The Prepared Mind 7.15.2013

The market waited with bated breath for Wednesday’s release of the minute of the June FOMC policy meeting.  At the time of the June’s meeting, Ben Bernanke’s press conference was interpreted to mean interest rates would be rising in the short term.  The minutes and Bernanke’s accompanying press conference clarified his earlier statements,  He made it clear the Fed might not taper bond purchases even if unemployment was less than 6.5%.  The markets heard this as the Fed would not ease and rates will continue to hover around 0%.

The U.S. equity indexes showed gains for the third straight week.  In fact, they are performing like Sammy Sosa on performance enhancing drugs.  The behavior is reminiscent of the pursuit of Babe Ruth’s home run record by Mark McGwire and Sammy Sosa.  On Friday the Dow achieved its 25th closing record for the year, the S&P 500 hit its 19th record close, and the NDX had its highest closing price since September of 2000.  Pundits have been calling the end of this bull market for months.  Remember what the sage market timer  Yogi Berra said, ” It ain’t over ’til it’s over. ”  It ain’t over yet, maybe tomorrow, but not yet.  This relentless market has left may market pundits and prognosticators echoing another Yogism – “I didn’t really say everything I said.”  Yes they did.  Examination of the markets behavior last week, over the past three weeks and for the entire year will confirm the tenacity of this bull market.  Here is the past three weeks:

 

 

 

 

 

 

The NASDAQ 100 (NDX) was the strongest index last week by closing above 3,000.  The NASDAQ 100 (NDX) closed at 3.709.07, gaining 3.91% or 115.85 points.  The Russell 2000 (RUT) gained 2.90%, up 29.19 points to close at 1,034.77,  The Dow Jones Industrial Average (DJIA) closed at 15,464.30 –   up 328.46 points or a gain of 2.17%.  The S&P 500 (SPX) is trading at 1,680.19 – up 29.19 points or a gain of 2.96%.  The S&P 100 (OEX) closed at 752.94 – gaining 20.03 points or 2.73%.  The strong market performance was reflected in the weakness of the VIX and the other volatility indexes.  The VIX closed last week at 13.84 – a loss of 1.05 or 7.05%.  Options trading at the CBOE on VIX futures options showed continued strength.  .

Here is a capsule view of last week’s market numbers:

Index

Close

Weekly Change

% Weekly

% YTD

Volatility of Index

Dow Jones Industrials (DJIA)

15,464.30

328.46

2.17%

18.01%

12.93% (VXD)

S&P 500 (SPX)

1,680.19

48.30

2.96%

17.81%

13.84% (VIX)

NASDAQ 100 (NDX)

3,079.07

115.85

3.91%

15.71%

13.96% (VXN)

Russell 2000 (RUT)

1,034.77

29.19

2.90%

21.54%

17.33% (RVX)

S&P 100 (OEX)

752.94

20.03

2.73%

16.44%

13.46% (VXO)

CBOE Volatility Index (VIX)

13.84

-1.05

-7.05%

NA

All eyes will be on Washing on Wednesday.  Ben Bernanke will be giving his semiannual testimony before Congress,  Expect difficult questions from lawmakers. The focus will be on China on Monday.  The Chinese announcements concerning GDP and industrial production will have a major impact on commodity markets.  Much of the price growth in these markets has been fueled by Chinese economic growth.  Focus for the rest of the week will be on US regional economic growth and housing.

The earnings cycle takes off this week.    The main body of announcements will take place the following three weeks. Be aware of the impact of earnings as you to establish positions in July, August and September options.  Earnings announcements include: Citigroup, Johnson & Johnson, Coca-Cola, Goldman Sachs, Yahoo, Abbott Labs, IBM, Intel, eBay, Bank of America, Morgan Stanley, Google, Philip Morris, Verizon, Baxter, Capital One, Black Rock, Microsoft, Union Pacific, Schlumberger and General Electric.     Continue to be wary of trading any products where there is not adequate liquidity and narrow enough markets.  You should be aware of daily volume and open interest in any products you trade.   I am including a consensus earnings estimate for each stock.  Stick with your plan.    Remain disciplined.

Remember:

  “Chance favors the Prepared Mind.” – Louis Pasteur

This week’s economic news (All times are Eastern Daylight Time.) Events, dates and times are subject to change:

Monday July 15:

Economic:  Retail Sales – 8:30, Empire State Manufacturing Survey – 8:30, Business Inventories – 10:00.

International:  China Quarterly GDP, Industrial Production, and Retail Sales. 

Optionable Earnings:

Symbol

Company Name

July 12 close

IV30

B/A

XEPS
C Citigroup Inc

$50.04

26.3

A

$0.70

JBHT J.B. Hunt Transport Services, Inc.

$76.90

25.1

N/A

$0.74

 

 

Tuesday July 16:

Economic:  ICSC – Goldman Sachs Store Sales – 7:45,  CPI – 8:30, Redbook – 8:55,  Treasury International Capital – 9:00, Industrial Production – 9:15,  Housing Market Index – 10:00.

International Economic:  Great Britain CPI – 4:30, Great Britain PPI _ 5:00,

Other:  Kansas City Federal Reserve Bank President Esther George speech the economy and agriculture in Kansas City, Missouri – 2:15.

Optionable Earnings:

Symbol

Company Name

July 12 close

IV30

B/A

XEPS

SCHW

Charles Schwab Corp

$21.47

28.0

B

$0.19

CMA

Comerica Incorporated

$40.94

25.6

B

$0.69

GS

Goldman Sachs Group Inc

$157.71

23.3

B

$2.81

MOS

Mosaic Co

$56.85

30.2

B

$1.15

OMC

Omnicom Group Inc.

$66.14

21.1

B

$1.09

CSX

CSX Corporation

$24.39

24.1

A

$0.47

PKG

Packaging Corp Of America

$51.69

22.5

A

$0.63

URI

United Rentals, Inc.

$52.74

44.3

A

$1.02

YHOO

Yahoo! Inc.

$27.04

33.0

A

$0.03

 

 

Wednesday July 17:

Economic:  MBA Purchase Applications – 7:00, Housing Starts – 8:00, EIA Petroleum Status Report – 10:30, Beige Book – 2:00 PM.

International Economic: Bank of England minutes – 4:30 AM.

Other:  Federal Reserve Chairman Ben Bernanke to testify before the House Financial Services Committee in Washington – 2:00.

Optionable Earnings: 

Symbol

Company Name

July 12 close

IV30

B/A

XEPS

ABT

Abbott Laboratories

$35.37

21.3

B

$0.44

ASML

ASML Holding N.V. (ADR)

$87.34

34.7

B

$0.61

MAT

Mattel, Inc.

$46.69

22.3

B

$0.31

NTRS

Northern Trust Corporation

$60.89

20.5

B

$0.83

PNC

PNC Financial Services

$74.10

21.1

B

$1.64

STJ

St. Jude Medical, Inc.

$47.96

25.2

B

$0.94

TXT

Textron Inc.

$27.74

32.6

B

$0.38

BK

The Bank of New York Mellon Corp.

$29.77

25.4

B

$0.58

GWW

W.W. Grainger, Inc.

$264.39

24.7

B

$2.96

AXP

American Express Company

$76.94

21.0

A

$1.21

CCK

Crown Holdings, Inc.

$42.91

20.9

A

$0.93

EBAY

eBay Inc

$55.88

28.3

A

$0.54

INTC

Intel Corporation

$23.99

26.5

A

$0.39

IBM

International Business Machines Corp.

$192.80

23.0

A

$3.78

KMP

Kinder Morgan Energy Partners LP

$88.07

21.0

A

$0.31

NE

Noble Corporation

$39.23

32.3

A

$0.58

SNDK

SanDisk Corporation

$60.78

37.5

A

$0.88

SCSS

Select Comfort Corp.

$27.41

59.1

A

$0.23

SLM

SLM Corp

$23.35

23.1

A

$0.70

XLNX

Xilinx, Inc.

$41.85

26.7

A

$0.47

 

 

 

Thursday July 18:

Economic:   Import and Export Prices – 8:30, Bloomberg Consumer Comfort Index – 9:45,Philadelphia Fed Survey – 10:00, Leading Indicators – 10:00, EIA Natural Gas Report – 10:30.

International Economic:  Japan All Industry Index – 12:30 AM.

Other: Federal Reserve Chairman Ben Bernanke to testify before the Senate Banking Committee in Washington – 10:00.

Optionable Earnings: 

Symbol

Company Name

July 12 close

IV30

B/A

XEPS

APH

Amphenol Corporation

$85.13

24.8

B

$0.94

AN

AutoNation, Inc.

$46.49

27.3

B

$0.74

BBT

BB&T Corporation

$34.58

20.6

B

$0.74

BLK

BlackRock, Inc.

$269.89

27.5

B

$3.82

CHKP

Check Point Software Technologies

$54.15

31.8

B

$0.76

HLSS

Home Loan Servicing Solutions Ltd

$24.11

27.2

B

$0.46

JCI

Johnson Controls Inc

$36.50

23.4

B

$0.75

MS

Morgan Stanley

$25.55

31.8

B

$0.44

NUE

Nucor Corporation

$45.62

24.0

B

$0.30

OSTK

Overstock.com, Inc.

$28.82

75.8

B

$0.12

BPOP

Popular Inc

$31.72

26.6

B

$0.69

PPG

PPG Industries, Inc.

$158.03

24.4

B

$2.34

DGX

Quest Diagnostics Inc

$59.31

25.2

B

$1.09

SWY

Safeway Inc.

$24.90

37.2

B

$0.50

SAP

SAP AG (ADR)

$74.56

24.9

B

$0.91

SHW

Sherwin-Williams Company

$186.88

25.9

B

$2.60

BX

The Blackstone Group L.P.

$21.79

35.4

B

$0.53

TZOO

Travelzoo Inc.

$29.14

47.3

B

$0.30

UTEK

Ultratech, Inc.

$36.83

48.7

B

$0.04

UNP

Union Pacific Corporation

$159.36

21.4

B

$2.35

UNH

UnitedHealth Group Inc.

$68.36

21.4

B

$1.26

WSO

Watsco Inc

$90.65

22.9

B

$1.41

ACTG

Acacia Research Corp

$24.91

45.5

A

$0.38

ALGN

Align Technology, Inc.

$39.40

46.1

A

$0.28

ATHN

Athenahealth, Inc

$91.57

43.2

A

$0.08

COF

Capital One Financial Corp.

$65.81

25.8

A

$1.71

CPHD

Cepheid

$36.21

40.3

A

($0.02)

CMG

Chipotle Mexican Grill, Inc.

$383.13

35.1

A

$2.80

CBST

Cubist Pharmaceuticals Inc

$53.89

40.2

A

$0.54

GOOG

Google Inc

$920.24

25.4

A

$9.01

ISRG

Intuitive Surgical, Inc.

$430.00

29.2

A

$4.12

MSFT

Microsoft Corporation

$35.69

21.3

A

$0.75

SWKS

Skyworks Solutions Inc

$21.94

49.1

A

$0.44

WYNN

Wynn Resorts, Limited

$131.63

28.1

A

$1.54

 

 

 

 

Friday July 19:

Economic: No major announcements.

International Economic:  German PPI – 2:00.

Other:  Federal Reserve Bank Presidents of Philadelphia, Charles Plosser, and St. Louis, James Bullard, on panel discussing economic outlook in Jackson Hole, Wyoming – 2:45, San Francisco Federal Reserve Bank President John Williams speech on moderation in monetary policy, in Vancouver, British Colombia – 5:15.

Optionable Earnings:

Symbol

Company Name

July 12 close

IV30

B/A

XEPS

BHI

Baker Hughes Incorporated

$48.80

27.5

B

$0.64

HON

Honeywell International Inc.

$82.57

21.4

B

$1.22

IR

Ingersoll-Rand PLC

$59.02

24.1

B

$1.07

KSU

Kansas City Southern

$113.27

27.4

B

$0.95

MAN

Manpowergroup Inc

$59.77

32.1

B

$0.89

SLB

Schlumberger Limited.

$76.63

21.4

B

$1.11

STI

SunTrust Banks, Inc.

$33.34

25.4

B

$0.67

STT

State Street Corporation

$68.50

25.6

B

$1.19

VFC

VF Corp

$199.72

22.6

B

$1.17

 

Monday July 22:

Economic:  Chicago Fed National Activity Index – 8:30, Existing Home Sales – 10:00.

International Economic:  No major announcements.

Optionable Earnings:

Symbol

Company Name

July 12 close

IV30

B/A

XEPS

BCC

Boise Cascade Co

$28.20

31.9

B

$0.15

GCI

Gannett Co., Inc.

$26.42

41.9

B

$0.59

HAL

Halliburton Company

$44.18

26.8

B

$0.73

HAS

Hasbro, Inc.

$47.28

23.5

B

$0.34

CBD

Companhia Brasileira de Distrib. (ADR)

$44.81

33.9

A

$0.45

HXL

Hexcel Corporation

$35.50

30.4

A

$0.47

NFLX

Netflix, Inc.

$244.17

73.4

A

$0.39

TXN

Texas Instruments Incorporated

$37.17

23.9

A

$0.46

ZION

Zions Bancorporation

$29.34

28.1

A

$0.42

 

 

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