U.S. equities opened to the upside only to be dragged down by poor Phily Fed data.

Equities managed to rebound after poor data and focus on earnings and some hot IPOs issued today.

Europe  has pared some of their gains, but remains strong given no sell off in the U.S. and decent earnings reports.

For all intensive purposes today is shaping up to be a day of digesting recent gains.

Gold has rebounded nicely and oil is popping over 2%.

Markets are led by conglomerates and technology.

MARKET UPDATE

[youtube://http://www.youtube.com/watch?v=66HvCjn8Wsk 450 300]

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Leading Indicators down 0.3%

 

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Continuing claims went sideways after a revision of last week’s numbers.

 

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“European stocks rose for a second day, to their highest level in three-and-a-half months, as companies reported earnings that exceeded analysts’ estimates. Asian shares and U.S. futures advanced.

Akzo Nobel NV (AKZA) climbed 6.5 percent after posting second- quarter results that beat forecasts. Remy Cointreau SA, France’s second-biggest distiller, gained 5.2 percent on higher revenue. Hermes International SCA (RMS), the French maker of silk scarves and leather goods, gained 2.9 percent as sales beat expectations. Actelion Ltd. (ATLN) climbed 5.7 percent as it raised its profit forecast for 2012.”

Full article

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“Asian stocks rose, with the benchmark index headed toward its biggest gain in almost three weeks, amid speculation China will do more to boost growth and after U.S. housing starts jumped to the highest in four years.

The Hang Seng China Enterprises Index (HSCEI) of mainland companies jumped 2.4 percent as the country’s swap market signaled a further reduction in the reserve ratio requirement for banks. BHP Billiton Ltd. (BHP), Australia’s biggest oil producer, increased 3.1 percent as crude prices exceeded $90 a barrel for the first time since May. Man Wah Holdings Ltd. (1999), a sofa maker which gets more than half of its sales from the U.S., climbed 4.9 percent in Hong Kong.”

Full article

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World Markets

Currencies

Commodities

USD Libor

Euribor

Yields for Italy, Spain, France,  and Germany …

 

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The bulls celebrate another day of upside. Some traders attribute the rally to short covering, but the bulls will take it.

The S&P challenged a resistance level of 1376 and closed just beneath it.

Hopes are building as Spain is set to most likely receive 100+ billion Euros by the end of the week.

We should reach a reversal soon as The PPT has the S&P @ 3.79 and the VIX is nearing 14 which has been a point of sharp reversal. Look for a blow off top in the next few days…..unless we see minor weakness to digest the recent lift. If that happens we may test 1425 S&P.

The clam is fully baked as he does not see a double dip recession. Perhaps the clam should stroll down main street.

If you look at corporate profits there is no problem. However,  nearly half of all companies have missed revenue expectation and guidance has been ‘notso good ay’.

Gold continues to be weak, oil reaches for stimulus hopium, and the dollar sees a little weakness.

Today’s rally was led by technology, consumer cyclical, conglomerates, and capital goods.

DOW UP 102

NASDAQ UP 33

S&P UP 9

10 Year Note is @ 1.49%

WTI UP $0.67 @ $89.88

GOLD DOWN $12 @ $1577

[youtube://http://www.youtube.comwatch?v=ZmP-fv3uuV0 450 300]

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3D heat map ,

S&P A/D Line ,

NASDAQ A/D Line 

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U.S. equities opened directionless, but soon gained momentum as Bernanke started his second day of testimony with members of congress. U.S. equities did have some decent earnings and good housing starts to help out the rally that is developing.

As a result Europe went from the flat  line to a full fledged rally of over 1% in most cases. Germany’s DAX led the charge closing up over 1.5%

European markets

Market update

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

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“the S&P is on the verge of an “ultimate” death cross. And what, pray tell, is that? A 50-200 moving average crossover, based on months, not days (or even weeks).”

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South Korea, Taiwan, Australia, and the Hang Seng are off by 0.50%- 1.1%

World Markets

Currencies

Commodities

USD Libor

Euribor

Yields for Italy, Spain, France,  and Germany …

 

 

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After back and forth action this morning the bulls took charge and bounced the market up into positive territory. Finishing off the highs of the day the bulls sent equities to higher ground after the clam gave his testimony to congress.

 The markets most certainly believe QE3 is coming despite no clear indications from the clam.

Gold and silver sold off a bit while  healthcare, energy, services, and utilities lead the rally.

DOW UP 77

NASDAQ UP 13

S&P UP 10

WTI up $0.54

[youtube://http://www.youtube.com/watch?v=Cw6pQUa0yS8 450 300]

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New York, July 12, 2012 — Nearly three-quarters of senior tranches of the tobacco settlement bonds will default should cigarette consumption in the US continue on its current rate of annual decline, says Moody’s Investors Service in a new report. Specifically, the rating agency finds that if the decline in consumption continues at a 3% – 4% pace, as Moody’s projects, bonds constituting 74% of the aggregate outstanding balance of all the tobacco settlement bonds will default.

The finding is consistent with current ratings on the tobacco settlement bonds, 79% of which are rated at B1 or below, says Moody’s in the new report “Sustained Decline in Cigarette Consumption Rates Will Cause Many Tobacco Settlement Bonds to Default.”

“Characteristics that lead bonds to be vulnerable to a lower rate of decline include high leverage, long bond maturity, and low cash reserves,” says Irina Faynzilberg, a Moody’s Vice President-Senior Credit Officer and Manager.

In the report Moody’s presents consumption break-even decline rates for the bonds, which estimate the rate of decline that would lead a particular bond to default.

Moody’s finds that 15 tranches representing 33% of the rated bond balance have an annual consumption decline break-even in the 2%-3% range, while 27 tranches representing 41% of the aggregate rated outstanding balance for all tobacco bonds, have an annual consumption decline break-even in the 3% – 4% range. The analysis assumes a constant rate of decline for the duration of the bonds’ life.

Moody’s calculates the break-evens for cigarette consumption decline rates by conducting iterative cash flow analyses to determine the default threshold for each rated bond, holding all other inputs constant. The default threshold is the highest constant annual decline rate for cigarette consumption at which each bond fully amortizes by its final maturity date without a payment default.

Moody’s notes that although it does not assign ratings based on consumption breakevens, they do closely correlate with ratings.

Read here:

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3D heat map ,

S&P A/D Line ,

NASDAQ A/D Line 

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The markets circle jerked from positive to negative into the clam testimony, but as the clam spoke markets decide to go positive hitting the highs of the day just after today’s testimony ended.

Materials seem to be leading the market higher.

Market update 

The story

[youtube://http://www.youtube.com/watch?v=mzJj5-lubeM 450 300]

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“Industrial production in the U.S. increased in June, led by gains among automobile and machinery makers that signal manufacturing is boosting economic growth.

Output at factories, mines and utilities rose 0.4 percent last month after a revised 0.2 percent drop in May that was larger than previously reported, Federal Reserve data showed today in Washington. Economists forecast a 0.3 percent gain, according to the Bloomberg News survey median. Manufacturing, which makes up about 75 percent of total production, rose 0.7 percent last month, reversing the prior month’s decline.”

Full article

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Gapping up 

DGIT +27%, ALTH +18.2%, CDXS +13.7%, JOEZ +12%, PATH +9%, PPHM +7.5%,

YHOO +2.9%, PKG +2.9%, SAN +2.6%, BCS +2.1%, VMW +1.5%,  S +4.6%,  LVS +1.8% ,

CMG +1.4%, DIS +1.1% ,  LTM +0.8%,  SIG +1% ,  VVUS +2.1% , OREX +2.7%,

BTU +1.4%, RIG +1.3%, SLB +1.2%, SDRL +1.2%, BP +0.6%, SD +0.6%,

SAN +2.6%,  BAC +1.2%, MS +1.2%, C +0.7%, MAT +5.0%, CMA +3.9%,

PKG +2.9%, MOS +2.4%, GS +1.4%

Gapping down

MFRM -12.7%, MILL -12.6%, ALU -12.4%, SFG -4.6%, JBHT -4%, LNG -3.6%,

RIMM -2.7%, ICUI -2.4%, FLIR -1.8%, RIO -1.3%, CTAS -1%, DNKN -3.2% ,

NOK -1.7%, LOW -0.8% ,  RIO -1.3%, SPLK -1.5%,  RIMM -2.7%, LNG -3.6%,

BRO -2.4%,  MMR -1.6%, JNJ -1.4%, NBR -4.9%, SFG -4.6%, JBHT -4% ,  ALU -14.6%

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Core 0.2%…Energy has taken the numbers down as of late.

Ex food and energy 2.2%.

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Bernanke will be testifying before congress today and markets are hopeful that some sort of cocaine stimulus injection will be announced.

Full article

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World Markets

Currencies

Commodities

USD Libor

Euribor

Yields for Italy, Spain, France,  and Germany …

[youtube://http://www.youtube.com/watch?v=7gs2o5T7oN8 450 300]

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