Good morning. Happy Friday. Happy New Years.
The Asian/Pacific markets closed mostly up. China rallied 2.1%, followed by India (up 1.4%), Hong Kong (up 1.1%), South Korea (up 0.6%) and Australia (up 0.5%). Japan dropped 1.6%, and Malaysia fell 0.5%. Europe is currently mixed. Austria, Prague and Greece are up more than 1%; Italy and Spain are also doing well. Russia is down 2.5% and Switzerland and Germany are down 0.6%. Futures here in the States point towards a moderate gap up open for the cash market.
The dollar is up. Oil is down, copper is down. Gold is down, silver is up.
Today feels like a Monday because of the time off and slow market on Wednesday, but it’s Friday. Many traders will still be out, so I wouldn’t expect things to fully get back to normal until next week.
The market ended 2014 with two down days which pulled the market off its highs. Several indexes hit new all-time highs just a couple days ago, and given the run off the mid-December low (S&P rallied 7 of 8 days and moved up about 120 points), a low-volume drop isn’t anything to be concerned with…yet.
The indicators are supportive of the bull’s case.
Unfortunately we don’t have a big basket of very good set ups. We’ve had some good trades the last month, but we don’t have our typical list of set ups to choose from. That’s what happens when the market goes straight down and then straight up. Charts in both directions get blown out, and we’re left with a near term bias and trend but not many textbook set ups to play with. Oh well. The market needs to move around a little to allow the charts to reset.
In my opinion the lead story heading into 2015 is still oil and oil stocks. Crude can hit a little downside air pocket and quickly drop to 45 (from its currently level near 52.5), or the recent weakness could be a trap before crude pops into the 60’s. Oil stocks, being very sensitive to the underlying commodity, could rally 20% in the next couple weeks or get hit hard. For short term trades who want movement, oil is where it will be to start the year.
Otherwise we’ll have to be patient because there aren’t a lot of good looking charts to play. More after the open.
Stock headlines from barchart.com…
Macau reported that December casino revenue fell -30.4%, affecting companies in the Macau gaming industry such as Las Vegas Sands (LVS -0.56%), MGM Resorts (MGM -0.33%), Melco Crown (MPEL -0.51%) and Wynn Resorts (WYNN -1.61%).
Signet Jewelers (SIG +0.14%) Kate Spade (KATE +0.13%), and Sally Beauty (ABH) were named as top picks at Sterne Agee.
LINN Energy (LINE +0.40%) provided its outlook for 2015 and announced a strategic partnership with GSO Capital Partners.
Main Street Capital reported a 21.4% stake in Glowpoint (GLOW unch) .
MiMedx (MDXG +3.97%) slid over 10% in after-hours trading after it announced that it has received a subpoena from the Office of Inspector General of the Department of Health and Human Services in connection with a civil investigation.
Deerhill Management reported a 5.25% passive stake in State Investors Bancorp (SIBC +34.90%) .
Cormorant Global Healthcare reported a 5.13% passive stake in Ardelyx (ARDX -0.74%).
Earnings and Economic Numbers from seekingalpha.com…
Today’s economic calendar:
9:45 PMI Manufacturing Index
10:00 ISM Manufacturing Index
10:00 Construction Spending
11:00 Global Manufacturing PMI
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
Notable earnings before today’s open: none
Notable earnings after today’s close: none
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers
0 thoughts on “Before the Open (Jan 2)”
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Japan having problems with national income, wants loans to be offered for next TWO years. Looks problematic, consumers look reluctant to spend. Same in China, even gambling in Macau?? Weak. Europe is dragging and Draghi is saying EU needs structural reform and some QE for very weak EU banks. The hope is that the US is in better shape. I doubt that we need exports…. but to whom??, so Caution for now.
Holding dividend portfolio (+20% 2014). Core market positions IWM, QQQ, VTI, (+9% 2012,) add bonds + 20% CASH. I WILL DEVOTE all CASH to Leavitt Bros picks 2015. Yes, I am a little Chicken. Best.
2014 Returns from ETFreplay.com…………………../////….. ETF winners;; below losers
ASHR
Deutsche X-Trackers CSI 300 China A Shares
+51.3%
ZROZ
PIMCO 25+Yr Zero Coup US Tsy (25+yr)
+48.7%
FBT
First Trust NYSE Arca Biotechnology Index
+47.5%
XBI
SPDR S&P Biotech ETF
+45.0%
EDV
Vanguard Extended Duration Tsy (25+yr)
+44.7%
PEK
Market Vectors China 300 A-Shares
+44.6%
SCIF
Market Vectors India Small-Cap Index ETF
+42.4%
JO
iPath DJ-UBS Coffee
+40.5%
PBE
PowerShares Intellidex U.S. Biotech-Genome
+36.3%
REZ
iShares FTSE NAREIT Residential Index
+35.2%
Year-To-Date Performance Laggards————–/////————— losers 2014
2014 Return
BNO
United States Brent Oil Fund
-49.0%
RSX
Market Vectors DAXglobal Russia
-47.2%
OIL
iPath S&P GSCI Crude Oil
-45.8%
ERUS
iShares MSCI Capped Russia
-44.7%
DBO
PowerShares DB Oil Fund
-43.3%
UGA
United States Gasoline Fund
-43.0%
USO
United States Oil Fund LP
-42.4%
FCG
First Trust ISE-Revere Natural Gas Equity
-42.0%
DBE
PowerShares DB Energy Fund
-40.1%
GREK
Global X FTSE Greece 20
-40.0%
data through: Dec 31, 2014 Courtesy of ETFreplay.com
How stocks perform in the first 5 days of the new year is a barometer to the overall stock market and within the SP500’s 10 sectors and 130 industries. The old school saying ‘As Goes January, So Goes the Year’. Statistical and historically speaking the last 41 up ‘first 5 days’ were followed by full-year gains 35 times for an 85.4% accuracy rate and a 14% average gain in all 41 years, according to the Stock Market Almanac. In contrast, following the last 23 times stocks were down in the first 5 days of the year, the market finished down 11 times(a 47.8% accuracy rate) and posted average gains of just 0.2%, according to Almanac data. *In pre-presidential election years this indicator also has a solid record. In the last 16 pre-presidential election years the stock market’s full-year performance followed the direction of the first 5 days 12 times, or 75% of the time. Just a quick glance food for thought.