Need to Know
JUNE 13, 2013
6 gut checks before the stock market's opening bell
By Shawn Langlois
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Good morning.
It's streaky out there, and not in the "yay, it's Tuesday!" kind of way.
Rather, the Dow just posted its first three-day losing streak of the year, Europe is looking at four-in-a-row, and the mercurial Nikkei closed with a seventh straight Thursday in the red.
The stomach-flipping drop on the Japanese benchmark brings the decline from its peak last month to about 21%. A retreat of more than 20% is generally considered to be bear market territory. So what are investors to do with their unwinding Japan bets?
Well, buy, buy and then when you're done, go ahead and buy some more, if Nomura's call for a 45% surge on the Nikkei is any indication (more on that below). With the way the world's markets are shaping up this morning, that sounds about as likely as catching a fly with chopsticks . The latest reason to run for cover comes from the World Bank's move to lower its global economic-growth forecast.
Key market gauges: Setting the tone, the Nikkei plunged 6.4% to close at 12,445.38 in its lowest finish since the day before the Bank of Japan rolled out its stimulus plan. The dollar tumbled against the yen, which one analyst said may force "the U.S. Fed to reconsider its tapering plans in the face of a global sell off." It was a rude return for investors in Chinese markets after the three-day holiday, as the Shanghai Composite shed about 3%.
In Europe , the selling isn't quite as bad, but it's certainly widespread. Of note, Germany DAX 30 is trading below the 8,000 level for the first time since early May. It doesn't look like U.S. markets will do much to lift the gloom, either. Futures on the Dow and the S&P are showing no signs of a rebound ahead of the bell. Read: Futures track global rout .
The economy: U.S. retail sales likely got a boost from stronger car purchases while weekly jobless claims are seen to have moved higher. We'll get the numbers on both at 8:30 a.m. Eastern, along with the import price index for May. Later in the day, the Commerce Department will report business inventories. Read: Spotlight on economy .
The buzz: Google is back in the news after a U.K. committee said this morning that the "don't be evil" company has aggressively shirked its tax obligations and won't have its reputation restored until it makes good on its debt.
Public Accounts Committee report shows Google goes to extraordinary lengths to avoid paying its share of tax in Britain. It needs to change.
— Ed Miliband (@Ed_Miliband) June 13, 2013
Apple speculation is running rampant on a report the company is mulling bigger screens for its iPhone, as well as cheaper models in a range of colors.
On a day that will probably focus more on the macro, H&R Block and SeaWorld could pop up on the radar along with Restoration Hardware , which is slated to post its quarterly results. Read: Stocks to watch .
The chart of the day: During sketchy market times like these one might take solace in the fact that equity markets absolutely destroy all other asset classes over the long-term. And in this case, by long-term, I'm talking about 163 years, give or take. This shouldn't come as a surprise to any long-toothed investor, but this stretched timeline, and the degree of the outperformance, is worth a look. Also, check out how they're all at or near all-time highs, except the 10-year, which would be, if the price had been used instead of the yield. (Click here for a better look at the original chart) .
The call of the day: While everybody else is lamenting the arrival of Japan's latest bear market, Nomura Equity Research just raised its target for the Nikkei to 18,000 from 16,000. Don't laugh, it's true. "We think the full impact of Abenomics on capex and household incomes has yet to be felt, which means that there are still substantial investment opportunities in these areas," the analysts wrote in a note earlier today.
Nomura raises YE Nikkei target from 16k to 18k, which leaves me with the vision of analysts in grey suits, sequined miniskirts and pom-poms
— Five Minute Macro (@5_min_macro) June 13, 2013
Random reads: "The fish came in and began eating the bodies . I could hear the sound." All of a sudden, being late to the short-yen party doesn't sound so bad.
Meet General Keith Alexander, the man in charge of U.S. cyberwar efforts. He's built a secret army and "now its ready to unleash hell."
"Going to the movies is going to cost you 50 bucks, maybe 100. Maybe 150," says George Lucas, a guy who knows a thing or two about the business.
Lionel Messi used Apple's trick in cutting his tax bill .
A week spent hanging out out with North Korea's hockey team . In South Africa. Playing against the likes of Greece, Luxembourg and the United Arab Emirates.
If one-faced kittens are click magic, what about the ones with two faces ?
Need to Know starts early and is updated as needed until the opening bell, but sign up here to get it delivered once to your e-mail box. Be sure to check the Need to Know item. The e-mailed version will be sent out at approximately 8:45 a.m. Eastern. Follow @slangwise on Twitter.
It's streaky out there, and not in the "yay, it's Tuesday!" kind of way.
Rather, the Dow just posted its first three-day losing streak of the year, Europe is looking at four-in-a-row, and the mercurial Nikkei closed with a seventh straight Thursday in the red.
The stomach-flipping drop on the Japanese benchmark brings the decline from its peak last month to about 21%. A retreat of more than 20% is generally considered to be bear market territory. So what are investors to do with their unwinding Japan bets?
Well, buy, buy and then when you're done, go ahead and buy some more, if Nomura's call for a 45% surge on the Nikkei is any indication (more on that below). With the way the world's markets are shaping up this morning, that sounds about as likely as catching a fly with chopsticks . The latest reason to run for cover comes from the World Bank's move to lower its global economic-growth forecast.
Key market gauges: Setting the tone, the Nikkei plunged 6.4% to close at 12,445.38 in its lowest finish since the day before the Bank of Japan rolled out its stimulus plan. The dollar tumbled against the yen, which one analyst said may force "the U.S. Fed to reconsider its tapering plans in the face of a global sell off." It was a rude return for investors in Chinese markets after the three-day holiday, as the Shanghai Composite shed about 3%.
In Europe , the selling isn't quite as bad, but it's certainly widespread. Of note, Germany DAX 30 is trading below the 8,000 level for the first time since early May. It doesn't look like U.S. markets will do much to lift the gloom, either. Futures on the Dow and the S&P are showing no signs of a rebound ahead of the bell. Read: Futures track global rout .
The economy: U.S. retail sales likely got a boost from stronger car purchases while weekly jobless claims are seen to have moved higher. We'll get the numbers on both at 8:30 a.m. Eastern, along with the import price index for May. Later in the day, the Commerce Department will report business inventories. Read: Spotlight on economy .
The buzz: Google is back in the news after a U.K. committee said this morning that the "don't be evil" company has aggressively shirked its tax obligations and won't have its reputation restored until it makes good on its debt.
Public Accounts Committee report shows Google goes to extraordinary lengths to avoid paying its share of tax in Britain. It needs to change.
— Ed Miliband (@Ed_Miliband) June 13, 2013
Apple speculation is running rampant on a report the company is mulling bigger screens for its iPhone, as well as cheaper models in a range of colors.
On a day that will probably focus more on the macro, H&R Block and SeaWorld could pop up on the radar along with Restoration Hardware , which is slated to post its quarterly results. Read: Stocks to watch .
The chart of the day: During sketchy market times like these one might take solace in the fact that equity markets absolutely destroy all other asset classes over the long-term. And in this case, by long-term, I'm talking about 163 years, give or take. This shouldn't come as a surprise to any long-toothed investor, but this stretched timeline, and the degree of the outperformance, is worth a look. Also, check out how they're all at or near all-time highs, except the 10-year, which would be, if the price had been used instead of the yield. (Click here for a better look at the original chart) .
The call of the day: While everybody else is lamenting the arrival of Japan's latest bear market, Nomura Equity Research just raised its target for the Nikkei to 18,000 from 16,000. Don't laugh, it's true. "We think the full impact of Abenomics on capex and household incomes has yet to be felt, which means that there are still substantial investment opportunities in these areas," the analysts wrote in a note earlier today.
Nomura raises YE Nikkei target from 16k to 18k, which leaves me with the vision of analysts in grey suits, sequined miniskirts and pom-poms
— Five Minute Macro (@5_min_macro) June 13, 2013
Random reads: "The fish came in and began eating the bodies . I could hear the sound." All of a sudden, being late to the short-yen party doesn't sound so bad.
Meet General Keith Alexander, the man in charge of U.S. cyberwar efforts. He's built a secret army and "now its ready to unleash hell."
"Going to the movies is going to cost you 50 bucks, maybe 100. Maybe 150," says George Lucas, a guy who knows a thing or two about the business.
Lionel Messi used Apple's trick in cutting his tax bill .
A week spent hanging out out with North Korea's hockey team . In South Africa. Playing against the likes of Greece, Luxembourg and the United Arab Emirates.
If one-faced kittens are click magic, what about the ones with two faces ?
Need to Know starts early and is updated as needed until the opening bell, but sign up here to get it delivered once to your e-mail box. Be sure to check the Need to Know item. The e-mailed version will be sent out at approximately 8:45 a.m. Eastern. Follow @slangwise on Twitter.
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