Stock Market Today: March 28th - April 1st

Discussion in 'Stock Market Today' started by Stockaholic, Mar 31, 2016.

  1. Stockaholic

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    Sweet spot for stocks is around the corner
    Patti Domm | @pattidomm
    11 Hours AgoCNBC.com

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    Andrew Renneisen | Getty Images
    Traders work on the floor of the New York Stock Exchange
    "This is the tenth time we've had a decline of 5 percent or more only to get back to or close to breakeven by the end of the quarter," he said. "Five of those times we set an even lower low (later in the year). There's no guarantee we'll set a lower low but there's concern about that." Even after reaching a lower low, the S&P averaged a 2.2 percent gain in those years.

    "If history should repeat, investors are encouraged to stay the course but not load up the truck," Stovall said.

    Stovall and other analysts are concerned earnings could give the market a bumpy ride. The S&P 500 companies are expected to see a decline of 6.9 percent in first-quarter earnings, according to Thomson Reuters.

    "If we continue to experience additional earnings erosion, then it could be like 2015 all over again, when we went from an 8 percent expected gain to a near 1 percent loss," he said.

    Thursday marks the last trading day of the quarter, before April 1 — when the March jobs report is released. Thursday's data include weekly jobless claims at 8:30 a.m. EDT and Chicago PMI at 9:45 a.m.

    After this week's rally, investors will focus on New York Fed President William Dudley, who speaks at 5 p.m. EDT on lessons from the financial crisis. He will take questions at the event held by the Virginia Association of Economists. Chicago Fed President Charles Evans speaks at 9:30 a.m. EDT. Fed Chair Janet Yellen sparked a risk rally Tuesday when she said the Fed would move cautiously to raise rates.

    Read MoreKensho: Finding stocks for today's strange economy

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    April is usually a positive month for stocks, and the S&P 500 has been positive 70 percent of the time since 1945, ranking it as the second-best month, after December, according to Stovall. But in the past 10 years, April has been the top-performing month.

    Going back to 1990, the second quarter has been a decent month for stocks — up an average 2.2 percent. The best quarter has been the fourth quarter, averaging a 5 percent gain.

    The S&P has gained an average 1.41 percent in April going back to World War II, versus an average of 0.65 percent for all 12 months.

    Read MoreWhy we're in 'Tom and Jerry' market

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    In second quarters dating to 1990, the S&P has gained an average 2.2 percent and was higher 58 percent of the time, Stovall said. He said over that time all 10 major S&P sectors saw second-quarter gains anywhere from 1.3 percent (telecom) to 3.5 percent for health care. All sectors posted gains at least 54 percent of the time, with the best Q2 performer being health care, up 69 percent of the time since 1990.

    Golub said he is looking at two growth themes in the stock market. He likes stocks that led the market last year — the FANG stocks and biotech, and then slower steady growers. "Boring companies that are 2 to 4 percent growers but have high visibility and low risk. You have defense contractors or companies like Waste Management that are growing. … None of them need the economy to do well in order to grow," he said.

    Some of the other names on his list include General Mills, Pepsico,Procter & Gamble, Johnson and Johnson, Pfizer, Aflac, Marsh and McLennan, Cintas, Lockheed Martin, McDonald's, Verizon, Airgas andDanaher.

    Read MoreWhy the Fed rate talk was 'a bunch of nonsense'
     
  2. Stockaholic

    Stockaholic Content Manager

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    Election year influences dampen DJIA April performance
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    April 1999 was the first month to gain 1000 DJIA points. However, from 2000 to 2005, “Tax” month was hit hard, declining in four of six years. Since 2006, April has been up ten years in a row with an average gain of 2.8% to reclaim its position as the best DJIA month since 1950. April is third best for S&P and fourth best for NASDAQ (since 1971).

    April marks the end of our “Best Six Months” for DJIA and the S&P 500. On April 1, we will begin looking for our seasonal MACD sell signal and corresponding early signs of seasonal weakness. Even in presidential election years, the second best year of the four-year cycle, the “Worst Six Months” have experienced some nasty selloffs.

    Normally bullish election-year influences (the second best year of the four-year presidential election cycle) have the exact opposite effect on April. Average gains since 1952 are approximately half of the average gain of all years since 1950 for DJIA and S&P 500. Largely due to a 15.6% loss in 2000, NASDAQ’s typical strength in all Aprils since 1971 is transformed into an average loss in election years.

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  3. Stockaholic

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    New All Time Highs Might Not Be So Great
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    Bullish seasonal forces driven by end-of-Q1 and beginning-of-Q2 fund flows and earnings season have been fanned by recent dovish and gradual Fed flames. The major indices are encroaching on several positive technical chart developments, yet still constrained by overhead resistance and getting overbought. Economic data readings are mixed, though it is clear the economy is growing slowly at best. Corporate profits and expenditures have been contracting. So while the economy grows slowly, corporations are struggling.

    However, the tonic of a renewed-dovish Fed, or the “Yellen put,” is likely to conspire with bullish seasonality and support the rally for at least a few more weeks and perhaps into May. But when those seasonal forces abate and the siren song of the Chair fades away, we expect the market to retreat into the summer, especially up to and through the conventions. (A contested or brokered Republican Convention might be a boon for news organizations, but it is bound to cause uncertainty on Wall Street – and we know how Wall Street loves uncertainty.)

    So we expect this rally to continue into and through April, but to fall short of new highs. From current levels the Dow and S&P 500 could gain 3% and the NASDAQ Composite could gain 7% and still fall short of new all-time highs. But even if the market rallied to new highs and the Chair reopened the QE spigot and the Republican candidates held hands together and sang Kumbayah, it just wouldn’t matter because all the years that had a higher high and a lower low than the previous year have been a volatile and bearish bunch.

    And that’s what 2016 would be if we make a new high. We have already taken out the 2015 lows. It’s not a big number. On the Dow there have only been six calendar years since 1950 engulfing lower lows and higher highs than the prior year. S&P 500 did it in only four of them. It’s a rather unruly bunch. Other than 1953 they all suffered sizable bears with big turnarounds in 1980 and 1982. So if history should repeat, be prepared for a downdraft in the Worst Six Months May-October (AKA “Sell in May”), but expect another turnaround later in the year, whether we make a new high or not.

    Hat Tip: Steve Deppe @SJD10304

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  4. Stockaholic

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    Frontrunning: March 31
    • Roller-coaster first quarter ends with shares, dollar under pressure (Reuters)
    • Oil prices slide as U.S. crude stocks hit record (Reuters)
    • GE Files to End Fed Oversight After Shrinking GE Capital (WSJ)
    • FDA Eases Rules for Abortion Pill, Making Access Simpler (BBG)
    • Kremlin denies report of Russia-U.S. deal on Assad's future (Reuters)
    • Thirst for Gasoline Fuels Oil Rally (WSJ)
    • Landlords in last-minute rush to beat stamp duty rises (BBG)
    • CEO of SunEdison’s Spinoffs Leaves (WSJ)
    • Zuma Counts on ANC Protection After Court Says He Violated Law (BBG)
    • Hong Kong Retail Sales Plunge the Most in 17 Years (BBG)
    • U.K. Economy Shows More Momentum; Current-Account Gap Widens (BBG)
    • Hong Kong Appeal Tribunal Fines Moody's $1.4 Million for Report (BBG)
    • Bank of Japan runs groupthink risk as board dissenters depart (Reuters)
    • Distorted Markets: Why Banks Are Better Off Than You Think, And Real Estate Isn’t (WSJ)
    • Twitter Insiders Pitched Standalone Messaging App Idea (ReCode)
    • Why a Chatbot Creeped Out Microsoft's AI-Focused CEO (BBG)
    • Students clash with police at protests against French labour reform (AFP)
    • U.S. May Let Govts, Banks Use USD for Business With Iran (AFP)
    • German Unemployment Unchanged as Refugees Bolster Labor Force (BBG)
    • China set to deploy world’s longest-range nuclear missile (FT)
    • BlackRock Is Said to Plan About 400 Job Cuts as Growth Slows (BBG)
    • The Investor Who's Betting on Brazil's Corruption Scandal (BBG)
    • Wage Surge in Hot U.S. Labor Markets Sending Hopeful Sign to Fed (BBG)
    • Deutsche Bank Says CIB Head Urwin May Be Worth More Than Cryan (BBG)
    here are today's most notable earnings reports-

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    here are today's economic events-

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    markets now-

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    happy trading to everyone in here on this final trading day of q1 [​IMG]
     
  5. Stockaholic

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  6. Stockaholic

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    market map heading into the 11am hour

    kind of a mixed bag out there heading into tomm's u/e report

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  7. Stockaholic

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    Don’t Be a Fool Out of the Market on April First
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    Despite a little end-of-Q1 profit taking today – very little – stocks have been on an upward tear throughout March, bucking the pattern of late month weakness. The week after triple-witching did display its usual weakness. We expected a strong March and April rally on the heels of the nasty down January and February. But the usual end-of-March respite has been mollified by the sweet, dovish and measured words of Fed Chair Yellen.

    We expect the market rally to continue into and through April, but to fall short of new highs and then begin to retreat later in the spring into the summer lull and the Worst Six Months (“Sell in May”), stabilizing after the conventions, rallying again into yearend, but falling short of new highs yet again.

    But for now the path appears to be higher and the first trading day of April has been a boon to traders – up 76.2% of the time on the DJIA and S&P 500 over the last 21 years with average gains on the day of about 0.5% NASDAQ has been a bit less strong, two-thirds of the time and Russell 2000 is up 61.9% of the time.

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  8. Stockaholic

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    happy april fools day!

    its the first friday of a new month so that must mean its jobs friday!

    here's what is expected from today's report-

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    happy first trading day of q2!
     
  9. Stockaholic

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    Payrolls Rise 215K In March, Beat Expectations As Average Hourly Earnings, Unemployment Rise

    And so the confusion remains: why did Yellen go uber dove three days ahead of a day in which the BLS reported that in March not only were 215K jobs created, more than the consensus 205K, if below last month's 245K, but in which average hourly earnings rebounded a solid 0.3%, above the 0.2% expected, and well above last month's -0.1% decline.

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    Wages rose:

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    However, the fly in the the ointment was that the unemployment rate picked up modestly from 4.9% to an above expectations 5.0%. This was due to a modest increase in the participation rate to 63% from 62.9%, as 396K new civilians entered the labor force, rising to 159,286K, while 246K new jobs were added (per the Household survey) while people not in the labor force declined by 206K to 93,482K.

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    Elsewhere manufacturing payrolls dropped 29K, far below the 2K increase expected, and below last month's -18K. Additionally, the energy recession is finally trickling down with oil and gas extraction payrolls falling 19,200 from a year earlier (chart courtesy of @not_jim_cramer).

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    And the last notable point: average hourly hours worked were flat at 2 year lows, which bodes poorfly for both productivity growth and for GDP.

    On net, the report was better than expected, which means it is "good news" if only for the economy, but will it be good news for the market, which will now start discounting another Fed rate hike all over again.

    Indeed, the speculation has already begun that June is once again in play as per Bill Gross, who moments ago said that "June Likely to Be When Fed Makes One of Two Rate Hikes."

    As of this moment, futures are near day lows, so Goldman's latest forecast that "Good news is good news again" was again wrong.

    From the report:

    Total nonfarm payroll employment rose by 215,000 in March. Employment gains occurred in retail trade, construction, and health care, while job losses occurred in manufacturing and mining.

    Retail trade added 48,000 jobs in March. Employment gains occurred in general merchandise stores (+12,000), health and personal care stores (+10,000), building material and garden supply stores (+10,000), and automobile dealers (+5,000). Over the past 12 months, retail trade has added 378,000 jobs.

    Construction employment rose by 37,000 in March. Job gains occurred among residential specialty trade contractors (+12,000) and in heavy and civilengineering construction (+11,000). Over the year, construction has added 301,000 jobs.

    Employment in health care increased by 37,000 over the month, about in line with the average monthly gain over the prior 12 months. In March, employment rose in ambulatory health care services (+27,000) and hospitals (+10,000). Over the year, health care employment has increased by 503,000.

    Over the month, employment continued to trend up in food services and drinking places (+25,000) and in financial activities (+15,000).

    In March, employment in professional and business services changed little for the third month in a row. In 2015, the industry added an average of 52,000 jobs per month.

    Employment in manufacturing declined by 29,000 in March. Most of the job losses occurred in durable goods industries (-24,000), including machinery (-7,000), primary metals (-3,000), and semiconductors and electronic components (-3,000).

    Mining employment continued to decline in March (-12,000) with losses concentrated in support activities for mining (-10,000). Since reaching a peak in September 2014, employment in mining has decreased by 185,000.

    Employment in other major industries, including wholesale trade, transportation and warehousing, information, and government, changed little over the month.

    The average workweek for all employees on private nonfarm payrolls was unchanged at 34.4 hours in March. The manufacturing workweek edged down by 0.1 hour to 40.6 hours. Factory overtime was 3.3 hours for the fourth month in a row. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.6 hours. (See tables B-2 and B-7.)

    In March, average hourly earnings for all employees on private nonfarm payrolls increased by 7 cents to $25.43, following a 2-cent decline in February. Over the year, average hourly earnings have risen by 2.3 percent. In March, average hourly earnings of private-sector production and nonsupervisory employees increased by 4 cents to $21.37. (See tables B-3 and B-8.)

    The change in total nonfarm payroll employment for January was revised from +172,000 to +168,000, and the change for February was revised from +242,000 to +245,000. With these revisions, employment gains in January and February combined were 1,000 less than previously reported. Over the past 3 months, job gains have averaged 209,000 per month.
     

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