Morning Watch, Nov. 18
Email This Article
Print This Article
Digg This
Delicious
SubscribeMOST POPULAR ARTICLES
- Foreign Exchange: To Parity and Beyond? Not Yet.
- Weekly Outlook, February 8, 2010
- Technical Analysis: Commodity Play
- Closing Wrap-Up, Feb. 8
- Kaeppel's Corner: Don't Give Up On Gold Stocks Just Yet
- Market Trends: Intermarket Analysis, Part I
- AU Editorial: A Likely Scenario?
- Closing Wrap-Up, Feb. 5
- Fundamental Focus: The Habits of Wealthy People
- Morning Watch, Feb. 8
- Fundamental Focus: The Habits of Wealthy People
- Kaeppel's Corner: Don't Give Up On Gold Stocks Just Yet
- Market Trends: Intermarket Analysis, Part I
- BACK TO BASICS: Choosing Between Bull Call and Bull Put Spreads
- TRADING FLOOR SECRETS: When to Avoid Buying Calls
- Analytical Toolbox: Market Timing and Portfolio Hedging
- Midday Action: February 9
- Growth Stock Swing Option: February 9, 2010
- Technical Analysis: Commodity Play
- Midday Action: February 8
- Foreign Exchange: To Parity and Beyond? Not Yet.
- AU Editorial: A Likely Scenario?
- Economic Watchdog, Feb. 4
- Market Trends: Intermarket Analysis, Part I
- Hot Shots: Feb 3, "RAD" Action for Bears?
- Kaeppel's Corner: Don't Give Up On Gold Stocks Just Yet
SPONSORED LINKS
November 18, 2009
Stocks suffer losses following disappointing economic data on housing. The major market indices managed gains Tuesday, albeit mildly, following a number of earnings reports in the retail sector and several economic reports. The release of economic news has continued this morning, but the results were disappointing, leaving stocks in the red. The bulls might be feeling pleased, however, given that losses are minor despite very bearish news.
Housing starts in October were expected to show a mild gain, but the actual number of housing starts fe3ll 10.6 percent. This put the annualized rate of starts at 0.529 million, well below estimates for a reading of 0.600 million units. This is surprising given extremely low mortgage rates. Year on year, housing starts are down 30.7 percent with building permits off 24.3 percent. Economists feel that with the extension of the first time home buyer credit, starts could see some strength in November.
On Tuesday, the PPI showed a gain of 0.3 percent overall and a decline of 0.6 percent at the core. Both these figures were below expectations, further supporting the Fed's view that inflation pressures will remain low for some time. Consumer prices were released this morning with the headline figure up 0.3 percent, a tenth more than expected. The core rate, which excludes food and energy, rose 0.2 percent, also a tenth above expectations. Nonetheless, the year on year rate was down 0.2 percent overall and up 1.7 percent at the core.
Shares of BJ's Wholesale (BJ) are down nearly 2 percent after reporting quarterly earnings. The company matched earnings expectations of 45-cents a share with revenues up 2.0 percent, slightly better than expected. However, same-store sales fell 2.5 percent, though this was solely a result of a 6.4 percent drop in gasoline sales. Merchandise same-store sales actually rose 3.9 percent. BJ shares have not been able to keep up with the strength seen in the broader market with the stock gaining just 6 percent in 2009, just a quarter of the gains seen in the S&P 500 ($SPX).
With stocks up 9 of the past 10 sessions, fear has come off recent highs. The CBOE Market Volatility Index ($VIX) ran into resistance at 30 at the end of October. In early trading Wednesday, the VIX is trading near 22.50. Despite concerns about the economy and the jobs market, traders are not panicking by buying puts.
Jody Osborne
Senior Staff Writer & Options Strategist
Optionetics.com ~ Your Options Education Site
Visit Jody's Forum
© Copyright 1995-2010 Optionetics. All rights reserved. This material is for personal use only. Republication and re-dissemination, including posting to newsgroups, is expressly prohibited without the prior written consent of Optionetics. Optionetics is a registered trademark of Optionetics, Inc.