Tag Archives for " morning hammer "
The Morning Hammer: Apple Slammed on Tax Ruling
Don’t Fear Forex… Attend Kurt forex’ free webinar today after the close and learn why so many stock and options traders are embracing the lucrative world of forex. ******* Shares of Apple (AAPL) are getting slammed this morning after the European Commission found that Ireland gave the iPhone maker an illegal “selective tax treatment. Apple has been ordered to repay 13 billion euros ($14.5 billion) plus interest, though Ireland will appeal the ruling. The stock traded as low as $103.50 in the early going but it’s come back a bit. Apple has well over $200 billion in cash so it won’t have any problem fitting the bill. The real issue is whether investors will start worry about the tech sector’s ability to cut taxes by using Ireland-based entities. NDX futures are down -0.2%, so it seems that no one really cares for now. But keep an eye out on this issue. Overseas markets are mostly in the green today, led by the banks, even with negative economic data. Euro-area economic confidence, UK mortgage approvals, and Adzuna advertised salaries were all weak. UK economic data has generally been solid post-Brexit, so these numbers are bucking the trend. Check out this of the Citi UK Economic Surprise Index (starts on 6/1/2016): The dollar is up and gold is down on increased confidence that the Fed is ready to move. The gold miners (GDX) look especially weak this morning. The news flow is pretty slow and the economic calendar is light, with just S&P CoreLogic home price and consumer confidence numbers on tap. Fed Vice Chairman Fischer appeared on Bloomberg TV this morning, expressing optimism that productivity growth will rebound. He also said that incoming economic data will determine the trajectory of interest rate increases. So for now, it looks like we’re back to the range, which makes sense ahead of Friday’s big jobs report. Maybe that will give traders an excuse to start taking real action? One can dream… P.S. Don’t forget to sign up for our FREE forex training session!
Continue Reading -->The Morning Hammer: Let’s Eat Some Dove Soup
Traders are buying into the Fed’s hawkish narrative. On Friday, FOMC Chair Janet Yellen very clearly put rate hikes on the table, and market are buying in. Fed Funds futures now imply a 65% chance of a December rate hike, up from 47% a week ago. And September is up to 42% This has gold and silver slightly offf and the dollar up huge Overnight, Italian business manufacturing missed expectations, as did Greek GDP, Swedish retail sales, and Hong Kong retail sales. Australian home sales were also weak. European equity markets are red, while SPX futures are flat. We’ve got some important economic data today, with personal income/spending, PCE deflator, and Dallas Fed numbers on tap. Even though the Fed’s signalling pretty hard that rate hikes are en route, folks will be watching the PCE deflator closely since it’s the Fed’s preferred inflation indicator. If it’s strong, I’d assume folks push those rate hike odds up even more, and we could probably see an intraday selloff in US Treasuries (which are up fractionally in the early going). Beyond that, it looks like we’re going to close out August the way we came in — quietly. The VIX has been ticking up after putting in what looks like a major low on August 8, but we’re still not seeing much actual movement. We haven’t had a 1% down day in SPX since June 27. And it feel slike the more people look for one, the less likely it is to happen. Volatility is mean reverting. Things go crazy, and then they get quiet. And things get quiet, and then they go crazy. This quiet period today though, it’s one for the ages. I just wanna wake up, you know?
Continue Reading -->The Morning Hammer: Will Yellen Pull a Fast One at Jackson Hole?
All eyes are on FOMC Chair Janet Yellen’s 10:00 a.m. ET speech in Jackson Hole. Fed officials have been out in force the past few weeks pushing a hawkish narrative, and the market has responded. Fed fund futures now imply a 57% chance of a December rate hike, up from 47% a week ago and just 9% after the 6/24 Brexit. 57% is far from certain. However, the trend has been up, and the trend is what counts. This has been pushing up bank stocks and putting pressure on gold, particularly the miners (GDX). So now we’re at an interesting juncture. If Yellen indeed comes out hawkish as many traders expect, I wonder if we get an immediate spike in the dollar and dip in gold, with both moves getting reversed by the end of the day. I almost feel like all the Fed heads have been overselling the idea that rate hikes are coming, which could set up a sell the news situation. On the flip side, if we get a repeat of June — doves flying when everyone’s looking for hawks — expect a monumental rally in GDX. SPX futures are as flat as an ironing board, and crude oil is down fractionally. Aside from all the Fed-sanity, I’m really interested to see what biotech does. For 2 straight days, IBB has gone from first in the morning to worst in the afternoon on heavy volume. (see chart) The alleged cause has been Presidential candidate Hillary Clinton’s attacks on Mylan’s (MYL) pricing practices, which raises fears about future price controls. The reality is that no politician — not even the President of the United States — can simply wave a magic wand and lower drug prices. So I wonder if traders have been looking for excuses to sell, and Hillary happened to serve it up. IBB is down -16% on the year, but it’s also up 19% from its February low. We’ve also got GDP, U. of Michigan Sentiment, and the Baker Hughes Rig Count on the economic calendar. So maybe, just maybe we’ll get some excitement today after 34 days without a 1% move in SPX.
Continue Reading -->The Morning Hammer: We Won’t Get Fooled Again?
Get a Quant Edge in Today’s Markets Today after the close, Rob Smith is hosting a FREE webinar on his unique Quant Edge Trading Strategy. Read all about it ********************************************************************* The bears had a great day yesterday. SPX only fell -0.5%, but with Hillary Clinton’s help, they sent biotech from first to worst in a matter of hours, and some key momo stocks like Twilio (TWLO) and Acacia (ACIA) took beatings. Oil also fell on a very bearish inventory report and the VIX got a little pop. Overnight, German business sentiment missed expectations, while Spain reported above-consensus GDP. And Bloomberg is reporting that Chinese authorities may act to cool off Shanghai’s surging property market, including restrictions on mortgages and development loans. This morning, we’re seeing some minor downside follow-through with SPX futures down 5 handles and crude oil off 30 cents. We’ve got a big chunk of economic data coming today with jobless claims, durable goods, Markit PMI, and the Kansas City Fed on tap. However, the big story is still FOMC Chair Janet Yellen’s speech in Jackson Hole tomorrow. Traders have been ratcheting up rate hike expectations, and Fed Funds futures now imply a 54% chance of a December rate hike, up from 47% a couple weeks ago. That’s been putting pressure on gold and US Treasuries. I won’t hazard a guess as to what she’ll say because trying to game the Fed has been extremely hard this year. Everyone was geared up for a big hawk move in June and Yellen came out dovish. In fact, now that I think about it, there are two major parallels with June. We’re heading into a Fed event where everyone is expecting a big hawkish twist. Funny, just as I wrote this, Kansas City Fed President Esther George (FOMC voting member) came out swinging the hawk hammer, saying the “time is right” for a rate hike and that gains in inflation give the Fed room to remove some accomodation. And we’re heading into an OPEC event where a lot of traders expect a production freeze or cut. In June, the Fed and OPEC disappointed the masses. Are we about to get fooled again? I’m not going to make any predictions since I’m not rolling the dice on Yellen’s speech. Just keep in mind that Mr. Market’s primary mission is to fool as many traders as possible at all times.
Continue Reading -->The Morning Hammer: The Bears Are Long F.O.M.O.
Get a Quant Edge in Today’s Markets Tomorrow after the close, Rob Smith is hosting a FREE webinar on his unique Quant Edge Trading Strategy. Read all about it The waiting game continues. We’ve now gone 32 trading days without a 1% up move, and 40 days without a 1% down move. It’s been a beautiful ride for the bulls becuase they’ve been enjoying a picture-perfect grind up. But it’s been hell for bears, particularly those buying put options. The slow upward movement and declining volatility slowly kills the value of those puts a penny at a time. I always think it’s far better to lose fast, because at least you get it over with. Now it seems like a lot of bears are tempted to capitulate to stop the slow bleed. But at the same time, there’s a big FOMO (fear or missing out) element. What if you cover just ahead of what seems like an inevitable market drop? I’m long VIX calls (which is basically a highly leveraged SPX short), so that’s the boat I’m in. I’m down about 9%, which isn’t the end of the world on an options positions, but I admit I’m growing restless. SPX futures are up fractionally following a decent up day in Europe. The stalemate looks set to continue ahead of FOMC Chair Janet Yellen’s Jackson Hole speech this Friday. It seems like traders are starting to buy into the recent hawkish trend in Fedspeak. Fed fund futures now imply a 53% chance of a December rate hike, up from 45% a month ago and 9% post-Brexit on June 27. That has gold and Treasuries sagging a bit. Crude oil is off a little on the American Petroleum Institute inventory report. The API said we had a 4.5 million barrel build in US crude stocks last week, which was a surprise. We get EIA data today at 10:30 a.m. ET. The current consensus calls for an -850K decline in inventories. However, remember that oil has been moving on chatter about the September OPEC meeting. We’re seeing a lot of conflicting news reports about whether OPEC will institute an output freeze or cut, so it’s getting hard to gauge the importance of data. I’m long oil (through the KYN and BGR closed-end funds), but I’m not going to hazard a guess as to what OPEC’s going to do. We’ve also got Existing Home Sales and the FHFA House Price Index on tap today. Housing stocks were up huge on yesterday’s big New Home Sales numbers, so maybe there’s action there again today. But I think biotech (IBB) may tell the tale for now. That group’s been pretty strong the past couple of days, and recent history shows that when biotech does well, the bears tend to fail. Good luck out there. P.S. Don’t forget to sign up for Rob Smith’s FREE webinar.
Continue Reading -->The Morning Hammer: Something’s Gotta Give!
Don’t Fear Forex… Attend my buddy Kurt Capra free webinar tonight and learn why so many stock and options traders are embracing the lucrative world of forex. Click here for more info. European markets are up this morning on solid economic data. Euro area PMI rose to 53.3 in August from 53.3, which implies little impact from the Brexit. France’s was better than expected, while Germany’s was a little weaker. On the US economic calendar, we’ve got the Markit US manufacturing PMI, Richmond Fed, and New Home Sales. Best Buy (BBY) beat by a mile and is up 14%, extending what’s generally been a pretty decent earnings season for big box retailers. Meanwhile, the Bank of Montreal (BOM) beat on strong retail banking activity. SPX futures are in modestly positive territory following yesterday’s yawnfest. Biotech is indicated higher following massive outperformance on the back of the Pfizer (PFE)/Medivation (MDVN) deal. Bloomberg is reporting that Bayer and Monsanto (MON) are closer to closing their deal, which has been stuck on issues like the price and termination fee. Crude oil is down again this morning after Iraq’s Oil Minister asked foreign oil companies to increase oil production and exports. The dollar is down after making solid gains on hawkish comments from the Fed’s Fischer and other officials. Some traders may be taking their feet off the gas ahead of FOMC Chair Janet Yellen’s Jackson Hole speech this Friday. I’m not in the business of trying to game the Fed, so I’ll just point out that in June, Yellen came out dovish after a barrage of hawkish comments from Fed officials. So please, tread carefully. Otherwise, we’re back to the same old grind. The action’s been so lame that it makes the April-May lull look like a firestorm in comparison. I am long VIX calls and I’m sitting on a loss of about 8%. That’s not the end of the world, but now I’m in that no man’s land where I’m worried about getting shaken out at the worst possible moment. But I’m going to stick it out for now. Arguing with the market is for fools, but we’ve gone 31 days without a 1% move. And we’ve gone 39 days without a 1% down move. Something’s gotta give. Right? P.S. Don’t forget to sign up for Kurt Capra’s free forex trading event!
Continue Reading -->The Morning Hammer: The Broken Record Market
Don’t Fear Forex… Attend my buddy Kurt Capra free webinar tomorrow and learn why so many stock and options traders are embracing the lucrative world of forex. Click here for more info. SPX futures are taking a small hit today as oil pulls back and the dollar keeps rising on Fed rate hike speculation. Morgan Stanley and Barclays both issues notes stating that crude prices would correct. There is also growing doubt that OPEC will institute a production freeze or cut at its September meeting. As I pointed out last week, oil ran up big into the June OPEC meeting on speculation of an output freeze. OPEC did nothing, and oil topped out shortly thereafter. It seems like folks are finally starting to remember that. On Sunday, Fed vice-chairman Stanley Fischer said the US economy was closing to hitting full employment and the Fed’s 2% inflation goal. Right now, traders are pricing in a 51% chance of a December rate hike, so markets are split right down the middle. We may get some clarity with FOMC Chair Janet Yellen’s speech at Jackson Hole on Friday. But I’d like to put an emphasis on the word MAY. Don’t forget that many Fed Heads came out hawkish ahead of the June meeting, only to be surprised by a dovish statement. The US economic calendar is pretty light — we just have the Chicago Fed National Activity Index hitting at 8:30 a.m. ET. At 12:00 p.m., German Chancellor Angela Merkel, French President Francois Hollande, and Italian Prime Minister Matteo Renzi will hold a press conference on the state of the European Union. On the deal front, Pfizer (PFE) is buying cancer drug maker Medivation (MDVN) for $14 billion. Reuters reported that several other players including Gilead (GILD) and Merck (MRK) were interested in Medivation. And a US security panel approved ChemChina’s $43 billion takeover of pesticide/seed giant Syngenta (SYT). The VIX is up 13%, which implies some more tension on the tape, but the bears still need to deliver some real downside follow-through to provide a real scare. We’ve gone 30 trading days without a 1% move in the SPX. I’ve got my fingers crossed that we’re finally passing this stretch of boredom, but I’m not holding my breath. P.S. Don’t forget to sign up for Kurt Capra’s free forex trading event!
Continue Reading -->The Morning Hammer: Is Today the Day for a Real Move?
Quantitative Analysis is the future of trading. Rob Smith will show you why. Click here for more info. World markers are a little shaky following yesterday’s late-day selloff in the S&P 500, and hawkish comments from Fed officials. However, Japan is up after the yen took a little break, which is helping shares of exporters. UK jobless claims were better-than-expected in July, while Singapore’s exports dropped on weak orders from China, Indonesia, and the US. Crude oil is down this morning after the American Petroleum Institute reported a 1 million barrel drop in US crude inventories. This was a bigger reduction than expected, but gasoline supplies were up 2.2 million barrels, raising concerns about a glut. The EIA reports its inventory numbers at 10:30 a.m. ET so keep an eye out. Target (TGT) cut its annual guidance due to weak sales, and Lowe’s (LOW) reported a miss. This is disappointing as we’re coming off a couple days of positive retail stock news. On the deal front, Bloomberg is reporting that United Bankshares (UBSI) is in talks to acquire Cardinal Financial (CNFL). SPX and NDX futures are as flat as an ironing board, so the holding pattern continues in the early going. However, yesterday I reiterated my view that the VIX indeed hit a bottom last week, and today we could see vol continue to pick up. Aside from the important crude oil inventories at 10:30 a.m., we’ve got FOMC minutes hitting the tape at 2:00 p.m. Right now, traders are pricing in a 51% probability of a December rate hike, which means the market is split right down the middle. So there’s a chance that at least half the market comes away disappointed, which could be a catalyst for movement. The regional banks (KRE) could be especially big movers, and of course, the dollar and gold will be in play. Yesterday, NY Fed President Dudley (voting member) said a rate hike could come next month, so some folks are thinking that’s on the table. But the big problem with trying to game the Fed is that you not only have to predict the timing of policy actions, but the wording of commentary. Markets can make huge moves on the inclusion or exclusion of a few words, so you can drive yourself batty trying to make sense of it all, ESPECIALLY since the Fed always has the back door of “data dependency.”
Continue Reading -->The Morning Hammer: Temperature Rising
Want to Start Earning Bigger, More Consistent Profits? Dave Green can show you how! We’re waking up to slightly shakier markets today. European carmakers are down after the US Department of Justice found evidence of criminal acts by Volkswagen AG relatded to its emissions cheating scandal. That’s helping push the Euro Stoxx 50 down -0.8%, while the DAX is of -0.6%. Euro bond markets are mixed. UK inflation was higher than expected in June, though perhaps Yesterday after the close, quarterly 13/F reports hit the tape, and the big news was that Warren Buffett’s Berkshire Hathaway upped its stake in Apple (AAPL) while reducing its position in Walmart (WMT) — seems like a big statement about Berkshire’s shift towards tech-friendliness. Retailers Home Depot (HD) and Dick’s Sporting Goods (DKS) are up on strong earnings earnings, while momo favorite Fabrinet (FN) is rising on what look like blockbuster numbers. Hot new issue Twilio (TWLO) is up premarket. I’ll discuss this more later — but I would not short this stock unless I was 100% confident that the market was set to drop sharply. Meawhile, Hain Celestial (HAIN) is getting smashed after it delayed results on accounting issues. Crude oil just broke through $46 and is hovering around there as traders continue to anticipate an OPEC output cut. We have inventory numbers coming today after the close (from the API) and tomorrow morning (EIA). On the deal front, Bloomberg is reporing that German industrial gas giant Linde is in talks to acquire Praxair (PX). SPX futures are down fractionally after showing very little movement overnight. And while the index fell for 5 straight hours into the close yesterday, there was still no volatility. Look at the chart below — that downdraft engulfed less than 4 points! We’re talking a -0.17% drop — that’s nothing. After 26 days without a 1% move in the SPX, this market could really use some excitement. We’ve got a nice chunk of economic data coming today, including CPI, Housing Starts, and Industrial Production, so maybe we’ll get the volatility bump for which we’ve been waiting. Good luck out there friends.
Continue Reading -->The Morning Hammer: Famous Last Words?
Want to Start Earning Bigger, More Consistent Profits? Dave Green can show you how! Crude oil poked its head above $45 in early trading, which is giving emerging markets a pop today. China is ripping on a report saying that an exchange link between Shenzen and Hong Kong will be announced shortly, as well as takeover speculation among property developers. The DAX is up 0.4%, putting it in the green on the year for the first time. European bonds are mostly flat. SPX futures are slightly green and showing very little volatility in early action, which means today could be our 26th straight day without a 1% move in the index. And unfortunately, the economic calendar is pretty light, with the Empire Manufacturing and NAHB Housing reports coming out. Neither is likely to make a big dent in the action. However, we may finally get some action with tomorrow’s heavy calendar (CPI, industrial production, housing starts, building permits), and Wednesday’s FOMC Meeting Minutes and crude oil inventories combo. On the deal front, Mid-America Apartment Communities (MAA) is buying Post Properties (PPS) for $3.9 billion to form a REIT giant. The CBOE equity put call ratio went out at 0.55, which is right around yearly lows. The ISE Sentiment Index hit 136 Friday (136 calls for every 100 puts). This implies some near-term complacency, but we’ve had near-term complacency for quite a while now and it hasn’t mattered. It still feels like folks are waiting for “something” to happen — a news event or a good-old fashioned breakdown/breakout — to bring some life back into the market. It feels like it’s in the wings, but since so many people are thinking it, maybe we don’t get it soon. But seriously, 25 days without a 1% move? That can’t last forever. Famous last words?
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