Stocks pullback modestly while bonds decelerated from its initial decline; major indices finished almost flat for the week where the S&P500 down by just half a percentage lower and the Dow Jones CBOT Treasury index added only 0.4%. Commodity was the weakest asset this week as weighed on fall in crude oil. Market sentiment was mostly on the negative side as economic data showed weaker prints relative to market expectation; where housing market remained weak on both new home sales (313k vs. 330k) and existing home sales (4.59m vs. 4.60m). Looking forward next week, investors will be focusing on consumer confidence, GDP and consumer spending as rising gasoline prices are becoming a critical economic recovery barrier.
Technical Highlights:
• Bonds decelerated from its decline, stocks turned slightly lower as fixed income rebounded.
• Stocks' internal tumbled across major equity benchmarks as the percentage of stock above 50 day moving average dropped shapely; negative divergence remains a concern as indices continue to rise while their underlying stocks keep on weakening.
• Energy stocks weighed on crude oil; offensive group remained strong in downward market environment.
• Historical returns continued to bias toward materials and energy, which become the market leading sectors.
• The yield curve came down slightly after hitting its 6 months high on the longer maturity bonds; however the 2yr rate is reaching a bullish moving average crossover, which suggests rate will remain at a high level.
read more at...
http://plus.alpbeta.com/report/201212.pdf
Technical Highlights:
• Bonds decelerated from its decline, stocks turned slightly lower as fixed income rebounded.
• Stocks' internal tumbled across major equity benchmarks as the percentage of stock above 50 day moving average dropped shapely; negative divergence remains a concern as indices continue to rise while their underlying stocks keep on weakening.
• Energy stocks weighed on crude oil; offensive group remained strong in downward market environment.
• Historical returns continued to bias toward materials and energy, which become the market leading sectors.
• The yield curve came down slightly after hitting its 6 months high on the longer maturity bonds; however the 2yr rate is reaching a bullish moving average crossover, which suggests rate will remain at a high level.
read more at...
http://plus.alpbeta.com/report/201212.pdf