Views From The Hill

Views From The Hill: August-12-2014


Stock Market Commentary

Tuesday’s trading session was about as dull as dull ever gets, i.e. very little price movement and low volume. Without any major economic data or earnings and the temporary containment of geopolitical issues, the market lacks any real catalyst to drive its direction. Despite the recent correction, the trends remain bullish and this market is oversold with respect to short and intermediate time frames.

Signing off at Hillbent for the Market Direction…



Daily Performance Summary

Index LAST Net Chg % Chg
S&P 500 Index 1933.75 -3.17 -0.16%
Nasdaq Composite 4389.25 -12.08 -0.27%
Nasdaq 100 Index 3905.22 -5.24 -0.13%
CBOE Volatility Index 14.13 -0.10 -0.70%
10-Year Treasury Note 2.44 0.02 0.83%
US Dollar Index (Sept-2014) 81.50 0.02 0.02%
Gold (Dec-2014) 1310.00 -0.60 -0.05%
Crude Oil (Sept-2014) 97.15 -0.22 -0.23%
U.S. Real Estate Index 281.93 -0.68 -0.24%
U.S. Home Construction Index 450.87 -4.32 -0.95%




Bullish Events

  • While not a major economic barometer, July-2014’s NFIB Small Business Optimism Index rose to 95.7 vs. estimates @ 95.8 and previous month @ 95.0.
  • In contrast to the Goldman ICSC report, the most recent Redbook report (week of Aug/9/2014) indicated strong growth of 4.8% year over year same-store sales.
  • The BLS JOLTS (Job Openings and Labor Turnover Survey) for June-2014 experienced an uptick in job openings to 4.671mm vs. prior @ 4.635mm and consensus @ 4.588mm. Job openings are at their highest level since 2001 with 1 job opening for every 2 unemployed persons vs. 1 job opening for every 3 unemployed persons in June -2013. This steady improvement is encouraging, but could also impact the Fed’s timing on its policy for rate increases if this trend continues over the next several months.



  • The July-2014 Treasury Budget report reflected a -24% decrease in the government deficit (at 10 months into the fiscal year) @ $460.5bn vs. previous year @ $607.4bn. Overall tax receipts increased 8% (individual tax recepits up 4.9% and corporate tax receipts (a smaller category) up 14.4%).
US Treasury Budget Prior Consensus Consensus Range Actual
Treasury Budget – Level $70.5 B $-96.0 B $-100.0 B to $-90.0 B $-94.6 B




Bearish Events

  • Germany’s ZEW Survey for August-2014, which gauges financial expert’s sentiment towards current and future economic conditions, came in much weaker than expected.
ZEW Survey Prior Consensus Actual
Current Conditions 61.8  55.0  44.3 
Bus. Expectations 27.1  17.0  8.6 


  • The ICSC-Goldman Store Sales report for the week of Aug/9/2014 showed a weekly drop of -1.4% in retail sales along with a -1.3% decline to 3.2% for year over year store sales. However, some economists believe this week’s report is not indicative of true retail consumer conditions as the recent benefits of declining gas prices will boost consumer purchasing power.


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