The markets seem very volatile and crazy when we experience 100+ point swings intraday, and the earnings action before and after the bell can be boom or bust on an individual stock basis. Get the popcorn! But the reality of the overall markets is that the apparent drama and gyrations has resulted in a whole lot of, um, nothing really. Still range bound. Still in the middle of the range. Average volume. No trend. ADP jobs data came in a bit soft, which seemed to actually give the markets a bit of a sugar high as it would help damage the case for the Fed to raise rates any time soon, but strong ISM data seemed to counterbalance the effect leaving the markets fairly flat, with the Nasdaq showing relative strength. The hottest trading instrument, even in boring markets, are Options. To get two hours of our very best beginner OPTIONS TRAINING via ON DEMAND streaming video, click here: http://www.optionsuniversity.com/oua-starter/
Early positive price action drove the volatility into the dust intraday to the ridiculously low level of 10.88! By the end of the day, though, the VIX bounced back to close at 12.51. Still, definitely near the low end of the range. Experts that follow seasonality would tell you that the dog days of summer can go hand-in-hand with low volatility, but the real excitement could happen in the fall, so stay tuned!
OVERSEAS: The Nikkei was up again, but the rest of the Asian markets were mildly, but broadly down. In Europe, markets were mixed and relatively flat as it appears that the Bank of England will not raise rates in the near term.
OIL: Inventories for crude continue to drift lower, even picking up the rate of decrease a tiny bit, falling 4.4 Million barrels. But inventories still remain historically VERY high, and crude prices have now fallen to multi-month lows of BELOW $45 a barrel! The busy refineries have now gotten caught up to some extent, and gasoline inventories actually increased slightly by 800K barrels.
JOBS: The ADP Employment kicked things off on Wednesday by coming in much lower than last period, at 185K compared to 237K previously. This number was also well short of the consensus expectation of 210K. Employers based in the U.S. cut over 105K jobs (the highest number since 2011). At the same time, the military has cut 10’s of thousands of troops and civilian positions. The Thursday jobless claims report had initial expectations of 273K, which was a slight increase of the 267K last week. The actual figure came in higher than last week, but lower than expected at 270K.
CONSTRUCTION SPENDING: Spending estimates came in very soft (0.1% actual versus an expectation of about 0.6%). The outlook for residential construction still remains favorable, but the business environment for commercial buildings and factories in the private sector is still showing weakness. Public spending for highways and education is still strong.
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