Bond mutual funds saw slowing net outflows while equity funds saw continued net inflows in the week ended August 7, according to data released by Investment Company Institute on Wednesday. Investors pulled $2.13 billion from municipal bond funds but put $33 million into taxable bond funds, for a total of $2.09 billion in bond fund outflows, less than the $6.95 billion in outflows from the previous week. Equities saw $3.41 billion in inflows last week after $711 million of receipts the week before. Meanwhile, Morningstar data for July showed investors pulled a mere $1.3 billion from taxable bond funds last month after $43.7 billion of withdrawals in June. However, investors pulled $10.3 billion from municipal bond funds as the Detroit bankruptcy filing continues to take its toll, capping the fifth month of municipal fund outflows – MarketWatch.
Today started with 170k ESU and 600 SPU traded on Globex, trading range was 1692.20 – 1685.50. Tuesday’s regular trading hours trading range was 1694.40 – 1679.20 before settling at 1690.80, up 3.7 handles. In the premarket, global equities firmed for the fifth day in a row following 2nd quarter GDP data from the Eurozone that showed the region has emerged from a 6-quarter-long recession. EURO AREA ECONOMY GROWS 0.3% IN 2Q FROM PRIOR QUARTER, exp +0.2% prev -0.3% *REHN SAYS `SUSTAINED RECOVERY’ NOW WITHIN REACH…U.K. APRIL-JUNE ILO JOBLESS RATE STAYS AT 7.8%, AS FORECAST… Hong Kong trading canceled due to a typhoon. GDP was up 0.7% in 2nd quarter of 2013. GBP strength; CHF, JPY weakness FX. TF right shoulder form / 1036/ 1059 makes or breaks pattern. Twitter chatter of SP H/S but TF is more well formed. EMD H/S with right shoulder from yesterday…hmm…multiple formations a warning signal. M&A activity – Paulson to Buy Steinway for $40-Share. U.S. producer prices for July checked in at unchanged vs exp of 0.3 and the PPI core checked in at 0.1 vs exp of 0.2. Chatter that weak international conditions have been pressuring prices and the Fed is keeping a close eye on the inflation readings. Equities went soft after retailer Macy’s [M] fell 5% on “some questions regarding the health of the American consumer in a sluggish economy.” That call trader … yesterday customer rolls 25k Aug ES1670C to Sep, same strike…leaves ~35k to be rolled.
Today’s pit hours opened unchanged at 1690.50 – 1691.00 and printed an early high of 1692.70 before fading back to 1683.70 by 10:50, European close. Middle East concerns, Roger_Volz (08:46) EGYPTIAN PRESIDENCY ANNOUNCES STATE OF EMERGENCY ACROSS THE COUNTRY STARTING 4 PM – 40 dead protesters in Egypt – heating up / Iraq civil war potential and Syria all on back burner and were supporting crude prices following 3 prior days of gains. The early equity trade was quiet with the retailers, [XRT], weighing on the overall market while the [DJIA] and the broader S&P500 also contributed to lead the early decline. The financials were mixed with the [BKX] up .16 and the XLF -.02 The [RUT] and [NDX], [AAPL] up another 2% were holding a bit better, leading to the midday sideways trade as the SPU held under the 1687 area. That call trader rolled another 17k Aug ES1670C to Sep, same strike..leaves ~18k to be rolled.
At 12:32 the e-mini topped 1m contracts traded as new intraday lows were being made at 1682.20 as St Louis Fed president BULLARD SAYS FED DOING `WHAT IT CAN DO’ TO AID U.S. RECOVERY – SEES `A LOT OF RISK GOING FORWARD’ OF HIGHER INFLATION as he expressed concern with recent low inflation readings and said that the central bank could lose credibility if it doesn’t hit its 2% inflation target. DJIA was off 125 points while the BKX was still up 18 cents and XLF was off 3 cents. A small buy program pushed the SPU back up to the late morning high of 1687.00 area around 2:10 before fading back to 1684.00 area going into the closing imbalance. The imbalance showed a small $115M to the buy side. redliontrader (14:54) -2:1 on the NYSE A/D line – that is not healthy…Zweig should be down tomorrow. The cash close traded 1682.60 area before settling at 1682.00, down 8.8 handles on the day. The NQ traded a late-day low of 3120.50.
St. Louis Fed President Bullard speaks again tomorrow morning at 8:15ET. Also, retailers [WMT] and [KSS] report pre-market and [JWN] post close tomorrow. Busy economic calendar too… 7:30CT Consumer Price Index, jobless claims, 8:00CT Empire State mfg survey. 8:15CT Industrial Production. 8:45CT Bloomberg Consumer Comfort Index. 9:00CT Housing Market Index and Philadelphia Fed Survey. Oh yeah, $3 – $4 billion POMO.
Jack’s interview on MrTS site … excellent! http://mrtopstep.com/2013/08/the-next-big-trade-will-be-in-bonds-in-fall-2013/
Sam_E (09:36) NQ european algo pivot 3132.75 yesterdays closing algo pivot 3140.25. gonna be a tight range till one of them break if they do. PivotBoss Matches at 3126.50 NQ, Sam the easy trade is over nq. Sam you can cover or wait for 3121.25 if she comes which i think she will. Roger_Volz see the 3121.
Roger_Volz shared yesterday: my experience has always been corrective phases led either by NDX or DJT…the rest follows. watching DJT for divergence signal, but not there yet and when it occurs could have 3-4 wks before rest mkt follows. 6222 is LT reversal DJT/ 6430 close starts ST technical damage.
Carley_Garner (08:23) For anybody following the grains…wheat has been trading lower in sympathy to corn, but is facing much more supportive supply fundamentals. If ever there is a time for the market to recognize this, it is on support with the RSI at 30. http://twitpic.com/d89ib6 Sam_E Carley i do have matches down here but there are no retraces to work off of in this landslide down. we do have some though on wheat. honestly some of the technicals say either 598 or 573 in a washout – keep an eye out for one of those.