Commentary

Thursday’s opening did not exactly welcome stock market investors with loving arms. The first half of the day saw stocks trading in negative territory and at the lower end of their range, but they managed to rally during the last two hours of trading and exhibit noteworthy relative strength: SP-500 (SPY) (@ 2,120.70 / -2.69 / 0.13%); DJ-30 Industrials (DIA) (@ 18,126.12 / -36.87 / -0.20%); Nasdaq-100 (QQQ) (@ 4,535.66 / -10.40 / -0.23%); Russell-2k (IWM) (1,253.09 / -1.26 / -0.10%).

Fear and safety havens offered did not offer much of an alternative. The VIX (@ 13.31 / +0.04 / +0.30%) was more or less flat. Bonds did not see much movement either as interest rates barely budged: 10-Yr Rate (TNX) (@ 21.30 / -0.05 / -0.23%); 30-Yr Rate (@ 28.84 / +0.10 / +0.35%).

In Currencies, the U.S. Dollar Index (@ 97.13 / -0.344 / -0.35%) failed to challenge resistance @ 98 and but did maintain support @ 97 levels.

With respect to Commodities, the pullback in the dollar did facilitate a relief rally in the July-2015 contract for Crude Oil (@ 58.02 / +0.51 / +0.89%). The June-2015 contract for Gold (@ 1,187.60 / +2.0 / +0.17%) barely changed.

Real Estate assets, despite positive news from the Pending Sales report (see Market Moving Events below), were also unmoved: DJ Real Estate Index (@ 296.85 / -0.75 / -0.25%) and DJ Home Construction Index (@ 545.19 (+2.44 / +0.45%).

ETF Capital Markets Performance Summary

May-28-2015

Market Moving Events

Bullish

• Residential Real Estate / USA: The Pending Home Sales Index for April-2015 increased for a fourth consecutive month to 112.4 vs. prior revised @ 108.7. Month-over-month, this reflected a 3.4% increase vs. consensus estimates @ 0.8% and prior revised @ 1.2%.

Bearish

• Sovereign Debt / Greece: Uncertainty still clouds negotiations on whether Greece will strike a deal with the EU. Greece reports that it’s very close, but Germany’s Finance Minister, Schauble, says just the opposite.
• China / Equity Markets: China’s Shanghai stock index declined -6.5% as brokerages increased their margin requirements to reduce speculation and reduce the risks of leverage exposure.
• Central Banks / China: The PBOC’s continued selling of repurchase agreements to targeted financial institutions signalled to the markets that it is does not intend to cut interest rates any time soon.

Neutral

• Energy / USA: The Petroleum Status report released by the EIA for the week of 5/22/2015 showed a 4-week consecutive drawdown of oil stocks. Crude Oil inventories dipped -2.8mm barrels down to 479.4mm reserves, which still reflects unprecedented high levels.
• Employment / USA: The Jobless Claims report for the week of 5/23/2015 showed an increase of 7k claims to 282k vs. consensus @ 270k and prior revised @ 275k. From a historical perspective, unemployment filings still remain at very low levels.
• Economic Growth / UK: Britain’s GDP for 1Q-2015 remained flat @ 0.3% and just below consensus expectations @ 0.4%.