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IB Traders' Insight

Global market commentary from IBG traders and market participants.

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2015-03-31 13:32:12

Posted by
Neil Azous
Founder & Managing Member
Rareview Macro LLC
Contributor

Macro

Closing Arguments - Q1 Consensus

The rearview mirror consensus views to end the quarter are as follows:

In local currency terms, European and Japanese equity markets are outperforming. The bear market in crude oil, weaker currencies, and monetary policy easing programs, each in their own right and even more powerfully in unison, are supporting growth and reinforcing the trend of lower inflation and bond yields. Add in the upturn in the Eurozone credit cycle and an improvement in the corporate sector in Japan led by wage growth or the prospects of third arrow of Abenomics beginning and it is easier to understand why these markets are doing well.

The internals of the US equity market continue to deteriorate and while the S&P 500 index option skew suggests there is greater upside than downside, investors will remain patient in adding length until the corporate reporting season in mid-April vindicates the concerns over the forward earnings profile and the impact of the US dollar strength. The S&P 500 is roughly flat on the year, lower on the month of March, and lower than the day of the FOMC meeting that suggested yields will be lower for longer; that in-and-of-itself tells you investors are focused elsewhere and truly taking a wait and see approach on the US. Put another way, professionals are investing in QE beneficiaries and reducing their US exposure to pay for it.

Despite the high degree of negative sentiment the fact is that emerging markets, at the asset class level, continue to trade range bound. There is no question that the concerns over emerging markets, both at the sovereign and corporate level, have risen in recent months due to the amount of large loan/credit balances outstanding and the foreign exchange risk associated with US dollar funding. However, at this point, to argue that the risks are not widely understood is now misguided. Everyone knows what they are. In fact, the exercise of March has been to argue that while risk is prevalent the concerns are overstated. We are not saying this is either wrong or right, and that some specific countries are not at real risk, but on aggregate it is one reason why the asset class as a whole is trading range bound.

 

Sight Beyond Sight® is a global macro trading newsletter written daily by Neil Azous. With close to two decades of institutional experience across asset classes, Neil interprets the day-to-day economic, policy and strategy developments and provides actionable trading ideas for investors. We invite clients of Interactive Brokers to sign up for a free trial in Account Management. If you are not a client of IB, you can sign up for a free trial by visiting our website.

 

This article is from Rareview Macro and is being posted with Rareview Macro’s permission. The views expressed in this article are solely those of the author and/or Rareview Macro and IB is not endorsing or recommending any investment or trading discussed in the article. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

 

2015-03-31 13:17:50

Posted by
John Carter
President
Simpler Stocks
Contributor

Stocks

Simpler Stocks: Monday Movers

A strong way to start the week, with US stocks surging more than 1% on Monday. Big gains were seen across energy and financials, with pending home sales and personal income data quick to cheer investors.  And of course, merger Monday lived up to its name, with lots of deals announced before the open, particularly in the health care sector.

UnitedHealth Group Inc. (Ticker: UNH)

The health insurer is buying pharmacy benefits manager Catamaran (Ticker: CTRX) for nearly $13 billion.  The all-cash deal will immediately boost earnings. That cheered investors a bit, as they sent UNH shares up 2% intraday. Beta is still below 1x, with sales growth estimates likely to pick up beyond the 7% level now projected by consensus through 2016.

Intel Corp. (Ticker: INTC)

No confirmation yet this week that INTC has inked a deal to buy specialty semiconductor company, Altera (Ticker: ALTR). Altera already has some chip design/production deals with INTC, so a deal should be relatively smooth post-closing should one occur. The current yield is about 3%, with free cash flow yield of $9 billion or 6% on today’s price. 

Zillow Group, Inc. (Ticker: Z)  

A Benchmark note last week said that fears over Realtor.com’s ability to take away Trulia listings are “overblown” resulting in Z’s stock being undervalued.  Most MLS brokerages are working with Z, the sell-side analyst noted, and sales growth warrants a higher target price. The analyst kept his buy rating and $155 target.

Lululemon Athletica, Inc. (Ticker: LULU)

Nomura was recently positive on Lululemon, citing the growing women’s active wear apparel trend internationally. The “productivity gap” between the US and Canadian operations should also narrow, the firm writes. And LULU also enjoys brand loyalty. Nomura continues with its buy rating and $70 target on the stock.

First Solar, Inc. (Ticker: FSLR)

Moving downstream and beyond the yieldco, FSLR has made recent moves into power plant management. The initial push has 40 megawatts of power production under management. The EV/EBITDA is 6x, with shares comfortably above both moving averages. The sales growth is also estimated to accelerate through 2016 to 18%. Earnings estimates have the bottom line growing by 21% to $3.63 a share, yet the multiple is under 17x.

HomeAway Inc. (Ticker: AWAY)

Oppenheimer initiated last week on HomeAway with a buy rating and a $37 price target. The analyst noted a “secular shift” ongoing in the online travel industry, with growth in global GDP helping fundamentals (travel is linked to that growth). Shares are trading just below the 50-day moving average, so any push above that level may give support. 

 

About the author: John Carter has been a full time trader for 15 years, serving over 100,000 subscribers in over 100 countries.  For more analysis on high growth stocks visit www.SimplerStocks.com.

 

This article is from Simpler Stocks and is being posted with Simpler Stocks’ permission. The views expressed in this article are solely those of the author and/or Simpler Stocks and IB is not endorsing or recommending any investment or trading discussed in the article. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

2015-03-31 12:37:52

Posted by
Waverly Advisors, LLC
Technical/Quantitative Market Research
Contributor

Technical Analysis

Waverly Advisors Afternoon Update

Largest Rel Volume: Stocks with the largest multiple of their 20 day average volume. Note that the “average” value for this number will change as the trading day progresses, but the relative position of a stock within this list should show some persistence. These are likely stocks in the news, or stocks experiencing a sharp flow of new information.

Largest Rel Ranges: First, we express each stock’s daily range as a % of the 20 day average range, and then choose the 10 with the largest values of that measure. These are the stocks with the largest daily ranges, relative to their own typical daily ranges.

Gap Analysis shows stocks with open gaps (today’s high < yesterday’s low or today’s low > yesterday’s high) remaining.

Stocks with Open Gaps (for the Day): ASHR, AZN, BBL, BCE, BHP, BP, BUD, CBG, CCJ, DB, EMR, EWG, GENE(F), GOLD, GSK, HPQ, HSBC, INFY, KLAC, KSU, LM, NVS, PCP, RDS.A, RDS.B, RIO, SNE, SNY, STO, SYY, TOT, TSM, UL, UN, VOD, WDC

 

For more information about Waverly Advisors please click here.

2015-03-31 11:36:19

Posted by
Russ Koesterich, CFA
Managing Director
Global Chief Investment Strategist
BlackRock
Contributor

Stocks

Beware Momentum Stocks in Sheep's Clothing

Weekly Commentary Overview

  • Stocks lost ground last week, despite some positive news: The announcement of the largest merger of the year between Heinz and Kraft and more evidence of economic improvement in Europe. Nonetheless, most global benchmarks were down between 1% and 2%.
  • Investors continue to wrestle with disappointing  U.S. economic numbers—last week it was a weak durable goods report—and soft company earnings.
  • Not surprisingly, as stocks corrected, volatility spiked. While volatility remains below the long-term average, it is on the rise from last summer’s historically low levels.
  • Financial market volatility has been on the rise due to slower economic growth, disappointing earnings and anticipation of an eventual rate hike by the Federal Reserve. Meanwhile, there may be a potentially bigger risk lurking that investors seem to be dismissing for the time being: Greece.
  • The recent sell-off and pickup in volatility serve as a useful reminder of the risks lurking in some areas of the market. This was particularly true among the so-called momentum stocks, like biotech—as well as some sectors, like utilities, that have been acting that way.

Stocks Struggle as U.S. Economy Continues to Disappoint

Stocks lost ground last week, despite some positive news: The announcement of the largest merger of the year between Heinz and Kraft and more evidence of economic improvement in Europe. Nonetheless, most global benchmarks were down between 1% and 2%.

In the U.S., the S&P 500 Index fell 2.23% to 2,061, the Dow Jones Industrial Average dropped 2.29% to 17,712, and the Nasdaq Composite Index lost 2.69% to close the week at 5,026. More signs of investor skittishness: For the week ended March 25, investors withdrew $11 billion from equity funds. As for bonds, the yield on the 10-year Treasury rose slightly from 1.93% to 1.96% as its price correspondingly fell.

Investors continue to wrestle with disappointing U.S. economic numbers—last week it was a weak durable goods report—and soft company earnings. But while the losses were across the board last week, the recent sell-off and pickup in volatility serve as a useful reminder of the risks lurking in some areas of the market. This was particularly true among the so-called momentum stocks—as well as some that have been acting that way.

Hello Again, Volatility

Not surprisingly, as stocks corrected, volatility spiked. While volatility remains below the long-term average, it is on the rise from last summer’s historically low levels. Last week the VIX Index, a common measure of stock market volatility, traded as high as 17, which was 35% above the week’s low. We see a similar phenomenon in bond markets, where volatility has pulled back somewhat from the February high, but is up around 65% from last summer’s lows, as measured by the MOVE Index.

Financial market volatility has been on the rise due to somewhat mundane issues: slower economic growth, disappointing earnings and anticipation of an eventual rate hike by the Federal Reserve (Fed). Meanwhile, there may be a potentially bigger risk lurking that investors seem to be dismissing for the time being: Greece.

Last week, investors looked past Greece’s unresolved issues and bid up Greek bonds. However, time is running out for the country, which faces a serious cash crunch as early as April 9 when it is scheduled to make a 400 million euro payment to the International Monetary Fund. It is still not clear where the money to make the payment might come from.



In order to unlock previously agreed upon loans from the European Union, Greece must submit a comprehensive proposal of economic and structural reforms, which it has yet to do. Even if the government does manage to submit an acceptable set of reforms, it is not clear that the governing coalition will be able to hold together and get the reforms passed by the Greek parliament.

In short, Greece could be facing a serious crisis. Yet there is little evidence that investors are overly concerned about the potential ramifications: that Greece might exit the eurozone or the risks spread to peripheral countries. While a Greek exit is still not our base case scenario—another last minute compromise is the most likely outcome—the risks are rising. With volatility still below average, there is a lot of room for it to rise should there be an actual catalyst.

Caution on Momentum Stocks of All Shapes and Sizes

Greece aside, the rise in volatility represents a relatively normal adjustment. And while an uptick in volatility doesn’t herald an end to the bull market, it does imply that investors may want to revisit their investment positioning.

Last week was illustrative. The rise in volatility had a predictable impact: Stocks that are most expensive and have been driven by momentum were the hardest hit. One case in point is biotech. Through the close of the week ended March 20, the Nasdaq Biotech Index had surged 20% year-to-date. Last week, despite the relatively modest pullback in stocks, the Nasdaq Biotech Index fell roughly 5%.

Biotech is an obvious example of the momentum trade. It is a high “beta” or risky industry that has been a strong relative performer for many years. But there are also less obvious momentum names. As we have pointed out in recent weeks, yield plays were some of the best-performing stocks last year. While investors don’t typically think of these as “momentum” names, their relative valuations are stretched and, like biotech, they have benefited from a steady stream of money into the space. These stocks—utilities, for example—warrant caution as well.
 

 

This article is from BlackRock and is being posted with BlackRock’s permission. The views expressed in this article are solely those of the author and/or BlackRock and IB is not endorsing or recommending any investment or trading discussed in the article. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

2015-03-31 11:28:00

Posted by
Barron's

Contributor

Options

Options Trading Bullish on Banks

How and why institutional investors are betting that the financial sector will turn around by year end.

 

Institutional investors that own major financial stocks are trading January options in anticipation that year-to-date weakness will turn into strength by year’s end.

With Morgan Stanley (ticker: MS) at $35.62, investors are selling January $32 puts. With Goldman Sachs (GS) at $186.78, top positions are January $205 calls, January $210 calls, and January $150 puts. Investors seem to be buying Goldman’s January upside calls and selling puts. With Bank of America (BAC) stock at $15.42, investors are buying January $17 calls. And positions in Citigroup (C), at $51, include the January $55, $60, and $65 calls.

The selection of contracts that expire in January represents a significant change in the sector’s usual trading tempo. In the past, investors primarily traded short-dated options to speculate on near-term stock events, such as quarterly earnings or Federal Reserve stress tests that would determine if banks could increase dividends and stock buyback plans. Options that matured over several quarters were rarely used to express fundamental views because too much could happen to roil the trade.

But investor confidence seems to be improving ahead of first-quarter earnings, even as banks trade relatively poorly. This is prompting some investors to use options to take a longer view.

The financial sector is down about 1% this year. Many top financial stocks, including Bank of America, Citi, Goldman, and Morgan Stanley are down even more. The sector is one of 2015’s worst-performing groups in the Standard & Poor’s 500. Only utilities and energy have fared worse, though the financial sector looks to be on the cusp of trending higher into mid-April earnings reports.

To be sure, the financials have been in sweet spots many times over the past few years, only to disappoint investors. But this time could be more than another head fake, just as many investors are having a hard time finding what they want.

The financial sector trades around 14 times earnings, compared with 17 times for the S&P 500. Financial earnings growth is expected to accelerate, creating a perfect storm for patient value investors and aggressive growth investors. Value investors are having a tough time paying 17 times earnings for stocks, and growth investors are queasy with the inventory of stocks offering 10% or more earnings growth.

MKM Partners, an institutional brokerage firm, is telling clients that composite bulge-bracket earnings should rise 19% in the first quarter, compared with the previous quarter, and up 8% from the year-ago period. Banks just received Fed permission to raise dividends and buy back shares, essentially reversing decisions unfriendly to shareholders from the financial crisis.

The January expiration captures several critical events that could boost bank stock prices, including several earnings reports. Should the Fed raise rates this year, the yield curve would actually resemble its name, and bank profits would increase.

ELSEWHERE IN THE MARKET, some pricing quirks have formed that let investors express bullish or bearish views without paying fear or greed premiums. Call options on the SPDR S&P 500 exchange-traded fund (SPY) that expire in 90 days are near the lowest level of the past five years.

By selling one S&P 500 put with a three-month expiration and a strike price 10% below the current market, it is possible to buy 11 calls with similar specifications, Credit Suisse is telling clients.

Investors who want to hedge stocks should consider the iShares Russell 2000 (IWM). The implied volatility of IWM options that expire in one month is at the lowest level in 10 years. Investors who want to hedge U.S. stocks should buy IWM puts, Credit Suisse says, because they are much cheaper than SPY puts.

 

Get investing analysis that moves stocks and markets—Subscribe to Barron’s for just $1 a week.

This article is from Barron’s and is being posted with Barron’s permission. The views expressed in this article are solely those of the author and/or Barron’s and IB is not endorsing or recommending any investment or trading discussed in the article. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

2015-03-31 11:15:05

Posted by
Andrew Wilkinson
Chief Market Analyst
Interactive Brokers
Contributor

Macro

Conference Board consumer confidence

Despite negative news out of Chicago on the manufacturing side of the US economy, consumers appear to believe the outlook is set to improve. According to the Conference Board, consumer sentiment improved with its index jumping to 101.3 in March, rebounding from an upwardly revised reading of 98.8 in February. Economists surveyed by Bloomberg anticipated no change in confidence this month. Curiously, consumers see better times by the end of the summer, but are a little cooler about the current situation. The present index eased back a little, while the expectations gauge (six months’ time) rebounded. The so-called labor differential, which measures consumers’ attitude towards the labor market, remained unchanged at -4.8. This index subtracts those seeing jobs as hard to get from those who see jobs as plentiful. As the labor market improves, the number becomes less negative. By this measure the labor market is in decent shape, but arguably running on ice. What is hard to separate from the mood of consumers is whether their perceptions are affected by prospects for income or inflation. More consumers expect to see income increase in coming months (18.4 versus 16.4) while those expecting income to decrease fell (9.9 versus 10.8). Consumers also expect inflation to be running at 5.2% in one year compared to 5.0% last month. They are well ahead of the muted level of actual inflation. More consumers expect to buy used autos in the next six months, while fewer expect to buy new cars. Fewer people expect to buy homes in the next six months, whether new or previously-owned. Overall, the report is a positive assessment of the health of the economy and is a comfortable rebuttal to the negative content within the Chicago manufacturing report.   

Chart – Consumer confidence rose in March, as attitudes towards employment remained buoyant

2015-03-31 11:14:32

Posted by
Jamie Lissette
Trading Analyst
Hammerstone Group
Contributor

Stocks

Sector News Breakdown

Consumer

  • Conn’s (CONN) Q4 EPS 42c/$426.7M vs. est. 64c/$420.6M; 4Q comp sales up 1.3% vs. est. up 0.4%; board authorizes mgmt. to “actively pursue” sale of all or portion of loan portfolio, or other refinancing of loan portfolio
  • Elon Musk says Tesla (TSLA) China sales rise 130%-150% in March MoM
  • D.R. Horton (DHI) upgraded to positive from neutral at Susquehanna & raise tgt to $34 from $22
  • Books-A-Million (BAMM) Q4 EPS ex-items $1.28 on revs $160.8M
  • Tata Motors (TTM) filed automatic mixed securities shelf

Energy

  • Vaalco Energy (EGY) says Kindele-1 well on Block 5 offshore Angola in process of being plugged and abandoned after objective reservoir found to be water-bearing
  • World Point Terminals (WPT) downgraded to Underperform from Neutral at Credit Suisse

Financials

  • Blackstone Group LP (BX) agreed to pay more than $1.2 billion to a consortium led by Paulson & Co. for three large hotels in Orlando, Fla., and Scottsdale, Ariz. http://goo.gl/o7Q3yq
  • CyrusOne (CONE) files to sell 12.2M shares of common stock

Healthcare

  • Intercept (ICPT) files to sell 1.2M shares of common stock
  • Teva Pharmaceuticals (TEVA) upgraded to Outperform at Oppenheimer
  • Coherus Biosciences (CHRS) files to sell $100M in common stock
  • Trillium Therapeutics (TRIL) files to sell $50M in common stock
  • Insmed (INSM) files to sell 10M shares of stock
  • Synta Pharmaceuticals (SNTA) files to sell common stock, no amount given
  • Raptor Pharmaceuticals (RPTP) files automatic proposed offering of $75M in shares
  • Cerulean (CERU) plans $50M stock offering
  • Analogic (ALOG) CFO Levitz Resigns to accept CFO Role at Insulet (PODD)
  • HCP upgraded to Buy from Neutral at UBS

Industrials & Materials

  • Teck (TCK) reports that it is not in discussions with Antofagasta in relation to any form of transaction, and there are no other corporate developments that justify any significant movement in its share price http://goo.gl/TzizhR
  • Koninklijke Philips (PHG) has sold a majority stake in its light-emitting diode components and automotive-lighting activities to a private-equity consortium in a deal that values the business at about $3.3 billion http://goo.gl/qbKZri
  • Mosaic (MOS) announced that the expected impact from the recent changes in Saskatchewan's Potash Production Tax, or CRT, calculation will increase the company's 2015 CRT pre-tax payments by $80M-$100M
  • Axalta Coating (AXTA) files to sell 35M shares for affiliates of The Carlyle Group
  • DryShips (DRYS) to Sell 4 Suezmax Tankers for $245M; may also sell 6 Aframax tankers for $291M; under Suezmax deal, buyers to pay 20% upfront to DRYS, balance due on delivery; says seals may generate additional $150M free cash
  • Note the WASDE ag report due later today (12:00 PM ET); Bloomberg estimates planting average estimates: corn: 88.9m acres (prior 91.7m acres), soybeans: 85.9m, (prior 81.5m), and wheat: 55.7m, (prior 55.8m)

Media & Telecom

  • U.S. cable T.V. operator Cablevision Systems Corp (CVC) is planning to make an offer for the New York Daily News as early as this week, valuing the troubled tabloid at just $1, according to a person familiar with the matter http://goo.gl/RUUR6W
  • The value of the mid-band spectrum given by AT&T (T) to T-Mobile (TMUS) as part of their failed bankruptcy proceedings has risen from $1B in 2012 to an estimated $4.7B in the wake of the recent spectrum auction, reports the Wall Street Journal http://goo.gl/pdRFXH
  • Media General (MEG) files to sell 6.8M shares

Technology

  • International Business Machines Corp. (IBM) said it will invest $3 billion over four years on a new business helping customers gather and analyze the flood of data from sensor-equipped devices and smartphones
  • Private equity firms KKR & Co LP and Hong Kong-based Anchor Partners are in talks to buy a majority stake in Groupon Inc.'s (GRPN) South Korean unit for around 350 billion won ($316 million) http://goo.gl/Apm17n
  • Priceline (PCLN) upgraded to Buy from Hold at Stifel
  • Palo Alto Networks (PANW) boosts gross margin target to 75%-78%; still sees operating margin 22%-25% on same timeline and reaffirms FY2015 capex view $45m-$50m

 

The content of this post was created by the Hammerstone Group. The Hammerstone Institutional Forum, a chat-based platform for traders, provides subscribers with up-to-the-minute breaking news headlines and instant analysis that drive the market. For more information please visit www.thehammerstone.com. For more information on the stocks mentioned in the Hammerstone Recap, please contact Brian Ducey at brian@thehammerstone.com.

 

This article is from The Hammerstone Group and is being posted with The Hammerstone Group’s permission. The views expressed in this article are solely those of the author and/or The Hammerstone Group and IB is not endorsing or recommending any investment or trading discussed in the article. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

2015-03-31 10:34:51

Posted by
Andrew Wilkinson
Chief Market Analyst
Interactive Brokers
Contributor

Macro

Chicago PMI fails to inspire

The March reading of PMI failed to rebound by as much as economists surveyed by Bloomberg ahead of the report had indicated. The headline index of 46.3 was barely an improvement on the February reading of 45.8 remaining below the 50.0 line separating expansion from contraction. The forecast reading was 51.7. In February the index slumped into contraction territory for the first time since April 2013 driven by the impact of the West Coast strike and the harsh winter weather. At the time the New Orders index suffered its largest monthly decline on record. In the current report most of the affected sub-indices improved. At 50.5 the three-month rolling average level for the index is suddenly struggling to depict expansion and does not offer support for a positive first-quarter growth report due at the end of April. One suspects that activity remains subdued on account of the weather and lingering impact of port strikes. However, the lack of rebound and failure to match economists’ expectations will not go unnoticed.

Chart – Chicago manufacturers just didn’t see the expected rebound

2015-03-31 09:11:53

Posted by
Jamie Lissette
Trading Analyst
Hammerstone Group
Contributor

Stocks

The Hammerstone Report

U.S. equity futures are lower after posting strong gains on Monday on monetary easing comments (in China) and M&A activity, but declining this morning as investors await the outcome of the Iranian nuclear talks (deadline was today). Iran and six global powers set Tuesday as the deadline to agree on a framework agreement that would outline the main elements of a deal constraining Iran’s nuclear program in exchange for lifting international sanctions. Oil prices are lower ahead of this deadline, with Brent crude down over 2% to $55 per barrel, while WTI crude futures drop below yesterday’s intraday low print (currently $47.57)

In Asian markets overnight, The Nikkei Index fell 204 points (or 1%) to close at 19,205, the Shanghai Index fell 38 points (or 1%) to 3,747, and the Hang Seng Index rose 45 points to 24,900. European stock markets are lower after jobs data showed unemployment this year is higher than previously expected. The main benchmarks, however, stayed on track to log their best quarterly gains in years, with Germany’s DAX 30 index eyeing its best quarter since 2003.

U.S. stocks advanced on Monday, with the main indexes booking solid gains for the second straight session, driven by dovish comments from China’s central-bank chief as well as a continued flurry of deal announcements. Data was mixed; oil prices fell, but recovered off the lows, as global markets opened the week in positive fashion.

World News

  • The EuroZone inflation rate improved in March to negative (-0.1%) from negative (-0.3%) the previous month, easing fears of deflation in the currency union
  • EuroZone unemployment rate for February came in at 11.3%, higher than the forecast of 11.2%; the joblessness rate for January was also revised up to 11.4%, from 11.2% reported previously.
  • The U.K. economy grew at a faster-than-expected pace in 2014, confirming that the country was the top growth performer in the Western world last year. Gross domestic product for the full year was revised up to 2.8%, from 2.6% reported previously
  • Greek Prime Minister Alexis Tsipras told Greece’s parliament late Monday they would not give in unconditionally to the economic overhauls demanded by its creditors. Greece is at risk of running out of cash in April unless it receives fresh funding

 

The content of this post was created by the Hammerstone Group. The Hammerstone Institutional Forum, a chat-based platform for traders, provides subscribers with up-to-the-minute breaking news headlines and instant analysis that drive the market. For more information please visit www.thehammerstone.com. For more information on the stocks mentioned in the Hammerstone Recap, please contact Brian Ducey at brian@thehammerstone.com.

 

This article is from The Hammerstone Group and is being posted with The Hammerstone Group’s permission. The views expressed in this article are solely those of the author and/or The Hammerstone Group and IB is not endorsing or recommending any investment or trading discussed in the article. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

2015-03-31 02:58:54

Posted by
Darren Chu, CFA
Founder
Tradable Patterns
Contributor

Technical Analysis

Wheat (ZW) Approaching Horizontal Resistance on Daily Chart

ZW powered ahead yesterday to within striking distance of a horizontal resistance line (seen on the daily chart).  Importantly on the weekly chart, a double bottom has held, and ZW appears readying to challenge horizontal resistance at roughly 565 in the next week or so.  Weekly RSI, Stochastics and MACD, along with daily and 4hr MACD are all bullishly turning up, while daily and 4hr RSI and Stochastics consolidate the gains over the last 2 sessions.

 

Wheat (CME ZW May15) Weekly/Daily/4hr/Hourly

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