Posted By: Ilan Levy-Mayer Vice President, Cannon Trading Futures Blog
1. Market Commentary
2. Futures Support and Resistance Levels – S&P, Nasdaq, Dow Jones, Russell 2000, Dollar Index
3. Commodities Support and Resistance Levels – Gold, Euro, Crude Oil, T-Bonds
4. Commodities Support and Resistance Levels – Corn, Wheat, Beans, Silver
5. Futures Economic Reports for Tuesday July 22, 2014
For 2014 I would like to wish all of you discipline and patience in your trading!
TradeTheNews.com Weekly Market Update: Markets Shake Off New Ukraine Tragedy
- The June US housing starts and building permits numbers were not confidence-inspiring. The monthly starts missed expectations by over 100K and the reading was at its lowest level since September 2013. Meanwhile the May starts figure was revised lower. June single-family starts fell to 575K, their lowest level since November 2012.
- Morgan Stanley and Goldman Sachs both beat earnings and revenue expectations in second-quarter results, with strong gains in investment banking revenue helping to drive profits higher. JPMorgan’s headline numbers also met consensus targets, but profit fell 8% y/y and revenue declined 3% y/y, while fixed income and equity revenue fell 15% y/y. Both Citigroup and Bank of America beat earnings expectations, although both banks took very large litigation charges that cut profit totals significantly in the quarter: Citi took a $3.8B charge and BoA took a $4.0B charge, both were related settlements DoJ investigations of mortgage-backed securities fraud.
- In one of the more surprising tech stories this week, ancient rivals IBM and Apple entered a cloud computing and mobile device partnership. Under the deal, IBM will sell Apple devices with newly created business apps using IBM’s big data framework. IBM’s headline earnings were mixed, although revenue declined a hair y/y, dragged lower by much slower server sales. Shares of AMD fell sharply after the company reported revenue in its computing solutions chip unit was down 20% y/y. Intel’s numbers were pretty strong, although its efforts to break into mobile continue to suffer.
- Microsoft said it would lay off up to 18,000 workers over the next year, and take a pretax charge of $1.1-1.6 billion to pay for the cuts. Two thirds of these cuts come in Microsoft’s ill-fated hardware division, representing about half of the total employees that the Nokia deal brought into the company in April.
- Industrials General Electric, Honeywell and Johnson Controls reported solid, in-line earnings. Both GE and HON met expectations on good earnings and revenue growth, with FY14 guidance reaffirmed. With divestiture and restructuring costs, JCI’s earnings were down sharply, but ex-costs the firm did well.
- Massive M&A deals were back in headlines. Rupert Murdoch’s Twenty-First Century Fox made a $85/share, $80 billion bid for Time Warner, which rejected the bid. Subsequent reports indicated Fox could expand its offer up to $100/share. AbbVie reached a deal worth roughly $55 billion in cash and stock to combine with Shire. In other deal flow, AECOM agreed to acquire URS Corporation for $56.31/share in cash and stock in a deal valued about $6B, and Kodiak Oil & Gas agreed to be acquired by Whiting Petroleum in an all-stock transaction valued at $6B.
- For most of the week, EUR/USD remained locked in the same two big-figure range it has held since May. Key support in the pair remains the 1.3503 post ECB low in June and the 1.3477 January low. On Friday, cable took a nose dive as chatter made the rounds that an interview would be published over the weekend in which BoE Governor Carney made dovish comments. GBP/USD dropped from 1.7095 to 1.7040, prompting a denial from the BoE.
- On Monday the BOJ cut its FY14/15 GPD forecast to 1.0% from 1.1% as part of its quarterly review of targets and reiterated projections for FY15/16 and FY16/17 GDP as well as FY14-17 inflation. The BoJ maintained its economic assessment for the 12th consecutive meeting, commenting that “effects of decline in demand following front-loaded increase prior to consumption tax hike are expected to wane gradually.” There were reports that the government would boost its economic outlook in the upcoming monthly report for the first time since January.
- China’s Q2 GDP (+7.5%) and June industrial production (+9.2%, a five-month high) topped expectations, which in turn tamped down expectations that Beijing would be forced to add more stimulus beyond the targeted measures already being taken. Property investment numbers for the first half of the year were ugly: sales fell 6.7%, property construction fell 16% and home sales value declined 9.2%. The National Bureau of Statistics warned that cooling in the property market, while a reasonable adjustment, could create more pressure on broader economy. Later in the week, a report showed June property prices fell sequentially for the second consecutive month and the newly appointed Land and Resources minister signaled more tolerance for easing curbs on property investment.
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|Contract Sept. 2014||SP500||Nasdaq100||Dow Jones||Mini Russell||Dollar Index|
|Contract||August Gold||Sept.Silver||August Crude Oil||September Bonds||Sept. Euro|
|Resistance 3||1330.1||2145.8||104.87||139 17/32||1.3583|
|Resistance 2||1324.6||2131.2||103.92||139 6/32||1.3567|
|Resistance 1||1319.0||2115.3||103.38||138 26/32||1.3546|
|Support 1||1307.9||2084.8||101.89||138 3/32||1.3509|
|Support 2||1302.4||2070.2||100.94||137 24/32||1.3493|
|Support 3||1296.8||2054.3||100.40||137 12/32||1.3472|
|Contract||Dec Corn||Sept. Wheat||Nov. Beans||Dec. SoyMeal||Dec. bean Oil|
|TueJul 22||8:30am||USD||Core CPI m/m||0.2%||0.3%|
|10:00am||USD||Existing Home Sales||4.98M||4.89M|
|USD||Richmond Manufacturing Index||5||3|
This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts here in contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgment in trading.