Commentary and Performance
Manufacturing within China’s economy may be slowing down, but this is not the case in North America or Europe where both regions have reported expansion in these components of their respective economies.
Equities started the month off with a markedly positive performance. The SP-500 closed @ 2104.05 (+24.69 / +1.19%). The Nasdaq-100 ended @ 4703.92 (+55.09 / +1.19%) and the Rusell-2000 bested them all @ 1186.09 (+24.23 / +2.09%).
The VIX closed @ 14.15 (-0.92 / -6.10%).
Treasury rates increased on the prospects of improving economic conditions with the 10-Yr @ 21.87 (+0.36 / +1.67%) and the 30-Yr @ 29.57 (+0.24 / +0.82%).
The US Dollar Index was unchanged @ 96.92 (0.00 / 0.00%).
In commodities, Gold is surrendering to the impending fate of higher interest rates @ 1135.90 (-5.80 / -0.51%) while WTI Crude Oil is trying to put the oversupply story behind it and stubbornly fighting to maintain support near its 22 and 55 day moving averages as it ended the day @ 46.14 (-0.25 / -0.54%).
The Dow Jones Real Estate Index may have just completed its consolidation phase and appears headed for a new breakout as it made a new 10-day high to close @ 301.52 (+6.36 / +2.15%). Meanwhile, the Dow Jones Home Construction Index has continued its bullish reversal since Thursday’s negative home sales data to close @ 582.39 (+4.65 / +0.80%).
Daily Chart Analysis
Today the SP-500 pierced thru its veil of resistance at 2100 and managed to not only hold its gains but also not retreat from the bottom range of the revisited bullish channel. Although one day does not a market make, it was an impressive showing and a great way to start the month.
(One caveat is that although the breadth was overwhelmingly positive for the SP-500 index components, more than 3/4 of its advancing issues traded on lower volume, which smells like distribution and buyer exhaustion.)
As always, keep Hillbent for the Market Direction…
- Advancers (2507) vs. Decliners (404).
- New 5-day highs (1112) vs. New 5-day lows (335)
- New 52-week highs (106) vs. new 52-week lows (32)
- Bullish reversals (537) vs. Bearish reversals (77)
Volume Radar Alerts
- First Niagara Financial Grp Inc. (FNFG) @ 10.54 (+1.84%) on 706% volume surge
- Estee Lauder Cos Inc. (EL) @ 86.97 (+8.09%) on 321% volume surge
- Aarons Inc (AAN) @ 25.39 (+2.92%) on 310% volume surge
- MSCI Inc (MSCI) @ 71.05 (+6.04%) on 253% volume surge
- Flir Systems Inc (FLIR) @ 27.52 (+3.19%) on 207% volume surge
- Hain Celestial Grp Inc (HAIN) @ 48.84 (-2.03%) on 369% volume surge
- Chitpole Mexican Grill (CMG) @ 624.00 (-2.54%) on 280% volume surge
- Visa Inc (V) @ 75.22 (-3.04%) on 254% volume surge
- Ecolab Inc (ECL) @ 117.99 (-1.96%) on 182% volume surge
- Santander Consumer USA Hldgs (SC) @ 17.50 (-2.83%) on 172% volume surge
Market Moving Events
- Economy / Manufacturing / USA: The Manufacturing Index for October-2015 revealed continual expansion @ 54.1 which met consensus @ 54.1 and increased from prior @ 53.1.
- Economy / Manufacturing / Europe: The PMI Manufacturing Index for October-2015 within the EU indicated positive growth. The overall EU region itself posted actual results @ 52.3 vs. consensus @ 52.0 and prior @ 52.0. Germany delivered 52.1 vs. consensus @ 51.6 and prior @ 52.3. France was @ 50.6 vs. consensus @ 50.7 and prior @ 50.6.
- Economy / Manufacturing / Great Britain: During October-2015, the UK’s Manufacturing Index exploded to upside @ 55.3 vs. consensus @ 51.3 and prior @ 51.5.
- Economy / Manufacturing / Global: The Global PMI Manufacturing Index for October-2015 remains in expansion mode @ 51.4 vs. prior @ 50.6.
- Real Estate / Construction Spending / USA: Month-over-month Construction Spending for September-2015 was up 0.6% vs. consensus @ 0.4% and prior @ 0.7%. Annually, it increased 14.1% vs. prior @ 13.7%. Overall it was a solid report, especially with regards to residential spending.
- Economy / Manufacturing / China: The October-2015 CFLP PMI Manufacturing Index was unchanged @ 49.8 vs. consensus @ 50 and prior @ 49.8. A number below 50 indicates a contraction and this marked the 3rd consecutive month of readings below 50.
- Economy / Manufacturing / USA: Tempering earlier released economic data was the ISM Manufacturing Index for October-2015 @ 50.1 vs. consensus @ 50.0 and prior @ 50.2. Although the above-50 reading indicates positive growth, the overall trend for the ISM report has been one of decelerating growth that borders on the edge of contraction.
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