Wednesday, November 27, 2013

Pre-Turkey Day Rally

Markets are higher again in early trading.  Economic data this morning was mixed, as was overnight trading in foreign markets.

In economic news, the Univ. of Mich Consumer Sentiment index for November rose to 75.1 from 72.0.  This is a divergence from the other consumer confidence reports out earlier this week.

October durable goods declined 2.0%, or -0.1% excluding transportation orders.  And the November Chicago PMI reading fell to 63 from 65.9, but this was still above expectations.

Asian markets were mixed overnight.  Tensions seem to be on the rise in Japan and China regarding the no-fly zone.  Yesterday a Japanese commercial jet flew over the zone and the day before 2 US B-52s flew over it.  Separately, the Thai central bank cuts its key rate 25 bps to 2.25% and lowered its growth outlook for both 2013 and 2014. 

Europe's markets sport modest gains.  Great Britain's GDP rose 1.5% year/year and Spain's retail sales slowed to 0.5%, below expectations.

Oil prices are weak again, falling to $92.35 today.  Gold prices are flat around $1242.

The 10-year yield is on the rise today, up to 2.74%.  REITs are trying to bounce after a showing significant weakness recently.

Trading comment: Yesterday we highlighted AAPL as a good candidate to rally into year end.  Volume picked up on yesterday's advance and today the stock is breaking out of the recent consolidation range we highlighted.  Volume looks solid again, especially for a pre-holiday trading session when volume will likely be light.  This breakout in AAPL should attract more late-to-the-party buyers and reinforce the positive price action.  We have sold our remaining shares of EMC due to ongoing lagging performance and concerns that the negative price action could be exacerbated into year-end.

KAM Advisors has long positions in AAPL


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