Category Archives: Daily Market Update

Daily Market Update – May 4, 2015  (8:30 AM)

Other than this week’s Employment Situation Report coming on Friday, there’s not too much to drive markets, as earnings reports are also now going to begin slowing down.

The week should be a fairly boring one as far as inputs go, but you never know what the output is going to look like. At least last week had the kind of news events that could be expected to shake markets. This week, we will have to wait until Friday for events, but the shaking could still come at any time while markets teeter at their tops.

Last week was somewhat rescued by Friday’s performance and the week ended with only a small loss, but still left the S&P 500 within about 0.4% of its all time high. Whatever the large moves were last week and there were those in both directions, there was little news or reason to account for the swings, other than by its very nature, swings move in opposite directions.

While the market has maintained its levels near those highs and actually built on them just a little, the prevailing question remains where the catalyst is coming from.

That’s always an ever-present question, but sometimes it’s harder to see answers. now is one of those times that it’s hard to see an answer.

In the longer term, that is the next earnings season, the catalyst might be the fact that we’ve been set up to have lowered expectations, but the bottom line could change for the better if the dollar weakens a little and top line revenues are enhanced.

But until that point it may be a mystery as to what leads us to the next level higher. Usually, it has to be the promise of growth and the latest promise of growth coming from lower oil prices hasn’t materialized, while in the meantime those prices have now begun edging higher.

The Employment Situation Report could give some reason to think that economic expansion is taking hold at a greater pace, but the past month was a disappointment. Since we’re pretty much assigned to interest rates going higher, a large number on new jobs creation shouldn’t frighten anyone away, but there aren’t too many indications that a really large number is in store for this month’s report.

With no assignments last week, but having had the good fortune of being able to make the rollover trades necessary, it was possible to create the week’s income stream. That was thanks to Friday’s recovery. But as a result of no cash recycling, I don’t expect to be in the market to add many new positions this week. Any new purchases are likely to look at expirations this week so that there is at least some chance of recycling money in order to be positioned to do something new the following week as the May 2015 option cycle will come to its close.

My hope is that there continues to be some opportunity to sell calls on existing uncovered positions and slowly attack that unwanted pile and see the market add to Friday’s gains so that the handful of positions expiring this week are at least in position to be rolled over.

Ultimately, it’s whatever it takes to make the week’s income and hopefully have some more money at the bottom line for the efforts.

 

Daily Market Update – May 1, 2015  (8:30 AM)

The Week in Review will be posted by 6:00 PM and the Weekend Update will be posted by Noon on Sunday.

The following trade outcome are possible today:

Assignments:  none

Rollovers:  TWTR (puts)

Expirations:   GM, GPS, KMI, KO

The following were ex-dividend this week: Kinder Morgan (4/28 $0.48)

The following will be ex-dividend next week: Intel (5/5 $0.24)

Trades, if any, will be attempted to be made before 3:30 PM EDT

Daily Market Update – April 30, 2015  (Close)

Mid-week, just like mid-town, was a busy place to be yesterday.

In addition to all of the earnings reports coming in and the continued focus on the manner in which the Twitter earnings were released and its aftermath, there were also the GDP Report and the FOMC Statement release to be digested.

The Twitter earnings, while fascinating in the manner in which they were prematurely released, was a non-event. Twitter won’t ever be a stock that actually moves markets, as even its continued existence as a standalone company is called into question, as its leadership runs from crisis of faith to crisis of faith.

On the other hand, the GDP Report and the FOMC Statement are meaningful, even if they don’t act as stimuli for change.

Not yesterday, though.

FOMC Statement release would be this morning and afternoon, respectively, but the Twitter debacle last night may still keep people’s attention for a while.The GDP Report was, as expected, not very encouraging. It failed to reflect what most everyone has been waiting for over the past 6 months. Anyone who has been waiting for a consumer led expansion of the economy has had to put those hopes on hold.

While expecting nothing, the market got even less than that.

At least the FOMC didn’t add to the disappointment, as it basically said nothing, other than to remove all temporal references and to re-emphasize that it would be driven by data.

Today, in addition to more earnings, are also Jobless Claims and “Personal Income and Outlays” reports.

The latter may be the first in a series of data points that the FOMC may use when considering a June interest rate hike, which is the time that so many had predicted it would finally become a reality.

So far, it’s hard to see where the economic growth necessary to spur interest rate increases will come from, although the bond market did drive interest rates higher yesterday. While they are generally thought to understand macro-economic events better than stock traders, the bond market has been really volatile of late, so there’s no real reason to believe that they know anything more than the next guy at the moment.

As this morning’s reports were released Jobless claims were well reduced, but personal income and spending left something to be desired and the pre-opening markets were basically unchanged.

With yesterday’s weakness, the prospects of rollovers or assignments was made more distant and this morning’s pre-open futures didn’t appear as they will be helping the situation. But at least the morning’s news didn‘t drive them deeper into the red, so there was always hope as the next 2 days would unfold and more earnings are released and maybe an FOMC Governor or two say something during prepared remarks that might goose the market a little higher before Friday’s expirations roll around.

That was the hope, anyway.

Sounds great on paper, but that’s not the way it worked out as the market may have just realized that nothing is really there to give any one a reason to keep pushing the “buy” button.

With at least an opportunity to rollover shares of United Continental the day wasn’t a complete loss. Interestingly, while just about everything was lower today, those positions that are expiring tomorrow, while now further away from their strikes, didn’t suffer as badly as the overall market.

So there always some hope for tomorrows’s trading, although it is disappointing that April 2015 goes out on such a negative note and barely finished the month higher, in contrast to the way Aprils are usually expected to perform.

 

Daily Market Update – April 30, 2015  (8:45 AM)

Mid-week, just like mid-town, was a busy place to be yesterday.

to all of the earnings reports coming in and the continued focus on the manner in which the Twitter earnings were released and its aftermath, there were also the GDP Report and the FOMC Statement release to be digested.

The Twitter earnings, while fascinating in the manner in which they were prematurely released, was a non-event. Twitter won’t ever be a stock that actually moves markets, as even its continued existence as a standalone company is called into question, as its leadership runs from crisis of faith to crisis of faith.

On the other hand, the GDP Report and the FOMC Statement are meaningful, even if they don’t act as stimuli for change.

Not yesterday, though.

FOMC Statement release would be this morning and afternoon, respectively, but the Twitter debacle last night may still keep people’s attention for a while.The GDP Report was, as expected, not very encouraging. It failed to reflect what most everyone has been waiting for over the past 6 months. Anyone who has been waiting for a consumer led expansion of the economy has had to put those hopes on hold.

While expecting nothing, the market got even less than that.

At least the FOMC didn’t add to the disappointment, as it basically said nothing, other than to remove all temporal references and to re-emphasize that it would be driven by data.

Today, in addition to more earnings, are also Jobless Claims and “Personal Income and Outlays” reports.

The latter may be the first in a series of data points that the FOMC may use when considering a June interest rate hike, which is the time that so many had predicted it would finally become a reality.

So far, it’s hard to see where the economic growth necessary to spur interest rate increases will come from, although the bond market did drive interest rates higher yesterday. While they are generally thought to understand macro-economic events better than stock traders, the bond market has been really volatile of late, so there’s no real reason to believe that they know anything more than the next guy at the moment.

As this morning’s reports were released Jobless claims were well reduced, but personal income and spending left something to be desired and the pre-opening markets were basically unchanged.

With yesterday’s weakness, the prospects of rollovers or assignments was made more distant and this morning’s pre-open futures don’t appear as they will be helping the situation, but at least the morning’s news didn‘t drive them deeper into the red, so there’s always hope as the next 2 days unfold and more earnings are released and maybe an FOMC Governor or two say something during prepared remarks that may goose the market a little higher before Friday’s expirations roll around.

Daily Market Update – April 29, 2015  (Close)

I didn’t know what the outcome of the GDP Report and the FOMC Statement release would be this morning and afternoon, respectively, but the Twitter debacle last night may still keep people’s attention for a while.

Like most news, though, even the most highly significant economic news, it will be forgotten as soon as the next bit of news comes forward. But its CEO did nothing to instill confidence today, as the shares tumbled even further after his appearance on TV, despite having tried to claw back some of this morning’s additional losses prior to his appearance.

Twitter aside, there were two potentially very significant events and still more earnings to come today.

Those earnings reports will be slowing down significantly once this week is over. At that point every one will try to interpret what the meaning of the past earnings season had been and what the prospects are for the coming quarter.

For now, the theme appears to not be ready to change any time soon. The dollar is strong and oil prices, despite rallying higher, are still low.

While this quarter was characterized by higher EPS data, but on lower top line revenue, as long as corporate buy backs continue into the next quarter, there may be some offset for the adverse impact of a strong dollar.

What may be different the next quarter is that if low energy prices do continue we may see the kind of consumer led expansion of the GDP that we’ve been waiting for since the beginning of 2015.

This morning the expectation was for another set of disappointing GDP statistics, so it was just a question of seeing  whether those expectations were met and whether they  were already baked into markets.

we’ll see where that leads if materialized or where a surprise may lead if expansion is finally noted.The answers are, “yes, they were materialized, but no, they weren’t fully baked into markets.”

While never looking very strong, even in the pre-open futures, once the GDP data was released and really was disappointing, there never was much of a reason to go higher.

The ensuing FOMC Statement release did nothing either, although it really had no worthwhile news or change, other than to try and remove attention from the calendar and point more to an FOMC that would be data driven, rather than coerced by the passage of time.

With enough new positions opened this week to keep me happy and generating some weekly income, I’d like to see prices strengthen a little bit more to have a better opportunity to see those positions set to expire this week either be assigned or get rolled over.

Today wasn’t going to be that day, though. Luckily, there are still 2 more days to go.

While I didn’t expect to make any new position trades yesterday, but did so, my expectations were even lower today, as they are on most Wednesdays when focus really turns to managing existing positions to close out the week or be put into position for subsequent weeks.

No one was more surprised than me when I did sell Twitter puts.

With today’s big economic news there was even more reason to just be a casual observer at the ready to sell calls on existing positions, but that opportunity never arrived. Instead, I chose to put more cash at risk for a week that doesn’t now look as if there will be too many chances to get additional income from rollovers or to replenish cash from assignments.

Still, that could all change tomorrow.