Macro Market

Daily Commentary – A Spark from US Data

US equity markets snapped a two day losing streak after a spark from a much better than expected non-manufacturing ISM number. To recap, “A gauge of U.S. service-sector activity rose to the highest level in nearly a year in September, a sign of steady growth for a key segment of the economy. The Institute for Supply Management on Wednesday said its nonmanufacturing index jumped to 57.1 in September from 51.4 in August. That was the highest level since October 2015. Economists surveyed by The Wall Street Journal had expected a September reading of 53.0.”

http://www.wsj.com/articles/u-s-nonmanufacturing-pmi-surged-to-highest-level-in-nearly-a-year-1475676770

With services being the main driver of US economy, this data is usually regarded tier 1 before NFP, and hence the significance of the jump. It also helped lift broader equity indices SPX and DOW off a crucial trendline support back towards the top of the much documented tightening wedge. For the DIA, it is the 4th time tagging the descending trendline, so we shall see if there is enough conviction to carry over the hurdle for further upside.

20161006-DIA.png

Safe havens (Treasuries, Gold and Yen) were once again under pressure in the risk-on environment, with 30-year bond yield up another 3bps and inching closer to the September highs of 2.5%. And unsurprisingly, the worst two performing sectors were once again REITs (IYR) and Utilites (XLU), but this time IYR was hit much harder, plummeting 2% right to 200DMA. More key support looms at 65 which is the bottom of a bullish channel.

20161006-IYR.png

And the top performer? You guessed it, it’s the financials (XLF) which were the sole beneficiary of higher rates, up 1.6% with little resistance until the September highs of 19.8. All eyes on NFP on Friday – shall we get another beat and leg up in interest rates, we expect XLF to make new highs as well.

20161006-XLF.png

In other news, Twitter (TWTR) was decimated after hours after reports that Google and Walt Disney are not bidding for the company. “Citing anonymous sources familiar with the matter, Recode first reported that Google “was not moving forward with an effort to buy it [Twitter] at this time.” And three hours later, it published another report about Disney, once again citing unidentified people close to Disney, who said “the media giant has decided not to move forward” with a bid to acquire Twitter.”

http://www.ibtimes.com/twitter-twtr-sale-google-walt-disney-not-bidding-report-says-2427161

TWTR plunged to 22 handle after earlier testing the key 25 resistance that we highlighted before. Filtering through the noise, technicals suggest the LT trend has turned bullish and dips to 20 would be a great buy.

20161006-twtr

 

Daily Market Snapshot

Sector ETFs by Daily Return %

SYMBOL NAME CLOSE DAILY (%) MTD % YTD %
KRE SPDR KBW Regional Banking ETF 43.28  

0.82

1.91%

2.39% 3.24%
XLF SPDR Select Sector Fund – Financial 19.6  

0.31

1.59%

1.55% 2.84%
XLE SPDR Select Sector Fund – Energy Select Sector 70.91  

1.07

1.52%

0.42% 17.56%
XLFS S&P SmallCap Financials Portfolio 30.91  

0.46

1.50%

1.51% 0.10%
XRT SPDR S&P Retail ETF 43.99  

0.58

1.33%

1.01% 1.73%
IBB iShares Nasdaq Biotechnology 290.8  

2.54

0.88%

0.46% -14.05%
SMH HOLDRS Merrill Lynch Semiconductor 69.17  

0.53

0.77%

-0.43% 29.82%
XLB Materials Select Sector SPDR 47.36  

0.32

0.68%

-0.82% 9.07%
DIA Dow Jones Industrial Average ETF 182.66  

1.18

0.65%

-0.07% 5.04%
XLI SPDR Select Sector Fund – Industrial 58.31  

0.37

0.64%

-0.12% 10%
IWM iShares Russell 2000 123.95  

0.74

0.60%

-0.21% 10.06%
SPY SPDR S&P 500 215.63  

0.95

0.44%

-0.31% 5.77%
XLG Rydex Russell Top 50 ETF 152.53  

0.67

0.44%

-0.16% 5.50%
XLY SPDR Select Sector Fund – Consumer Discretionary 80.04  

0.33

0.41%

0% 2.41%
XLV SPDR Select Sector Fund – Health Care 72.19  

0.28

0.39%

0.11% 0.22%
XLK SPDR Select Sector Fund – Technology 47.64  

0.17

0.36%

-0.29% 11.23%
QQQ PowerShares QQQ Trust 118.79  

0.42

0.35%

0.06% 6.20%
PFF iShares S&P US Preferred Stock Fund 39.2  

-0.02

-0.05%

-0.76% 0.90%
XLP SPDR Select Sector Fund – Consumer Staples 52.37  

-0.05

-0.10%

-1.58% 3.72%
XLU SPDR Select Sector Fund – Utilities 47.19  

-0.1

-0.21%

-3.67% 9.03%
IYR iShares Dow Jones U.S. Real Estate Index Fund 76.53  

-1.51

-1.95%

-5.10% 1.93%

 

Commodity & Bond ETFs

SYMBOL NAME CLOSE DAILY  (%) MTD % YTD %
USO United States Oil Fund 11.35  

0.26

2.32%

3.84% 3.18%
GDX Market Vectors TR Gold Miners 23.58  

0.18

0.77%

-10.78% 71.87%
HYG iShares iBoxx $ HY Corp Bond Fund 86.9  

0.23

0.27%

-0.41% 7.84%
DBA PowerShares DB Agriculture Fund 20.17  

0.04

0.20%

0.95% -2.13%
LQD iBoxx $ Investment Grade Corporate Bond Fund 121.81  

-0.13

-0.11%

-1.11% 6.84%
AGG iShares Barclays Aggregate Bond Fund 111.56  

-0.15

-0.13%

-0.76% 3.29%
GLD SPDR Gold Trust 120.78  

-0.19

-0.16%

-3.87% 19.04%
TLT iShares Barclays 20 Year Treasury Bond Fund 134.58  

-0.63

-0.47%

-1.95% 11.61%
SLV iShares Silver Trust 16.85  

-0.09

-0.53%

-7.42% 27.75%

Country ETFs

SYMBOL NAME CLOSE DAILY (%) MTD % YTD %
EWZ iShares MSCI Brazil Index Fund 34.92  

0.88

2.55%

3.53% 68.86%
FXI iShares FTSE/Xinhua China 25 Index Fund 38.66  

0.92

2.41%

1.71% 9.55%
DXJ WisdomTree Japan Total Dividend Fund 44.03  

0.77

1.76%

2.61% -12.08%
EWI iShares MSCI Italy Index Fund 11.04  

0.19

1.74%

0.18% -19.65%
EWS iShares MSCI Singapore Index Fund 10.87  

0.16

1.48%

0.09% 5.74%
EEM iShares MSCI Emerging Index Fund 37.83  

0.54

1.44%

1.01% 17.52%
EWX SPDR S&P Emerging Markets Small Cap ETF 43.76  

0.62

1.43%

1.39% 16.04%
EWY iShares MSCI South Korea Index Fund 57.66  

0.74

1.29%

-0.81% 16.09%
EWP iShares MSCI Spain Index Fund 26.88  

0.29

1.08%

0.22% -4.92%
EWW iShares MSCI Mexico Index Fund 49.93  

0.53

1.07%

2.99% 0.20%
EWH iShares MSCI Hong Kong Index Fund 22.17  

0.23

1.04%

0.73% 11.86%
EWM iShares MSCI Malaysia Index Fund 8.1  

0.08

0.99%

-0.12% 4.65%
EWT iShares MSCI Taiwan Index Fund 15.73  

0.15

0.96%

0.19% 23.18%
EWO iShares MSCI Austria Index Fund 16.38  

0.15

0.92%

0.37% 4.66%
EWC iShares MSCI Canada Index Fund 25.45  

0.22

0.87%

-0.93% 18.37%
EWJ iShares MSCI Japan Index Fund 12.51  

0.08

0.64%

-0.24% 3.22%
EWK iShares MSCI Belgium Index Fund 18.82  

0.12

0.64%

-0.21% 4.21%
EWA iShares MSCI Australia Index Fund 20.9  

0.12

0.58%

0% 10.23%
EWD iShares MSCI Sweden Index Fund 29.29  

0.16

0.55%

0.76% 0.38%
EWQ iShares MSCI France Index Fund 24.27  

0.13

0.54%

0.46% 0.25%
EWL iShares MSCI Switzerland Index Fund 30.57  

0.15

0.49%

0.07% -1.51%
EWN iShares MSCI Netherlands Index Fund 25.23  

0.11

0.44%

0.68% 5.83%
EWG iShares MSCI Germany Index Fund 26.39  

0.11

0.42%

0.46% 0.76%
EWU iShares MSCI United Kingdom Index Fund 15.89  

0.01

0.06

0.32% -1.55%

 

 

 

 

 

Days Ahead – Events and Economic Data

10/6 Thursday

Time Event / Data
8:30am Initial Jobless Claims

10/7 Friday

Time Event / Data
8:30am Nonfarm Payroll (NFP)
Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s