Markets climbed out of the hole with transports hitting 52 week highs and vol hitting 52 week lows. A serious conundrum that will bite our portfolios in the ass some day. Enjoy it for now ’cause it will not last….maybe until May, then go away!
DOW up 27
S&P up 1.6
NASDAQ down 6.7 thanx to $AAPL
WTI down $0.65
Gold up $ 9.4
Markets are off to a skittish start this morning. Nothing too serious in the broader averages, but technology….AKA $AAPL is killing the NASDAQ.
Precious metals are up nicely as we await full commentary from the bearded clam.
It appears that WTI and the broader markets are starting to pare losses.
The dollar is weak against some of its major peers.
“European stocks declined as concern that debt-ceiling talks will harm the U.S. economy, and a report showing German growth slowed more than expected in 2012 offset Spain’s better-than-targeted sale of debt.
IG Group Holdings Plc (IGG) slipped 2.4 percent after saying first-half net trading revenue fell. Air Liquide SA (AI), a maker of industrial gases, retreated 1.5 percent after Bank of America Corp. cut its recommendation on the stock. Hennes & Mauritz AB (HMB) advanced 3.4 percent after posting sales that beat estimates.
The Stoxx Europe 600 Index (SXXP) lost 0.4 percent to 285.0 at 1:16 p.m. in London….”
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Most European stocks rose after Federal Reserve Bank of Chicago President Charles Evans said the central bank should continue to support economic recovery. U.S. index futures were little changed, while Asian shares excluding Japan climbed.
Electricite de France SA jumped 4.4 percent after the French government agreed to compensate EDF fully for the deficits incurred from its mandatory public-service investments. Cie. de Saint-Gobain SA advanced 2.7 percent after Ardagh Group offered to buy its glass-container unit for $1.7 billion. TNT Express NV (TNTE) plunged 40 percent after United Parcel Service Inc. said it expects regulators to block its takeover of TNT.
The Stoxx Europe 600 Index added less than 0.1 percent to 287.29 at 11:27 a.m. in London as two shares on the measure gained for every one that fell. The equity benchmark dropped last week amid the highest valuation in 11 quarters and concern that quickening inflation in China will limit the scope for economic stimulus. Futures on the Standard & Poor’s 500 Index expiring in March climbed less than 0.1 percent today, while the MSCI Asia Pacific Excluding Japan Index advanced 0.5 percent.
“Despite the Federal Open Market Committee minutes earlier this month giving traders a shock reminder that the unlimited quantitative easing wasn’t a permanent monetary policy and may one day end, Evans reassured traders that the policy would remain in place until well after the economy got back on track to self sustainability,” Jonathan Sudaria, a trader at Capital Spreads in London, wrote in a note.
The number of shares traded on the Stoxx 600 companies was 30 percent higher than the average of the last 30 days, according to data compiled by Bloomberg.
The U.S. government should put “in place policies that slowly but surely bring the prospects of future revenues into balance with future spending,” Evans said in remarks in Hong Kong today. “Under this scenario, monetary policy has an important contribution to make.”
Comments »B.I . reports no big news over the weekend. With Japan closed we look to Australia and South Korea….YAWN! Singapore is getting hammered though.
Comments »“European stocks pared their decline as Italy’s borrowing costs dropped at a debt sale, offsetting concern that China has less room for monetary easing after a reported showed inflation increased more than estimated. U.S. index futures and Asian shares were little changed.
BHP Billiton Ltd. (BHP) slid 2.7 percent, for the biggest drag on the Stoxx Europe 600 Index.Tullow Oil Plc (TLW) slumped 5.4 percent after saying it will write off $299 million in 2012. SAP AG (SAP) gained 1.3 percent after unveiling the most significant overhaul of its enterprise software in two decades.
The Stoxx 600 lost less than 0.1 percent to 287.33 at 12:20 p.m. in London, paring a slide of as much as 0.4 percent. The equity benchmark is headed for a decline of 0.2 percent this week. Futures on the Standard & Poor’s 500 Index expiring in March decreased less than 0.1 percent today, while the MSCI Asia Pacific Index slipped 0.1 percent.
“The Chinese inflation report is what is weighing on equities today as it has some investors worried that it could limit the degree of further stimulus in China,” Mark Andersen, co-head of asset allocation at UBS AG in Zurich, said in a telephone interview. “We still think the positive growth momentum is supportive of markets.”
European (SXXP) stocks declined from a 22-month high yesterday as European Central Bank policy makers left their benchmark interest rate at a record low. The volume of shares changing hands on the Stoxx 600 shares was 37 percent greater than the 30-day average, according to data compiled by Bloomberg….”
Comments »U.S. equities rose to 5 year highs on the S&P led by energy, utilities, financials and technology.
DOW up 80
NASDAQ up 15
S&P up 11
WTI up $0.76
Gold up $17
You are dead….
[youtube://http://www.youtube.com/watch?v=QRmvNMUEFZg 450 300]
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“Yesterday we touched on the implications relating to regime changes in the volatility space. The phenomenon currently in the US is similar in Europe where European equity volatility trading has been trading marginally below the VIX. This is displayed in the chart below from Cheuvreux’s recent Cross Asset Research paper from the 7th of January – The Tactical Message:
“The VStoxx index of implied volatility has followed the American example by falling to a cycle-low. The increase in America’s political-fiscal risk premium since September has allowed indices of European equity volatility to trade marginally below the VIX.” – source Cheuvreux Cross Asset Research, 7th of January 2013.
Cheuvreux makes the argument that the decline in financial volatility is a general phenomenon, with the lead coming from debt markets. Further, they argue that there is more to it than financial repression….”
Comments »U.S. equities started off with a blast, but have gone flat to slightly positive rolling into mid day trade…aka samch time.
Commodities are fairly better than the broader averages with gold up $20 bones and WTI up $1.05.
Europe failed to hold gains into the closing bell, partly due to conservative comments out of the ECB. As well cocaine gorilla traders were probably upset that rates were not cut in Europe.
“Japanese shares rose, with the Nikkei 225 (NKY) Stock Average gaining for a second day, as the yen weakened after Prime Minister Shinzo Abe pressed for a higher inflation target and China’s trade data beat estimates.
Honda Motor Co. (7267), which gets about 81 percent of its sales outside Japan, advanced 2.5 percent. Komatsu Ltd., a maker of construction equipment that gets about 14 percent of sales from China, climbed 1.6 percent. Izutsuya Co. jumped 48 percent after the department-store operator raised its profit forecast. Tokyo Electric Power Co. finished the day flat after a plunge that almost erased a 19 percent gain in seconds. The stock exchange said the selloff wasn’t the result of an error.
The Nikkei 225 gained 0.7 percent to close at 10,652.64 in Tokyo. Trading volume on the gauge was 54 percent above the 30- day average. The broader Topix (TPX) Index advanced 1.1 percent to 889.02, with about three stocks advancing for each that fell.
“Optimism for policy action is continuing from the end of last year,” said Masaru Hamasaki, chief strategist at Toyota Asset Management Co., which oversees about $20 billion. “The market seems to have priced in half of the weaker yen’s impact on earnings and the effect of Abe’s stimulus measures….”
Comments »The recent significant fall in implicit volatilities means that long dated volatilities (1 year) of most significant equity indices are now testing the frontier level between the post-crisis lows and the ultra low regime of 2004-2007.
Implicit 1 year volatility for the S and P500 (SPX) – source Bloomberg:
Could it be an attractive entry point or more simply a clear indication of regime change? We have to agree with our-good cross-asset friend that we have a hard time believing in the regime change when taking into account the fundamental macro picture. Could it simply be the broader impact of financial repression? One has to wonder….”
Comments »U.S. equities proceeded to wipe away yesterday’s losses and move higher beyond those losses.
We have a strong advance decline line with winners outpacing losers by 2:1
Transports are at 1 year highs while the Russell 2000 is hitting fresh new highs.
Equities were happy about $AA earnings and many cross industry companies are trading above market gains.
Home builders seem to be on fire today.
Gold is off by $4 and oil is flat on the session.
European markets added to earlier gains when Wall street opened to the upside.
“European stocks rose for the first time in three days as Alcoa Inc. began the U.S. earnings season by posting sales that beat estimates, outweighing a report on German industrial production that missed estimates. U.S. index futures were little changed, while Asian shares climbed.
Telecom Italia SpA led a gauge of telecommunications companies higher after a report that mobile-phone operators discussed sharing their infrastructure across Europe. Delta Lloyd NV jumped 6.7 percent after Aviva Plc (AV/) sold its stake in the Dutch insurer. J Sainsbury Plc (SBRY) dropped 2.8 percent after reporting the slowest sales growth in eight years.
The Stoxx Europe 600 Index (SXXP) advanced 0.3 percent to 287.01 at 11:55 a.m. in London. The benchmark gauge last week surged to the highest level since February 2011 after U.S. lawmakers agreed on a compromise budget. Standard & Poor’s 500 Index futures increased less than 0.1 percent today, while the MSCI Asia Pacific Index added 0.4 percent.
“Alcoa’s results were good, especially the revenue numbers and forward guidance, as was the comment that demand inChina is coming back,” said Manish Singh, who helps manage more than $2 billion as head of investment at Crossbridge Capital in London. “U.S. earnings will probably beat expectations and this should lift European stocks.”
Alcoa, the largest U.S. aluminum producer, unofficially kicked off the earnings season late yesterday as it reported fourth-quarter sales of $5.9 billion, beating the $5.6 billion average analyst estimate in a Bloomberg survey….”
Comments »“Despite the vol-compressing efforts, the S&P 500 closed down for the second day in a row as the last 30 minutes or so saw a totally normal +/-5point roller-coaster around VWAP in its very ‘human’ way. The afternoon’s dips and rips as VIX melted down further (now recoupled with SPX) had the feel of hedged longs unwinding both legs and for sure VWAP was the focus as Treasury yields fell and the USD rose on the day. Despite USD strength, precious metals rose into the green for the week. Risk assets in general saw correlations rise as the day progressed but the very narrow 10 point or so range that ES has traded in since the initial gap-open on Jan 2nd seems vulnerable here – and perhaps explains the urgency to compress the front-end vol to keep us up. Interestingly S&P 500 futures closed today at almost exactly the VWAP for the year (around 1452) so far. HY credit dumped into the close but overall it was a normal day of two halves – selling into the European close and buying after…”
Comments »A very quiet session indeud.
U.S. equities fall on low volume and a general lack of buying interest.
$BA is taking the DOW down more than the S&P, as another Dreamliner is being grounded for a fuel leak, while the NASDAQ is showing the smallest decline of 0.37%.
Telecoms seem to be leading the markets downward while oil is essentially flat.
Gold is up nearly 1%.
Overall the markets wait for $AA and other bell weathers to report earnings after the bell today.
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