bond yield fell -0.91 bps to 2.6913%, compared to 2.7004% at the prior close.

    This morning, 10-year U.S. Treasury yields are down -0.91 bps at 2.6804%, compared to the prior close. Spanish and Italian 10-year debt yields are near their lowest levels since 2005, at 3.05% and 3.1%, respectively.

    U.S. options markets worsened to neutral, compared to neutral to bullish the prior day. The CBOE SKEW remains above a neutral range.

    In pre-market futures trading, June SPX equity futures (SPM4) price near the middle a 1866-1874 trading range. After a fair value adjustment of +0.63 points, the SPM4 future prices at 1870.25, down -2.13 points. The SPX opens +0.81% and +0.99% above its respective 20- and 50-day moving averages, and +2.33% and +5.88% above its 200-day moving averages. Initial resistance is 1882.36. Initial support is 1872.54, then 1866.75.

    In Asia, Japanese equity markets reopened, and the Nikkei 225 (NYSEARCA:NKY) gave up strong early gains and ended up +0.11%. The index remains in correction, with its 50-day moving average below its 200-day moving average. In China, equities closed mixed. The Hang Sang index (HSI) fell -1.42% and closed near its intraday low. The Shanghai SE composite (SHCOMP) index closed up +0.30%. Both HSI and SHCOMP 50-day moving averages are also below their respective 200-day moving averages. Today's volumes are unavailable.

    Commentary focused on the Bank of Japan's inflation forecast, which it left unchanged. The BOJ meets this week. This week , the NKY is down -0.87%. The HSI is down -0.40%, and the SHCOMP is down -0.50%. Last week, the NKY closed down -0.60%, while the HSI closed off -2.36%, and the SHCOMP closed down -2.92%. In April, the NKY is down -3.53%, while the HSI and SHCOMP are down -0.40% and -0.50%, respectively, compared to March, when the NKY, HSI, and SHCOMP lost -0.09%, -3.00%, and -1.12%, respectively.

    In 2014, the NKY and HSI are down -12.2% and -5.03%, respectively, while the SHCOMP is down -4.24%. In 2013, the NKY rose +56.7%. The HSI closed up +2.87%. The SHCOMP closed down -6.75%.

    In China, short-term interbank lending rates remain volatile, as the SHIBO 7-day rate rose +5.00 bps to 4.12%, compared to 4.07% Tuesday, up from a 2.26% low on March 11th, but down from the February 7th 5.41% recent high.

    Regional relative strength indexes (RSI) show Tokyo, Hong Kong, and Shanghai in neutral ranges. The NKY RSI ended at 44.70, compared to 44.19 the prior day, up from an oversold 27.92 on February 4th, the most recent prior yearly low. The HSI RSI fell to 43.87, compared to 50.16 the prior day. The SHCOMP's RSI rose to 40.83, compared to 39.04 the prior session. On June 27, 2013, the index's RSI fell to a low of 15.27, which was also last year's low index close.

    In Japan, the NKY closed at 14,304.11, compared to 14,288.23 the prior day, -12.2% below its recent year-end 16,291.31 high and -63.2% below its late-1989 38,915.87 high close. The index gapped higher to open near 14,400 and set an early 14,421.22 intraday high. The index traded narrowly around 14,380 until late in the morning session, then weakened and fell to breakeven early in the afternoon, when the index set its 14,275.69 intraday low. Rallies failed through the afternoon, and the index closed with a modest gain. The index closed -1.24% and -2.23% below its 20- and 50-day moving averages, and -4.75% and -2.44% below its respective 100- and 200-day moving averages. Most market segments closed higher. Leaders were utilities, health care, and telecommunications, which rose at least +0.49%. Laggards were financials, consumer services, and basic materials, which fell at least -0.03%.

    In China, the HSI closed at 22,133.97, compared to 22,453.89 at the prior close. The index traded narrowly higher at the open, when it set its 22,466.04 intraday high, then eased through the morning session to 22,200. The index eased to a late 22,097.36 intraday low. Most market segments closed lower. Leaders were telecommunications, which rose +1.42%, and utilities and oil and gas, which fell at least -0.70%. Financials fell -1.36%. Laggards were industrials, consumer services, and technology, which fell at least -1.88%. The index closed -6.09% below its recent December 3rd 23,910.47 high, but +23.5% above its 18,185.59 June 4, 2012 low.

    In Shanghai, the SHCOMP closed at 2,076.78, compared to 2,020.34 at the prior close, +3.92% above the 1,950.01 June 27, 2013 close, last year's low. The index traded to a late morning 2,029.49 intraday high, but fell back to breakeven in early afternoon before improving through the afternoon. Most market segments closed higher. Leaders were telecommunications, health care, and consumer services, which rose at least +1.03%. Laggards were oil and gas, which rose +0.06%, and basic materials and financials, which fell at least -0.04%.

    In Europe, equities are mixed. The Euro Stoxx50 and CAC 40 are down -0.48% and -0.53%, respectively, while the FTSE 100 and DAX are up +0.08% and +0.01%, respectively. The Spanish IBEX 35 is down -0.36%. The Italian FTSE MIB down -0.89%.

    Economic reporting focuses on Eurozone inflation and the day's disappointing earnings reports..

    European bourses have recently outperformed U.S. equity indexes. Intraday Euro Stoxx50 relative strength (RSI) is 55.59, compared to 58.09 at the prior close, in a neutral (30-70) range, but better than its recent February 5th 33.57 low, which coincided with its 2014 low. The indexes lowest recent RSI level was 25.77 on June 24th, which marked the 2013 2,494.54 closing low.

    The Euro Stoxx50 trades -1.15% below its 3,230.33 April 4th post-2008 high close, and -39.2% below its 5,249.55 March 31, 2000, all-time closing high. From its prior day 3,208.68 close, the index opened at 3,200 and has traded narrowly lower to an early afternoon 3,192.22. The index currently trades at 3,192.44. Most market segments are lower. Leaders are telecommunications, health care, and technology, which are up at least +0.18%. Laggards are basic materials, utilities, and financials, which is down at least -0.42%.

    This week, the Euro Stoxx50, FTSE 100, CAC 40, and DAX are up +1.45%, +1.35%, +0.68%, and +1.98%, respectively. Last week, the Euro Stoxx50 and DAX closed down -0.27% and -0.09%, while the FTSE 100 and CAC 40 closed up +0.91% and +0.27%, respectively. In April, the Euro Stoxx50, FTSE 100, CAC 40, and DAX are up +1.00%, +2.69%, +1.88%, and +0.33%, respectively. In March, Euro Stoxx50 closed up +0.39%, while the FTSE 100, CAC 40, and DAX closed down -3.10%, -0.38%, and -1.40%, respectively.

    In 2014, the indexes are higher. The Euro Stoxx50, FTSE 100, CAC 40, and DAX are up +2.714%, +0.40%, +4.15%, ad +0.37%, respectively. In 2013, the indexes closed up +18.0%, +14.4%, +18.0%, and +25.5%, respectively.

    1Q2014 SPX Earnings. Of 310 (of 500) reporting companies, 233 or 75.2% surprised positively on earnings, with an average +5.99% surprise average. Of reporting companies, 162 or 52.6% reported sales or revenues above estimates. The average sales/revenue surprise is +0.90%. Utilities leads with respective +11.5% and +18.2% earnings and revenue surprises. Financials have a respective +6.52% and +0.08% earnings and revenue surprises. Consumer staples lags with respective +0.26% and -1.04% earnings and revenue surprises.

    Valuation. The SPX trades at 17.1x estimated 2013 earnings ($110.15), 16.0x estimated 2014 earnings ($117.60), 14.3x estimated 2015 earnings ($130.91), and 12.9x estimated 2016 earnings ($145.37). The 10-year average median price/earnings multiple is 15.9x. Analysts expect 2014, 2015, and 2016 earnings to grow +6.72%, +11.3%, and 11.1%, respectively.

    The KBW Bank Index (BKX) trades at 13.2x 2013 adjusted EPS ($5.16), 12.7x estimated 2014 earnings ($5.38), 11.3x estimated 2015 earnings ($6.03), and 10.1x 2016 earnings ($6.74). Analysts expect 2014, 2015, 2016 EPS will grow +4.32%, +12.1%, and +11.7%, respectively.

    Composite, index, and equity options. Options markets worsened to neutral, compared to neutral to bullish the prior session. Composite options are neutral, index options are neutral, and equity options are neutral. The composite put/call ratio is 0.90, compared to 0.90 the prior day, and worse than 5- and 10-period moving averages of 0.94 and 0.89, respectively. The index put/call ratio is 1.11, compared to 1.50 the prior day, and worse than its 5- and 10-period moving averages of 1.12 and 1.00, respectively. The equity put/call ratio closed the day at 0.85, compared to 0.90 the prior day, and better than its 5- and 10-period moving averages of 0.90 and 0.87, respectively.

    NYSE Volume, Breadth Indicators. Volume fell -9.99% to 739.20 million shares, compared to 821.27 million shares the prior day, 1.02x the 727.16 million share 20-day moving average. Market breadth was positive, and up volume led down volume. Advancing stocks led by +578 (compared to +119 the prior day) or 1.47:1. Up volume was 1.779:1 down volume.

    "In Correction" Market Outlook and Distribution Day Count. On April 4th, the U.S. equity markets distributed, and the market outlook worsened to "in correction", ending a brief "confirmed uptrend" that began on April 1st. The SPX opened April 3rd at a record 1890.90, up +0.99% from the April 1st 1872.34 open. Today, the SPX opens -0.66% below the April 2nd record close.

    Libor, LOIS, Currencies, Treasuries, Commodities:

    · USD LIBOR is 0.08760%, compared to 0.08820% the prior day. USD 3-month LIBOR is 0.22335%, down from 0.22535% the prior day, and compares to the January 4, 2013, recent peak of 0.58250%.

    · The US LIBOR-OIS (LOIS) spread is 13.285 bps, compared to 13.135 bps the prior day, and compares to the recent June 12, 2012, 46.785 bps high. Euribor-OIS is 17.300 bps, compared to 14.700 bps the prior day, and down from the December 27, 2011, high of 98.800 bps. Moves in the LOIS indicate changes in intra-bank lending risk premiums.

    · The 3-month Euro basis swap is -3.3733 bps, compared to -5.228 bps the prior day, up from a trough of -147.00 bps on December 14, 2011, but far better than a normal -10 bps and -40 bps range.

    · German 10-year debt yields are 1.52%, compared to 1.50% the prior day.

    · Japanese 10-year debt yields are 0.63%, compared to 0.62% the prior day.

    · Spanish and Italian 10-year debt yields are near their best levels since 2005. Spanish 10-year debt yields are 3.05%, compared to 3.07% the prior day. Italian 10-year debt yields are at 3.11%, compared to 3.12% the prior day.

    · U.S. Treasury yields are slightly higher, with 2- and 10-year maturities yielding 0.438% and 2.704%, respectively, compared to 0.438% and 2.691% Tuesday. The yield curve widened +1.270 bps, with the 2- to 10-year spread at +2.266%, compared to 2.254% the prior day. In the past year, the 2- and 10-year spread varied from a low of +1.429% on May 1, 2013, to a high of +2.648% on December 31, 2013.

    · The U.S. dollar is weaker compared to the Euro, British pound, and Japanese yen. The dollar trades at US$79.665, compared to a US$79.665 intraday low and US$79.808 the prior day, and worse compared to its $79.910 50-day, US$80.257 100-day, and US$80.547 200-day averages. The euro trades at US$1.3854, compared to a US$1.3855 intraday high and US$1.3812 the prior day. The euro trades better compared to its US$1.3806 50-day and US$1.3730 100-day averages, and compares to a multi-year low of US$1.1877 on June 7, 2010. In Japan, the dollar trades at ¥102.52, compared to ¥102.64 the prior day. The yen trades worse than its 50-day moving average ¥102.42, and better than its January 1st 105.31 closing low, its weakest prior multi-year closing low.

    · Citigroup Economic Surprise Index improved to -21.00, compared to -21.40 the prior day, better than its recent -45.90 worst on April 7th, but continuing its string of consecutive negative readings since February 18th. The index is better compared to its respective -25.26 5-day and -29.33 10-day moving averages. Last year, on June 10th, the index fell to a then 52-week low of -33.26. The index improved and turned positive on July 30th and rose to 53.30 on October 1st, but subsequently fell on dollar weakness to -2.10 on October 31st. It subsequently strengthened to a +72.70 high on January 15th, but then subsequently trended lower and turned negative on February 19th and fell to a -45.90 124-week low on April 7th . After a lag, the CESIUSD correlates with EPS revisions.

    · Commodities prices are mostly lower, with lower energy, lower precious metals, lower aluminum and copper, and mostly lower agriculture prices.

    Volatility, Skew:

    · The CBOE SPX Volatility Index (VIX) fell -1.86% to 13.71, compared to 13.97 at the prior close. The VIX is -3.71% below the 14.24 20-day moving average. Its 30-day high is 17.85. Its 30-day low is 12.60. The index's all-time closing low is 9.31 on December 22, 1993. The long-term average is 20.14.

    · The Euro Stoxx 50 volatility index (V2X) is 17.44, up +0.54% compared to 17.37 at the prior day's close. The V2X index trades -0.21% below its 17.47 20-day moving average, -28.3% below the 24.33 30-day high, and +12.5% above the 15.50 30-day low.

    · The Hang Seng volatility index (VHSI) closed at 14.85, up +2.48% compared to 14.49 at the prior close. The VHSI index trades -2.19% below 15.18 20-day moving average. Its lowest historical close was 11.72, on June 30, 2005.

    · CBOE SKEW (SKEW) fell -0.20% to 123.44, compared to 123.69 the prior session, above a neutral reading (115-120), but below 130, a level that correlates well with short-term market tops. The recent record high was 143.20 on December 20th. Its recent low was 112.47 on May 25, 2013. Spikes in excess of 130 correlate well with short-term market tops, though not in October or November. The index rarely falls below 110, last on July 31, 2009. The index correlates with market tail risks, the cost of buying out-of-the-money, long-dated options, i.e., options not affected by expirations. A rise suggests that investors are buying more puts than calls, a bearish signal.

    U.S. Economic Reporting and News:
     

    • The latest week's MBA mortgage applications fell -5.9%, compared to a decline of -3.3% the prior week.
    • At 8:15, April ADP employment change was 220K, compared to 210K survey and 209K revised prior.
    • At 8:30, 1Q2014 QoQ GDP rose +0.1%, compared to +1.2% survey and +2.6% prior.
    • 1Q2014 personal consumption rose 3.0%, compared to 2.0% survey and 3.3% revised prior.
    • 1Q2014 GDP price index was +1.3%, compared to 1.6% survey and prior.
    • At 9:00, April ISM Milwaukee, with 56.00 survey and 56.03 prior.
    • At 9:45, April Chicago purchasing manager index, with 57.0 survey and 55.9 prior.
    • April 29-30, FOMC meeting.
    • At 2:00, FOMC policy statement.
    • On May 2nd, at 8:30 , April change in nonfarm payrolls.


    Overseas Economic Reporting and News:
     

    • Australia - March MoM private sector credit rose +0.4%, compared to +0.4% survey and prior.
    • Japan - April Markit/JMMA manufacturing was 49.4, compared to 53.9 prior. March preliminary industrial production rose +0.3%, compared to +0.5% survey and -2.3% prior. March construction orders fell -8.8%, compared to +12.3% prior.
    • France - March YoY consumer spending fell -1.2%, compared to -0.4% survey and -0.6% revised prior.
    • Germany - March MoM retail sales fell -0.7%, compared to -0.7% survey and +0.4% revised prior. Unemployment was unchanged at 6.7%.
    • Italy - March preliminary unemployment was 12.7%, compared to 13.0% survey and 12.7% revised prior.
    • Portugal - March MoM industrial production fell -4.0%, compared to -0.8% revised prior.
    • United Kingdom - GfK consumer confidence was -3, compared to -4 survey and -5 prior.


    Company Ratings/News:
     

    • None.


    Tuesday's Trade. On lower and slightly above average NYSE volume, major U.S. equity indexes rose moderately. The SPX, DJI, Nasdaq, and the NYSE composite rose +0.48%, +0.53%, +0.72%, and +0.54%, respectively. All are higher on the week, but the Nasdaq remains lower in April. The SPX and NYSE composite are higher in 2014.

    Other notable indexes rallied. The Russell 2000 (RTY) rose +0.34%, and closed -7.27% below its March 4th record close. The Nasdaq Internet Index (QNET) rose +2.39%, and is in correction at -17.0% below its March 6th closing high. The Nasdaq Biotech Index (NBI) rose +2.68%, and is in correction, down -16.1% from its recent February 25th record high.

    On April 4th, the U.S. equity markets distributed, and the market outlook worsened to "in correction", ending a brief "confirmed uptrend" that began on April 1st. Today, the SPX opens -0.66% below the April 2nd record 1890.90 close.

    Market breadth was positive, with gainers 1.47x losing stocks. Most SPX market segments closed lower. Leaders were financials, basic materials, and technology, which rose at least +0.70%. Laggards were industrials, which rose +0.27%, and consumer goods and utilities, which fell at least -0.29%.

    NYSE volume fell -9.99% to 739.20 million shares, compared to 821.27 million shares the prior day, 1.02x the 727.16 million share 20-day moving average volume. On the day, bond markets weakened. The U.S. 10-year yield opened at the 2.6995%, rose to a mid-session 2.7287% intraday high, then eased and reversed lower to a late 2.6859% intraday low. The yield ended at 2.6913%, down -0.91 bps compared to the 2.7004% prior close.

    From its prior day 1878.61 SPX close, June 2014 SPX futures (SPM4) suggested a moderately higher open. The SPX index gapped higher to 1872 in early trading and rose to 1877.01 by mid-morning, but then reversed lower in early afternoon to a mid-afternoon 1850.61 intraday low. Finding support, the index rallied and reversed higher shortly after 3:00, and rallied to nearly 1873 before weakening again into the close. The index closed at 1869.43, -1.14% below its 1890.90 April 2nd record close. The index closed +73.9% above the 1074.77 October 4, 2011, intraday low, the bottom of the most recent correction.

    The DJ Transportation index (TRAN) rose +0.43%, compared to the DJI's +0.53% gain. From its prior 7,584.34 close, the TRAN traded to 7,620 in early trading, then briefly reversed lower to its mid-morning 7,567.08 intraday low. The index reversed higher by mid-session and rose to a late session 7,625.04 intraday high. The index closed at 7,617.29. Volume fell -16.5% to 12.910 million shares, compared to 15.463 million shares the prior session, and 0.92x the 15-day moving average volume. The TRAN closed +0.44% and +1.58% above its 20- and 50-day moving averages, and +3.12% and +8.17% above its respective 100- and 200-day moving averages.

    Market volatility fell -1.86%, as the CBOE SPX volatility index (VIX) closed at 13.71, compared to 13.97 at the prior close. The VIX opened slightly lower, but spiked to its mid-morning 14.24 intraday high, then eased to a late 13.61 intraday low. The VIX's all-time closing low was 9.31, on December 22, 1993. Its record high was 89.53 in December 2008. Its lifetime average is 20.01. The CBOE put/call SKEW fell -0.20% to 123.44, compared to 123.69 the prior session, above a neutral 115-120 range, but below 130, a level that correlates well with short-term market tops.

    The market's technical factors were little changed. The SPX relative strength (RSI) improved to 55.68, compared to 52.93 the prior day, in a neutral range, but better than an oversold 31.24 on February 3rd. The RSI is also down from an overbought 71.26 on December 31st, when the SPX closed at an earlier record high, but above earlier oversold levels of 35.14 on August 27th and 39.19 on October 9th. This week, the SPX DJI, Nasdaq, and NYSE composite are up +0.72%, +0.77%, +0.20%, and +0.48%, respectively. Last week, the SPX, DJI, Nasdaq, and NYSE composite closed down -0.08%, -0.29%, -0.49%, and -0.26%, respectively. In April, the SPX, DJI, and NYSE composite are up +0.325, +0.47%, and +0.53%, while the Nasdaq is down -2.27%. In March, the DJI and NYSE composite closed up +0.01% and +0.09%, respectively, while the SPX and Nasdaq are down -0.10% and -3.54%, respectively.

    In 2014, the SPX and NYSE composite are up +1.62% and +1.76%, respectively, while the DJI and Nasdaq are down -0.25% and -1.75%, respectively. In 2013, the SPX, DJI, Nasdaq, and NYSE composite closed up +29.6%, +26.5%, +38.2%, +23.2%, respectively. All closed at least +5.91% higher in 2012.

    KBW Bank Index (BKX). On lower and below average volume, the BKX rose +0.80% to 68.26, compared to 67.72 at the prior day's close, its 13th consecutive below 70.0 and -6.38% below its 72.91 March 20th post-2008 closing high and at its worst level since January 15th. Most of the day's activity was compressed in the session's first 45 minutes, when the index rallied to its 68.37 intraday high. The index traded narrowly around 68.20 through the close. Volume fell -36.7% to 55.341 million shares, compared to 87.455 million shares the prior day, and 0.98x the 56.228 million share 15-day moving average.

    Large cap banks outperformed the regional banks, as the KBW regional banking index (KRX) fell -0.45%.

    This week, the BKX is down -1.09%, compared to last week, when the BKX fell -0.67%. In April, the BKX is down -5.57%, compared to March, when the BKX closed up +4.94%. In 2014, the BKX is down -1.44%, compared to the SPX's +1.62% gain. In 2013, the BKX rose +35.1%, better than the SPX's +29.6% rise.

    The BKX is now +15.3% better than the June 24, 2013 59.19 close, its worst since May 13, 2013. The index crossed above 50 on December 17, 2012, 60 on May 15, 2013, and 70 on January 8, 2014, but then dropped back below 70 on January 24th, which persisted until March 6th. On April 10th, the BKX fell below 70.00 to an April 11th 68.09 closing low. The BKX closed +109.6% above the 32.56 intraday low on October 4, 2011, the bottom of that year's correction. Large-cap bank stocks have outperformed the broader market's rebound, with the SPX up +74.8% in the same period.

    The BKX index closed -43.6% below its February 20, 2007, record 121.06 high. The BKX is up +266.6% from its 18.62 March 6, 2009, closing low.

    Technical indicators were little changed. The index's 20-day moving average remains below its 50-day moving average. The index closed -2.28% and -2.60% below its respective 20- and 50-day moving averages, but -1.51% below and +1.87% above its 100- and 200-day moving average. The 20-day moving average fell -20 bps to 69.85. The 70.08 50-day moving average fell -1 bp. Its 100-day moving average rose 2 bps to 69.31, and the 200-day moving average rose +2 bps to 67.01. The 20-day closed (by -0.23 points) below the 50-day, and the gap widened -19 bps. The 50-day moving average closed (by +3.07 points) above the 200-day moving average, and the gap narrowed -3 bps. The 100-day moving average closed (by +2.30 points) above the 200-day moving average, and the gap narrowed -1 bp.

    The directional movement indicator improved to -19.198, compared to -20.175 the prior day, its 16th consecutive negative reading. Relative strength rose to 40.02, compared to 35.50 the prior day, in the lower end of a neutral range, up from the recent 32.95 low on February 3rd, but down from an overbought 75.56 and 71.88 on January 9th and 10th, respectively. The recent low RSI level was 31.08 on November 14, 2012, which is also the date of the BKX's 2012 closing low. Next resistance is 68.46; next support is 67.97.

    SPX, DJI, RTY, TRAN, CCMP, NYA, VIX, SKEW, NKY, EURUSD, USGG10YR, HSI, SHCOMP, SX5E, CAC, DAX, FTSE, JPY, GBP, EUR

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