Weekly Market Review 201222

Weaker economic data continued to push the bearish momentum forward; May nonfarm payrolls' (69k vs. 165k est.) disappointed the market by adding the least job in the last 12 month periods. Furthermore, consumer confidence (64.9 vs. 70.0 est.), Chicago PMI (52.7% vs. 56.8% est.), and the ISM manufacturing index (53.5% vs. 54.0% est.) all showed below estimate readings throughout this past week. These pessimistic releases drove the U.S. bond market to trade at record high that the 10yr is currently trading below 1.5%. But how low can yield goes? While this low rates environment may least a lot longer given from the poor economic condition. However, from the technical perspective, it may be ready for a bounce that the 10-yr is approaching to its multi-decade support. Looking forward next week, stocks are likely to continue to stay volatile with this downtrend momentum, and the ISM service will be the key mover for bonds.

Technical Highlights:
• Stocks turned underwater on year-to-date basis; bonds soared to record high.
• The NYSE composite failed to make a bullish turn on its 200day moving average; Both the S&P and the NASDAQ composite are now trading in the bearish territory (below 200day SMA).
• Market decline led by abnormal negative performances on offensive stocks; Historical data continued to point the market lower.
• While the 10-yr Treasury yield traded at record low, it is also approaching to its multi-decade support (see chart on page 6).

read more at...
http://plus.alpbeta.com/report/201222.pdf