SOX Whips Naz Dogs
A Merrill Lynch downgrade of Applied Micro Circuits (AMCC)
and predictions by an AMCC official that demand for products that drive the use
of its communication semiconductors will fall, turned back a two-day rally in
stock index futures. The semiconductor index
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decision to maintain a “hawkish” policy bias on inflation and a CPI
that showed inflation rising above last year’s levels worked to halt the
mid-week reversal in index futures.Â
Negative readings in the TRIN Thrust and Momentum Index
Indicator from the
Market
Bias Indicators Page gave an early heads up that indexes could decline.
NASDAQ 100 futures
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slumped 18.20 to 1379.30, and
Dow futures
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Dec. T-bond futures
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TradingMarkets Futures Indicators Momentum-5
List, rallied to a 15-day high in response to the no-surprises Consumer
Prices Index, which came in as expected at +.2% and +.2% core for October. This
translates to an annualized inflation rate of 3.6% and 2.7% core. Energy prices
make up about 10% of the CPI, with natural gas–which hit an all-time high (see
Wednesday and Thursday’s Futures
Market Recap)–rising 5% in the report. Unemployment remains low, an
inflationary threat, but is being compensated by rising productivity. At its
current pace, inflation is about one-third higher than in 1999, which helps
explain why General Greenspan and crew left rates and their policy bias
unchanged (hawkish) at Wednesday’s FOMC meeting.Â
The Japanese yen
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after gapping down and closing at a
New 10-Day and contract low Wednesday, hit new lows to close down .0012 at
.9222.
Also in the currencies, the
British pound
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UK economy and made good on their Pullback From Lows
reading to close down .0030 at 1.4244.
Traders reassessed the explosive run-up in natural gas
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two-week period. Nat gas rocketed to its second all-time high Wednesday after a
mid-session report from the American Gas Association showed storage levels fell.
Moderating temperatures, profit-taking and a shifted view that the AGA storage
figures were not as bad as the all-time high prices reflects, all worked in
favor of the sell side Thursday as December settled down a hefty 7.45%, or .467
at 5.798.
In the grains, December soybean oil
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led the bean sector down, making good on its Turtle Soup Plus One
Sell below the old 20-day high trigger at 15.3500, dropping .1800 to
15.1300.
January soybeans
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soymeal
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Institutional buying of sugar
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Wednesday translated into a second strong day of gains off a four-month low in,
triggering buy stops as the March contract erases recent losses and closed an
overhead gap in the 9.20-9.22 area. An upswing in demand for global sugar from
such nations as Russia, Iran, Taiwan, and Syria amid lower forecasts for
Brazilian and Louisiana cane contributed to the March contract adding .46, or
5%, to 9.56.
Representing the softs on the Implosion-5 List,
coffee
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fourth consecutive decline.