Daily Market Analysis 20150715

Market Overview

Most Of the major indexes gain and now above their 50 days moving averages

Bullish percent index rebound from the low

From Briefing.com

[BRIEFING.COM] The major average registered their fourth consecutive advance on Tuesday with the S&P 500 climbing 0.5%. The benchmark index reclaimed its 50-day moving average (2,100) at the start of the session while the tech-heavy Nasdaq Composite (+0.7%) outperformed throughout the trading day. 

Equity indices began near their flat lines after overnight reports from Vienna revealed that P5+1 negotiators agreed to a nuclear deal with Iranian representatives. The news had little impact on the market, but crude oil was down about 2.0% overnight amid expectations that global oil supplies will increase once Iran begins selling its oil on the open market. However, an intraday rebound resulted in crude oil climbing 1.7% to $53.06/bbl. Accordingly, the energy sector (+0.8%) climbed alongside crude oil to end the day among the leaders, while only the health care sector (+1.0%) had a better showing. 

The influential health care space finished the day well ahead of other countercyclical groups even though Johnson & Johnson (JNJ 99.78, -0.49) slumped 0.5% despite reporting a two-cent beat. However, biotechnology filled the void withiShares Nasdaq Biotechnology ETF (IBB 387.94, +8.79) spiking 2.3%, which contributed to the relative strength in the Nasdaq. 

Furthermore, high-beta chipmakers also helped the Nasdaq stay ahead of the broader market with the PHLX Semiconductor Index rallying 1.1%. Micron (MU 19.61, +2.00) was the standout performer, soaring 11.4% after the Wall Street Journal reported Micron may have received a $21.00/share takeover offer from Tsinghua Unigroup. As for large cap tech names, Apple (AAPL 125.61, -0.05), Microsoft (MSFT 45.62, +0.08), and Oracle (ORCL 40.78, -0.02) ended near their flat lines while Google (GOOGL 584.18, +12.45) outperformed, climbing 2.2%. 

Elsewhere among cyclical sectors, financials (+0.4%) spent the day behind the broader market even though JPMorgan Chase(JPM 69.04, +0.95) and Wells Fargo (WFC 57.25, +0.51) posted respective gains of 1.4% and 0.9% in reaction to earnings. JPMorgan Chase delivered a bottom-line beat on below-consensus revenue while Wells Fargo matched earnings expectations on revenue that missed estimates. 

On the downside, the utilities sector (-0.1%) was the lone decliner, narrowing its July gain to 3.6%. 

Treasuries spiked in the morning following a disappointing Retail Sales report. The 10-yr note settled just below its high with the benchmark yield falling five basis points to 2.40%. 

Today's participation was in-line with recent totals as 680 million shares changed hands at the NYSE floor.  

Economic data included Retail Sales, Import/Export Prices, and Business Inventories: 

• Retail sales declined 0.3% in June after increasing a downwardly revised 1.0% (from 1.2%) in May while the Briefing.com consensus expected an increase of 0.3% 
  • The motor vehicle manufacturers reported that unit sales declined to 17.2 million SAAR in June from 17.8 million SAAR in May, which translated into a sizable 1.1% decline in sales at motor vehicles and parts dealers 
  • Excluding motor vehicles, retail sales declined 0.1% in June after increasing a downwardly revised 0.8% (from 1.0%) in May while the consensus expected an increase of 0.5% 
  • Core sales, which exclude motor vehicle dealers, gasoline stations, and building material and supply stores, declined 0.1% in June after increasing 0.6% in May 
• Export prices, excluding agriculture, decreased 0.1% in June after increasing 0.7% in the prior reading 
  • Excluding oil, import prices decreased 0.2%, which followed last month's unchanged reading 
• Business inventories increased 0.3% in May after increasing an unrevised 0.4% in April while the Briefing.com consensus expected an increase of 0.2% 
• The inventory changes from manufacturers (0.0%) and merchant wholesalers (0.8%) were known prior to the release. The only new information was that retailer inventories were flat in May after increasing 0.6% in April. 
• Inventory declines from motor vehicle and parts retailers (-0.2%) and furniture and appliances retailers (-0.3%) were offset by increases from general merchandise stores (0.5%) and building material and supply stores (0.2%) 

Source (Briefing.com)

Market Diaries

Market Mover

Most of tech companies slumps due to weaker earnings, such as AMD, Tesla, Micron, while airline improve, banking like JPM & Wells fargo profit surge, railroad CSX corporation also beats estimate. PepsiCo beats estimate, yum brand growth slows due to China slowth

China GDP growth beats estimate at 7%. and housing price increase by 12%, while Japan GDP outlook is +1.7% from 2%. and Japan keeps monatery policy unchanged as expected.

Earning in focus for today would be from BAC, Netflix, Intel, Delta Airlines.

Oil was down 2% last night, but today it;s up more than $53. 

Forecast

Expect to see some good progress over the Greece, Direction for Wednesday is UP

Forecast accuracy 100% (2/2)

Weekly Market Analysis Jul 13-17

Last week Preview

Last wee, Index was closed almost at flat line. here is the summary on what has happened on last week.

Looking at the volume is well above average, but ti shows that new low outpace new high in the weekly summary 424 vs 107.

While on friday itself, the volume is good also, well above 700 million shares traded. participation is quite normal.

Below chart shows the statistic of market breadth indicator where we can see that for the last few weeks the  new low is winning over new highm those altogether with the decline volume outpacing advance volume.

 Bullish sentiments among those indexes are tracked in the following chart, where at average, bullish percent index were at 60+%

SECTOR

The Above chart shows the winner of last week, where utilitizes and cons. staples are the biggest winner, while material & energy were the worse in the sector.

MONEY SUPPLY

The  following table shows the lastest money supply m1 at comercial bank and other instituion. it shows that money supply is increasing for the week ended in June 29, which is a good sign that it seems that the stock will rebound.

this hyphotestis were backed up with the reality that China government was trying to defend their stock market with injecting 500 Billion RMB.

Weekly Forecast

As most indexes at it's lower bolinger band and there's a big hope on the greece deal as well as China Government trying to protect their market, i thik this week is going to be a rebound. we should see some new development over the Greece. 

weekly Direction is UP

More explanation on Greece Crisis

The following  post  NYTimes.com provide more detail explanation to the Greece Crisis. It provides some fact & figures on those contagious effect from Greece Crisis to the rest of the Europe.

And how it impact the world financial system those includes the weaker Euro VS stronger Dollar. i think the next few weeks we'll hear more on options available to solve the crisis, my personal view is that there could be a rebound in the stock market as history will repeat just like the past. whenever there's an  known issue, those government are ready  to negotiate and/or printing more money to solve the issue. and stock market will rebound.

Greece Crisis

The last 1 month, the financial news were all about Greece Crisis, as they are not able to pay for debt that they have from IMF. it triggers the stock market to be on panic mode. we can see sell off everywhere.

It's just a small economy but why trigger panic everywhere? and how can they get out of their issue? will Greece crisis cause the world economic crisis?


For those who want to know more about this economic crisis related to Greece, there;s a website which  you can track on those issue http://www.greekcrisis.net/

I personally think that Greece exits Euro zone is the best option as the union will not give much benefit for those least competitive country like Greece, those Euro zone will need to do their reform not just on the trade policy, but also related to tax transfer policy, whereby those least competitive country /small country like Greece will get benefit from those income inequality tax across the Euro, so that the gaps among those countries can be minimized.

Steps that Leads to Economic Crisis

Steps to Economic Crisis

No	Indicator	Up/Down	Timing
1	Corporate Bankruptcy	UP	_ 10-12 month
2	Housing Price	Down	_ 9 month
3	Housing Start Nahb Housing Index New Homes Consumer Spending	Down	_ 6 Month
4	Corporate Profit Consumer Sentiment (< 80)	Down	_ 3 month
5	Wage Growth Job Offering Job vacancy Philadelphia Fed index Cointinuing Claim	Down Down Down Down UP	0-1 Month
6	Initial Claims (> 350,000) ISM Manufacturing (<50)	Up Down	+2 Month +2 Month
7	Personal Spending	Down	+3 Month
8	Personal saving Vehicle sales Unemployment rate Retail Sales	UP Down UP Down	+6-9 months

Crisis = WHEN GDP negative