Sunday, 1/29/2012
Market preview 30 Jan-3 Feb 2012
last week preview
Weekly Wrap for January 23, 2012
Listless and lackluster action left stocks to slog along in negative
territory for almost the entire session, but a late lift helped the
S&P 500 limit its loss in the face of disappointing fourth quarter
GDP data. The effort ensured the broad market measure eked out an
incremental gain of less than 0.1% for the week. Still, that marked its
fourth straight weekly gain.
The major equity averages were mostly mixed this session -- the Dow was
down for the entire day, while the S&P 500 managed to limit its move
lower and the Nasdaq maintained its position narrowly above the neutral
line. Dow components Procter & Gamble (PG 64.30, -0.50) and Chevron
(CVX 103.96, -2.63) both displayed weakness, even though consumer
staples giant P&G posted an upside earnings surprise and integrated
oil outfit Chevron was the one that came short of the consensus earnings
estimate. The Nasdaq was helped by Netflix (NFLX 123.79, +7.78), which
extended its prior session rally to offset weakness in Starbucks (SBUX
47.85, -0.49) as the coffee company suffered selling pressure despite
its upside earnings surprise.
Other earnings reports featured on Friday included Ford (F 12.28,
-0.46), which fell short of expectations, but Altria (MO 28.14, -0.52)
had better-than-expected results. Honeywell (HON 58.27, +0.44) had an
in-line report.
Financials offered some leadership late in the session. The sector had
been mired in the red with a modest loss for most of the session, but
broke out in the final hour. Although it eased off of its high in the
final 30 minutes, it still settled with a 0.4% gain, which is better
than what any other sector achieved on the session.
Utilities fell out of favor after they had posted the only gain of any
major group in the prior session. The defensive-oriented sector slid
1.3% on Friday.
Although stocks spent most of the session trading in mixed fashion,
market participants didn't appear too spooked or disappointed by an
advance estimate on fourth quarter GDP, which showed that the economy
grew at an annualized rate of 2.8% in the fourth quarter, up from a 1.8%
clip in the prior quarter. However, the increase in activity still came
short of the Briefing.com consensus call of 3.2% growth. A deeper look
shows that most growth in the fourth quarter was owed to an increase in
private inventories, although increases in personal consumption
expenditures and residential fixed investment also provided positive
contributions.
The University of Michigan released a finalized Consumer Sentiment
Survey for January that showed a reading of 75.0, up from 74.0 in the
preliminary reading. That exceeded the 74.2 that had been generally
expected among economists polled by Briefing.com.
A substantial serving of economic reports on Thursday helped make up for
the dearth of data earlier in the week, but their overall quality was
mixed relative to expectations. Leading Indicators increased by 0.4%
during December after a downwardly revised 0.2% increase in the prior
month, but that was less than the Briefing.com consensus call for a 0.7%
increase. For the first time since 1996 the Index experienced a change
in its calculation.
Durable goods orders for December increased by 3.0% to best the
Briefing.com consensus for a 2.0% increase. That came on top of an
upwardly revised 4.3% increase for the prior month. Excluding autos,
durable orders climbed 2.1%, which is considerably better than the 0.7%
increase that had been commonly expected. Orders less autos for the
prior month were revised upward to reflect a 0.5% increase.
The latest weekly initial jobless claims tally increased by 21,000 to
377,000, which is on par with the 375,000 initial claims that many had
expected. Notably, the uptick did not alter the downward trend in the
4-week moving average, which decreased by 2,500 to 377,500.
New home sales for December fell 2.2% to a seasonally adjusted annual
rate of 307,000 units, but analysts polled by Briefing.com had generally
expected sales to climb to clip of 321,000 units. The drop in new home
sales came in the face of a 12.8% decline in median home prices to
$210,300.
On Wednesday market participants were dealt disappointing pending home
sales numbers for December. They showed a 3.5% drop when a 3.0% decline
had been expected.
The highlight of the session, however, was news that the Federal Open
Market Committee decided to keep its federal funds target rate at 0.00%
to 0.25%, and that economic conditions are expected to warrant
exceptionally low levels for the federal funds rate through at least
late 2014. That forecast for the fed funds rate preceded news that the
Fed now believes economic growth in 2012 will range from 2.2% to 2.7%,
which is down from the previously forecasted range of 2.5% to 2.9%.
Without any data during the first two days of the week market
participants took their cues from Europe amid speculation about Greece's
dealings with its creditors. Disappointment and frustration related to
ongoing wrangling induced selling some days, but ultimately the euro was
able to rally back. On Friday alone it rallied about 1% against the
greenback. That helped fuel a gain of more than 2% for the week.
Although nothing official has been stated, rumors continue to point to a
possible solution between Greece and its creditors.
Although generally strong, earnings didn't generate much excitement in
the broad market this week. That's not to say there weren't any
stock-specific swings, though.
Colgate-Palmolive (CL 90.40, -0.95) announced in-line earnings earlier
in the week, but blue chips 3M (MMM 87.46, -0.12) and Caterpillar (CAT
111.28, -0.03) bested expectations for the bottom line. AT&T (T
29.16, -0.29) came short of the consensus estimate, as did Bristol-Myers
Squibb (BMY 32.29, -0.19). Apple (AAPL 447.28, +2.65) absolutely blew
out Wall Street's forecast, prompting the stock to bound to a new record
high, but better-than-expected earnings from Boeing (BA 74.55, -0.76),
United Technologies (UTX 77.62, +0.21), and ConocoPhillips (COP 69.40,
-0.13) were given less regard when they were released.
Although both tech plays posted upside earnings surprises, shares of
Texas Instruments (TXN 32.61, +0.42) were sold after their quarterly
report was released whereas Western Digital (WDC 37.05, +0.04) was a top
performer in the wake of its announcement. Market participants also had
varied responses to better-than-expected results from blue chips
Johnson & Johnson (JNJ 65.56, -0.14), DuPont (DD 50.72, -0.22), and
McDonald's (MCD 98.69, -0.49). Fellow Dow components Travelers (TRV
58.05, -0.65) and Verizon (VZ 37.21, -0.13) both traded lower after they
posted earnings that came short of what had been widely expected.
Halliburton (HAL 37.10, +0.94) was the most widely held name in a
handful of companies that announced earnings at the very start of the
week. Though it posted better-than-expected bottom-line results while in
the spotlight, the stock still encountered selling pressure.
..Nasdaq 100 +0.3%. ..S&P Midcap 400 +0.5%. ..Russell 2000 +0.7%.
Index Started Week Ended Week Change % Change YTD %
DJIA 12720.48 12660.46 -60.02 -0.5 3.6
Nasdaq 2786.70 2816.55 29.85 1.1 8.1
S&P 500 1315.38 1316.33 0.95 0.1 4.7
Russell 2000 784.62 798.85 14.23 1.8 7.8
Read more:
http://www.briefing.com/investor/markets/weekly-wrap/weekly-wrap-for-january-23-2012.htm#ixzz1kr2bSgrE
Things to watch next week
next week there will be some economic data to watch, people is waiting
for the non-farm payroll data to come out on friday, consumer confidence
on Tue.
Week of January 30 - February 03
Date ET Release For Actual Briefing.com Forecast Briefing.com Consensus Prior Revised From
Jan 30 08:30 Personal Income Dec 0.4% 0.4 0.1%
Jan 30 08:30 Personal Spending Dec 0.2% 0.1 0.1%
Jan 30 08:30 PCE Prices - Core Dec 0.1% 0.2 0.1%
Jan 31 08:30 Employment Cost Index Q4 NA 0.4 0.3%
Jan 31 09:00 Case-Shiller 20-city Index Nov -2.0% -2.6 -3.4%
Jan 31 09:45 **Chicago PMI ** Jan 61.0 62 62.5
Jan 31 10:00
Consumer Confidence Jan 67.0 67 64.5
Feb 01 07:00 MBA Mortgage Index 01/28 NA NA NA
Feb 01 08:15 ADP Employment Change Jan 250K 175K 325K
Feb 01 10:00 **ISM Index **Jan 55.0 54.7 53.9
Feb 01 10:00 Construction Spending Dec 0.5% 0.4% 1.2%
Feb 01 10:30 Crude Inventories 01/28 NA NA NA
Feb 01 14:00 Auto Sales Jan NA 13.5M 4.20M
Feb 01 14:00 Truck Sales Jan NA NA 6.04M
Feb 02 07:30 Challenger Job Cuts Jan NA NA 30.6%
Feb 02 08:30 Initial Claims 01/28 375K 375K NA
Feb 02 08:30 Continuing Claims 01/21 3550K 3525K NA
Feb 02 08:30 Productivity-Prel Q4 2.0% 0.6% 2.3%
Feb 02 08:30 Unit Labor Costs Q4 -1.0% 0.8% -2.5%
Feb 03 08:30 **Nonfarm Payrolls ** Jan 225K 170K 200K
Feb 03 08:30 Nonfarm Private Payrolls Jan 250K 145K 212K
Feb 03 08:30
Unemployment Rate Jan 8.4% 8.5% 8.5%
Feb 03 08:30 Hourly Earnings Jan 0.2% 0.2% 0.2%
Feb 03 08:30 Average Workweek Jan 34.4 34.4 34.4
Feb 03 10:00 Factory Orders Dec 1.5% 1.6% 1.8%
Feb 03 10:00 ISM Services Jan 53.0 53.1 52.6
Read more:
http://www.briefing.com/investor/calendars/economic/2012/01/30-03#ixzz1kr2tpeYD
European Crisis
-Fitch downgrade several european countries
- greek swap deal this week, investors are ready to lost 50% of their money and swap with longer maturity bond
Technical Analysis
market has topped, DJI is at it's resistance (last october high), all sectors are facing resistance, except financial.
all indexes are above their 20, 50, and 200 moving averages.
Prediction
next week going to be down
monday down
