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Market Update

European Markets Fall Back on Poor Earnings Reports

European stocks fell for a second day, paring their biggest monthly advance since July, as companies from AstraZeneca Plc to Banco Santander SA (SAN) slid after reporting earnings. U.S. futures and Asian shares fluctuated.

AstraZeneca sank 5.1 percent after the drugmaker forecast that profit and sales will slide this year. Santander and Royal Dutch Shell Group Plc both declined more than 1.5 percent as fourth-quarter earnings missed analysts’ estimates.

The Stoxx Europe 600 Index (SXXP) retreated 0.4 percent to 287.46 at 12:45 p.m. in London, as about three stocks fell for every one that rose. The equity benchmark has still advanced 2.8 percent in January, its eighth month of gains and its longest winning streak since 1997. Futures on the Standard & Poor’s 500 Index expiring in March added less than 0.1 percent today, while the MSCI Asia Pacific Index was little changed.

“Over the last six months, we’ve had a big re-rating of stocks, but we haven’t had the earnings power coming through,” Toby Nangle, head of multi-asset allocation at Threadneedle Asset Management told Francine Lacqua on Bloomberg Television. “Earnings are going to be critical. We need to get delivery on what we’ve already paid for.”

The valuation for the Stoxx 600 has climbed to 12.2 times estimated earnings from a price-earnings ratio of 10.6 at the end of June. Some 19 companies on the Stoxx 600 report earnings today, according to data compiled by Bloomberg. In western Europe, 58 percent of companies reporting earnings since Jan. 8 have beaten analysts’ estimates. About 57 percent have exceeded projections for revenue.

Slowing Growth…”

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Concerns Over Evaluations Take Chinese Stocks Down From Recent Highs

“Most Chinese stocks fell, led by property developers, amid concerns over equity valuations at a 10-month high. Miners and utilities advanced.

Gemdale Corp. (600383) and Poly Real Estate Co. sank more than 5 percent on speculation Beijing had submitted a property tax plan to the Chinese cabinet for approval. Health-care stocks dropped for the third day as technical indicators signaled the stocks are overbought. Jiangxi Copper Co. jumped to an eight-month high, pacing gains among material producers, while SDIC Power Holdings Co. led utilities higher.

The Shanghai Composite Index (SHCOMP) added 0.1 percent to 2,385.42 at the close, even as five stocks fell for every four that gained. The index rose 5.1 percent this month. The CSI 300 (SHSZ300) lost 0.1 percent to 2,686.88 today, while the Hang Seng China Enterprises Index (HSCEI) slumped 0.5 percent in Hong Kong. The Bloomberg China-US 55 Index (CH55BN) fell 0.3 percent yesterday.

“Some investors are worried the market will have a big correction after the big rally and sold some stocks with weak fundamentals and earnings,” said Wang Weijun, a strategist at Zheshang Securities Co. in Shanghai. “The upward momentum is still there because the macro-economy isn’t an issue.” ..”

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Australian Markets Put Together the Longest Rally in 9 Years as the Reserve Bank of Australia Cuts Cash Rates

“Australian stocks posted the longest streak of daily gains in more than nine years as three cuts in interest rates boosted lenders’ profit margins and signs of recovery in China’s economybuoyed BHP Billiton Ltd.

The benchmark S&P/ASX 200 (AS51) Index rose for a 10th day, the longest run since October 2003. Lenders from Westpac Banking Corp. (WBC) to National Australia Bank Ltd. (NAB)accounted for the largest proportion of the increase as home sales climbed and business confidence grew. BHP, the world’s largest mining company, paced gains among mining companies as China’s manufacturing, economic growth and industrial production exceeded estimates. The measure climbed 0.2 percent to 4,896.70 today.

Investors are moving into equities as the Reserve Bank of Australia undertakes the most aggressive interest-rate cuts among advanced economies, sapping the allure of bonds as yields decline. The S&P/ASX 200’s forecast dividend yield of 4.5 is the highest among the world’s 10 largest equity markets, according to data compiled by Bloomberg.

“Lower interest rates contributed to strong gains in the banking sector and the improved China outlook supported demand for Australian resources,” Keith Poore, the Wellington-based head of investment strategy at AMP Capital, which has about $126 billion in assets under management, said in a phone interview yesterday. “We didn’t think there was going to be a hard landing in China and that seems to have been the case. This year will be more about how fast the recovery is in China.”

Interest Margins

RBA governor Glenn Stevens has cut the central bank’s target cash rate four times, or 1.75 percentage points, since November 2011. Australia’s four biggest banks, controlling more than three of every four contracts in the nation’s A$1.1 trillion ($1.2 trillion) mortgage market, have withheld about a quarter of the cuts, according to Bloomberg data….”

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Property and Financials Lead China Stocks to New Highs

“Chinese stocks rose, led by property companies and brokerages, as the Shanghai Composite Index extended its bull-market rally.

Gemdale Corp. (600383) led a gauge of property developers to a 21- month high as Fitch Ratings said Chinese homebuilding volumes will rise this year. China Merchants Securities Co. led brokerages higher after Taiwan’s securities regulator said the island will double the limit on mainland Chinese institutions’ securities investments. China Resources Sanjiu Medical & Pharmaceutical Co. (000999) paced declines among health-care shares as technical indicators signaled the stocks are overbought.

The Shanghai Composite rose 1 percent to 2,382.48, its highest close since May 30. The index has climbed 22 percent since Dec. 3, signaling a bull market to some investors. The CSI 300 Index (SHSZ300) climbed 0.5 percent to 2,688.71, taking its surge since Dec. 3 to 28 percent. Hong Kong’s Hang Seng China Enterprises Index (HSCEI) gained 0.9 percent.

“The rally will remain strong as the local economy has shown evidence that it’s growing steadily,” Zhang Haidong, an analyst at Tebon Securities Co., said by phone from Shanghai. “We have risen a lot so there is a requirement for a correction. But this year, we are bound to gain.”

The Shanghai gauge is valued at 13.1 times reported profit, the highest level since March 13, after it exited its longest- ever bear market yesterday. A 756-day stretch without a 20 percent gain from Nov. 8, 2010 through Dec. 3 is the longest on record, according to data compiled by Bloomberg and Birinyi Associates Inc. The gauge fell 38 percent during the period.

Higher Volumes…”

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The Nikkei Closes Above 11k Since April of 2010

“Japanese shares gained, with the Nikkei 225 Stock Average closing at its highest since April 2010, as positive earnings reports boosted the market.

Yahoo Japan Corp. (4689) surged 17 percent after the Internet company boosted its operating profit forecast and said it would buy back shares. Central Japan Railway Co. gained 6.6 percent after reporting a 49 percent gain in net income. Softbank Corp. (9984) advanced 3.6 percent after the Nikkei newspaper said the mobile carrier may post a record operating profit, boosted by sales of Apple Inc.’s iPhone. KDDI Corp. rose 3.1 percent after Credit Suisse AG named the phone-network operator as one of its top picks in Japan.

The Nikkei 225 gained 2.3 percent to 11,113.95 at the close in Tokyo, its highest level since April 30, 2010. The broader Topix Index (TPX) climbed 1.5 percent to 934.67, headed for a five- month advance, the longest such streak since August 2009. All of the gauge’s 33 industry groups rose.

“Investors are starting to price in expectations of increasing earnings going forward for the next few years,” said Soichiro Monji, chief strategist at Tokyo-based Daiwa SB Investments Ltd., which manages the equivalent of about 6 trillion yen ($66 billion). “The yen is positive, but there’s also an increasingly better outlook for an economic recovery in places like China as well as in Japan. There are a lot of positive reasons why earnings should improve.”

Topix Rally

The Topix surged 29 percent from Nov. 14….”

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Market Update

The markets grind higher on better manufacturing data from yesterday along with better housing news this morning.

The bears will stew in camel oil! DO NOT FIGHT THE LAW!

Oil and gold are higher off a weaker dollar, but gold remains cautious going into the Fed  meeting today.

Lower rates and QE combine for a new law in physics: Markets can not go down by law of bearded clam action.

Europe which was largely lack luster this morning ends up with U.S. wind in their sails into the closing bell.

Market Update 

European close

3 D Heat Map 

[youtube://http://www.youtube.com/watch?v=MBeT4ptY9sY 450 300]

 

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Shanghai Markets Bounce 20% From the Lows Entering Bull Territory

“China’s stocks rose, sending the benchmark index into a bull market, on optimism over the outlook for the nation’s economy. Financial and energy shares led gains.

The Shanghai Composite Index (SHCOMP) climbed 0.5 percent to 2,358.98 at the close, extending its advance since Dec. 3 to 20 percent, a threshold signaling a bull market to some investors. Haitong Securities Co., the second-biggest listed brokerage jumped 7.3 percent, leading a rally for financial shares. Shanxi Lu’an Environmental Energy Development Co. surged 3.1 percent as oil traded near the highest level in four months in New York.

Chinese stocks have rallied since approaching a four-year low last month on signs of an economic recovery and a government pledge to bolster urban development. A government report showed yesterday industrial companies’ profits jumped 17.3 percent last month. A preliminary reading for a Purchasing Managers’ Index last week showed manufacturing expanded at the fastest rate in two years.

“The economic is recovering and this is the year of reforms by new leaders, so there are a lot of expectations,” Deng Wenyuan, an analyst at Soochow Securities Co., said by phone from Suzhou, near Shanghai. “We are expecting urbanization to pick up pace and there are hopes for more liquidity in the stock market. This rally should continue.”

The CSI 300 Index (SHSZ300) advanced 0.9 percent to 2,675.87 today and is up 27 percent since Dec. 3. The Hang Seng China Enterprises Index (HSCEI) slid 0.3 percent today. The Bloomberg China-US 55 Index increased 0.1 percent in New York yesterday.

The Shanghai Composite exited its longest-ever bear market today. A 756-day stretch without a 20 percent gain from Nov. 8, 2010, through Dec. 3 is the longest on record, according to data compiled by Bloomberg and Birinyi Associates Inc. The gauge fell 38 percent during the period.

Financials Rally…”

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Market Update

Market Update

[youtube://http://www.youtube.com/watch?v=_WI_VFERxOo 450 300]

Link for iPhone users: http://www.youtube.com/watch?v=_WI_VFERxOo

 

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Industrial Company Profits Take Chinese Markets to 7 Month Highs

China’s stocks rose, driving the benchmark index to the highest level in seven months, after industrial profits climbed for a fourth month in December.

Sany Heavy Industry Co. led a rally for heavy machinery stocks after a report showed industrial companies’ net income increased 17.3 percent last month. Citic Securities Co. advanced to the highest level since April 2011 after regulators expanded the number of stocks allowed for margin trading and short selling. Kweichow Moutai Co., the biggest maker of baijiu liquor, dropped the most in seven weeks after Credit Suisse Group AG cut the stock to neutral.

The Shanghai Composite Index (SHCOMP) rose 2.4 percent to 2,346.51, the highest close since June 1. The CSI 300 Index (SHSZ300) climbed 3.1 percent to 2,651.86. The Shanghaiindex has risen 19.7 percent since approaching a near four-year low on Dec. 3 amid signs of an economic recovery. The CSI 300 rallied 26 percent.

“Industrial company profits are fueling gains for the index,” Huang Cendong, an analyst at Tebon Securities Co., said from Shanghai by phone today. “In the longer term, we expect Chinese stocks to rally as company earnings in general will be better this year.”

The Hang Seng China Enterprises Index (HSCEI) added 0.7 percent. The Bloomberg China-US 55 Index (CH55BN) lost 0.9 percent in New York on Jan. 25. Average trading volumes in the Shanghai index were 3.9 percent higher than the 30-day average. The 30-day volatility was at 20.6 on Jan. 25, compared with last year’s average of 17.1. The index trades at 10.1 times estimated earnings, compared with 10.9 for the MSCI Emerging Markets Index.

Industrial Profit…”

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The Yen Rises Against its Peers, While the Nikkei Takes a Step Back on Poor Earnings

“The yen strengthened, while European stocks and U.S. equity-index futures were little changed before a report on durable goods. The pound weakened after Mark Carney, who becomes Bank of England governor in July, said there’s room for more stimulus.

Japan’s currency appreciated against 15 of its 16 major peers, gaining 0.2 percent versus the euro at 7:40 a.m. in New York. The pound dropped to its lowest level against the euro since December 2011. German 10-year bund yields climbed to the highest level in four months. The Stoxx Europe 600 Index swung between gains and losses and Standard & Poor’s 500 Index futures advanced 0.1 percent. The Shanghai Composite Index jumped to a seven-month high after Chinese industrial companies’ profits gained for a fourth month…”

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The Nikkei Falls Back

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Market Update

Elevator going up on a low volume slow grind scenario…

Market Update

[youtube://http://www.youtube.com/watch?v=1SoXbXbh2Vc 450 300]

Link for iPhone users: http://www.youtube.com/watch?v=1SoXbXbh2Vc

 

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LTRO and German Confidence Data Help European Markets Hit 23 Month Highs

European stocks rose, extending a 23-month high, as German business confidence improved and European Central Bank data showed lenders will repay more long- term refinancing operation loans than estimated. U.S. index futures and Asian shares also advanced.

Banca Monte dei Paschi di Siena SpA (BMPS) led banks higher, surging 12 percent, on a report the Bank of Italy may approve a bailout as soon as tomorrow. STMicroelectronics NV jumped 4.4 percent after Exane BNP Paribas upgraded the semiconductor maker. SolarWorld AG (SWV) sank the most ever after saying it needs to make “serious” adjustments to its debt structure.

The Stoxx Europe 600 Index rose 0.3 percent to 289.66 at 12:43 p.m. in London, extending its gain this week to 0.9 percent. The gauge has climbed 3.6 percent so this year and is on track for its longest stretch of monthly gains since July 1997 after U.S. lawmakers reached a budget compromise. Standard & Poor’s 500 Index futures rose 0.4 percent today, while the MSCI Asia Pacific Index added 0.2 percent.

“The market will move higher, it is still undervalued, and any pullback we view as a buying opportunity,” said Kevin Lilley, a fund manager at Old Mutual Asset Managers U.K. in London, which oversees about 4 billion pounds ($6.2 billion). “I do feel hopeful for this year in that all the leading indicators across the globe are all picking up.”

The number of shares changing hands on companies listed on the Stoxx 600 was 42 percent higher than the average of the last 30 days, data compiled by Bloomberg showed….”

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The Bulls Celebrate ‘Rocky Mountain Way’

Retail, consumer cylcicals, housing, builders, transports, and the indices are hitting new highs;

the bears are getting squeezed.

Profit takers took the S&P to unch into the close while the DOW managed to hold onto 40 some odd points.

Guess I was wrong about a 15hundo close or better on the S&P, but with no money on line who really cares.

$AAPL spoiled a new high for the NASDAQ, but there is something to be said about all these new highs in the face of a 12% drop in $AAPL.

Chip stocks got crushed in the wake of $AAPL helping to hurt the NASDAQ.

DOW up 51

NASDAQ down 24

S&P up .73

WTI up $0.76

Gold down $20

[youtube://http://www.youtube.com/watch?v=lygD0A1p9ws 450 300]

 

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