Category Archives: Daily Market Update

Daily Market Update – December 2, 2014 (Close)

While we wait for Friday’s employment Situation Report this seems like the perfect week, with otherwise little economic news, to stuff a total of eleven Federal Reserve Governor speeches into it.

Conceivably, any of those could move markets, especially if speaking off script. The one most likely to do that is Richard Fisher, who speaks after Wednesday’s close. He is a hawkish member and will become a non-voting one next month.

Stanley Fischer, who is the Vice-Chairman and also thought to be relatively hawkish speaks twice this week, but thus far hasn’t ruffled any feathers in public, as Fisher has done throughout his tenure, dating back to Alan Greenspan’s time.

Meanwhile, Fischer spoke before the market’s open this morning and prior to the opening it didn‘t appear as if anything surprising or unintended had been said as the market’s modest open higher had been maintained since futures trading began earlier in the day.

In a week where there isn’t much news until the week’s end these speeches may end up being the only entertainment we get and possibly the only catalysts for some sort of movement.

It’s not really clear what sent the market higher today, but whatever it was it began shortly before the first 30 minutes of trading could even get done and then had another buying flurry start shortly after noon.

No real news of any sort to account for either of the moves higher, but interestingly while oil was giving back yesterday’s gains, oil stocks moved higher today, even though the broader sector was mixed.

Otherwise, the story will continue to focus on oil and retail for the week, at least until Friday’s Employment report. That report shouldn’t hold too many surprises and probably won’t be a springboard for any significant market moves higher. In fact, too good of a number would probably be construed as meaning wage inflation is ahead and a rising interest rate environment would come sooner than anticipated.

Most will probably be hoping for another month with job growth in the low to mid 200,000 range and  engendering little need for the market to react to the bland news.

While the focus is on retail, so far, the numbers for Black Friday and Cyber Monday are all over the place and their interpretations are also expressing a broad range. of opinion.

The same broad range of opinion is characterizing what sits behind OPEC’s decision to keep production steady. Many see it as an outright assault against the US shale industry, while a minority simply see it as another expression of Saudi Arabian duplicity in saying one thing but believing something very different. In this case the overt words are blatantly aimed at the fledgling US industry, but the real intent may be to bring no benefit to their enemies in Iran.

It just happens to be much easier to publicly fling arrows at the US, since there’s little worry of repercussion, as opposed to slinging those arrows at a
fellow OPEC member or the people who funnel arms to your enemies, not to mention your enemies.

Yesterday’s bounce higher in oil doesn’t appear to be replicating itself this morning and so energy may be on the radar screen for quite a while as we wait to see how lower prices to end users might impact the economy, even though the stock market may not see that same kind of potential benefit.

I would have loved the opportunity to take advantage of any possible moves higher today to sell some calls rather than adding more new positions, but while the market did move nicely higher the option market continued to be very quiet and had very low volume..

For now I’m content with some dividends this week and whatever additional premiums can be squeezed out of positions as the countdown to the year’s end has already begun. Another day like today would be welcome if investors can find any other reason to push levels even higher.

Daily Market Update – December 2, 2014 (9:00 AM)

While we wait for Friday’s employment Situation Report this seems like the perfect week, with otherwise little economic news, to stuff a total of eleven Federal Reserve Governor speeches into it.

Conceivably, any of those could move markets, especially if speaking off script. The one most likely to do that is Richard Fisher, who speaks after Wednesday’s close. He is a hawkish member and will become a non-voting one next month.

Stanley Fischer, who is the Vice-Chairman and also thought to be relatively hawkish speaks twice this week, but thus far hasn’t ruffled any feathers in public, as Fisher has done throughout his tenure, dating back to Alan Greenspan’s time.

Meanwhile, Fischer is speaking before the market’s open this morning and thus far it doesn’t appear as if anything surprising or unintended has been said as the market’s modest open higher has been maintained since futures trading began earlier in the day.

In a week where there isn’t much news until the week’s end these speeches may end up being the only entertainment we get and possibly the only catalysts for some sort of movement.

Otherwise, the story will continue to focus on oil and retail for the week, at least until Friday’s Employment report. That report shouldn’t hold too many surprises and probably won’t be a springboard for any significant market moves higher. In fact, too good of a number would probably be construed as meaning wage inflation is ahead and a rising interest rate environment would come sooner than anticipated.

Most will probably be hoping for another month with job growth in the low to mid 200,000 range and  engendering little need for the market to react to the bland news.

While the focus is on retail, so far, the numbers for Black Friday and Cyber Monday are all over the place and their interpretations are also expressing a broad range. of opinion.

The same broad range of opinion is characterizing what sits behind OPEC’s decision to keep production steady. Many see it as an outright assault against the US shale industry, while a minority simply see it as another expression of Saudi Arabian duplicity in saying one thing but believing something very different. In this case the overt words are blatantly aimed at the fledgling US industry, but the real intent may be to bring no benefit to their enemies in Iran.

It just happens to be much easier to publicly fling arrows at the US, since there’s little worry of repercussion, as opposed to slinging those arrows at a fellow OPEC member.

Yesterday’s bounce higher in oil doesn’t appear to be replicating itself this morning and so energy may be on the radar screen for quite a while as we wait to see how lower prices to end users might impact the economy, even though the stock market may not see that same kind of potenti
al benefit.

This morning I would love the opportunity to take advantage of any possible move higher to sell some calls rather than adding more new positions, but the indication higher isn’t terribly strong and could easily wither once the bell rings.

For now I’m content with some dividends this week and whatever additional premiums can be squeezed out of positions as the countdown to the year’s end has already begun.

Daily Market Update – December 1, 2014 (Close)

Weak oil begins the week that begins the month that is often the best of the year.

For now it doesn’t look as if the month will get off to a good start, but the drop in oil seen late last night, that was a continuation of the real plunge on Friday, had already started greatly moderating before the market opened, so there’s always hope.

In what some think was just a relief bounce, oil ended up having a decent day, now all it has to do is string together about 15 similar increases to get back to its baseline.

This week we have an Employment Situation Report, and while it has been a non-event the past couple of months, the market could use its boost this time around. Otherwise, there’s not too much going on, with the exception of some Federal Reserve Governors making speeches.

Like last week, this week has lots of ex-dividend positions, so there is already a revenue stream in hand. With a reasonable number of positions set to expire in each of the next three weeks when the December 2014 option comes to its end, any purchases this week could fit in well into any of those three choices. However, I would like to be able to recycle some cash through assignments, so I may look a little bit more at those contracts expiring this week.

With energy trading so low it would seem like a good buying opportunity, but so far those who said oil would go below $75 have been right and many continue to talk about $50 being the next stop. Given that the crowd was right on that one, it’s not likely a good time to go against the crowd at the moment. Today was nice, but far from an indication that the pain is done if you’re already knee deep in energy.

While low oil prices seem to logically be a good thing for stock markets that hasn’t necessarily been borne out in reality, although low oil prices are usually driven by low demand which is rarely good for stock markets.

This time around it’s being driven by high supply and middling demand. What remains to be seen is whether that mediocre demand will be increased after having been enticed by what may be a rare opportunity to lock into low prices.

Other than oil being the big story now, retail is on everyone’s radar, as it is every Thanksgiving until the end of the year.

For at least the past 10 years it has seemed as if the same story has unfolded.

Sales are always reported to be weak after the frenzy surrounding Thanksgiving and dour projections are made for the holiday season. When it’s all done and the numbers are finally tallied after Christmas, it always seems to turn out to be better than expected.

This year, so far, it is all going according to script, as in-store numbers have been reported as being weak. Given how the “Black Friday” phenomenon has been very much downplayed this year, maybe the decrease shouldn’t come as too much of a surprise and may also be offset by on-line shopping, which we’re now being told may be more safe, as far as credit card identity theft goes, than actually shopping in a s
tore.

In all likelihood, unless something unforeseen breaks on the international news front the two stories in front of us this morning are going to be the key two stories for the final trading month of the year.

Neither of those would appear to offer the kind of fuel that would send the market to even more highs.

However, as the US keeps looking comparatively better than most anyone else in the world our markets may become a magnet for more and more international funds to come to our shores and that could be the source of growth. Given efforts taken by the Bank of Japan and the ECB the expectation would have been that those stock markets would have benefitted just as ours had done during Quantitative Easing. However, with the real strength of the dollar, the reality may end up being very different.

I won’t be on a shopping spree this week and would like to see some reason to believe that the market can get beyond the heavy burden placed at the moment by the representation of the energy sector in the indexes.

Hopefully the direction will be higher this week if only anyone could figure out what will take us there, or anywhere.

Daily Market Update – December 1, 2014 (8:45 AM)

Weak oil begins the week that begins the month that is often the best of the year.

For now it doesn’t look as if the month will get off to a good start, but the drop in oil seen late last night, that was a continuation of the real plunge on Friday, had already started greatly moderating before the market opened, so there’s always hope.

This week we have an Employment Situation Report, and while it has been a non-event the past couple of months, the market could use its boost this time around.

Like last week, this week has lots of ex-dividend positions, so there is already a revenue stream in hand. With a reasonable number of positions set to expire in each of the next three weeks when the December 2014 option comes to its end, any purchases this week could fit in well into any of those three choices. However, I would like to be able to recycle some cash through assignments, so I may look a little bit more at those contracts expiring this week.

With energy trading so low it would seem like a good buying opportunity, but so far those who said oil would go below $75 have been right and many continue to talk about $50 being the next stop. Given that the crowd was right on that one, it’s not likely a good time to go against the crowd at the moment.

While low oil prices seem to logically be a good thing for stock markets that hasn’t necessarily been borne out in reality, although low oil prices are usually driven by low demand which is rarely good for stock markets.

This time around it’s being driven by high supply and middling demand. What remains to be seen is whether that mediocre demand will be increased after having been enticed by what may be a rare opportunity to lock into low prices.

Other than oil being the big story now, retail is on everyone’s radar, as it is every Thanksgiving until the end of the year.

For at least the past 10 years it has seemed as if the same story has unfolded.

Sales are always reported to be weak after the frenzy surrounding Thanksgiving and dour projections are made for the holiday season. When it’s all done and the numbers are finally tallied after Christmas, it always seems to turn out to be better than expected.

This year, so far, it is all going according to script, as in-store numbers have been reported as being weak. Given how the “Black Friday” phenomenon has been very much downplayed this year, maybe the decrease shouldn’t come as too much of a surprise and may also be offset by on-line shopping, which we’re now being told may be more safe, as far as credit card identity theft goes, than actually shopping in a store.

In all likelihood, unless something unforeseen breaks on the international news front the two stories in front of us this morning are going to be the key two stories for the final trading month of the year.< /span>

Neither of those would appear to offer the kind of fuel that would send the market to even more highs.

However, as the US keeps looking comparatively better than most anyone else in the world our markets may become a magnet for more and more international funds to come to our shores and that could be the source of growth. Given efforts taken by the Bank of Japan and the ECB the expectation would have been that those stock markets would have benefitted just as ours had done during Quantitative Easing. However, with the real strength of the dollar, the reality may end up being very different.

I won’t be on a shopping spree this week and would like to see some reason to believe that the market can get beyond the heavy burden placed at the moment by the representation of the energy sector in the indexes.

Hopefully the direction will be higher this week if only anyone could figure out what will take us there, or anywhere.

Daily Market Update – November 28, 2014 (9:15 AM)

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

Today’s possible outcomes include:

Assignments: none

Rollovers:  DOW

Expirations:  BP, JOY

The following were ex-dividend this past week: ANF (11/28 $0.20), HFC (11/26 $0.50 Special Dividend), K (11/26 $0.49), LXK (11/25 $0.36), MAT (11/24 $0.28), SBGI (11/26 $0.16)

The following will be ex-dividend next week: COH (12/3 $0.34), HAL (12/3 $0.18), HFC (12/2 $0.32), JOY (12/2 $0.20), MOS (12/2 $0.25), NEM (12/3 $0.025)

Trades, if any, will be attempted to be made by 3:30 PM EST