JUNE 17, 2013
6 gut checks before the stock market's opening bell
By Shawn Langlois
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20th Century Fox
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Good morning.
Channel your inner Don McLean and sing along with the Macro Man blog : "Did you write to Hilsenrath ? And do you lunch on the Grapes of Wrath? If Bernanke tells you so?" Clearly, investors are in a much more festive mood this morning as global markets are firing higher to start the week.
Of course, they'll be singing the blues come Wednesday if Bernanke wages war on stock-market bulls by saying something as nefarious as: "We are pleased with the rate at which the economy is improving." Fear of such Fed villainy have played no small part in the "great rotation" over the past month. No, not that one. The one where investors flee both stocks AND bonds for the safety of cash.
Key market gauges: Look out above! Futures on the Dow and the S&P are setting up for a rip-snorting kickoff to the week, following in the footsteps of Asia , where the Nikkei jumped 2.7%.
Europe is also partaking in the fun, with broad gains paced by France's CAC 40 and Germany's DAX .
The economy:The Empire State manufacturing index rose to 7.8 in June from negative 1.4 the prior month. Economists polled by MarketWatch were looking for the index to improve to flat. Later, the National Association of Home Builders will report its June housing market index. Readings of 50 are considered "good", but we haven't seen that level since way back in 2006. Economists are expecting to see 45 this time around.
What exactly is confusing people about central bank communication? Been incredibly clear. Fed: taper soon,long way from hikes. ECB: feck off
— Paweł Morski (@Pawelmorski) June 17, 2013
For its part, the Bundesbank said growth in Germany is likely to slow over the summer, saying production expectations for the coming months have been significantly scaled back recently given weaker orders in April. Which brings me back to one more gem from the aforementioned ditty that's stuck in my head: "Helter skelter in a summer swelter, my Bunds were saved with a put spread shelter."
The buzz: Groupon is trending on MarketIQ after the stock caught a huge lift Friday, thanks to one analyst's upbeat take on the coupon peddler. Lululemon is still drawing clicks after the retailer posted a quirky job opening for its vacated CEO spot. As long as you "communicate powerfully, often through Sanskrit" and "can hold a headstand for at least 10 minutes," the job could be yours.
SolarCity and Tesla , both up about 200% this year, ended last week on another positive note. With Elon Musk a driving force behind both, they'll likely stay in the spotlight as trading gets underway today. Read: Stocks to watch .
Apple's disclosure of just how much information the government wants about its customers will keep the company firmly in the PRISM news this week, joining the likes of Facebook and Microsoft .
With the Paris Air Show underway, Boeing shares are up 1% early after GE said it signed a commitment to order 10 Dreamliner aircrafts. Expect to hear some more big orders throughout the day. Check out images from the show .
The chart of the day: U.S. and emerging markets stocks have been highly correlated over the past five years, but that has changed in a big way, as you can see clearly by this chart from J.C. Parets on the All Star Charts blog. Any divergence has quickly adjusted itself in the past, so there's reason to believe it will again. If that's the case, is the smart money betting on a drop for the S&P or a rise in emerging markets ? Or a little bit of both? I smell a pair trade somewhere in there.
Channel your inner Don McLean and sing along with the Macro Man blog : "Did you write to Hilsenrath ? And do you lunch on the Grapes of Wrath? If Bernanke tells you so?" Clearly, investors are in a much more festive mood this morning as global markets are firing higher to start the week.
Of course, they'll be singing the blues come Wednesday if Bernanke wages war on stock-market bulls by saying something as nefarious as: "We are pleased with the rate at which the economy is improving." Fear of such Fed villainy have played no small part in the "great rotation" over the past month. No, not that one. The one where investors flee both stocks AND bonds for the safety of cash.
Key market gauges: Look out above! Futures on the Dow and the S&P are setting up for a rip-snorting kickoff to the week, following in the footsteps of Asia , where the Nikkei jumped 2.7%.
Europe is also partaking in the fun, with broad gains paced by France's CAC 40 and Germany's DAX .
The economy:The Empire State manufacturing index rose to 7.8 in June from negative 1.4 the prior month. Economists polled by MarketWatch were looking for the index to improve to flat. Later, the National Association of Home Builders will report its June housing market index. Readings of 50 are considered "good", but we haven't seen that level since way back in 2006. Economists are expecting to see 45 this time around.
What exactly is confusing people about central bank communication? Been incredibly clear. Fed: taper soon,long way from hikes. ECB: feck off
— Paweł Morski (@Pawelmorski) June 17, 2013
For its part, the Bundesbank said growth in Germany is likely to slow over the summer, saying production expectations for the coming months have been significantly scaled back recently given weaker orders in April. Which brings me back to one more gem from the aforementioned ditty that's stuck in my head: "Helter skelter in a summer swelter, my Bunds were saved with a put spread shelter."
The buzz: Groupon is trending on MarketIQ after the stock caught a huge lift Friday, thanks to one analyst's upbeat take on the coupon peddler. Lululemon is still drawing clicks after the retailer posted a quirky job opening for its vacated CEO spot. As long as you "communicate powerfully, often through Sanskrit" and "can hold a headstand for at least 10 minutes," the job could be yours.
SolarCity and Tesla , both up about 200% this year, ended last week on another positive note. With Elon Musk a driving force behind both, they'll likely stay in the spotlight as trading gets underway today. Read: Stocks to watch .
Apple's disclosure of just how much information the government wants about its customers will keep the company firmly in the PRISM news this week, joining the likes of Facebook and Microsoft .
With the Paris Air Show underway, Boeing shares are up 1% early after GE said it signed a commitment to order 10 Dreamliner aircrafts. Expect to hear some more big orders throughout the day. Check out images from the show .
The chart of the day: U.S. and emerging markets stocks have been highly correlated over the past five years, but that has changed in a big way, as you can see clearly by this chart from J.C. Parets on the All Star Charts blog. Any divergence has quickly adjusted itself in the past, so there's reason to believe it will again. If that's the case, is the smart money betting on a drop for the S&P or a rise in emerging markets ? Or a little bit of both? I smell a pair trade somewhere in there.
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StockCharts.com
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The call of the
day: J.P. Morgan Cazenove is closing its short position on
commodities, explaining that mining is down 20% year to date and near relative
lows from 2008. "The space is a consensus short now, valuations are
attractive and DXY has rolled over," analyst Mislav Matejka wrote.
His favorite picks in the sector are Rio Tinto and Glencore
Xstrata .
Random reads: If you think active stock pickers are a waste of your investment expenses, check out how dismal active bond traders fare vs. their benchmark. Speaking of active stock pickers, check out this guy's track record .
London, Paris, New York... "Our great, global cities are turning into vast gated citadels where the elite reproduces itself," writes the FT's Simon Kuper .
Summer is here and it's time to tear down some longstanding myths about cooking steak, like the "poke test" and the need to sear the meat first to lock in juices.
Norwegians LOVE boring television .
"Google Glass is great for toddlers. Seriously," per Wired .
The Vine that haunts Steve Stricker . And makes the rest of us duffers around the world feel a whole lot better about themselves.
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.
Get the latest news on our mobile site: http://www.marketwatch.com/m
Random reads: If you think active stock pickers are a waste of your investment expenses, check out how dismal active bond traders fare vs. their benchmark. Speaking of active stock pickers, check out this guy's track record .
London, Paris, New York... "Our great, global cities are turning into vast gated citadels where the elite reproduces itself," writes the FT's Simon Kuper .
Summer is here and it's time to tear down some longstanding myths about cooking steak, like the "poke test" and the need to sear the meat first to lock in juices.
Norwegians LOVE boring television .
"Google Glass is great for toddlers. Seriously," per Wired .
The Vine that haunts Steve Stricker . And makes the rest of us duffers around the world feel a whole lot better about themselves.
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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