Futures Now: Blog


  Tuesday, 1 Jul 2014 | 3:37 PM ET

Gold will be the second half's big winner: Trader

Posted By: Alex Rosenberg

In the first half of 2014, coffee was the best-performing commodity, rising about 50 percent. So what will be the big winner in the second half?

Jeff Kilburg of KKM Financial is eyeing gold, saying that it reminds him of the coffee trade.

"Just a month ago, on June 3, we had that $1,240 low in gold. Coffee got thrown to the curb just like gold," he said on Tuesday's "Futures Now."

Read MoreThe doctor is in: Copper rises to 16-week high

So why will gold take off now, after rising about 8 percent in the first six months of the year?

"Now all of the sudden there's an inflation play potentially, there's geopolitical risk, and the third head of this monster which no one has talked about and hasn't been deserving of talking about for quite some time is the safe haven trade," Kilburg said. "It sounds like I'm crazy, it sounds like maybe I've got a little too much coffee in me here, as we have all-time highs in the S&P 500, but gold is going to go higher. Technically I like it as well."

Read More Payrolls to test gold's resilience after gains

»Read more
  Tuesday, 1 Jul 2014 | 2:44 PM ET

Economy's strong, and jobs will prove it: LaVorgna

Posted By: Alex Rosenberg

Joseph LaVorgna is expecting some good news.

The chief U.S. economist at Deutsche Bank, LaVorgna is expecting June nonfarm payrolls to come in at 225,000 when the Bureau of Labor Statistics reports the key economic data point on Thursday morning. And as for GDP, he expects the second quarter to follow up the 2.9 percent Q1 decline with growth of 4.2 percent.

When it comes to payrolls growth, his 225,000 is not far above the consensus of 210,000 gathered by Reuters, or the 217,000 jobs created in May. But even a consensus reading would mean the fifth straight month of plus-200,000 job gains.

Read MoreWhy investors are anxious about the jobs report

"If we registered 225,000 or even a consensus-type number on Thursday, that's going to keep that three-month moving average right around 235,000," LaVorgna pointed out on Tuesday's "Futures Now."

And he expects that the jobs growth will continue to be registered "in a lot of different areas—in manufacturing, construction, retail trade, professional business services, leisure, hospitality—it's broad based. That's what we've been seeing the last few months, with most industries adding to employment."

All in all, "this is an economy that's doing reasonably well, GDP considerations aside," he said.

»Read more
  Monday, 30 Jun 2014 | 2:25 PM ET

The doctor is in: Copper rises to 16-week high

Posted By: Alex Rosenberg
Munshi Ahmed | Bloomberg | Getty Images

Copper futures rose 1 percent in two hours on Monday morning, taking the industrial metal to the highest level since March 7. Experts say the quick move largely reflects a weaker dollar and fading concerns about Chinese copper financing. But for believers in the "Doctor Copper" theory, the move also indicates something more: growing optimism about the global economy.

It hasn't been a great year for copper. The reddish metal—which is used in everything from electrical wiring to plumbing to roofing to jewelry, and arguably enjoyed its heyday some 5,000 years ago— is still down 6 percent in 2014.

The most recent cause of concern has been Chinese copper-based loans, whereby copper is used as collateral for financing. Not only might the loan-related demand for copper be less reliable than industrial demand, but authorities have recently found that the same physical metal has been used to back up multiple loans. A major crackdown on copper-based loans could be very bad news for the copper market.

Yet such jitters are now beginning to recede.

»Read more
  Monday, 30 Jun 2014 | 11:13 AM ET

Financials sector will only get worse: Technician

Posted By: Alex Rosenberg

The financials haven't been a great place to be recently. With only a 2.7 percent rise over the past three months, they've actually been the worst-performing of the 10 S&P 500 sectors over that time frame. And according to close chart-watchers, a rebound shouldn't be expected anytime soon.

"Financials continue to underperform the market month after month after month," wrote Sterne Agee chief market technician Carter Worth in a Monday note. "And if one excludes certain very strong, large-cap, marquee names that are buttressing the sector (such as Wells Fargo, Berkshire Hathaway, American Express) things would be even worse. …Bottom line: We retain the view that Financials are not a good place to be."

»Read more
  Sunday, 29 Jun 2014 | 5:00 PM ET

Why investors have got the jobs report jitters

Posted By: Alex Rosenberg

Don't let the short week fool you. There's big news ahead for the American economy.

With Independence Day falling on July 4th this year, which happens to be a Friday, the June employment report will be released one day earlier than normal. And market participants (at least the ones who haven't already headed to the Hamptons) will be watching with great interest, because a supremely weak revised first quarter GDP number leaves open some tricky questions about the state of the US economy.

"This is a huge deal this week in light of the fact that we got such awful GDP numbers last week," said trader Jim Iuorio of TJM Institutional Services. "People have got to get some clarity from these numbers."

On Wednesday, the third estimate for GDP growth in the first quarter was revised down to a 2.9 percent decline, significantly worse than the prior estimate of a 1.0 percent decline. And while the weather and other somewhat random factors have been shouldered with the blame, the print is still seen as raising the stakes on Thursday.

"Even though the Q1 GDP figure is old news, the financial markets will need to see continued strength in the current quarter to become confident that last quarter's results were truly an aberration," wrote Deutsche Bank chief US economist Joseph LaVorgna in a recent note. "In this regard, the June employment report… takes on added significance."

»Read more
  Thursday, 26 Jun 2014 | 2:19 PM ET

Soccer is 'total distraction' on the trading floor

Posted By: Alex Rosenberg

With the United States playing Germany in a Thursday afternoon World Cup soccer game, sports-crazy floor traders had a tough time focusing on slow-moving markets. In fact, for many traders, the World Cup is serving as a welcome diversion from the low-volatility year that stocks and commodities alike have experienced.

"It's a total distraction," reported Anthony Grisanti, who trades energy on the floor of the New York Mercantile Exchange. "During the beginning of the game, the market was not moving. It seems program trading was turned off—maybe even the computers were watching."

Read More For NYMEX traders, making money has 'never been harder'

In Chicago, too, "the entire trading floor is focused on the soccer game, completely ignoring markets," said Jim Iuorio of TJM Institutional Services.

Attention didn't even turn back to finance at halftime.

"The cattle pit actually broke out into a mini soccer game at halftime of the real game," Iuorio said. "It was difficult to figure out if the cheering we were hearing was from the real game or from the impromptu heated cattle match."

"Sure it's a distraction, but given that the S&P was down as much as 15 points this morning, maybe it's the distraction we needed," points out Scott Nations of NationsShares. "Seriously, it's summer. I think it's fun to turn away from the computer screen and turn to the TV screen to watch a game I don't understand."

Read More Even if Brazil wins World Cup, it loses: Bankers

»Read more
  Wednesday, 25 Jun 2014 | 1:07 PM ET

Tiny event could now trigger correction, pros warn

Posted By: Alex Rosenberg

Will the Macarena once again sweep the nation?

Maybe not, but some say it feels a lot like 1996 regardless.

Canaccord Genuity's chief equity strategist, Tony Dwyer, has the highest year-end S&P 500 target on the Street, at 2,185, but nonetheless expects a 5 to 10 percent correction in the near term. When asked what catalyst would drive that drop, he pointed to what happened at the end of 1996.

"Let me give you a scenario: we're up 34 percent in one year, the next year we're up about 14, 16 percent, and all of a sudden, people are looking for reasons for a correction," Dwyer said on Tuesday's "Futures Now." "Nobody was thinking it was going to be Alan Greenspan […] giving an irrational exuberance speech, and in real bull markets, it's the unknown unknowns that come in and cause a 5 to 10 percent correction. It's just when the market gets very tired and it gets extended, you don't know what's going to cause it, but it comes in, and I think that's what we're set up for."

Read More Wall Street's biggest bull calls for a correction

In a speech on Dec. 5, 1996, then-Federal Reserve Chairman Alan Greenspan used that memorable phrase in a rhetorical question: "How do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?"

The S&P 500, which was already down slightly over the past few sessions, continued to slide, eventually taking the market down 6 percent, from high to low, over the course of 11 sessions. But from there, the market continued on a long road higher that didn't end for good until the 2000 tech-bubble top.

»Read more
  Tuesday, 24 Jun 2014 | 3:29 PM ET

Wall Street's biggest bull calls for a correction

Posted By: Alex Rosenberg

With an S&P 500 year-end target of 2,185, Canaccord Genuity chief equity strategist Tony Dwyer expects the market to close the year more than 11 percent above current levels — technically making him the most bullish strategist on Wall Street. But that doesn't mean he advises buying in now.

In fact, Dwyer is calling for a 5 to 10 percent correction in the near-term, after which he sees the market resuming its upward climb.

"The fundamental backdrop is terrific," he said. "I just think the market is too extended and typically, at this point, it should pull back."

Read More Earnings expectations are driving stocks this year

What's notable is that Dwyer makes this call without a specific catalyst in mind.

"In real bull markets, it's the unknown unknowns that come in and cause a 5 to 10 percent correction," he said. "It's just that when the market gets very tired and it gets extended, you don't know what's going to cause it, but it comes in, and I think that's what we're set up for."

»Read more
  Tuesday, 24 Jun 2014 | 8:41 AM ET

Everything changed since correction call: Acampora

Posted By: Michelle Fox

Ralph Acampora, known as "The Godfather of Technical Analysis," still thinks the stock market is extended and should be correcting, but he told CNBC's "Closing Bell" that "everything has changed" since he predicted a 25 percent correction in May.

"About 63 percent of the Dow components are in strong, strong trends and no topping action, and about … 8 out of 10 S&P sectors are doing very, very well," he said Monday. "Of course the market is extended and should be correcting but I can't fight the tape and I love what I see."

Read MoreDow, S&P headed to this level: Art Cashin

»Read more
  Monday, 23 Jun 2014 | 10:37 AM ET

Earnings expectations driving stocks this year

Posted By: Alex Rosenberg
Traders work the floor of the New York Stock Exchange.
Jin Lee | Bloomberg | Getty Images
Traders work the floor of the New York Stock Exchange.

The S&P 500 is up a bit more than 6 percent in 2014, and while that isn't breathtaking, the gains have been consistent enough to bring the index to 22 all-time closing highs. What may be less widely known is the role that earnings expectations appear to have played in the gains.

In order to create what's known as a "blended growth rate" for earnings in the first half of the year, FactSet senior earnings analyst John Butters takes the earnings that companies actually reported for the first quarter and combines that with bottom-up analyst expectations about the earnings companies will report in the second quarter. For the first half of 2014, the S&P's blended earnings growth rate is 3.7 percent. When he combines the earnings estimates for the third and fourth quarters, he finds that the overall forecast for earnings growth in the second half is 9.9 percent.

"One possible reason for the rise in the value of the market is the expectation for much higher earnings growth in the index in the second half of 2014," Butters concludes.

This logic certainly comports with the thinking of bullish strategist Jonathan Golub. The chief U.S. market strategist at RBC Capital Markets, Golub determines that "the change in NTM [next 12 month] EPS expectations has contributed 4.6 percent of the S&P 500's 6.2 percent return."

This fact gives Golub confidence that the market will continue higher, eventually reaching his 2,075 target for the end of the year.

"Importantly, the market's return since January has largely been driven by corporate results as opposed to multiple expansion, a healthy sign in our view," he wrote in a Monday note.

Read More Wells Fargo's famous bear is turning a new leaf

»Read more

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