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Need to Know
MAY 23, 2013
6 gut checks before the stock
market's opening bell
By Shawn Langlois
Good
morning.
Taper? You've hardly fixed her. Investors know the day will come, but they
clearly aren't ready for a world without the Fed's cash hose.
Ben Bernanke's ominous "in the next few meetings" comment
triggered a nasty reversal in the U.S. markets yesterday that was soon to
be upstaged by the much more extreme version in Japan this morning. The
sellers don't seem to have gotten their fill just yet, either. It's abysmal
out there. Everywhere.
Together, the world's two biggest stock markets, which account for a
whopping 42% of global market cap , served a
double-barreled reminder of just how quickly investor mood can shift, no
matter how bulletproof the market appears to be.
The good news is that we'll be able to forget about it for an extra day
this weekend. The historical odds are we could get back to making money,
barring some other unforeseen twist. All five days surrounding Memorial Day
have averaged gains, albeit small ones, dating back to 1971, according to the Stock Trader's Almanac .
Key market gauges: Like it's been doing a lot lately, the
Nikkei one upped the Dow with its performance today. After an initial 2%
rise, the Japanese benchmark seppuku'd its way to its biggest drop in more than two years to
end down a staggering 7.3%. Economy minister Akira Amari isn't sweating the drop .
An unexpected contraction in Chinese manufacturing hit the Hang Seng
and the Shanghai Composite . Europe isn't faring much better, with a
big drop on Italy's FTSE MIB pacing a broad pullback.
And as often happens after a big snapback to the downside, futures on the
Dow and the S&P are setting up to extend yesterday's
losses. Read: Stock futures slide, rattled by Fed, China data
.
The economy: After Wednesday's mania, today's slate of data
is rather anticlimactic. But that doesn't mean it's not worth paying
attention to. First off, the number of people who applied for new
unemployment benefits fell by 23,000 to 340,000 , keeping the level
in a range consistent with modest job growth. Economists had expected
claims to drop to a seasonally adjusted 343,000. The average of new claims
over the past month, a more reliable gauge than the volatile weekly number,
edged down by 500 to 339,500. That's just above a five-year low.
Also on tap, the U.S. Department of Commerce will post data on new
single-family home sales. Economists are targeting a rise to an annual rate
of 430,000 in April from a rate of 417,000 in March. In between the
two, there will be another housing report and Markit's flash manufacturing
purchasing managers index for May. Read: Spotlight on the economy .
Oh, and the Fed's James Bullard regurgitated his views from Tuesday.
The buzz:Ford is in the spotlight this morning after
the company said it will stop building cars in Australia in 2016, resulting
in job losses and delivering a painful blow to a government
that's been spending big to prop up its auto industry. Crossing Wall
Street's Eddy Elfenbein says he thinks Ford is a $20 stock .
Chinese ADR YY Inc. is trending on StockTwits after the stock plunged
16% yesterday on a huge surge in volume. Joining YY on the watch list are
Goldman Sachs , Apple and Sony , which has been thrust into the news
lately because of Dan Loeb's spinoff plan .
Also on the radar, Hewlett-Packard , a rare advancer this morning, is up
13% premarket on its strong report yesterday , while Sears
and Gap highlight today's spate of earnings. Read: Stocks to watch .
The chart of the day: This could be "the most bullish
pattern Apple has created in years," according to the Kimble Charting
Solutions blog. Fresh off his timely call of an Apple turnaround a
month ago, the blogger said he sees a bullish inverse head-and-shoulders
pattern forming. If Apple breaks above $465, consider it confirmed.
The
call of the day: Tesla has been smothered
with love from longs and loathing from shorts this year as the stock has
been unstoppable. But Gregory Vousvounis says to enjoy it while it lasts because the
company's "glory days will be few as bigger competitors are already
catching up." He specifically pointed to big-pocketed players like
Daimler and Toyota. "Tesla isn't a long-term play," he writes.
"It has no protection against competitors and there are many of them
out there with the means to hit it hard." He likened the scenario to
what happened to Apple when Samsung reared up. In premarket trading, Tesla
shares are down 3.4%.
Random reads: All New York City Football Club needs now is
"a washed up old star." What about Wayne Rooney? Or any one of these candidates ?
The headlines lately have been littered with beheadings, tornados,
kidnappings, shootings ... as if the Mayans were just a bit off on their
target date. So here are 31 charts compiled by Business Insider
that will "restore your faith in humanity." And the internet
thanks you for putting them all on the same page.
Here's the nerdy details you might have missed
amid the Xbox hoopla. You had me at "eight 64-bit cores, 8GB of
high-speed RAM, and an on-chip GPU with built-in sRAM."
Sabrina Brady, the 12th-grade winner of Google's 2013 doodle competition . And this
coffee artist should win something if he hasn't already.
Fake Psy -- or "Psych", as the New York Post calls him -- gets the full red-carpet treatment in Cannes
... until some "real" rapper had to spoil all his fun.
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