US equities finished the week lower after trading the highest levels in 4 years early in the week. The S&P500 was fell 0.5% and finished at 1411. NASDAQ fell 0.1% to 2778 for the week and traded at levels not seen for the last 12 years. The markets did stage a comeback on Friday to close up on the day. It the option space total Put/Call ratio of 0.827 suggests options plays still favor bullish moves but less so than the previous week. Volatility on the CBOE VIX at 15.18 had a bounce of 12.9% on the week which may suggest the bull is running into some bear territory as they battle it out at these lofty levels. The DJIA fell 0.9% at 13,158.
The dollar was centre stage this week after the release of the FOMC minutes. This gave markets some clue to the thinking of the Fed which has highlighted the increased dovish stance of the FOMC. Yet again though markets seem to be very choppy as volatility looks to be on the rise as we head into a new week where markets are likely to be anticipating the September move by the Fed. Dollar Index fell 1.3% to 81.603 on the week. Elsewhere the EUR/USD rallied 1.6% as the markets were buoyed by the late market speculation that the ECB may look to cap peripheral European yields. ECB has cautioned that speculation on future bond purchases by the ECB in unlimited quantities was contrary to ECB stance which has always reframed from making any statements about size and duration of any bond purchases. AUD/USD was down 0.4% for the week to 1.0396.
Crude saw yet again another larger drawdown on oil inventories for the third week of -5.4m barrels versus analyst forecast of 100k build despite this news Brent fell 0.2% to 113.51 on the October 2012 contract. WTI also was down 0.4% to 96.12 also on the October 2012 contract. RBOB unleaded gasoline futures closed up 1.2% at 3.0710. Natural Gas fell 1.1% at 2.703 but was down 3.5% on Friday. Heating Oil finished up 0.9% to 3.119 on the week. Gold finished the week up 3.5% at USD$1673.40 /oz in New York as markets break to the upside on possible QE.
Apple +2.3% as they win the patent infringement case over Samsung ( to pay USD1bn)
Intel -5.4% computer makers shifting to cheaper Intel processors could affect their revenues plus HP outlook.
HP -9.9% reported weak qtrly results on Wed and issued an equally bleak outlook.
Bristol-Myers Squibb+3.2% dropped development of a hepatitis C drug
Eli Lilly +3.4% Alzheimer’s drug did slow cognitive decline in some patients and that studies will continue was “encouraging”
BIDU -13.6% Deutsche downgrades to Hold - predicts co. will lose share to Qihoo’s due to their user base 272m users (51% China’s user base)