Chris Tyler, Optionetics.com
December 23, 2010
A flurry of economic data disappoints analysts while too much “naughty but nice” behavior of late finds even fewer bulls as quiet as mice in pre-holiday trade. As of 10:55 ET the SP-500 (SPY) is off -0.15% in more of the same and slightly more difficult-to-handle “VIX’ing” price behavior.
In economic news, a headline snow job of bulls hitting the exits has been provided by a flurry of purportedly disappointing data. With trading desks thinly-staffed or on likelier virtual hands-free autopilot, mouse-like market action has been the order of the day following in-the-ballpark weekly claims figures, mixed durable goods stats and other non-threatening income and spending data.
By the numbers, initial claims fell 3,000 to 420,000 and warmed the cockles of analysts forecasting an increase to 424,000. At the same time, continuing claims also proved pleasing to the eye with a figure of 4.064M versus estimates of 4.075M and dropping by 103,000 week-over-week.
Total durable goods for November stumbled not tumbled by a slightly weaker -1.3% versus estimates of -1.1%. Axing transportation, orders enjoyed an increase of 2.4% compared to Street views of 0.8%.
And also barely causing a stir amongst market critters, income and spending data for November rose by 0.3% and 0.4% respectively. Economists wearing matching hoof-style mittens and buffalo hats polled by other analysts had come to expect increases of 0.2% and 0.5%.
Intraday and keeping muted interest alive and well, Michigan sentiment came in at 74.5, up marginally from a prior reading of 74.2 but slightly below consensus views of 74.8. Finally, new home sales rose by 15,000 to 290,000 and matched to possibly missed by 10,000; depending on which bull is surveyed.
On the corporate side, light earnings continue to support the merry theme of delivering stronger-than-expected packages. In the spotlight, shares of Bed Bath & Beyond (BBBY) are up 6.30% after its beat.
The NASDAQ 100 constituent and specialty retailer managed to grow profits by 25% in beating Street forecasts by $0.08 on earnings of $0.74 per share while sales for Q3 climbed by a slightly beefier 11.1%.
Looking forward, Bed Bath & Beyond issued bracketing in-line guidance for Q4, above views earnings of $2.86 - $2.90 vs. $2.80 for 2011 and authorized a new $2.0B repurchase program.
For ye ol’ faithful but late to the party, alpha chasing, year-end favor for financials (XLF) has taken a pause after back-to-back sessions of market outperformance and great influence.
On a dearth of bearish news provisions, profit-taking style leadership has found its way into “Bilk of America” (BAC) with shares off -1.75% but following its 6% plus gainer on Tuesday and Wednesday.
In those often intertwined markets of notice, continued mostly aligned and even quieter church mouse type action is the order of the day. In no particular order, the US Dollar (UUP), iShares Silver ETF (SLV), 20-Yr (TLT) and Black Gold (USO) are all flickering fractionally red and green lights of promise and little else.
Finally, the CBOE Volatility Index ($VIX) is up 4.25% or more importantly at 16.10% from last night’s “hair on our chinny-chin-chin” close of 15.45% which took out last Friday’s lows by 0.01%. As much, the price investors are willing not-to-pay nominally for protection; remains concerning for folks less concerned about accurately pricing in a quiet holiday in a sometimes greedy market that never sleeps. Have a great holiday!
Senior Staff Writer & Options Strategist
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