(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers.)
SPANISH YIELDS AGAIN OVER 5.5%
March 23, 2012
Bench mark 10 year bond yields in Spain have risen to 5.53%. This is a stark reminder that problems in Europe may raise their head again and pull down world markets.
India’s jewelers went on strike to protest a hike in taxes on gold imports. There is significant anecdotal evidence that physical demand for gold is falling. India is the world’s biggest gold buyer.
Gold futures are at $1649, silver futures are at $31.63, and oil futures are $105.72.
S&P 500 resistance levels are 1400, 1410, and 1424; support levels are 1380, 1360, and 1358.
DJIA futures are down 18 points.
CHINA AND EUROPE GET WEAKER, U.S. GETS STRONGER
March 22, 2012
China HSBC Purchasing Managers Index (PMI) for March came at 48.1. This is the fifth straight month of contraction.
The PMI estimate for eurozone came at 48.7, down from 49.3 in February. This is the sixth decline over the last seven months.
The U.S. weekly jobs data came better than expected.
The point is China and Europe are getting weaker, the U.S. is getting stronger.
Correction in gold and silver continues.
Gold futures are at $1635, silver futures are at $31.56, and oil futures are $105.49.
S&P 500 resistance levels are 1400, 1410, and 1424; support levels are 1380, 1368, and 1358.
DJIA futures are down 57 points.
UNDER PERFORMING MONEY MANAGERS MAY STAMPEDE TO CAUSE A MELT UP
March 21, 2012
A large number of money managers are significantly under performing their benchmarks this quarter. As the end of the quarter approaches, such money managers may stampede into the market and cause a melt up.
There is no way to tell with certainty if this will happen because some money managers are like sheep. If a few large ones start following this strategy, others will jump in. It is important that investors be aware of this possibility.
First four days of April are usually positive. Some selling takes as investors raise funds to pay taxes. The tax deadline is April 15th. If such a scenario unfolds, any correction will be postponed to second week of April.
Gold futures are at $1652, silver futures are at $31.99, and oil futures are $106.41.
S&P 500 resistance levels are 1410, 1424, and 1437; support levels are 1400, 1380, and 1368.
DJIA futures are up 14 points.
SAUDI ARABIA AIMS TO DRIVE OIL TO $100
March 20, 2012
Saudi Arabia’s cabinet said it would work “individually” and with others to help return “oil prices to fair levels” by boosting its exports to the U.S. and re-opening old oilfields to expand production. Saudi aims to drive oil to $100.
In the U.S. important housing data is released. February Housing Starts at 0.698M vs. consensus of 0.700M. February Housing Starts Permits at 0.717M vs. consensus of 0.700M. Part of the stock market rally has been driven by optimism over housing. The data are mixed, but housing bulls are not likely to be deterred in their optimism.
Our models continue to show a 65% probability of correction in the stock market.
Significant selling is seen by Smart Money in gold so far today.
Gold futures are at $1645, silver futures are at $32.17, and oil futures are $107.54.
S&P 500 resistance levels are 1400, 1410, and 1424; support levels are 1380, 1368, and 1358.
DJIA futures are down 64 points.
AAPL INITIATES DIVIDED AND BUY BACK
March 19, 2012
“We have used some of our cash to make great investments in our business through increased research and development, acquisitions, new retail store openings, strategic prepayments and capital expenditures in our supply chain, and building out our infrastructure. You’ll see more of all of these in the future,” said Tim Cook, Apple’s CEO. “Even with these investments, we can maintain a war chest for strategic opportunities and have plenty of cash to run our business. So we are going to initiate a dividend and share repurchase program.”
Apple announced plans to initiate a dividend and share repurchase program commencing later this year. Subject to declaration by the Board of Directors, the Company plans to initiate a quarterly dividend of $2.65 per share sometime in the fourth quarter of its fiscal 2012, which begins on July 1, 2012. Additionally, the Company’s Board of Directors has authorized a $10B share repurchase program commencing in the Company’s fiscal 2013, which begins on September 30, 2012. The repurchase program is expected to be executed over three years, with the primary objective of neutralizing the impact of dilution from future employee equity grants and employee stock purchase programs.
AAPL stock is halted as of this writing. Expect a battle between those who buy on this news and those who believe that part of the last $100 run up has already discounted the news in the stock.
The rest of the market will be heavily influenced by who wins the AAPL battle.
If there are any trading opportunities with reasonable risk that arise out of this situation, we will provide you with a signal on the Real Time Feed.
Gold futures are at $1656, silver futures are at $32.50, and oil futures are $107.70.
S&P 500 resistance levels are 1400, 1410, and 1424; support levels are 1380, 1368, and 1358.
DJIA futures are down 18 points.
