After their worst week since August, markets followed with the best week of 2015 (for the S&P 500). This is some serious volatility. The S&P 500 gained 0.38% and the NASDAQ 0.62%. Ahead of the open, European Central Bank President Mario Draghi said the ECB stands ready to “do what (it) must to raise inflation as quickly as possible” if it decides current policy isn’t stimulating the sluggish euro zone economy.Continue reading
Certainly some interesting action out there of late. Two Fridays ago markets were up on the good employment data which signaled they were ok with a coming rate hike. Then they spent all last week digesting that news and selling off to the tune of the worst week since mid August. Today the Fed minutes indicated a rate hike is imminent ( “most” participants felt conditions for a rate hike “could well be met by the time of the next meeting”) – and markets were again happy with it. The action is a bit bipolar to say the least. The S&P 500 gained 1.62% and the NASDAQ 1.79%.
The minutes showed that many members of the Federal Open Market Committee believe a rates hike next month would be appropriate. “To me, the minutes were unusually clear,” said Jeffery Elswick, director of fixed income at Frost Investment Advisors. “They seem to be leaning toward a December rate hike.” “I think the market thinks [the Fed’s] going to be very dovish in its trajectory,” said Steve Blitz, chief economist at ITG Investment Research.
Also the Fed sent out the troops to give more guidance to the markets:
Richmond Fed President Jeffrey Lacker told CNBC that any economic effects from the Paris attacks should be temporary, adding that he still believes the central bank should raise rates. Atlanta Fed President Dennis Lockhart said the central bank should start raising rates now that financial markets have “settled down.”
In economic news:
On the data front, U.S. housing starts for October fell 11%, while building permits rose 4.1%. Single-family building permits rose 2.4% to their highest level since December 2007.
A second quiet session as indexes digest a big month+ move; today the S&P 500 and NASDAQ both fell 0.32% in a choppy session where markets mostly stayed near the unchanged line. Data remains quiet in the U.S. so eyes turn overseas as people try to gauge what is happening in China. Chinese data out overnight showed firmness in the consumer, with retail sales up 11% year-over-year in October, up slightly from 10.9% in September. Industrial production edged lower in October and missed expectations. As we wrote yesterday, we are in a bit of a quiet period post earnings season and post a heavy week of economic data…and ahead of the December Fed meeting.
“There’s a lot of news behind us and not a lot of potentially market-moving news ahead of us in the short term,” said James Gaul, a portfolio manager at Boston Advisors LLC, which oversees $2.8 billion. “It seems like it’s going to be quiet because there aren’t a whole lot of obvious catalysts right now.”Continue reading
It was a great week for the market as conditions were overbought to start the week and instead of any major selling, indexes consolidated nicely just below key congestion areas – then central bankers words and actions Thursday and Friday spiked markets upward. Bulls could not ask for more. The S&P 500 gained 1.10% and the NASDAQ 2.27% as huge moves by Amazon.com and Alphabet (i.e. Google) lifted tech stocks. The People’s Bank of China cut interest rates for the sixth time since November to 4.35 percent, effective from Oct. 24.
“The hope for more ECB support and the rate cut in China should help stabilize those weakening sales trends and other deteriorating economic data points,” Nick Raich, CEO of The Earnings Scout, said in a note.Continue reading
Yum yum yum, the delectable taste of central bank easing in the morning. Indexes shot up premarket as European Central Bank head Mario Draghi held out some goodies and roared all day as the S&P 500 gained 1.66% and NASDAQ 1.65%. In economic news (not that anyone cared because central bank easing is all that matters) September existing home sales, rose 4.7% to 5.55 million.
ECB President Mario Draghi said the bank will consider adding to its bond-buying program this year. Draghi’s remarks pushed the euro down about 2% against the dollar. “We were hoping the ECB would remain open to further easing, and it appears as though they are,” said Art Hogan, chief market strategist at Wunderlich Securities. (translation: “Cmon get happy!”)Continue reading
Indexes continue to exhibit better behavior. The best way to work off overbought conditions is sideways action and we saw that again today. The S&P 500 gained 0.03% while the NASDAQ added 0.38%. Over a fifth of S&P 500 companies are scheduled release quarterly results this week. Overnight, China reported a third-quarter gross domestic growth figure of 6.9%, slightly above the expected 6.8%, but also its lowest in six years. China also reported industrial production rose 5%, below the expected 6% increase. How valid any of these numbers are from the Chinese government is up to your imagination. And theirs!Continue reading
The action continues to be much healthier of late as indexes worked off extreme overbought conditions this week and in short order buys came right back in. The indexes gapped up at the open on dovish commentary from European central bankers and after noon an army of buyers walked in. The S&P 500 gained 1.49% and the NASDAQ 1.82%. Since the bad news two Fridays ago about employment, the indexes have been mostly on a tear. The Consumer Price Index out Thursday showed little inflation in the near-term, while retail sales barely rose Wednesday.
Robert Pavlik, chief market strategist at Boston Private Wealth, noted support for stocks from dovish comments by European Central Bank policymaker Ewald Nowotny, who said it was “obvious” the bank must search for more ways to stimulate the euro zone economy. “This is the same story that we’ve had for so many years now as the market seems to be instinctively responding to the notion that we’re going to have more stimulus (and) shrugging off questions on earnings,” said Quincy Krosby, market strategist at Prudential Financial.Continue reading
Wednesday began as carbon copy of Tuesday’s action with a big gap up at the open and looked very similar until up to 3 PM. But instead of falling off a cliff, buyers came in and there was another surge to close out the day in the last 90 minutes. The S&P 500 gained 3.90% and the NASDAQ 4.24%. It is feeling a lot like late 2007 thru early 2009 when 300-500 DOW swings were normal. The Federal Reserve did what it has done relentlessly since 2008 – try to boost the market with either actions or words.
New York Fed Bank President William Dudley said Wednesday the upheaval has reduced the case for raising rates in September, while cautioning it’s important not to overreact to short-term developments.Continue reading