Bill Cara’s Blog for Feb 1, 2012
CTA Trading Desk Morning Report
[9:00am ET] Good morning, Geoff here.
Green, green everywhere. Markets rallied overnight on positive news from China and were then supported by more good news from the euro-zone.
Manufacturing activity rose in China, France, Germany and the UK. We need to watch the US ISM Manufacturing Index (being released this morning), because a good number will do a lot towards easing worries about the economy caused by the recent drop in the Baltic Dry Index – something that we have been writing and wondering about here.
The UK Manufacturing Purchasing Managers index rose to 52.1 in January from an upwardly revised 49.7 in December. A number over 50 indicates expansion and this is the fastest expansion rate since last May.
Greek Finance Minister Evangelos Venizelos stated that the talks between Greece and its private creditors were going well. He said that they were “one formal step away” from inking a deal that would avoid a Greek default.
Those reports are leading to a rally in the Euro as traders take off their long US Dollar trades. It is “risk-on” overseas.
Here in the States, earnings continue to be mixed with roughly 60% of companies that have already reported beating estimates. That sounds positive for the markets, but it is actually less than in recent quarters and could be viewed as negative should other data support the slowing economy view.
Amazon (AMZN) fell 9% after posting a large drop in 4th quarter profits and warning of a possible 1st quarter loss.
Aetna (AET) posted much higher quarterly profit that was in line with Wall Street expectations and is rallying this morning. (FD; we are long AET).
This morning, ADP released its payroll numbers. January ADP private payrolls added 170,000 jobs vs. the estimated 182,000. This could be seen as disappointing, but I think eyes are on manufacturing today so pay attention to that ISM number.
I read an article over at Zero Hedge regarding California running out of money. The state Controller sent a letter to lawmakers that warned of California running out of cash by early March if they are not able to raise $3.3 billion. Over a year ago, we were writing about this possibility as being supportive to further liquidity injections in the form of QE from the Federal government. Not much has changed, has it?
If following daily US troop movement into the Middle East is not part of your daily reading, I’ll let you in on something…the US is sending a third Aircraft Carrier group to the Middle East and has been building up its presence in the area for some time. Of course, so have the other world powers. This troop activity is leading many to think that the question of an Iranian conflict is not “if”, but “when”. My question is; “why”? I have never met another person, in any country, who wants to send their kids to die, never.
The S&P 500 has not moved in 2 weeks and our stance has not changed; we are cautiously bullish.
Have a great trading day!
Here are the 7:00am ET snapshots of the latest equity market trading results for Europe, and futures prices plus 5-minute charts of the futures for S&P 500, 30-year US Treasury Bond, US Dollar index, Gold and Crude Oil.
|Symbol||Name||Last Trade||Change||Related Info|
||30.20 (1.45%)||Components, Chart, More|
||38.86 (1.76%)||Components, Chart, More|
||53.14 (1.61%)||Components, Chart, More|
||121.48 (1.88%)||Components, Chart, More|
||4.72 (1.48%)||Components, Chart, More|
|^OSEAX||OSE All Share||456.09
||4.04 (0.89%)||Components, Chart, More|
||4.60 (1.41%)||Components, Chart, More|
||69.36 (1.16%)||Components, Chart, More|
||76.75 (1.35%)||Components, Chart, More|
||3.50 (0.36%)||Chart, More|
||13.65 (1.60%)||Components, Chart, More|
||24.80 (1.64%)||Chart, More|
|GD.AT||Athex Composite Share Price Index||821.12
||25.10 (3.15%)||Chart, More|
The team will check in during the day, reporting in the Discourse when there is a new entry.
Enjoy your day.
Cara on Trends & Cycles
Vad’s Catch of the Day
Kaimu’s Sound Money
CTA Trading Desk Mid-Day Report
CTA Trading Desk Post-Close Report