Weekly S and P Report Comments
by Sean Lusk, PFGBEST
1-877-294-7757
slusk@PFGBEST.com
E Mini S&P settles 1312.50 up 1.75
For the week ended (1/23-1/27)
Stock futures finished the week mixed with a slightly better finish for the mini S&P 500 but lower finish in the mini Dow. Investors waded through mixed earnings and economic releases along with major commentary from the Federal Reserve that saw rising volume in all three bench mark indexes. All three major averages are still on pace for their best monthly gains since October 2011. The mini Dow futures contract lost just 40 points in trading this week to close at 12,614. The mini S&P posted just a slight gain for the week to finish at 1312.50, after trading to its highest level for 2012 following the Fed’s statement on Wednesday afternoon. The CBOE volatility index, widely considered the best gauge of fear in the market, finished below 19. In economic news this week U.S. GDP expanded at a 2.8 percent annual rate, according to the Commerce Department, posting its quickest pace in almost a year and a half for the 4th quarter. However the figure did miss expectations for a three percent gain. Consumer sentiment rose to an eleven month high in January, climbing to 75, from December’s 69.9, according to the University of Michigan survey. In Europe, Greece Finance Minister Evangelos Venizelos said the debt risen nation is just “one step away” from a debt deal with its private creditors. Venizelos’ statements echo an earlier comment from European economic affairs Chief Ollie Rehn who said a Greek debt deal is imminent and should be completed by the end of January. Meanwhile Fitch said it is downgrading Italy, Spain, Belgium, Cyprus, and Slovenia, in the face of the ongoing financial headwinds from the euro zone’s debt crisis.
The market got a lift on Wednesday from the Federal Reserve’s forecast, which called for an extended period of low interest rates into the fourth quarter of 2014. This comes after last month’s statement from the Fed that called for rates to stay exceptionally low until mid 2013. Gains however were chipped away late this week due to economic and earnings releases that simply missed expectations. Economic reports this coming week could be mixed as well, with the January jobs report Friday is calling to show lower job growth in January, with an increase of non- farm payrolls of about 125K. December’s report showed 200K jobs were added, with the unemployment rate falling to 8.5 percent. Analysts note that there were many seasonal hires added in December, particularly 42K courier jobs, and many more part time hires that will be taken out of the equation on the February report. Fed Chairman Ben Bernanke’s testimony Thursday before the House Budget committee will also be closely watched. Bernanke will no doubt be pressed on Fed policy along with its new economic forecasts and if it has any plans to undertake another round of quantitative easing. Bernanke this past week said the Fed has no current plans for a new QE program, but has repeatedly said it carries the tools necessary to initiate another round of easing if economic conditions warrant such a move.
Earnings reports are expected this week from more than a fifth of the S&P 500, led by Exxon Mobil. Heavyweights such as Pfizer, Merck, Mastercard, and Amazon.com highlight a list of others reporting, including the anticipated filing by Facebook for an IPO. To date, about 37 percent of the S&P 500 companies have reported, with Reuters reporting that just 59 percent have beaten estimates. This comes well below the 70 percent plus in recent quarters. This is also the first quarter in the last nine of the recovery, where earnings growth is in single digits. My swing numbers for the upcoming week come in as follows for the mini S&P. Support comes in first at 1299.25 and below there at 1286.25. Resistance is up at 1327.25, and then up at 1342.75. Please call me at anytime with any questions or comments.
Daily Swing #s ESH2 (1/30)
R2-1325.25
R1-1319.00
Pivot-1313.00
S1-1306.75
S2-1300.75
Weekly Swing #s ESH2 (1/30-2/3)
R2-1342.75
R1-1327.25
Pivot-1314.50
S1-1299.25
S2-1286.25
Daily Swing #s YMH2 (1/30)
R2-12745
R1-12626
Pivot-12601
S1-12482
S2-12457
Weekly Swing #s YMH2 (1/30-2/3)
R2-12904
R1-12758
Pivot-12640
S1-12494
S2-12376
There is a substantial risk of loss in trading futures and options. Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. PFGBEST, its officers and directors may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.
