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Need to Know
MAY 24, 2013
6 gut checks before the stock
market's opening bell
By Barbera Kollmeyer
Good
morning.
That wild Japan stock ride kept going on Friday, likely leaving some pretty
exhausted Tokyo traders just wishing they had a long
weekend ahead. From IG Market's Chris
Weston : "My poor Japanese equities/futures desk!!"
Maybe we can live without the Jet Star rollercoaster after all.
Wall Street, meanwhile, was looking jittery a day after brushing off that
huge Nikkei plunge. Maybe we should relax this Memorial Day weekend (there's an app for that ), but then again,
maybe not."Wall Street traders are bailing out," says the SentimenTrader's Smart Money/Dumb Money Confidence
index . "It remains to be seen if they are moving ahead of
a small, 5% correction or something much worse, but they see something bad
coming."
"Something bad?" Doesn't sound good, though Humble Student of the Market says bulls
should get the benefit of the doubt.
Key market gauges:The Nikkei did this: rose 3% early
in the day, then fell just as hard thanks to comments from BOJ Gov.
Kuroda's. The battered Nikkei finished up 0.9%. St. Louis Fed
President James Bullard, who seems happy to keep chattering this week, told
CNBC that "it's a big moment for Japan," and relax already over
the volatility panic. No worries, Jim, we're watching the horse mackerel indicator .
The Hang Seng eased 0.2% and the Shanghai Composite rose 0.6%.
Outside of Asia, Europe stocks failed to get much lasting lift from
an upbeat Ifo business-climate index .
That's because futures for the Dow and the S&P are
dipping. Pre-holiday jitters are part of that.
The economy: Durable-goods orders surprised on the
upside. Orders for big-ticket U.S. goods jumped 3.3% in April, led by
higher demand for aircraft, military wares and autos. Economists expected
the data to rise 1.4%. Stripping out the volatile transport sector, orders
rose a smaller 1.3%.
The buzz: Sears was down 12% in premarket trading. A
day prior, the retailer announced big losses and weaker margins and
revenues. Seems investors agree with CEO Edward Lampert's "not
acceptable," comment about those results.
Also getting dinged, Abercrombie & Fitch shares are down 9% in
premarket trading after earnings and sales disappointed. "It's
official. Teen space sucks," says @Retail_guru
.
Among techs, Pandora Media and Marvel Tech rose 11% and 6%,
respectively, after respective results released late the prior day.
And Google may be headed for a bidding war with Facebook
over map-software maker Waze.
Activist hedge-fund manager Bill Ackman, meanwhile, has gotten his way , after Procter &
Gamble replaced Chairman and CEO Bob McDonald with its former chief.
Call of the day:
Back to
Japan again, sorry. Tossing in his two-cents worth, NY Times columnist Paul Krugman says it's
too soon to tell if Abenomics are working, but "early signs are
good" and no, Thursday's sharp drop in Japan stocks did nothing to
change that. Among those green shoots he sees: surprisingly rapid growth in
the first quarter of the year, soaring stocks (at least up to Thursday) and
rising interest rates. "In a sense, the really remarkable thing about
'Abenomics'...is that nobody else in the advance world is trying anything
similar. In fact, the Western world seems overtaken by economic
defeatism," says Krugman.
Bonus call: Gold and silver mining investors, here's your next move .
Random reads:
Bridge collapses north of Seattle Thursday
night, sending cars and people into the water, but, thankfully, no
fatalities so far.
A
magnitude 8.2 earthquake hit Russia's Far East in the Sea
of Okhotsk (pronounced howjsay for all you
smarties out there). But no one felt a thing as it was 385 miles deep.
This Midwesterner would like some good news. This works: A woman dies, has a baby, then comes back to life.
Oh, and to distract you from things that really matter, guess who got arrested for possession and felony bong
tossing ?
One last one. My London colleague looks at how Germany has moved from economic dominance
to soccer kingdom.
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