Just Another Manic Monday
We're off to a fast global start already.
In comments on Friday I had trouble figuring out if the FXI was pointing to an 800-point gain or a 200-point gain in China today. I need to remember to just average myself whenever I'm confused as the Hang Seng jumped 511 points (2.5%) as China loosened some banking restrictions so Kudos to the clever FXI traders for picking up on this way ahead of the game on Friday!
Everyone in Asia was having fun this morning with a 124-point gain in the Nikkei (led by our TM!) and 169 points added to Bombay. The dollar came back a little against they Yen, back over the critical 120-Yen mark which boosted Japanese export firms.
Europe is in a good mood this morning as DCX managed to dump Chrysler for $7.5Bn but EU energy companies are quaking in their boots as the Union opens formal antitrust cases against RWE.AG and E "over possible abuse of their dominant positions in transporting and supplying natural gas." Regulators have said they believe a few large companies control too much of the market and seldom compete across national borders. If the companies are found to be in violation of EU law, the commission could impose fines of as much as 10% of their annual revenue. The commission could also order "structural remedies" — such as a government-ordered breakup of the companies.
Ha ha ha, ha ha ha! I predicted this would happen in the fall and I predicted that the Dems would take up this cause over here after the '08 elections so stay turned!
Both European stocks and US futures are trading flat ahead of our open but more bad news out of Nigeria is pushing oil and gas higher so we should get a very interesting week in the US oil markets. We still have earnings for the week from ELOS (today); AMAT, HD and WMT (Tues); BEAS, DE, FD, HPQ, MT and PETM (Weds); ALKS, ADSK, CHINA, INTU, JWN, MRVL, PDC and TOPT (Thurs) so things are really winding down.
Data for the week according to Briefing.com is as follows:
| Date | ET | Release | For | Actual | Briefing.com | Consensus | Prior |
|---|---|---|---|---|---|---|---|
| May 15 | 08:30 | CPI | Apr | 0.5% | 0.5% | 0.6% | |
| May 15 | 08:30 | Core CPI | Apr |
|
0.2% | 0.2% | 0.1% |
| May 15 | 08:30 | NY Empire State Index | May | 8.0 | 9.0 | 3.8 | |
| May 15 | 09:00 | Net Foreign Purchases | Mar | $75.0B | $58.1B | ||
| May 16 | 08:30 | Housing Starts | Apr | 1480K | 1480K | 1518K | |
| May 16 | 08:30 | Building Permits | Apr | 1525K | 1520K | 1564K | |
| May 16 | 09:15 | Industrial Production | Apr | 0.2% | 0.3% | -0.2% | |
| May 16 | 09:15 | Capacity Utilization | Apr | 81.4% | 81.5% | 81.4% | |
| May 16 | 10:30 | Crude Inventories | 05/11 | NA | NA | 5511K | |
| May 17 | 08:30 | Initial Claims | 05/12 | 315K | 310K | 297K | |
| May 17 | 10:00 | Leading Indicators | Apr | -0.2% | 0.0% | 0.1% | |
| May 17 | 12:00 | Philadelphia Fed | May | 3.0 | 4.0 | 0.2 | |
| May 18 | 10:00 | Mich Sentiment-Prel. | May | 85.0 | 86.5 | 87.1 |
Unless the CPI is a surprise there is nothing earth shaking here so I'll be a lot more interested in the markets reaction to the numbers than the numbers themselves. We'll see how our levels hold up this week as we have a lot of critical spots to watch:
|
|
|
Day's |
Must |
Comfort |
Break |
Next |
|
Index |
Current |
Move |
Hold |
Zone |
Out |
Goal |
| Dow | 13,326 | 111 | 12,468 | 12,600 | 13,000 | 13,500 |
| Transports | 2,888 | 28 | 2,825 | 2,900 | 3,000 | 3,250 |
| S&P | 1,505 | 14 | 1,430 | 1,460 | 1,500 | 1,550 |
| NYSE | 9,787 | 117 | 9,218 | 9,465 | 9,600 | 10,000 |
| Nasdaq | 2,562 | 28 | 2,454 | 2,500 | 2,600 | 2,750 |
| SOX | 504 | 6 | 477 | 490 | 500 | 560 |
| Russell | 829 | 10 | 803 | 820 | 850 | 900 |
| Hang Seng | 20,979 | 511 | 20,200 | 20,600 | 21,000 | 22,000 |
| Nikkei | 17,677 | 124 | 17,400 | 17,500 | 18,300 | 18,500 |
| BSE (India) | 13,965 | 169 | 13,200 | 14,000 | 14,725 | 15,000 |
| DAX | 7,492 | 13 | 6,900 | 7,000 | 7,400 | 8,000 |
| CAC 40 | 6,039 | -11 | 5,650 | 5,800 | 6,000 | 7,000 |
| FTSE | 6,550 |
-14 |
6,325 | 6,450 | 6,600 | 7,000 |
13,500 is literally just 2 good days away for the Dow but it's not going to get there without the transports. Hopefully the Russell can bring up the rear and we still need India to stop being a drag on the Asian markets. London will be the one to watch in the Euro zone as they bounce between 6,450 and 6,600 after a rate hike and Blaire's resignation.
Gasoline is averaging a US record $3.07 as we head into the Summer Driving Season and it's hard to imagine this will continue to not matter to the US consumer but we'll have to wait about a month to get the figures in to see if demand is really as high as they say it is or if the refiners have been right to operate at less than 87% capacity all winter. We'll continue to watch the $62.50 mark for oil this week and I no longer have a lot of confidence in a huge sell-off ahead of the June contract close as they managed to dump 200M barrels at the end of the May period without tanking the price (also with the timely aid of Nigerian rebels) last month.
Gold will struggle with $670 this week and will give us an early indication of a dollar bounce so we'll watch that and watch the dollar at 82.50 as a break above there will cause all sorts of covering.
Looks like another interesting week ahead of us!
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