Following a ferocious bullish media campaign in the early hours of financial entertainment television, US equity prices headed higher on low volume for most of Monday. But, profit-taking set in and the indexes closed flat.
The DJIA (+3 +0.02% to 12612), S&P 500 (+2 +0.16% to 1372.5) and Nasdaq Composite (-6.15 -0.26% to 2364.8) were quiet and mixed. The Toronto Exchange gained +77 (+0.56%) to 13800.
In the Far East, Hong Kong (+1.29% to 24579) and Japan (+1.18% to 13450) were up just about +1.25% to start the day. Then the European bourses followed through with gains of +1.0%: FTSE (+1.14% to 6015); CAC (+0.89% to 4945); and DAX (+0.85% to 6821). That boosted the US to open higher, at least.
During the day, the Healthcare sector (XLV +1.14%) was the only notable mover. Among industries, the Banks ($BKX +1.58%) and Broker-Dealers ($XBD +1.32%) were stronger, but nothing really stood out.
On the corporate scene, Alcoa (AA) reported 1Q net earnings dropped from $662 million ($0.75/sh) to $303 million ($0.37/sh), missing at $0.44/sh the Street expectations for continuing operations of $0.48/sh. Higher costs were cited.
Advanced Micro Devices (AMD) said it would cut 10% of its work force, which traders see as a company suffering from business pressures from industry leader Intel (INTC).
On the economics front, consumer debt grew at a more restrained pace.
Crude Oil ($WTIC) jumped +$2.86/bbl to 109.09 after a fire at Finnish company Neste Oil extended its Porvoo refinery shutdown.
The 30-year US Bond ($USB) dropped -0.64% to 118.34, while yields gained across the board (30-year $TYX +1.18% to 4.369) (10-year $TNX +2.15% to 3.556) (5-year $FVX +4.18% to 2.743) and (T-Bills +3.03% to 1.360). That strengthened the US Dollar.
Despite the $USD strengthening (+0.32%) to 72.22, while all major currencies slumped (Euro -0.08% to 157.17; Yen -0.92% to 97.60; Pound -0.26% to 198.78; and the Loonie -0.42% to 98.68), $GOLD lifted +$13.60 (+1.49%) to 926.80.
Earlier today, the All Ords of Australia (-0.87%), Hong Kong (-1.09%), BSE 30 of India (-1.08%) and Nikkei of Japan (-1.49%) were all down. At 8:27am ET, Europe was down about -1.0% (FTSE -0.73%) (CAC -0.99%) (DAX -1.01%).
The futures market has the DJIA (12555 -47), Crude Oil (108.79) and Euro (1.5645), all a bit weaker.
Spot gold, palladium, platinum and silver are at 912.94, 445, 2003, and 17.71 respectively, which has softened.
The talk is of softening economic data.
Comments & Outlook
If unemployment is going to become a crisis in America, I think that the US Retailers ($RLX) will continue under pressure. Part of that pressure will also come from inflated import prices, and high costs of fuel for automobiles.
As we go into the 10th and the few days following, traders have to be watching this industry. “No shoes for baby” could become a mantra.
Yesterday, some of the US retailers continued to be knocked down (KSS -2.7% among the Cara 100 companies). I noted many losers, such as Ann Taylor (ANN -6.5%), Pacific Sunwear (PSUN -5.6%), Dilards (DDS -6.5%), TJX Stores (TJX -3.1%), Tween Brands (TWB -4.2%) and The Buckle (BKE -4.1%) all very weak on the day.
Just something to watch. Either the US consumer has savings or credit, or they do not. The US economy is weakening because they do not.
