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The ‘Never short a boring market’ seems to be in play early this week as Monday saw a modest rise. Both the Dow industrials (DIA) and the S&P 500 (SPX) settled at all-time highs albeit on low volumes. Economic data is being ignored as Central Bank action and optimism have the Bulls in charge. Ahead of the opening bell this morning, equity futures (/ES) are suggesting another modestly higher open.The CBOE Volatility Index (VIX) actually rose slightly yesterday despite the rise in equities. The ‘Fear Gauge’ remains at low levels and we would possibly need a catalyst to send stocks lower at this point.
Bonds and stocks are higher around the world. Gains have been paced by European markets, inspired by comments from ECB's members, who indicated the central bank will accelerate bond purchases slightly in May and June and could extend the QE program beyond September next year if necessary. Also, the European Commission President’s optimism on a quick deal on Greece added support. Data also factored in as German and U.K. inflation unexpectedly declined. There isn't a lot on the U.S. calendar today with just April housing starts and weekly chain store sales. This lack of news may once again provide support for markets despite the frothy valuations.
Stock Stories:
Home Depot (HD) – Wilting – The home improvement reported better than expected EPS but the Revenue was only in-line. The company guided FY15 higher than expected but left out charges such as its recent data breach. The shares are up slightly ahead of the opening bell.
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Thursday saw low volumes and minimal losses for the major indices in stocks. M&A activity is keeping a bid in stocks and comments from the Fed’s Kocherlakota also supported riskier assets such as stocks. This morning, equity futures (/ES) are slightly lower ahead of the GDP report which is estimated to show a decline of nearly 1%. Concerns about an interest rate hike continued to put resistance in equities just below all-time highs. The Benchmark S&P 500 Index (SPX) is still up 1.7% for the month as the ‘sell in May and go away’ theory is shot once again. Option Volatility continues to show little concern from investors to the downside as the VIX sits near the $13 level.
Treasuries are mixed this morning as the 30-year Bond is out-performing shorter-dated Notes. The 10-year Treasury yield is at 2.12% and has risen from 1.6% since the end of January.U.S. equity futures are lower in sync with declines in European bourses. Overnight news was mixed but Greek fears continued to dominate. German retail sales were better than expected, but U.K. confidence disappointed, while the Swiss economy unexpectedly contracted. Today's U.S. focus will be the revised Q1 GDP report, the May Chicago PMI and consumer sentiment reports. Meanwhile, next week's calendar includes a number of key reports, as is the typical to start the new month, with the May jobs report headlining Friday.
Stock Stories:
Altera (ALTR) – Rumored – The shares of ALTR are up over 5% in the premarket as rumors swirl of a takeover by its rival Intel (INTC). M&A activity has picked up in the chip sector and volatility is rising as takeovers are in play.
发表于 2015-5-19 14:24
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