Intraday Market Update
In the overnight session US index futures were sharply lower with the S&P 500 reaching a low of 1,052 as the Asian and European markets digested US trading from Friday and the terrible employment report. But the S&P 500 futures bounced back and are little changed from Friday's close. All of the major indexes are holding their ground but have not been able to sustain any meaningful move to the upside. The S&P 500 reached a high near 1,071 and a low near 1,059 and chopping back and forth in this range. Small caps and technology are faring a little worse with the Russell 2000 and tech heavy NASADAQ both down about more than -0.50%.
With little US economic data or corporate earnings on the schedule early this week attention has turned to the European debt situation yet again. Spreads for CDS insurance on European sovereign debt has been spiking as evidenced by the 10-year Spanish and German government bonds widening to above 200 bps. Investors appear to be concerned about additional potential deficit surprises, similar to Hungary's over the weekend, as news lurks from several European countries regarding their 2011 budgets. Also lurking is expectations for news as to when the market will see the results of European bank stress tests to determine which of Europe's banks have the most exposure to the debt crises.
In equities, the Financial Crises Inquiry Committee (FCIC) has filed a subpoena seeking documents from Goldman Sachs after they said the bank did not provide documents and interviews in a timely manner. Shares of GS are down about -1.65%. BP stated that it is collecting upwards of 10,000 barrels per day after they successfully connected the cap to the leaking well late last week. The company expects to double the amount of oil being captured to 20,000 barrels per day in the coming days. The live video feed of the well still shows oil blowing into the Gulf. Shares of BP are higher by +0.3% but were up about +3% in early trading.
Shares of CVS were off more than -12% in early trading after Walgreen's cut off their participation in CVS's pharmacy benefit manager plans. CVS has recovered some of the losses and is now off -7.30%. Among the beneficiaries of the decision by Walgreen's are Medco and Express Scripts, both of which are higher by more than +5%. Walgreen's is down -1.40%.
Commodities are mixed with front month crude recovering +.50% from Friday's sell off. Natural Gas is higher again tacking on +2.00%. Gold and silver are both higher by +1.88% and +5.00%, respectively. Copper is getting hit again losing -1.90%. Copper has lost a key support level near $2.81 and appears to be headed lower. Copper has given us clues as a leading indicator in major trend changes over the last few years. Weekly chart of copper:
All major markets throughout the world were lower on Monday. Notable losers were Japan (-3.84%), Australia (-2.77%), Hong Kong (-2.03%), China (-1.64%), France (-1.21%), Spain (-1.44%) and London (-1.11%). Stocks in Germany fared the best but still lost -0.57%.
Core Sector List:
Overall reading: 9 sectors declining, 7 sectors advancing.
Strongest Sectors: Gold Miners, Utilities, Oil
Weakest Sectors: Home Construction, Semiconductors, Internet
S&P 500 - Daily and 30-minute Intraday Charts:
Dow Jones - Daily and 30-minute Intraday Charts:
NASDAQ - Daily and 30-minute Intraday Charts:
Russell 2000 - Daily and 30-minute Intraday Charts: