Just in the nick of time, a special delivery of relief felt, bullish gifts stateside and abroad put a “ho-ho-hopeful” bid into Thursday’s out-the-gate action. As of 9:55 ET the SP-500 (SPY) is up a nicely-packaged 1.05% and tied up with a blue price ribbon.
“Eur-o mean one Mr. Grinch” behavior has been given the boot Thursday on a bevy of varied and overall pleasing reports. From across-the-pond, investors watched the other guy and gal show strong demand for indebted Spain’s latest auction of two and five-year notes.
Bulls have also reacted well to a bit of helpful regional manufacturing data spearheaded by France’s Purchasing & Services Manager’s Index which rose to 48.7 for December compared to last month’s 47.3 and forecasts of 47.0.
Stateside, economic bellwether FedEx (FDX) delivered a gift-wrapped corporate confessional for bulls.
Shares of FDX are up 4.25% in the premarket and wedged back between its 50 and 200SMAs after the air and freight giant beat the Street by $0.04 on profits of $1.57 per share, saw in-line sales growth of 10.0% and issued a bullishly-bracketing Q3 EPS forecast of $1.25 - $1.45 vs. $1.31 while reaffirming above-views guidance of $6.25 - $6.75 vs. $6.30 consensus estimate.
A surprise acquisition in the semiconductor (SMH) sector is also welcome news for bargain-hunters. After Wednesday’s close it was announced semi equipment manufacturer Lam Research (LRCX) will acquire Novellus (NVLS) in an all-stock transaction valued around $3.3B or $44.42. Intraday, shares of LRCX are off 3.85% while NVLS trades up by about 21%.
Credit card issuer Discover Financial (DFS) has also assisted in this morning’s improved sentiment and bulls shopping for bargains. The outfit’s shares are up about 2.50% after declaring a quarterly dividend of $0.10, beating profit forecasts of $0.91 per share with earnings of $0.94, matching sales growth of 13.2% and seeing loans grow by 17% to a record $57.3 billion.
Technically speaking, today’s bid is challenging key five-month long symmetrical triangle resistance as bulls look to persuade hedge hogs and bears to help out with a potential breakout from the neutral formation.
On the officially-sanctioned stateside economic front, reports have also proven a boon for bulls. Weekly claims hit their lowest levels in more than a handful of months with a reading of 366,000 versus the prior week’s 385,000 and a substantial surprise over analyst views expectant of a 5K increase to 390,000.
Regional manufacturing out of NY State via the Empire Survey jumped to 9.5 in December. The reading marks a vast improvement over November’s 0.6 and also easily trumped estimates of 3.0.
The only headline blemish but largely dismissed is a total PPI increase of 0.3% for November which rose two-tenths above forecasts of 0.1%. However, core levels which axe out the little things in life such as food and energy matched views and rose by just 0.1%.
In those often intertwined markets of notice, the SP-500’s early bid looks to confirm the three-day pullback as today’s price action has just penetrated Wednesday’s highs, as well as the 50SMA.
“Eur-o mean one Mr. Grinch” a.k.a. the EUR/USD is putting together a matching doji off Wednesday’s price action which tested eleven month lows.
Currently the important currency pair is up 0.33%. As this week’s showcase ticker of influence, both bulls and bears will be monitoring the instrument for confirmation from its current indecisive price pattern.
Silver (SLV) is up 0.75% but contained to inside candle action following Wednesday’s slippery drop of nearly 6.0% caused by the double whammy of Dollar (UUP) flight strength and soured economic sentiment.
Technically speaking, one man’s potential double bottom is taking on the more menacing look of a continuation head and shoulder or grizzly flag pattern, both of which began in late September.
Shares of the US Oil Fund (USO) are lagging the broader market and up just 0.35%. On the brighter side, maybe, technically shares remain wedged between its 200 and 50SMA. And the VIX ($VIX) isn’t open just yet for Thursday’s jovial festivities.
However, in a week marked by “vix’ing” behavior and failure to please either bulls or bears with accurate signals regarding forthcoming investor reaction and a failure of a market based follow-through day or FTD to signal after a generous 13 days; we’d have to say “Eur-o mean one Mr. Grinch” behavior is bound to make more expected appearances in the days ahead.
Senior Options Writer, former Market Maker & fulltime Option Hedge Hog Advocate
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