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Market Action: Volatility Is Back in Style
Today's financial recap and tomorrow's financial outlook.
Minyanville Staff    

Both international and domestic equity markets were weak in early trading following Thursday's rout, which was driven by Argentina's default and ongoing strife at Portugal's Banco Espirito Santo.

The July jobs report helped stabilize S&P 500 (INDEXSP:.INX) futures pre-market, as while there were some bright spots, it was not strong enough to move expectations for interest rates hikes from the Federal Reserve.

The S&P hit an early-morning high at 1937.35 before dipping over 20 points before noon, and then bouncing higher to finish -0.3% at 1925.15.

The economy added 209,000 nonfarm payrolls in July, which was less than the 209,000 expected. June's number was revised up by 10,000.

Hourly earnings were flat month-over-month. Economists had been forecasting a 0.2% gain.

The PCE deflator rose 1.6%, below the 1.7% gains, which helped quell inflation fears, giving support to US Treasuries.

The unemployment rate was slightly higher-than-expected at 6.2%, but that was because of an increase in the labor force participation rate. That means more people are entering the workforce, which is a positive.

Looking deeper in the market, we saw intraday weakness in junk bonds and strength in US Treasuries, indicative of fear among traders.

Major bank stocks suffered as the International Swaps and Derivatives Association ruled that Argentina's sovereign debt default constitutes a credit event, meaning sellers of credit default swaps must compensate buyers. However, net exposure to the debt in question is just $1 billion.

The small-cap Russell 2000 (INDEXRUSSELL:RUT) also underperformed.

In earnings, LinkedIn (NASDAQ:LNKD) was the star of the show today, soaring 11.7% to $201.78 after beating consensus estimates by a wide margin Thursday afternoon.

Dow Jones Industrial Average (INDEXDJX:.DJI) component  Procter & Gamble (NYSE:PG) rose 3.0% after delivering a solid earnings beat.

Action camera maker GoPro (NASDAQ:GPRO) delivered a strong report, exceeding revenue and earnings forecasts, but the stock fell 14.6% as the numbers weren't strong enough to please the momentum traders that bid the stock up over 100% since it came public.

In international news, Israel and Palestinian militants arranged a 72-hour cease-fire, but the agreement unraveled quickly.

Tomorrow's Financial Outlook

On Monday, we will see earnings reports from the likes of Michael Kors (NASDAQ:KORS), American International Group (NYSE:AIG), and Tenet Healthcare (NYSE:THC). There are no major US economic reports on the calendar.

Traders will continue monitoring geopolitical developments in Gaza and Ukraine, but overall, it appears that volatility is finally picking up after an extended period of stability.

Whether this will lead to a real pullback remains questionable. The S&P 500 is still less than 4% off all-time high, and the bulls' comeback on Friday shows that the bulls still have some mettle.

Twitter: @Minyanville

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
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No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Market Action: Volatility Is Back in Style
Today's financial recap and tomorrow's financial outlook.
Minyanville Staff    

Both international and domestic equity markets were weak in early trading following Thursday's rout, which was driven by Argentina's default and ongoing strife at Portugal's Banco Espirito Santo.

The July jobs report helped stabilize S&P 500 (INDEXSP:.INX) futures pre-market, as while there were some bright spots, it was not strong enough to move expectations for interest rates hikes from the Federal Reserve.

The S&P hit an early-morning high at 1937.35 before dipping over 20 points before noon, and then bouncing higher to finish -0.3% at 1925.15.

The economy added 209,000 nonfarm payrolls in July, which was less than the 209,000 expected. June's number was revised up by 10,000.

Hourly earnings were flat month-over-month. Economists had been forecasting a 0.2% gain.

The PCE deflator rose 1.6%, below the 1.7% gains, which helped quell inflation fears, giving support to US Treasuries.

The unemployment rate was slightly higher-than-expected at 6.2%, but that was because of an increase in the labor force participation rate. That means more people are entering the workforce, which is a positive.

Looking deeper in the market, we saw intraday weakness in junk bonds and strength in US Treasuries, indicative of fear among traders.

Major bank stocks suffered as the International Swaps and Derivatives Association ruled that Argentina's sovereign debt default constitutes a credit event, meaning sellers of credit default swaps must compensate buyers. However, net exposure to the debt in question is just $1 billion.

The small-cap Russell 2000 (INDEXRUSSELL:RUT) also underperformed.

In earnings, LinkedIn (NASDAQ:LNKD) was the star of the show today, soaring 11.7% to $201.78 after beating consensus estimates by a wide margin Thursday afternoon.

Dow Jones Industrial Average (INDEXDJX:.DJI) component  Procter & Gamble (NYSE:PG) rose 3.0% after delivering a solid earnings beat.

Action camera maker GoPro (NASDAQ:GPRO) delivered a strong report, exceeding revenue and earnings forecasts, but the stock fell 14.6% as the numbers weren't strong enough to please the momentum traders that bid the stock up over 100% since it came public.

In international news, Israel and Palestinian militants arranged a 72-hour cease-fire, but the agreement unraveled quickly.

Tomorrow's Financial Outlook

On Monday, we will see earnings reports from the likes of Michael Kors (NASDAQ:KORS), American International Group (NYSE:AIG), and Tenet Healthcare (NYSE:THC). There are no major US economic reports on the calendar.

Traders will continue monitoring geopolitical developments in Gaza and Ukraine, but overall, it appears that volatility is finally picking up after an extended period of stability.

Whether this will lead to a real pullback remains questionable. The S&P 500 is still less than 4% off all-time high, and the bulls' comeback on Friday shows that the bulls still have some mettle.

Twitter: @Minyanville

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

More From Minyanville Staff
Daily Recap
Market Action: Volatility Is Back in Style
Today's financial recap and tomorrow's financial outlook.
Minyanville Staff    

Both international and domestic equity markets were weak in early trading following Thursday's rout, which was driven by Argentina's default and ongoing strife at Portugal's Banco Espirito Santo.

The July jobs report helped stabilize S&P 500 (INDEXSP:.INX) futures pre-market, as while there were some bright spots, it was not strong enough to move expectations for interest rates hikes from the Federal Reserve.

The S&P hit an early-morning high at 1937.35 before dipping over 20 points before noon, and then bouncing higher to finish -0.3% at 1925.15.

The economy added 209,000 nonfarm payrolls in July, which was less than the 209,000 expected. June's number was revised up by 10,000.

Hourly earnings were flat month-over-month. Economists had been forecasting a 0.2% gain.

The PCE deflator rose 1.6%, below the 1.7% gains, which helped quell inflation fears, giving support to US Treasuries.

The unemployment rate was slightly higher-than-expected at 6.2%, but that was because of an increase in the labor force participation rate. That means more people are entering the workforce, which is a positive.

Looking deeper in the market, we saw intraday weakness in junk bonds and strength in US Treasuries, indicative of fear among traders.

Major bank stocks suffered as the International Swaps and Derivatives Association ruled that Argentina's sovereign debt default constitutes a credit event, meaning sellers of credit default swaps must compensate buyers. However, net exposure to the debt in question is just $1 billion.

The small-cap Russell 2000 (INDEXRUSSELL:RUT) also underperformed.

In earnings, LinkedIn (NASDAQ:LNKD) was the star of the show today, soaring 11.7% to $201.78 after beating consensus estimates by a wide margin Thursday afternoon.

Dow Jones Industrial Average (INDEXDJX:.DJI) component  Procter & Gamble (NYSE:PG) rose 3.0% after delivering a solid earnings beat.

Action camera maker GoPro (NASDAQ:GPRO) delivered a strong report, exceeding revenue and earnings forecasts, but the stock fell 14.6% as the numbers weren't strong enough to please the momentum traders that bid the stock up over 100% since it came public.

In international news, Israel and Palestinian militants arranged a 72-hour cease-fire, but the agreement unraveled quickly.

Tomorrow's Financial Outlook

On Monday, we will see earnings reports from the likes of Michael Kors (NASDAQ:KORS), American International Group (NYSE:AIG), and Tenet Healthcare (NYSE:THC). There are no major US economic reports on the calendar.

Traders will continue monitoring geopolitical developments in Gaza and Ukraine, but overall, it appears that volatility is finally picking up after an extended period of stability.

Whether this will lead to a real pullback remains questionable. The S&P 500 is still less than 4% off all-time high, and the bulls' comeback on Friday shows that the bulls still have some mettle.

Twitter: @Minyanville

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

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