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S&P, Dow Climb to New Records
20-Sep-18 16:25 ET
Dow +251.22 at 26656.98, Nasdaq +78.19 at 8028.23, S&P +22.80 at 2930.75
https://www.briefing.com/investor/markets/stock-market-update/2018/9/20/s-and-p-dow-climb-to-new-records.htm
[BRIEFING.COM] Wall Street soared on Thursday, with the Dow Jones Industrial Average adding 1.0% and finishing at a new all-time high for the first time since January 26. With trade war fears still lingering and no fundamental catalyst to drive the market higher, stocks relied on momentum and the fear of missing out to log Thursday's gains.
As for the other major averages, the S&P 500 also closed at a new record, finishing with a gain of 0.8%; the tech-heavy Nasdaq Composite advanced 1.0% to finish about 1.0% off its August 29 record; and the small-cap Russell 2000 climbed 1.0%, coming within 1.2% of its all-time high.
The top-weighted information technology sector rebounded on Thursday after a slow start to the week, finishing atop the sector standings with a gain of 1.2%. However, within the space, software company Red Hat (RHT 133.81, -9.35) tumbled 6.5% after disappointing Q3 guidance overshadowed above-consensus earnings.
In total, 10 of 11 sectors finished in the green. After tech, the materials (+1.1%), consumer staples (+1.2%), and health care (+0.9%) sectors were the next-best performers. The influential financial sector (+0.8%) was also strong, even though yields fell from multi-month highs. The benchmark 10-yr yield, for instance, slipped one basis point to 3.08% after hitting a four-month high on Wednesday.
Conversely, the oil-sensitive energy sector finished with a loss of 0.1%. A decline in the price of crude oil weighed on energy shares after President Trump criticized OPEC on Thursday morning, saying the "OPEC monopoly must get [oil] prices down now!" WTI crude futures lost 0.6%, closing at $70.26/bbl.
In corporate news, Amazon (AMZN 1944.30, +17.88) introduced 15 Alexa-enabled products at an event in Seattle, including a microwave, as the company looks to strengthen its position in the voice assistant space. Shares of Amazon finished the day higher by 0.9%.
On the currency front, the U.S. Dollar Index fell for the fourth day in a row, tumbling 0.7% to 93.46; that marks its lowest level since early June.
Reviewing Thursday's economic data, which included Existing Home Sales for August, the weekly Initial Claims report, the Philadelphia Fed Index for September, and the Conference Board's Leading Economic Index for August:
Existing home sales stayed at an annualized rate of 5.34 million units (Briefing.com consensus 5.37 million) in August. The July reading was left unrevised at 5.34 million.
The key takeaway from the report is that inventory is stabilizing, implying that there could be some moderation in the pace of price increases that could help drive increased buying interest (and perhaps added listing interest).
The latest weekly initial jobless claims count totaled 201,000, while the Briefing.com consensus expected a reading of 209,000. Today's tally was below the unrevised prior week count of 204,000. As for continuing claims, they declined to 1.645 million from a revised count of 1.700 million (from 1.696 million).
The key takeaway from the report is that it reflects a reluctance on the part of employers to reduce staff, which goes hand-in-hand with a strong economy and tight labor market.
The Philadelphia Fed Survey for September rose to 22.9 (Briefing.com consensus 15.3) from an unrevised 11.9 in August.
A number above zero is indicative of growth, so the key takeaway from the report is that it reflects the idea that manufacturing activity in the Philadelphia Fed region accelerated in September.
The Conference Board's Leading Economic Index increased 0.4% in August (Briefing.com consensus +0.5%), and the July reading was revised to +0.7% from +0.6%.
The key takeaway from the report is that strength among the leading indicators remained widespread, which points to a sustained pace of economic expansion.
Investors will not receive any notable economic data on Friday.
Nasdaq Composite +16.3% YTD
Russell 2000 +12.0% YTD
S&P 500 +9.6% YTD
Dow Jones Industrial Average +7.8% YTD
Financials Push S&P 500 Slightly Higher
19-Sep-18 16:30 ET
Dow +158.80 at 26405.76, Nasdaq -6.07 at 7950.04, S&P +3.64 at 2907.95
https://www.briefing.com/investor/markets/stock-market-update/2018/9/19/financials-push-s-and-p-500-slightly-higher.htm
[BRIEFING.COM] The S&P 500 finished Wednesday with a slim gain of 0.1%, buoyed by financial shares, which rallied amid another rise in interest rates. The blue-chip Dow Jones Industrial Average outperformed, adding 0.6%, but the tech-heavy Nasdaq lagged, closing lower by 0.1%. The small-cap Russell 2000 fell 0.5%.
Wednesday's mixed outing followed an unexpected rebound on Tuesday, which came after the U.S. announced a $200 billion tranche of tariffs on Chinese goods, to which Beijing responded with $60 billion in retaliatory duties. Asian shares rallied for the second day in a row on Wednesday, with China's Shanghai Composite climbing 1.1%.
The rate-sensitive financial sector led the S&P 500 higher with a gain of 1.8% as Treasuries sold off, sending yields higher across the curve. The yield on the benchmark 10-yr note, for instance, climbed three basis points to 3.08%, hitting a fresh a four-month high. For the week, the 10-yr yield is up eight basis points.
The materials sector (+1.1%) also outperformed on Wednesday, but most groups finished in the red, including the top-weighted technology space (-0.1%). The lightly-weighted utilities, telecom services, and real estate sectors were the worst performers, losing between 0.9% and 2.1% apiece.
Cannabis stocks were in focus with Tilray (TLRY 214.06, +59.08) going on a wild ride after its CEO said on Tuesday evening that his business would be a "smart hedge" for major pharmaceutical companies. TLRY shares finished higher by 38.1%, but were halted several times after adding as much as 93.2% and losing as much as 1.3%.
Amazon (AMZN 1926.42, -14.63) also made headlines as it's reportedly planning to construct up to 3,000 cashier-less stores by 2021 and is testing a new shopping site for furniture and women's shoes -- news that weighed on shares of Wayfair (W 139.03, -4.23, -3.0%). Amazon shares finished lower by 0.8%.
In geopolitics, North Korean leader Kim Jong Un agreed to further steps towards denuclearization after meeting in Pyongyang with South Korean president Moon Jae-in, and China said it won't devalue the yuan to make its exports more competitive, despite its ongoing trade dispute with the U.S.
Trade talks between the United States and Canada resumed in Washington on Wednesday, but Bloomberg reported that a deal this week is unlikely.
Reviewing Wednesday's economic data, which included August Housing Starts and Building Permits, the Q2 Current Account Balance, and the weekly MBA Mortgage Applications Index:
Housing starts rose to a seasonally adjusted annualized rate of 1.282 million units in August (Briefing.com consensus 1.229 million), up from a revised 1.174 million units in July (from 1.168 million). Building permits declined to a seasonally adjusted 1.229 million in August (Briefing.com consensus 1.310 million) from a revised 1.303 million in July (from 1.311 million).
The key takeaway from the report is that permits (a leading indicator) for single-family homes fell 6.1% month-over-month to 820,000, driven by declines across all four geographic regions.
The current account deficit for the second quarter totaled $101.5 billion (Briefing.com consensus -$103.3 billion). The first quarter deficit was revised to $121.7 billion from $124.1 billion.
The weekly MBA Mortgage Applications Index rose 1.6% to follow last week's decrease of 1.8%.
Looking ahead, investors will receive several pieces of economic data on Thursday, including weekly Initial Claims, the Philadelphia Fed Index for September, Existing Home Sales for August, and the Conference Board's Leading Economic Index for August.
Nasdaq Composite +15.2% YTD
Russell 2000 +10.9% YTD
S&P 500 +8.8% YTD
Dow Jones Industrial Average +6.8% YTD
Unlikely Rebound Leaves Stocks Flat for the Week
18-Sep-18 16:25 ET
Dow +184.84 at 26246.96, Nasdaq +60.32 at 7956.11, S&P +15.51 at 2904.31
https://www.briefing.com/investor/markets/stock-market-update/2018/9/18/unlikely-rebound-leaves-stocks-flat-for-the-week.htm
[BRIEFING.COM] Stocks rallied on Tuesday as investors shrugged off a fresh exchange of tariffs between the world's two largest economies. The S&P 500 climbed 0.5%, reclaiming its Monday decline, while the Dow Jones Industrial Average and the Nasdaq Composite advanced 0.7% and 0.8%, respectively. The major averages opened higher and climbed into the afternoon, finishing a step below their best marks of the day.
President Trump announced after Monday's close that the U.S. will be slapping tariffs on $200 billion worth of Chinese goods starting on September 24. The tariff rate will start at 10%, but will increase to 25% on January 1. Mr. Trump also said he will impose additional tariffs on $267 billion worth of Chinese goods if Beijing retaliates -- which it vowed to do with 5-10% tariffs on $60 billion worth of U.S. goods.
Like Wall Street, Asian stocks also managed to rally despite the seemingly negative headlines, with China's Shanghai Composite adding 1.8%.
In an attempt to explain Tuesday's gains, some analysts pointed to the fact that the initial 10% tariff rate by the U.S. was not as harsh as expected -- thereby reflecting a willingness to negotiate -- while others said the rally reflects the market's belief that the U.S.-China trade dispute will eventually die down. Regardless, it's worth noting that short-covering activity was likely a helping hand for the bulls.
The consumer discretionary (+1.3%) and information technology (+0.6%) sectors outperformed on Tuesday after leading Monday's retreat. The trade-sensitive industrial sector (+0.9%) was also strong, as was the energy space (+0.7%), which benefited from a rise in the price of crude oil; WTI crude futures jumped 1.5% to $69.87/bbl.
Oil rallied amid speculation that OPEC won't be raising production in the short term to offset any lost supply from Iran, which will soon be facing U.S. oil sanctions. Also of note, Bloomberg reported on Tuesday that Saudi Arabia is comfortable with Brent above $80 a barrel.
On the corporate front, Oracle (ORCL 49.03, -0.15, -0.3%), FedEx (FDX 241.58, -14.15, -5.5%), General Mills (GIS 44.13, -3.64, -7.6%), and AutoZone (AZO 732.76, -14.76, -2.0%) fell after reporting earnings. Separately, Tesla (TSLA 284.96, -9.88) lost 3.7% on news that it's under investigation by the Justice Department over CEO Elon Musk's August 7 tweet about taking the company private.
In the bond market, U.S. Treasuries tumbled on Tuesday, sending yields higher across the curve, with the benchmark 10-yr yield jumping five basis points to 3.05% -- which marks its highest level in four months. The Fed-sensitive 2-yr yield ticked up one basis point to 2.79%, hitting its highest level in over a decade.
Reviewing Tuesday's economic data, which was limited to the NAHB Housing Market Index for September:
The NAHB Housing Market Index for September came in at 67 (Briefing.com consensus 66), unchanged from the August reading.
On Wednesday, investors will receive the weekly MBA Mortgage Applications Index, August Housing Starts and Building Permits, and the Q2 Current Account Balance.
Nasdaq Composite +15.3% YTD
Russell 2000 +11.4% YTD
S&P 500 +8.6% YTD
Dow Jones Industrial Average +6.2% YTD
Pending Tariff Announcement Pushes Stocks Lower
17-Sep-18 16:20 ET
Dow -92.55 at 26062.12, Nasdaq -114.25 at 7895.79, S&P -16.18 at 2888.80
https://www.briefing.com/investor/markets/stock-market-update/2018/9/17/pending-tariff-announcement-pushes-stocks-lower.htm
[BRIEFING.COM] Wall Street fell on Monday, with tech shares leading the retreat, as investors prepared for another tranche of U.S. tariffs on Chinese goods. The S&P 500 declined 0.6%, breaking a five-session winning streak, and the Dow lost 0.4%. The Nasdaq and the Russell 2000 underperformed, losing 1.4% and 1.1%, respectively.
This latest round of tariffs is expected to slap a duty of around 10% on $200 billion worth of Chinese goods. Beijing has responded by saying it may decline a U.S. offer to resume trade talks if the duties are implemented, adding it's not going to negotiate with "a gun pointed to its head." That news had equity futures down in pre-market trading.
The S&P 500 and the Dow held modest losses for much of the session, but those losses were extended in the afternoon when President Trump said an announcement on U.S.-China trade will be coming after the closing bell. The tech-heavy Nasdaq also hit news lows on the president's comment, but was notably weak even before as FAANG names lagged -- Amazon (AMZN 1908.03, -62.16) lost 3.2%; Apple (AAPL 217.88, -5.96) lost 2.7%; Netflix (NFLX 350.35, -14.21) declined by 3.9%; and Facebook (FB 160.58, -1.74) and Alphabet (GOOG 1156.05, -16.48) lost 1.1% and 1.4%, respectively.
The consumer discretionary sector, which houses Amazon, and the top-weighted technology sector, which houses the other FAANG names, finished at the bottom of the sector standings, losing roughly 1.3% apiece. Financials (-0.4%) and health care (-0.3%) also finished in the red, but the seven remaining groups finished in the green. Gains were limited though, with no group adding more than 0.5%.
Overseas, stock markets in Asia opened the week on a lower note, weighed down by the threat of new tariffs, with China's Shanghai composite losing 1.1% and Hong Kong's Hang Seng tumbling 1.3%. European equity markets also slid, but losses were more modest, with Germany's trade-heavy DAX shedding 0.2%.
U.S. Treasuries were under pressure early, pushing the yield on the benchmark 10-yr note as high as 3.02% -- its highest level in four months. However, buyers emerged later in the session, leaving the 10-yr yield highe
Pending Tariff Announcement Pushes Stocks Lower
17-Sep-18 16:20 ET
Dow -92.55 at 26062.12, Nasdaq -114.25 at 7895.79, S&P -16.18 at 2888.80
[BRIEFING.COM] Wall Street fell on Monday, with tech shares leading the retreat, as investors prepared for another tranche of U.S. tariffs on Chinese goods. The S&P 500 declined 0.6%, breaking a five-session winning streak, and the Dow lost 0.4%. The Nasdaq and the Russell 2000 underperformed, losing 1.4% and 1.1%, respectively.
This latest round of tariffs is expected to slap a duty of around 10% on $200 billion worth of Chinese goods. Beijing has responded by saying it may decline a U.S. offer to resume trade talks if the duties are implemented, adding it's not going to negotiate with "a gun pointed to its head." That news had equity futures down in pre-market trading.
The S&P 500 and the Dow held modest losses for much of the session, but those losses were extended in the afternoon when President Trump said an announcement on U.S.-China trade will be coming after the closing bell. The tech-heavy Nasdaq also hit news lows on the president's comment, but was notably weak even before as FAANG names lagged -- Amazon (AMZN 1908.03, -62.16) lost 3.2%; Apple (AAPL 217.88, -5.96) lost 2.7%; Netflix (NFLX 350.35, -14.21) declined by 3.9%; and Facebook (FB 160.58, -1.74) and Alphabet (GOOG 1156.05, -16.48) lost 1.1% and 1.4%, respectively.
The consumer discretionary sector, which houses Amazon, and the top-weighted technology sector, which houses the other FAANG names, finished at the bottom of the sector standings, losing roughly 1.3% apiece. Financials (-0.4%) and health care (-0.3%) also finished in the red, but the seven remaining groups finished in the green. Gains were limited though, with no group adding more than 0.5%.
Overseas, stock markets in Asia opened the week on a lower note, weighed down by the threat of new tariffs, with China's Shanghai composite losing 1.1% and Hong Kong's Hang Seng tumbling 1.3%. European equity markets also slid, but losses were more modest, with Germany's trade-heavy DAX shedding 0.2%.
U.S. Treasuries were under pressure early, pushing the yield on the benchmark 10-yr note as high as 3.02% -- its highest level in four months. However, buyers emerged later in the session, leaving the 10-yr yield higher by just one basis point at 3.00%. Meanwhile, the U.S. Dollar Index dropped 0.5% to 94.07.
Reviewing Monday's economic data, which was limited to the September Empire State Manufacturing Index:
The Empire Manufacturing Survey for September declined to 19.0 (Briefing.com consensus 23.0) from the prior month's unrevised reading of 25.6.
Looking ahead, the NAHB Housing Market Index for September and Net Long-Term TIC Flows for July will be released on Tuesday.
Nasdaq Composite +14.4% YTD
Russell 2000 +10.9% YTD
S&P 500 +8.1% YTD
Dow Jones Industrial Average +5.4% YTD
r by just one basis point at 3.00%. Meanwhile, the U.S. Dollar Index dropped 0.5% to 94.07.
Reviewing Monday's economic data, which was limited to the September Empire State Manufacturing Index:
The Empire Manufacturing Survey for September declined to 19.0 (Briefing.com consensus 23.0) from the prior month's unrevised reading of 25.6.
Looking ahead, the NAHB Housing Market Index for September and Net Long-Term TIC Flows for July will be released on Tuesday.
Nasdaq Composite +14.4% YTD
Russell 2000 +10.9% YTD
S&P 500 +8.1% YTD
Dow Jones Industrial Average +5.4% YTD
InvestmentHouse - Trump Makes His 'Usual' Friday Trade Comments (Weekend Newsletter)
https://www.investmenthouse.com/frblog.php
- Trump makes his 'usual' Friday trade comments, market reacts like
Pavlov's dogs.
- In the end it was just a day off Friday, similar to the day off
Wednesday, in a continuation of the uptrend.
- Various big names help drive the action on the week, but the small
and midcaps step up late week.
- SOX makes a bounce off support just as, of course, the final big
names throw in the towel on chips. A little bit of history repeating.
- Retail sales miss but still trending nicely higher.
- Industrial production revised nicely higher with mining producing
good jobs
- Still plenty of negative vibes on the market, but the leaders remain
as do the trends.
I said last weekend that it seemed every Friday the President would say
something negative about trade ahead of the weekend causing a market drop,
and perhaps we should play it. We should have.
Friday once again the President had something to say. Just before 12:00ET
President Trump said he still wanted to implement the $200B in tariffs
against China regardless of whether the two sides were talking or going to
talk again about trade.
The stock market, after starting higher, testing, then rallying to midday,
responded as usual, dumping 143 points on DJ30, 60 points on NASDAQ. After
an hour of this weakness, stocks then recovered in the afternoon session,
the large cap indices never made it back to their session highs,
particularly NASDAQ. The small and midcaps did while SOX posted a nice
recovery as well for its second 1+% gain.
SP500 0.80, 0.03%
NASDAQ -3.67, -0.05%
DJ30 8.68, +0.03%
SP400 0.36%
RUTX 0.43%
SOX 1.11%
NASDAQ 100 -0.21%
VOLUME: NYSE +1%, NASDAQ -11%. All things considered, this is not bad
price/volume action. The small caps, midcaps and large cap NYSE moved up,
albeit in the latter cases very little, on rising, once again above average
volume. NASDAQ sold back but on significantly lower trade than the prior 3
sessions of upside. Again, not bad price/volume action.
ADVANCE/DECLINE: NYSE 1.1:1, NASDAQ 1.1:1. Pretty much tells the story . .
. of boring trade.
The move left the large cap stock indices little changed, showing doji
similar to Wednesday's pause or continuation doji. These are likely the
same.
SP400 and RUTX, however, posted nice moves off rather tight lateral
consolidations. Good resumptions of their upside moves after testing and
resting.
SOX rallied for a second session over 1% after the Wednesday gap down to the
200 day SMA and doji with tail. It was a gap lower, a gap higher -- an
island reversal -- and as per that pattern, SOX is moving upside. It also
happened at a key level, the 200 day SMA and tapping the lower trendline in
its triangle pattern. There is some history there and it bounced chips.
Important group, finished the week decently, but was it just a flare for
help?
NEWS/ECONOMY
The trade commentary impacted market action the most, but there was other
news.
Bonds: The 10 year yield closed at 3.0% for the first time since August.
It should, but reluctance marks the move.
Manafort: Entered a plea deal with the Mueller team and agreed to help.
The usual Hollywood types were ecstatic with one saying 'check mate and f***
Trump.' Class as always. The plea deal, however, discusses the areas he
will provide aid, and they deal with key officials tied to the Clinton
campaign as well as Obama advisors. The intrigue, if not boredom, continues
to grow.
Retail Sales, August: Smallest rise in 6 months, but still a solid trend
higher in sales. Is it inflation, more buying, both? CPI for August backed
off from expectations and prior reading on the core both for the month and
year/year (0.1% vs 0.2%, 2.2% vs 2.4%) -- thus, there was some inflation
aspect to the sales number, but it played a lesser role than in the prior
months.
Overall: 0.2% vs 0.2% expected vs 0.2% July. Year/year 2.7% vs 2.8%.
Note that PPI rose 2.9% year/year, indicating that while both consumer and
producer prices are rising, producer prices are rising more and thus profits
are getting squeezed a bit. Morgan Stanley stated Wednesday that the US was
already in a bear market because profits were starting to decline. Well,
this data would seem to suggest MS is at least partially correct: if this
month's results continue then companies will see profits decline as costs
rise but selling prices do not.
Sales ex-autos: 0.3% versus 0.5% expected versus 0.9% July (from 0.6%).
NICE upside revision.
Industrial Production, August: 0.4% as expected vs 0.4% July (from 0.1%).
VERY NICE revision.
Mining: +0.7% vs 0.7% July. Year/year +14%! This sector is producing a LOT
of quality jobs.
Utilities: +1.2% -- a sweltering August significantly increased HVAC usage.
Manufacturing: +0.2% versus 0.3% expected, but year/year +3.1%
Capacity Utilization: 78.1 versus 78.3 expected vs 77.9 July (revised lower
from 78.1). This is not bad. We are producing more but not straining
capacity so no supply bottlenecks that leads to price increases.
THE MARKET
CHARTS
SOX: SOX failed to hold the 50 day MA mid-range in its triangle --
obviously. It gapped lower Wednesday as MU and others were downgraded by
big name brokerages. After all the selling in these names I posited this
looked as if the towel had been thrown in and it could bounce. Further,
looking at the pattern, it was a gap lower to a doji with tail that tapped
the lower triangle trendline on the low then rebounded to hold the 200 day
SMA on the close. Sure enough, SOX gapped upside Thursday, then added
another 1+% Friday, closing over the 50 day MA's. Not a breakout, not a new
resurgence, but it held the pattern and bounced right back. A bit more work
in the pattern and some of these other chip names that were mauled in the
selling can set up some bases to rally upside. Well what do you know?
RUTX: after 5 sessions of tight doji at the 20 day EMA testing the late
August move to a new high, the small caps posted a quite solid move upside
Friday. Not a blast off, but a notable bid moved their way.
SP400: Very similar to RUTX, i.e. after a weeklong lateral test of the late
August new high, the midcaps jumped higher, almost putting in a new all-time
high Friday. It is hard to argue with the action: breakout of its 7 month
base in mid-August, rallying to a series of new highs. A test of that move,
coming back to the 20 day EMA and holding the breakout, then breaking higher
again. Textbook.
NASDAQ: On the week NASDAQ held the 50 day MA test and started higher
Tuesday. Paused Wednesday, gapped upside Thursday. Paused again Friday.
Very solid volume Tuesday to Thursday as NASDAQ held and then broke higher
off that key level. Looks very good to continue moving upside in its trend
after this test and bounce.
SP500: Held the 20 day EMA on the week and bounced similar to NASDAQ,
moving higher Tuesday, then a pause, then up again Thursday. Friday was
flat, but SP500 is just below the late August all-time high.
DJ30: The same action as SP500, the move up off the weeklong 20 day EMA
test on Tuesday, a rest day, then a gap upside to a higher rally high.
Friday was not much but the Dow did edge higher.
LEADERSHIP
FAANG: AAPL was off Friday but testing the 10 day EMA on lower volume. A
good rally after a week of testing back to the 20 day EMA. AMZN also had
tested back to the 20 day EMA and started upside Tuesday with a big move.
It continued higher Wednesday and Thursday but then sold back Thursday after
the initial high. Had a harder time keeping on track upside. NFLX broke
higher Tuesday and Wednesday in a move over the 50 day SMA, testing Thursday
and Friday. We are looking to enter after this test. FB trying to set up a
bounce, forming a short double bottom at its lower low in the selloff. GOOG
bled higher on the week up to the 10 day EMA but sluggish. Looks like a bear
flag setup.
Chips: NVDA enjoyed a solid Friday on strong volume, though it did close
off its high. Wednesday it sold to the 50 day EMA on the low and reversed
sharply to a doji. That helped spring it higher and it still looks good.
AMD sold hard Thursday but was back upside Friday, maintaining its trend.
XLNX finished its 20 day EMA test on the week, gapped higher Thursday,
flattish Friday; still looking to enter. SMTC remains solid in a 2 week
pennant. SIMO broke down over the past 2 weeks. For those that crashed,
they bounced with SOX but the patterns are not necessarily comforting to the
upside. MU bounced, but looks like a bear flag. Ditto AMAT, INTC. AVGO is
interesting as is MLNX, but they need more work.
Software: Solid group on the week though testing a bit late week. DATA
moved higher, off a bit Friday. NOW solid on the week. VRSN new high again
Friday. MSFT new high into Friday. ADBE posted a big new upside break
Friday. VMW posted a huge surge Friday in a clean, new breakout.
Retail: Mostly testing on the week, e.g. ULTA, ROST, TJX, COST.
Financial: Credit services had a good week, e.g. V, MA. Banks more of the
same, i.e. going nowhere, even struggling the cases of BAC, C.
Energy: Getting some interesting setups, e.g. CRC, PTEN, UNT, APA. Some
service companies already making good moves, e.g. ESV. The big service
companies (SLB, HAL) rallied, but just moved up to their resistance in
downtrends. The group has been down awhile and it is setting up a bounce.
Transports: Airlines are still interesting and look set to move up, e.g.
AAL. Truckers still solid. ODFL testing after a great move while SAIA,
JBHT, WERN test and try to set up as well. Rails are mixed with NSC solid,
KSU not bad, CSX struggling right now.
Materials/Industrial metals: Not bad as CLF continues higher. LPX (lumber)
solid. CX (cement) and VMC trying to set up.
Manufacturing: Remains solid, e.g. EMR, ETN. UTX broke out Friday after a
weeklong move higher; we will try to pick it up on a test. We don't want to
buy right now because it rallied to get to the breakout and is near term
extended; let it test, hold then pick it up as it starts back upside. BA
tested the 200 day SMA on the week and reversed to rally back to the late
July high.
MARKET STATS
DJ30
Stats: +8.68 points (+0.03%) to close at 26154.67
Nasdaq
Stats: -3.67 points (-0.05%) to close at 8010.04
Volume: 2.06B (-11.21%)
Up Volume: 1.16B (-70M)
Down Volume: 877.36M (-182.64M)
A/D and Hi/Lo: Advancers led 1.13 to 1
Previous Session: Advancers led 1.09 to 1
New Highs: 147 (+4)
New Lows: 74 (+6)
S&P
Stats: +0.80 points (+0.03%) to close at 2904.98 NYSE Volume: 760.443M
(+0.73%)
A/D and Hi/Lo: Advancers led 1.06 to 1
Previous Session: Advancers led 1.31 to 1
New Highs: 108 (-27)
New Lows: 91 (+6)
SENTIMENT
VIX: 12.07; -0.30
VXN: 16.12; -0.33
VXO: 10.80; +0.14
Put/Call Ratio (CBOE): 0.83; -0.01
Bulls and Bears:
After a one week move to 60 the bulls faded but not significantly. This
move reflects two weeks ago, and the market was n a fade to test. With all
the negative commentary from the big brokerages and billionaires, even a
routine test of the trend support freaks some investors. Bears were up, but
still quite low historically.
Bulls: 57.7 versus 60.1
Bears: 18.3 versus 18.1
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 57.7 versus 60.1
60.1 versus 59.6 versus 57.7 versus 57.3 versus 54.9 versus 54.5 versus 54.9
versus 55.3 versus 52.4 versus 47.1 versus 47.6 versus 52.0 versus 55.5
versus 52.9 versus 50.0 versus 49.1 versus 46.6 versus 43.1 versus 43.6
versus 48.0 versus 43.6 versus 42.2 versus 49.5 versus 55.5 versus 54.9
versus 48.6 versus 48.1 versus 48.5 versus 41.9 versus 54.4 versus 66.00
versus 64.7 versus 66.7 versus 64.4 versus 61.9 versus 64.1 versus 64.2
versus 62.3 versus 61.5 versus 63.5 versus 64.4 versus 63.5 versus 62.3
versus 60.6 versus 60.4 versus 57.5 versus 54.3 versus 50.5 versus 47.1
Bears: 18.3 versus 18.1
18.1 versus 18.3 versus 18.3 versus 18.6 versus 18.8 versus 18.6 versus 18.5
versus 18.5 versus 18.6 versus 18.4 versus 17.6 versus 17.8 versus 17.7
versus 19.2 versus 19.2 versus 19.4 versus 19.4 versus 20.6 versus 20.8
versus 19.6 versus 19.8 versus 18.6 versus 17.5 versus 16.8 versus 15.7
versus 15.5 versus 14.4 versus 14.6 versus 14.4 versus 15.5 versus 12.6
versus 12.8 versus 12.7 versus 13.5 versus 15.2 versus 15.1 versus 15.2
versus 15.1 versus 15.1 versus 15.4 versus 15.4 versus 14.4 versus 14.4
versus 15.1 versus 15.2 versus 15.1 versus 17.0 versus 17.1 versus 19.0
versus 20.2
OTHER MARKETS
Bonds: 3.00% versus 2.972%. After bounce off the prior selling, touching
the 10 day EMA on the Thursday high, bonds gapped sharply lower Friday,
closing in on the early August low. They should sell and rates should rise.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.972%
versus 2.963% versus 2.977% versus 2.937% versus 2.941% versus 2.879% versus
2.904% versus 2.897% versus 2.86% versus 2.857% versus 2.882% versus 2.882%
versus 2.846% versus 2.813% versus 2.828% versus 2.821% versus 2.819% versus
2.819% versus 2.864% versus 2.871% versus 2.879% versus 2.882% versus 2.873%
versus 2.928% versus 2.963% versus 2.977% versus 2.977% versus 2.945% versus
2.95% versus 2.986% versus 3.005% versus 2.962% versus 2.975% versus 2.958%
versus 2.982% versus 2.965%
EUR/USD: 1.16226 versus 1.16900. Euro broke higher Thursday, matched the
late August high, and then was pounded Friday. The ECB talk Thursday
apparently ran its course.
Historical: 1.16900 versus 1.15863 versus 1.16016 versus 1.15946 versus
1.15534 versus 1.16243 versus 1.16341 versus 1.15832 versus 1.16029 versus
1.1664 versus 1.17035 versus 1.1691 versus 1.16802 versus 1.16216 versus
1.15390 versus 1.15709 versus 1.158 versus 1.1487 versus 1.1437 versus
1.13765 versus 1.13731 versus 1.13479 versus 1.14052 versus 1.1413 versus
1.1526 versus 1.16186 versus 1.16001 versus 1.15572 versus 1.15683 versus
1.15864 versus 1.1662 versus 1.1689 versus 1.17074 versus 1.16558 versus
1.17324 versus 1.17385 versus 1.16846 versus 1.16989 versus 1.17214 versus
1.1651 versus 1.16514 versus 1.16603 versus 1.1709 versus 1.1685 versus
1.16608 versus 1.1672 versus 1.17288 versus 1.17578 versus 1.17439 versus
1.1689
USD/JPY: 112.06 versus 111.81. Strong week for the dollar, clearing interim
highs on the base formed off the mid-July high.
Historical: Last below 109 four months back. 111.81 versus 111.491 versus
111.608 versus 111.192 versus 111.064 versus 110.680 versus 111.448 versus
111.468 versus 111.082 versus 110.962 versus 111.734 versus 111.19 versus
111.081 versus 111.249 versus 111.351 versus 110.766 versus 109.92 versus
110.49 versus 110.935 versus 110.818 versus 111.229 versus 110.737 versus
110.840 versus 111.07 versus 111.361 versus 111.344 versus 111.254 versus
111.621 versus 111.628 versus 111.744 versus 110.990 versus 110.995 versus
110.791 versus 110.871 versus 111.235 versus 111.084 versus 111.451 versus
112.732 versus 112.783 versus 112.896 versus 112.337 versus 112.631 versus
112.093 versus 110.911
Oil: 68.99, +0.40. Gapped higher over the 50 day MA, fell back to test it
to end the week.
Gold: 1201.10, -7.10. Moved up to tap the 50 day MA on the Thursday high,
then faded back off that test.
MONDAY
Plenty more data, some more current, e.g. the Empire PMI Monday and the
Philly Fed Thursday. Housing starts, Existing home sales, Leading
indicators also on the week. Of course, the FOMC is the following week and
expected to hike rates at that meeting.
The indices continue to trend higher and in the face of quite a load of very
negative views regarding the current market and the economy's future. As
noted during the week, big firms, economists, billionaires were saying
another financial crisis will occur in 2019 or 2020, a recession in 2019, a
bear market either is here now or in the near future -- the trending market
that continues trending higher with leadership gets no respect. Ah, one of
the Rodney Dangerfield 'no respect' rallies. As Charles Payne noted Friday,
he likes all the negativity given the contrary indications and that the
market rallies in the face of adversity (I hate to call it this, but so many
people know what it means -- 'climbing the wall of worry.' Yuck).
We still see leadership setting up, we still see the indices test support,
hold, bounce. In that environment I am going to continue to play the solid
upside setups.
What worries me? The Fed. I commented on this Thursday, and if you have
not you need to read that commentary. The Fed is speaking the 'Fed
language' about the perils of a strong economy, particularly vis-a-vis the
rest of the world. The 2000 Fed created disaster out of prosperity and we
are still paying the price. The current Fed is using different words but
talking the same theories. As the late, great Crocodile Hunter would say,
danger, danger, danger.
For now we continue to play the good setups because for now it is just
negative talk and Fed posturing. If it changes and the market's character
changes, we will change as well, but for now it has not.
Have a great weekend!
Upbeat Week Ends on Flat Note
14-Sep-18 16:15 ET
Dow +8.68 at 26154.67, Nasdaq -3.67 at 8010.04, S&P +0.80 at 2904.98
https://www.briefing.com/investor/markets/stock-market-update/2018/9/14/upbeat-week-ends-on-flat-note.htm
[BRIEFING.COM] The stock market saw limited movement on Friday, ending a positive week on a flat note. The S&P 500 (unch) settled just above its flat line, locking in a 1.2% gain for the week. The Dow (unch) and Nasdaq (-0.1%) also finished near their flat lines, ending the week with respective gains of 0.9% and 1.4%.
Equities started the day just above yesterday's closing levels, but relative weakness in a handful of rate-sensitive sectors and a mixed showing from other groups kept the market near its unchanged level. The underperformance in groups like utilities (-0.5%), telecom services (-0.4%), and real estate (-0.9%) was owed to overnight and early-morning selling in Treasury futures, which lifted the 10-yr yield to a six-week high just below the 3.000% area.
The broader market treaded water during early trade, thanks to gains in cyclical sectors like financials (+0.7%), industrials (+0.5%), and energy (+0.6%). The S&P 500 was on the verge of climbing to a fresh high around noon, but a Bloomberg report, indicating that President Trump is seeking to impose tariffs on $200 billion worth of imports from China despite the recent efforts to revive trade talks, sent the broader market to a session low.
In addition to pressuring stocks, the news weighed on offshore yuan and helped the U.S. Dollar Index (94.94, +0.42) climb to a fresh high, trimming this week's loss to 0.4%.
Afternoon trade saw a slow climb off session lows, but the S&P 500 was not able to revisit its high, as heavily-weighted groups like consumer discretionary (-0.3%) and health care (-0.3%) struggled. For its part, the top-weighted technology sector spent the session near its flat line, ending little changed.
The market received just two earnings reports between yesterday's closing bell and today's open. Adobe Systems (ADBE 274.69, +6.17) climbed 2.3% to a fresh record after beating earnings and revenue expectations while Dave & Buster's (PLAY 62.05, +4.53) rose 7.9% to a 13-month high after beating quarterly expectations and initiating a quarterly dividend of $0.15 per share.
Treasuries ended the day with losses, though intraday action saw the complex climb off mid-morning lows. The 10-yr yield rose three basis points to 2.99% after approaching its August high (3.02%) in early trade.
Investor participation was fairly consistent with the past two sessions as 762 million shares changed hands at the floor of the New York Stock Exchange.
Participants received a sizable batch of economic data today, including August Retail Sales, August Import/Export Prices, August Industrial Production and Capacity Utilization, July Business Inventories, and the preliminary reading of the University of Michigan Consumer Sentiment Index for September:
August retail sales rose 0.1% (Briefing.com consensus +0.4%), while the July increase was revised to 0.7% from 0.5%. Excluding autos, retail sales increased 0.3% in August (Briefing.com consensus +0.5%), and the July increase was revised to 0.9% from 0.6%.
The upward revisions to the prior month helped mitigate some of the headline disappointment for August, yet the key takeaway from the report is that consumer spending is up and will continue to support real GDP growth in the third quarter.
Import prices declined 0.6% in August after sliding a revised 0.1% in July (from 0.0%). Excluding oil, import prices slid 0.1% in August after slipping an unrevised 0.3% in July.
The key takeaway from the report is the recognition that nonfuel import prices have declined for three straight months, underscoring perhaps some of the effects of a stronger dollar. The moderation in nonfuel import prices could help temper budding inflation concerns for the time being.
Industrial Production rose 0.4% in August (Briefing.com consensus +0.4%), while the July increase was revised to 0.4% (from 0.1%). Meanwhile, Capacity Utilization came in at 78.1% (Briefing.com consensus 78.3%), up from a revised reading of 77.9% in July (from 78.1%).
The key takeaway from the report is the understanding that factory output was unchanged, excluding the gain in motor vehicles and parts.
Business Inventories rose 0.6% in July (Briefing.com consensus +0.6%). The June reading was left unrevised at +0.1%.
The key takeaway from the report is that business sales continued to outpace inventory growth year-over-year, which is a favorable trend that carries the potential to lead to a better pricing environment for businesses.
The preliminary reading of the University of Michigan Consumer Sentiment Index for September rose to 100.8 (Briefing.com consensus 97.0) from 96.2 in August.
The key takeaway from the report is that the pickup in sentiment was widespread across all major socioeconomic groups, which is a good underpinning for solid consumer spending activity.
Monday's economic data will be limited to the 8:30 ET release of the Empire Manufacturing report for September (Briefing.com consensus 23.0).
Nasdaq Composite +16.0% YTD
Russell 2000 +12.2% YTD
S&P 500 +8.7% YTD
Dow Jones Industrial Average +5.8% YTD
Week In Review: Wind in the Sails
Wall Street returned to its winning ways this week, powering through trade-related headlines and Hurricane Florence, one of the strongest storms to hit the Carolinas in decades. The S&P 500 advanced 1.2%, the tech-heavy Nasdaq Composite rose 1.4%, and the blue-chip Dow Jones Industrial Average climbed 0.9%.
Hurricane Florence was largely the talk of the week, forcing residents near the Carolina coast to either pack their bags or hunker down. The storm weakened to a Category 1 from a Category 4 before it made landfall on Friday though, which helped the market keep a positive bias. WTI crude futures were once up nearly 4.0% on the week, but gave the majority of that back as the storm weakened.
Meanwhile, on the trade front,the White House confirmed reports that it has proposed a new round of trade talks with China -- a proposition that was welcomed by Beijing. However, President Trump muddied the waters a bit with a tweet on Thursday, saying the U.S. isn't under pressure to make a deal with China; rather, China is under pressure to make a deal with the United States.
China's major stock index, the Shanghai Composite, fell 0.8% this week, touching its lowest level since January 2016.
Separately, President Trump is reportedly considering a second meeting with North Korean leader Kim Jong-un ahead of the November midterm elections. The two leaders held a historic summit in June, but relations have cooled since, due to North Korea's unsatisfactory progress towards denuclearization.
In U.S. corporate news, Apple (AAPL) unveiled a trio of new iPhones -- iPhone Xs ($999), iPhone Xs Max ($1099), and iPhone Xr ($749) -- at its annual product event on Wednesday, extending last year's high-end iPhone X line, which was created in celebration of the iPhone's 10th anniversary. Apple shares added 1.2% on the week.
The top-weighted technology sector was among the top-performing groups this week, rebounding from last week's disappointing performance, with a gain of 1.8%. In total, ten of eleven groups finished in positive territory. Cyclical sectors generally outperformed, although the heavily-weighted financial space did not, finishing lower by 0.4%.
On the data front, investors received some influential inflation data this week, including the core Producer Price Index for August and the core Consumer Price Index for August. The core PPI declined 0.1%, while the Briefing.com consensus expected an increase of 0.2%, and the core CPI showed a less-than-expected increase of 0.1% (Briefing.com consensus +0.2%).
Those readings helped to ease fears that the Fed might have to be more aggressive in raising rates in order to keep the economy from overheating.
In monetary policy, a trio of central banks released their latest policy decisions this week, including the European Central Bank, the Bank of England, and the Central Bank of Turkey. Both the ECB and the Bank of England kept interest rates unchanged, as expected, but Turkey's central bank increased its benchmark rate to 24.00% from 17.75%, attempting to stabilize the beleaguered Turkish lira.
The Fed is expected to raise rates by 25 basis points at its September 25-26 policy meeting, with the market placing the chances of a rate hike at 100%.
Trading Up on Trade Headlines
13-Sep-18 16:15 ET
Dow +147.07 at 26145.99, Nasdaq +59.48 at 8013.74, S&P +15.26 at 2903.92
https://www.briefing.com/investor/markets/stock-market-update/2018/9/13/trading-up-on-trade-headlines.htm
[BRIEFING.COM] The stock market traded up on Thursday, helped in part by some pleasing consumer inflation data and headlines that suggested senior officials from the U.S. and China appear headed for new discussions on trade matters. The S&P 500 increased 0.5% while the Dow Jones Industrial Average jumped 0.6%. It was the Nasdaq Composite, however, that led things with a 0.8% gain. The Russell 2000 slipped 0.1%.
Those indices sported higher gains shortly after the start of trading, yet they got reined in some after President Trump tweeted the U.S. isn't under pressure to do a deal with China and that it is China who is under pressure to do a deal with the U.S.
That didn't sound like a soft negotiating style, so it caused market participants to consider the prospect that new trade talks might not produce the result everyone is hoping for, which is an agreement that avoids the further implementation of tariffs.
Even so, the stock market held up reasonably well, supported by leadership from the information technology sector (+1.2%), which was driven by a rebound in Apple (AAPL 226.41, +5.34, +2.4%) and the semiconductor stocks, and leadership from the health care sector (+1.1%).
That was a stalwart combination as those happen to be the two most-heavily-weighted sectors in the S&P 500, accounting for nearly 41% of its market value.
Gains there helped offset a relatively weak showing from the financial sector (-0.2%), which continued to get pinched by a flattening yield curve, and a lackluster showing from the consumer staples (-0.4%) and energy (unch) sectors.
Oil prices dropped 2.5% to $68.62 per barrel, pressured by a report from the IEA that global oil supply hit a record 100 million barrels per day in August and the downgrade of Hurricane Florence to a Category 2 storm from a Category 4 storm.
In other developments, both the Bank of England and the European Central Bank held policy meetings that culminated with decisions to leave their key interest rates unchanged, as expected. Turkey's central bank, on the other hand, raised its key lending rate 6.25% to 24.00% in a bid to help support the beleaguered lira.
There wasn't much corporate news of note today, although Kroger (KR 28.58, -3.15, -9.9%) stood out as a story stock. The grocery retailer got hit hard after reporting better than expected second quarter earnings results. The issue for investors reportedly was same-store sales that came up shy of analysts' consensus estimate.
Reviewing today's economic data, which included the August Consumer Price Index, weekly Initial Claims, and the Treasury Budget for August:
Total CPI increased 0.2% (Briefing.com consensus +0.2%) in August, and core CPI, which excludes food and energy, rose 0.1% (Briefing.com consensus +0.2%). On a year-over-year basis, total CPI is up 2.7% (vs +2.9% in July) and core CPI is up 2.2% (vs +2.4% in July).
The key takeaway for the market is that there was a moderation in the year-over-year growth rates for total CPI and core CPI. That won't alter the prevailing view that the Federal Reserve is likely to raise rates two more times this year, yet the moderation is apt to be seen as a data point that could keep the Federal Reserve from tightening rates too rapidly.
The latest weekly initial jobless claims count totaled 204,000, while the Briefing.com consensus expected a reading of 210,000. Today's tally was below the revised prior week count of 205,000 (from 203,000). As for continuing claims, they declined to 1.696 million from a revised count of 1.711 million (from 1.707 million).
The key takeaway from the report is that the four-week moving averages for initial claims and continuing claims are at their lowest level since 1969 and 1973, respectively.
The Treasury Budget for August showed a deficit of $214.1 billion versus a deficit of $107.7 billion for the same period a year ago. The Treasury Budget data is not seasonally adjusted, so the August deficit cannot be compared to the $76.9 billion deficit for July.
The large, year-over-year uptick stemmed mainly from outlays for military active duty and retirement, Veterans' benefits, supplemental Social Security Income, Medicare payments to HMOs, and Social Security benefits that got pushed into August because September 1 was a non-business day and September 3 was a holiday.
The fiscal year-to-date deficit is $898.1 billion versus $673.7 billion at the same point in fiscal 2017.
Friday will be a very busy day of economic reporting. The Retail Sales and Export/Import Price Index reports will be released at 08:30 ET, followed by the Industrial Production report for August at 09:15 ET, and then the Business Inventories report for July and the preliminary University of Michigan Consumer Sentiment report for September at 10:00 a.m.
Nasdaq Composite: +16.1% YTD
Russell 2000 +11.6% YTD
S&P 500 +8.6% YTD
Dow Jones Industrial Average +5.8%
Apple Unveils New iPhones, But Stocks End Little Changed
12-Sep-18 16:20 ET
Dow +27.86 at 25998.92, Nasdaq -18.24 at 7954.26, S&P +1.03 at 2888.66
https://www.briefing.com/investor/markets/stock-market-update/2018/9/12/apple-unveils-new-iphones-but-stocks-end-little-changed.htm
[BRIEFING.COM] Wall Street struggled for direction on Wednesday, initially pulled lower by lagging tech shares only to regain its footing on headlines that the U.S. is proposing a new round of trade talks with China. The S&P 500 finished just slightly higher (+0.04%), and the Dow added 0.1%. The tech-heavy Nasdaq underperformed, shedding 0.2%.
The heavily-weighted information technology (-0.5%) and financials (-0.9%) sectors, which make up roughly 40% of the broader market combined, kept the S&P 500 grounded despite gains from eight of its nine other groups. The consumer staples (+1.3%) and telecom services (+1.4%) sectors were the top performers.
Apple (AAPL 221.07, -2.78) unveiled a trio of new iPhones -- iPhone Xs ($999), iPhone Xs Max ($1099), and iPhone Xr ($749) -- at its annual product event, extending last year's high-end iPhone X line, which was created in celebration of the iPhone's 10th anniversary. The company also announced a new Apple Watch, the Series 4, that has better fitness tracking and new health features.
Shares of Apple were down going into the event and finished Wednesday lower by 1.2%, but remain up 30.6% for the year.
Elsewhere in the tech space, chipmakers sold off, pushing the Philadelphia Semiconductor Index lower by 1.2%. Micron (MU 41.74, -1.86) was particularly weak, with shares falling 4.3% after being downgraded to 'Neutral' from 'Buy' at Goldman. Separately, Snap (SNAP 9.20, -0.69) dropped 7.0% to a new all-time low after BTIG lowered its price target to $5 a share.
Looking at other markets, WTI crude futures extended Tuesday's rebound, climbing 1.4% to $70.18/bbl, helped by the weekly EIA inventory report, which showed that U.S. crude stockpiles declined by 5.3 million barrels last week. Meanwhile, U.S. Treasuries ticked higher, pulling the benchmark 10-yr yield, which hit a one-month high on Tuesday, down one basis point to 2.96%.
Also of note, Hurricane Florence continued moving towards the Carolina coast, but was downgraded to a still-powerful Category 3 storm.
Reviewing Wednesday's economic data, which included the Producer Price Index for August, the Fed's Beige Book, and the weekly MBA Mortgage Applications Index:
Producer prices slipped 0.1% in August (Briefing.com consensus +0.2%), and core producer prices declined 0.1% (Briefing.com consensus +0.2%). Year-over-year, producer prices are up 2.8% (vs +3.3% in July) and core producer prices have risen 2.3% (vs +2.7% in July).
The key takeaway from the report is that it will soothe some burgeoning inflation concerns, as the monthly declines led to a moderation in producer price inflation on a year-over-year basis. The latter point notwithstanding, the market is apt to maintain its view that the Federal Reserve remains on course to raise rates two more times this year.
Reports from the Federal Reserve Districts suggested that the economy expanded at a moderate pace through the end of August. Dallas reported relatively brisk growth, while Philadelphia, St. Louis, and Kansas City indicated somewhat below average growth. Businesses generally remained optimistic about the near-term outlook, though most Districts noted concern and uncertainty about trade tensions, which prompted some businesses to scale back or postpone capital investment.
The weekly MBA Mortgage Applications Index decreased 1.8% to follow last week's downtick of 0.1%.
Looking ahead, investors will receive the August Consumer Price Index, weekly Initial Claims, and the August Treasury Budget on Thursday.
Nasdaq Composite +15.2% YTD
Russell 2000 +11.7% YTD
S&P 500 +8.1% YTD
Dow Jones Industrial Average +5.2% YTD
S&P Overcomes Slow Start, Extends Monday's Rebound
11-Sep-18 16:25 ET
Dow +113.99 at 25971.06, Nasdaq +48.31 at 7972.50, S&P +10.76 at 2887.63
https://www.briefing.com/investor/markets/stock-market-update/2018/9/11/s-and-p-overcomes-slow-start-extends-mondays-rebound.htm
[BRIEFING.COM] Stocks stumbled out of the gate on Tuesday, but strengthened as the day wore on, ending higher for the second day in a row. The benchmark S&P 500 was down as much as 0.4% early, but finished with a gain of 0.4%, closing a tick below its session high. The Dow also climbed 0.4%, while the tech-heavy Nasdaq added 0.6%.
Tuesday's slow start came after China told the World Trade Organization (WTO) that it wanted to impose sanctions on the U.S., citing Washington's non-compliance with a ruling in a dispute over U.S. dumping duties. That headline weighed on the futures market, but stocks immediately started moving higher after the opening bell.
Energy shares were particularly strong, helped by a rebound in the price of crude oil. WTI crude futures rallied 2.5% to $69.25/bbl, ending a five-session losing streak, as Hurricane Florence continued barreling towards the East Coast, where it may disrupt the Colonial Pipeline that connects Houston to New York. The S&P's energy sector advanced 1.0%.
Meanwhile, FAANG names gave the information technology (+0.8%) and consumer discretionary (+0.8%) sectors a boost, with Facebook (FB 165.94, +1.76), Apple (AAPL 223.85, +5.52), Amazon (AMZN 1987.15, +48.14), Netflix (NFLX 355.93, +7.52), and Alphabet (GOOG 1177.36, +12.72) adding between 1.1% and 2.5%.
The lightly-weighted telecom services sector (+1.1%) was another outperformer, but no other group posted a gain of more than 0.2%. Conversely, five of the eleven sectors finished in negative territory, but losses were modest; consumer staples and utilities were the worst-performing groups with a loss of 0.4% apiece.
U.S. Treasuries moved notably lower on Tuesday, pushing yields higher across the curve. The yield on the Fed-sensitive 2-yr note jumped four basis points to 2.75% -- its highest level in over a decade -- and the yield on the benchmark 10-yr note also advanced four basis points, settling at 2.98% -- its highest level in a month.
In politics, President Trump is reportedly considering a second meeting with North Korean leader Kim Jong Un ahead of the November midterm elections. The two leaders held a historic summit in June, but relations have cooled since as North Korea drags its feet in its promise to work towards denuclearization.
Reviewing Tuesday's economic data, which included July Wholesale Inventories, the July Job Openings and Labor Turnover Survey, and the August NFIB Small Business Optimism Index:
July Wholesale Inventories rose 0.6% (Briefing.com consensus +0.7%). The June reading was left unrevised at +0.1%.
The key takeaway from the report is that the pace of sales growth year-over-year continues to exceed the pace of inventories growth, which is a positive dynamic that can eventually help wholesalers regain pricing power if it persists.
The July Job Openings and Labor Turnover Survey showed that job openings increased to 6.939 million from a revised 6.822 million (from 6.662 million) in June.
The NFIB Small Business Optimism Index for August increased to 108.8 from 107.9 in July.
Looking ahead, investors will receive the weekly MBA Mortgage Applications Index, the August Producer Price Index, and the Fed's Beige Book for August on Wednesday.
Nasdaq Composite +15.5% YTD
Russell 2000 +11.9% YTD
S&P 500 +8.0% YTD
Dow Jones Industrial Average +5.1% YTD
S&P Breaks Four-Session Losing Streak
10-Sep-18 16:25 ET
Dow -59.47 at 25857.07, Nasdaq +21.62 at 7924.19, S&P +5.45 at 2876.87
https://www.briefing.com/investor/markets/stock-market-update/2018/9/10/s-and-p-breaks-foursession-losing-streak.htm
[BRIEFING.COM] The S&P 500 advanced for the first time this month on Monday, tacking on 0.2%, in what was a range-bound day of trading on Wall Street. Most S&P sectors climbed, but continued concerns over U.S.-China trade relations kept gains in check. The tech-heavy Nasdaq advanced 0.3%, but the blue-chip Dow underperformed, losing 0.2%.
President Trump still hasn't enacted a $200 billion tranche of tariffs on Chinese goods, but the lingering possibility has kept investors cautious as of late. On a related note, the president told Apple (AAPL 218.33, -2.97) over the weekend that it should manufacture products in the U.S. if it's worried about the impact of tariffs.
Shares of Apple -- the world's largest tech company -- slid for a fourth straight session on Monday, losing 1.3%, which helped to keep the top-weighted information technology sector in check, especially in the morning. However, the group did eventually finish in line with the broader market, closing with a gain of 0.3%.
Conversely, three of eleven sectors finished in the red, including energy (unch), financials (-0.1%), and health care (-0.3%). Within the health care space, shares of UnitedHealth (UNH 259.73, -8.55) and Anthem (ANTM 262.59, -9.31) lost more than 3.0% after being downgraded to 'Neutral' from 'Buy' at Citigroup.
Hurricane Florence, which is headed towards the Carolina coast, strengthened to a Category 4 storm on Monday and is on track to make landfall on Thursday night.
The rapidly intensifying storm gave home improvement retailers, like Home Depot (HD 210.69, +4.46, +2.2%) and Lowe's (LOW 112.39, +2.80, +2.6%), a boost on Monday, but weighed on insurance names, including Progressive (PGR 67.79, -1.08, -1.6%), Travelers (TRV 127.60, -2.49, -1.9%), and Allstate (ALL 97.85, -2.18, -2.2%).
In corporate news, shares of CBS (CBS 55.20, -0.86) slid 1.5% following the departure of chairman and CEO Les Moonves, who stepped down shortly after additional sexual harassment allegations. Tesla (TSLA 285.50, +22.26) shares rallied though, adding 8.5%, after CEO Elon Musk told employees that the company is "...about to have the most amazing quarter in our history."
Looking at other markets, U.S. Treasuries were flat on Monday, with the benchmark 10-yr yield closing unchanged at 2.94%, and the U.S. Dollar Index slid 0.3% to 95.13. The dollar was particularly weak against the pound (-0.9%) after the EU's chief Brexit negotiator, Michael Barnier, said a deal is possible by early November.
Reviewing Monday's economic data, which was limited to the Consumer Credit report for July:
The Consumer Credit report for July showed an increase of $16.6 billion (Briefing.com consensus $14.5 billion). June credit growth was revised to $8.5 billion from $10.2 billion.
The key takeaway from the report is that the credit expansion in July was driven almost entirely by nonrevolving credit.
Looking ahead, investors will receive the August NFIB Small Business Optimism Index, the July Job Openings and Labor Turnover Survey, and July Wholesale Inventories on Tuesday.
Nasdaq Composite +14.8% YTD
Russell 2000 +11.9% YTD
S&P 500 +7.6% YTD
Dow Jones Industrial Average +4.6% YTD
InvestmentHouse - Strong Wages Rattle a Market Fearing a Fed Overreach (WeekendNewsletter)
https://www.investmenthouse.com/frblog.php
- Strong wages rattle a market fearing a Fed overreach yet again.
- Pullback, but nothing major as stocks put in a better test Friday as
a for now modest pullback continues.
- Fed operates by theory versus facts and history, and thus the
market's concern.
- Even with reform, we are still paying a lot of people not to work.
- Just when the market was recovering Friday, Trump talks of another
$267B in China tariffs
- Still good trends in the indices, good stocks tested and in good
position, not quite a market top.
Futures were lower Friday even before the jobs report, and when a solid
enough report was released, futures . . . fell farther with DJ30 tickling
-100 and NASDAQ -60+ points.
Or perhaps it was Elon Musk slurping whiskey, smoking weed, and playing with
a samurai sword on a Joe Rogan podcast that kept investor moods lower
Friday. Thursday night Musk enjoyed himself and got visibly stoned, no
doubt to the delight of the true believers. Apparently, however, the true
believers don't own the stock because TSLA was bombed, down 28+ points at
the low. Earlier in the week and then pre-market I speculated that we might
actually make some money on the TSLA downside play even after the 'going
private' tweet appeared to put the kibosh on the play. The beauty of that
was it took so much value out of the put options we just left it on. A long
strange trip it has been, from 'funding secured' to 'funding not secured' to
whiskey swilling and pot smoking absurdity. We sold our options at a stock
price near 255 this morning, just a few points off the low and a 60% gain.
Thanks Elon!
Stocks opened lower but immediately managed a rebound into midday. Not bad.
Then it all fell apart with a selloff into early afternoon. Not major
losses at all, and very much in keeping with the pullback by the techs off
the recent runs higher. Indeed, we were somewhat relieved the market did
not try to rally given it was Friday and we did not really want to open a
lot of new positions heading into the weekend.
SP500 -6.37, -0.22%
NASDAQ -20.19, -0.25%
DJ30 -79.33, -0.31%
SP400 -0.21%
RUTX -0.08%
SOX -0.41%
NASDAQ 100 -0.31%
VOLUME: NYSE -8%, NASDAQ -8%. Volume faded on both NYSE and NASDAQ,
holding just above average on NYSE, well above average on NASDAQ. Some
distribution on NASDAQ Wednesday to Friday, but holding over the 50 day is
not bad after the selling.
ADVANCE/DECLINE: NYSE -2.1:1, NASD -1.2:1. It would appear the NASDAQ had
done most of its selling.
That didn't keep all stocks, and quality stocks, from moving higher. AAPL,
AMZN continued nice tests. Other leaders started upside off short tests on
the week, e.g. DATA, GRUB, NOW, ROKU -- some solid names that have moved
well and recently tested.
The index charts continued the test. Lots of press about the indices
finishing a week lower, I suppose part of the 'market selloff' story we
discussed Wednesday and Thursday. Yes, quite the selloff indeed (that is
totally facetious).
DJ30 'sold off' to the 20 day EMA, testing it on the Friday intraday low
before closing with a doji. Looks to have 'sold off' into a good lateral
test that is setting up for a run at that January high.
SP500 is showing a doji at the 20 day EMA as well. Very orderly fade to
support. Not violently volatile as seen in the past.
NASDAQ tested lower toward the 50 day MA as expected, showing a hammer doji
and coming off the low. Maybe it wants to finish the 50 day MA test, but
even so, that is not much of a drop. Some big names that rallied it were
selling so NASDAQ sold. Now those names and NASDAQ are in good position to
continue higher here from the middle of the range.
SP400 also shows a doji at the 20 day EMA, also a nice test in progress, not
aggressive, but an orderly 6-day test despite all the selloff speculation.
RUTX also shows, surprise, a tight doji at the 20 day EMA after that sharp
Thursday drop to that level. Thursday was harsh, but Friday was nice: held
the June and July highs on the low, held the 20 day EMA on the low, held the
38% Fibonacci retracement on the low. A doji at the 38% retracement is a
good upside signal.
SOX dropped hard Thursday as well, but lo and behold, it shows a hammer doji
at the 50 day SMA Friday. Could it be that SOX holds here, makes the 50 day
MA test we were looking for, and then tries a breakout form its triangle?
Certainly did not look as if it could pull that off on the Thursday drop,
but it is holding at the 50 day MA and showing a doji.
In sum, a lot of talk about a selloff but not a lot of selloff. Sure AMZN
and AAPL finally sold back after some great upside moves, but that is to be
expected.
What was more concerning was the lack of serious upside by the 'industrial
side' stocks after the big techs started to sell. There is some movement in
them, but as noted Thursday, it was not a dollar for dollar move to that
group once the techs started to take profits.
With some important techs moving up Friday and others such as AMZN set up at
near support to rally again, however, that may not be too serious a concern.
Still, you want to see those other stocks get money as well as they were
very good performers heading into the two week test following those moves.
Even so, if the techs that faded on the week start back up the coming week,
you go with that.
NEWS/ECONOMY
Back to Jobs
But surely 201K jobs versus 187K expected and 147K in July (from 157K) was a
good thing, particularly with wages higher (0.4% vs 0.2% exp and 0.3% July),
good enough to rally stocks on good news in an expansion. Sure, it is a
good thing unless you live in the upside down contrarian Phillips Curve cage
that the Princeton school economists dominating the Federal Reserve call
home.
In that world they talk of a thing called 'wage-led inflation' whereby
supposedly when workers make more money they bid up prices because they have
more money to spend on them (more money chasing the same number of goods).
In a controlled, socialist/communist economy, yes that could be the case.
What the PCurve has always failed to account for is that in a free
enterprise system where government does not attempt to control where
investments are made, industry will invest more money to create more supply,
dampening any inclination for prices to rise. Sure there might be near term
rises while businesses gear up more production, but they WILL gear up to
produce more because they make more money selling an extra unit than the
marginal price increase they may get due to a temporary shortage. In other
words, if it costs you $15 to make a product you sell for $75, you would
rather sell another product and make the $60 profit versus sell the same
product for a marginally higher price at $85. Two sales with a profit of
$120 beats one sale at a profit of $70.
That is how economics really works, backed up by plenty of history -- pretty
much the entire history of economics. The tragedy is the Fed has its own
control agenda -- that is what is was created for, not the 'economic
stability' it says is the reason for its existence -- and thus it ignores
facts in favor of continuing the dogma that favors it remaining in control.
Thus, in its world, the Fed sees the wage component rise to 2.9% year/year,
the highest since June 2009, and the market panics. Why? Because the Fed
always panics and ends up going too far and too hard, wrecking the market
followed by the economy. It chased inflation that never showed up in 1929,
fearing the economy was too hot. It fixed the problem: it helped cause the
crashes that led to the Great Depression. Greenspan oft talked of the
'runaway consumer' in the late 1990's and hiked rates and drained the money
supply, ostensibly to prevent the consumer from spending us into inflation.
He avoided that fictitious problem for sure: the stock market lurched into a
rollover and the economy lurched into a recession from which we never really
recovered as we lost so many quality US jobs to overseas markets never to
return.
The problem is the Fed gets it in its collective mind things are too hot.
It hikes and hikes rates to bring things under control (as if they needed
that) but nothing changes. It is like a puppy that doesn't follow the
owner's rules and the owner keeps telling it 'no' but the puppy doesn't
listen. So the owner starts saying 'no' louder and tapping the puppy with a
rolled up newspaper. The puppy is not bothered and it keeps on doing the
same thing. Then the owner gets hacked off, takes the newspaper, and knocks
the cr*p out of the puppy. The dog runs off and hides under the bed, crying
and whimpering, and not coming out. The Fed ratchets up its inflation
'fight' the same way and ultimately gets so aggressive it goes too far. The
market breaks, then the economy breaks.
THAT IS WHY stocks sold more after the release of the jobs data. Good news
is bad news because the Fed is on a hiking campaign and it is going to see
its hiking having no discernible effect (of course that is like beating the
dog when the cat poops on the rug -- no cause and effect). So it keeps on
doing the only thing it knows to do, expecting a result that its actions
won't bring about. It goes too far, market crashes.
Thus, stocks were selling Friday in a near term reaction to the data and how
the Fed would perceive it. Indeed, Rosengren reiterated that the Fed should
continue gradual rate increases and Kaplan latter pretty much echoed that
notion. They will continue as long as they don't see any reaction. The
tragedy is, of course, they WON'T see a reaction to their actions until it
is too late. Trying to prevent a fire when a flood is the problem at hand.
It was not the top, it was not 'the' moment the market checks out. It was a
near term reaction to what it feels the Fed will ultimately accomplish yet
again. Tops, however, are a process, and the market is trending with
leadership, not in a signature rollover yet. So, Friday was a near term
reaction, and frankly, it helped set up some good stocks in good positions,
e.g. AMZN, SQ, AMZN. Indeed, some stocks moved higher already, e.g. DATA,
GRUB, NOW, ROKU.
The other parts of the report.
Workweek: Still at 34.5. Not increasing despite all the claims of worker
shortages. Usually the workweek jumps when there is no one to work. This
is one of those 'how can that be?' if the anecdotal evidence we are given is
true.
Participation: 62.7% versus 62.9%. Now hold on. With all of those jobs,
with the shortage of labor, why is participation among working aged citizens
falling? I will tell you why.
Despite the rollback of the absurd expansion of definitions for what
constitutes looking for work (e.g. bed rest, reading the want ads, attending
a parent/teacher conference) and the reduction in people receiving food
stamps, we still make it too tempting not to work.
Numerous studies in the second term of the Obama administration tried to
answer why people were not working. Other than the obvious of reduced hours
thanks to the Affordable Care Act's hours worked cap, they found that a
person with a couple of kids who took advantage of all the government
programs (aka handouts) had as much disposable income as a person with the
same number of kids working a job paying roughly $75,000/year.
We continually hear this fiction about how everyone really wants a job
versus taking a handout. Apparently not. Over the past 50+ years (Great
Society boondoggles) we have created a mindset where it is okay not to work
but to instead take the benefits so you could pursue your bliss. Recall the
'Jane' commercials in the prior administration? She got free healthcare,
free this, free that so Jane could take the time to find out what she really
wanted to do in her life. Sadly, we are finding out, surprise, that what
Jane wants to do is not work, goof off, but collect those benefits. Thus
when anyone questions why we are spending hundreds of billions on these
programs that pay people not to work, an angry, screaming mob that has no
qualms going to your house to harass you or even commit physical violence
against you demands the status quo remain. It would appear 'Jane' can be
quite an ogre when she cannot pursue her bliss on someone else's dollar.
Thus, we have over 95M working aged people out of an entire population of
around 320M who are not working and are living off the those that are
working. At some point those working will ask 'why the heck am I doing this
to pay for them?' and the sham crashes down. That is what Tocqueville wrote
and it is happening now.
Where the jobs are: Still decent but manufacturing flipped negative.
Healthcare 33K
Construction 23K
Transportation 20K
Leisure 17K
Manufacturing -3K
Autos -4900
Retail -5900
More tariffs anyone?
Stocks were okay, however, recovering from the open to surge upside by the
time Europe close. Looked promising as the bids yet again returned. Alas,
but they did not hold. They bombed lower by midday and then struggled to
hold those levels to the close.
Cause? One could argue that AAPL's comments the $200B in tariffs would hurt
the economy if implemented were not well-received. Indeed, the market
dipped when they hit the wire.
Then the President decided to rattle everyone ahead of the weekend
announcing that another $267B were 'ready to go on short notice' with
respect to China. Open bomb bay doors.
Larry Kudlow gave a less than rosy update on the trade negotiations saying
they were working on them but it was quite simple. For China it is IP
theft. Obviously wrong but China won't admit to it. For Canada it was one
word: milk. Canada will not let the US sell its milk in the great white
north tariff free.
All in all no progress on the week, one where the US and Canada renewed
their efforts to get Canada into the deal US/Mexico deal.
In short, there was no reason for bids to return after the initial effort
stalled midday.
THE MARKET
LEADERSHIP
Software: Leading off because it was stronger Friday. CRM, DATA, NOW
started higher. MSFT showing doji at the 50 day MA after a week of declines
off a higher high. COUP gapped upside Wednesday, tested modestly waiting
for the 10 day EMA to catch up. A still strong group.
Drugs: The big names stated back upside. PFE, LLY, BMY, MRK. Big biotechs
not bad, e.g. AMGN. CELG is interesting with a 50 day MA test. Some
smaller bios are not bad, e.g. IMMU.
FAANG: FB sold off farther and faster. NFLX sold hard Wednesday, still
below the 50 day EMA. GOOG sold as did FB. AAPL faded to just below the 20
day EMA, showing a hammer doji. Testing the move but could drop farther
toward the 20 day EMA. AMZN is already at the 20 day, tapping it Thursday,
opening there Friday. Good setup.
Financial: Not bad but not going anywhere. Working on patterns. Still.
BAC continuing to work laterally over the 50 day EMA. JPM holding at the 50
day EMA as well with several doji. C broke down Thursday and Friday,
closing below the 50 day MA. GS finished an 8-session fade to the 50 day
SMA. V hanging on at the 20 day EMA after an ugly flop to that level
Wednesday.
Materials/Metals: Not surging upside, but could something arise here? LPX
is in a handle to a 3+ month double bottom with handle base. VMC is trying
to bottom at long term support. Overall, however, still not much strength.
Some industrial minerals moving (e.g. CLF), but metals look bad.
Manufacturing/Machinery: Manufacturing was good through Wednesday then
struggled a bit, e.g. EMR. Others not bad as ETN tested a good move.
Machinery trying to set up: CMI, CAT. DE starting higher on volume. BA all
over the place but forming a triangle. We will see.
Retail: Still overall strong with some testing, some still rallying. COST
added another 2% to a strong move. JWN still rising. ULTA surged 3+% on
top of a week of gains. FIVE gapped sharply higher on earnings just as it
did in June on those earnings. TJX paused after a good move, WSM in a two
week gap consolidation. Others not so good: M, DDS, GES.
Semiconductors: It was a week of haves and have nots, but by the end it was
mostly have nots. NVDA tested its new high, but actually looks quite good
at the 20 day EMA. AMD made a good short test, SMTC as well. LSCC rolled
over. CY rolled over. INTC continued a week of selling. LRCX, MU cracked
hard, TXN sold to the 200 day SMA.
Transports: A classic example of a group that has some good members but
also some dogs. ODFL strong. KSU strong. NSC started upside off the 20
day EMA after a week of consolidation. CSX is hanging on at the 20 day EMA.
Airlines had a hard week, AAL, DAL. LUV looks good.
MARKET STATS
DJ30
Stats: -79.33 points (-0.31%) to close at 25916.54
Nasdaq
Stats: -20.18 points (-0.25%) to close at 7902.54
Volume: 2.16B (-7.82%)
Up Volume: 961.31M (+911.62M)
Down Volume: 1.17B (+1.122B)
A/D and Hi/Lo: Decliners led 1.24 to 1
Previous Session: Decliners led 1.88 to 1
New Highs: 108 (+5)
New Lows: 84 (+2)
S&P
Stats: -6.37 points (-0.22%) to close at 2871.68 NYSE Volume: 705.407M
(-8.41%)
A/D and Hi/Lo: Decliners led 2.07 to 1
Previous Session: Decliners led 1.45 to 1
New Highs: 81 (-18)
New Lows: 134 (+25)
SENTIMENT
VIX: 14.88; +0.23. VIX rose the entire week, moving up to the 200 day SMA
where it stalled mid-August. As the market faded you would expect it to
rise and it did. Still in the longer term range, no significant indications
here yet.
VXN: 19.76; +0.59
VXO: 13.66; +0.78
Put/Call Ratio (CBOE): 1.17; +0.12
Bulls and Bears:
Bulls now back at 60, a number that suggests excessive bullishness and thus
likely selling. The market is already pulling back but -- modestly thus
far. This indication has a bit of a delayed effect: everyone is bullish and
feeling good and it takes a bit for the market to peak. Once everyone who
wants to put money in upside is in, then you get the decline.
Bulls: 60.1 versus 59.6
Bears: 18.1 versus 18.3
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 60.1 versus 59.6
59.6 versus 57.7 versus 57.3 versus 54.9 versus 54.5 versus 54.9 versus 55.3
versus 52.4 versus 47.1 versus 47.6 versus 52.0 versus 55.5 versus 52.9
versus 50.0 versus 49.1 versus 46.6 versus 43.1 versus 43.6 versus 48.0
versus 43.6 versus 42.2 versus 49.5 versus 55.5 versus 54.9 versus 48.6
versus 48.1 versus 48.5 versus 41.9 versus 54.4 versus 66.00 versus 64.7
versus 66.7 versus 64.4 versus 61.9 versus 64.1 versus 64.2 versus 62.3
versus 61.5 versus 63.5 versus 64.4 versus 63.5 versus 62.3 versus 60.6
versus 60.4 versus 57.5 versus 54.3 versus 50.5 versus 47.1
Bears: 18.1 versus 18.3
18.3 versus 18.3 versus 18.6 versus 18.8 versus 18.6 versus 18.5 versus 18.5
versus 18.6 versus 18.4 versus 17.6 versus 17.8 versus 17.7 versus 19.2
versus 19.2 versus 19.4 versus 19.4 versus 20.6 versus 20.8 versus 19.6
versus 19.8 versus 18.6 versus 17.5 versus 16.8 versus 15.7 versus 15.5
versus 14.4 versus 14.6 versus 14.4 versus 15.5 versus 12.6 versus 12.8
versus 12.7 versus 13.5 versus 15.2 versus 15.1 versus 15.2 versus 15.1
versus 15.1 versus 15.4 versus 15.4 versus 14.4 versus 14.4 versus 15.1
versus 15.2 versus 15.1 versus 17.0 versus 17.1 versus 19.0 versus 20.2
OTHER MARKETS
Bonds: 2.941% versus 2.879%. Gapped lower from the 200 day SMA Tuesday.
Tried to bounce through Thursday, then gapped to a lower low on this selling
Friday. Okay, this is as it should be: stronger data equals weaker bonds,
higher yields.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.879%
versus 2.904% versus 2.897% versus 2.86% versus 2.857% versus 2.882% versus
2.882% versus 2.846% versus 2.813% versus 2.828% versus 2.821% versus 2.819%
versus 2.819% versus 2.864% versus 2.871% versus 2.879% versus 2.882% versus
2.873% versus 2.928% versus 2.963% versus 2.977% versus 2.977% versus 2.945%
versus 2.95% versus 2.986% versus 3.005% versus 2.962% versus 2.975% versus
2.958% versus 2.982% versus 2.965%
EUR/USD: 1.15534 versus 1.16243. After a week holding the 50 day MA in a
test, Friday the euro broke that support.
Historical: 1.16243 versus 1.16341 versus 1.15832 versus 1.16029 versus
1.1664 versus 1.17035 versus 1.1691 versus 1.16802 versus 1.16216 versus
1.15390 versus 1.15709 versus 1.158 versus 1.1487 versus 1.1437 versus
1.13765 versus 1.13731 versus 1.13479 versus 1.14052 versus 1.1413 versus
1.1526 versus 1.16186 versus 1.16001 versus 1.15572 versus 1.15683 versus
1.15864 versus 1.1662 versus 1.1689 versus 1.17074 versus 1.16558 versus
1.17324 versus 1.17385 versus 1.16846 versus 1.16989 versus 1.17214 versus
1.1651 versus 1.16514 versus 1.16603 versus 1.1709 versus 1.1685 versus
1.16608 versus 1.1672 versus 1.17288 versus 1.17578 versus 1.17439 versus
1.1689
USD/JPY: 111.064 versus 110.680. Sold hard Thursday on Trump musing about
Japan tariffs, then rebounded Friday. Still, still in the 8 week lateral
range at the 50 day MA.
Historical: 110.680 versus 111.448 versus 111.468 versus 111.082 versus
110.962 versus 111.734 versus 111.19 versus 111.081 versus 111.249 versus
111.351 versus 110.766 versus 109.92 versus 110.49 versus 110.935 versus
110.818 versus 111.229 versus 110.737 versus 110.840 versus 111.07 versus
111.361 versus 111.344 versus 111.254 versus 111.621 versus 111.628 versus
111.744 versus 110.990 versus 110.995 versus 110.791 versus 110.871 versus
111.235 versus 111.084 versus 111.451 versus 112.732 versus 112.783 versus
112.896 versus 112.337 versus 112.631 versus 112.093 versus 110.911 versus
110.973 versus 110.474 versus 110.666 versus 110.40 versus 110.854 versus
110.687 versus 110.523 versus 110.223 versus 110.097 versus 109.678 versus
109.980 versus 109.895 versus 110.376 versus 110.03 versus 109.783 versus
110.668 versus 110.578 versus 110.247 versus 110.381 versus 110.314 versus
109.466 versus 109.705 versus 110.164 versus 109.878 versus 109.90 versus
109.53 versus 108.767
Oil: 67.75, -0.02. Sold on the week, holding near 67 on the lows,
rebounding off the lows Thursday and Friday. Still very range bound.
Gold: 1200.47, -3.83. Two weeks working laterally at the 20 day EMA after a
bounce from the lows. Still trending lower below the 50 day MA's.
MONDAY
Another data dump the coming week. Consumer credit, Small business
sentiment, PPI, CPI, Fed Beige Book, retail sales, Production. Interesting
for certain, but nothing really definitive. CPI is watched because of the
FOMC and its rate hiking. Retail sales are watched as a barometer of the
consumer, though inflation as we know can disguise the results as they are
based on prices, not quantity. If inflation pushes up prices, retail sales
can 'rise' without any real increase in sales.
Oh well, another screwed up 'measure' of economic activity. Everything gets
perverted at some point. The law is so twisted that procedure trumps the
facts. We all know about 'legal-eze' and how simple contracts are so
convoluted not even the lawyers really know the true result. Now, with
economic indicators, they are taken to such an extreme they do not reflect
the real world and their utility is thus highly questionable. Look at the
football rules: they are now so subjective who knows what will happen. What
is a catch? What is 'making a football play?' What is the point of instant
replay when hyper-technical rules say it is okay to use it in some instances
but not others, when the ones not allowed are the very plays that are often
game-determinative. Again, oh well.
After that digression into the recesses of my mind, what about next week?
Lots of talk about market tops and perhaps this is the market topping. That
is a process as discussed before, with rallies, declines, rallies, declines.
Right now, however, the indices are trending higher, rotation continues as
one area rallies, another tests, and then they reverse more or less,
changing positions. Wednesday to Friday saw the drugs and some
manufacturing start back up after tests. At the same time the tech leaders
were testing, but now they are set up fairly well for a bounce and indeed
Friday some, particularly in software, already started back upside.
Thus, we are going to continue looking upside at those stocks holding trends
or in good patterns that are ready to move. That includes AMZN already
simply because it is testing the 20 day EMA and could hold and resume the
move as it is that strong. Software is very interesting, drugs -- a lot of
stocks that moved well on the last move that are showing good activity even
with just a short test.
Have a great weekend!
Stocks Slip Following Jobs Report, Tariff Talk
07-Sep-18 16:30 ET
Dow -79.33 at 25916.54, Nasdaq -20.18 at 7902.57, S&P -6.37 at 2871.42
https://www.briefing.com/investor/markets/stock-market-update/2018/9/7/stocks-slip-following-jobs-report-tariff-talk.htm
[BRIEFING.COM] Stocks slipped on Friday, giving the bears a clean sweep for the abbreviated week, after the Employment Situation report for August showed a stronger-than-expected increase in average hourly earnings and after President Trump threatened yet another round of tariffs on Chinese goods. The S&P 500 finished lower by 0.2%, while the Dow Jones Industrial Average and the Nasdaq Composite lost 0.3% apiece.
The Employment Situation report for August crossed the wires early Friday morning, showing a 0.4% rise in average hourly earnings (Briefing.com consensus +0.2%), which pushes the year-over-year rate to 2.9% -- its highest level since May 2009. That ignited fears that inflation may be picking up more than expected, as that may force the Fed to be more aggressive in raising rates.
Equity futures dipped lower following the release, but the market didn't stay down for long, with the S&P 500 fully reclaiming its opening loss of 0.4% about an hour into the session. However, President Trump sent stocks back to their opening levels around midday after saying that he's got another tranche of tariffs on $267 billion of Chinese goods "ready to go" if China retaliates to a U.S. bid to impose a tariff on an additional $200 billion of Chinese goods (which hasn't happened yet, but is expected by many to come to fruition soon).
In the end, the S&P 500, which traded as high as +0.2% and as low as -0.5%, settled near the middle of its trading range. 10 of 11 S&P sectors finished in negative territory, with health care (+0.2%) being the lone exception. The lightly-weighted utilities (-1.2%) and real estate (-1.2%) spaces were the worst performers, but losses were modest in general, with no other group dropping more than 0.5%.
The top-weighted technology space outperformed for much of the day, but eventually finished in line with the broader market, losing 0.3%. Within the space, Broadcom (AVGO 232.58, +16.61) rallied 7.7% after reporting better-than-expected earnings for its fiscal third quarter. Meanwhile, Apple (AAPL 221.30, -1.80) dropped in the late afternoon, settling lower by 0.8%, following headlines that the Trump administration's proposed tariff list may cover a wide range of the company's products.
In other corporate news, electric automaker Tesla (TSLA 263.24, -17.71) tumbled 6.3%, hitting a five-month low, after its Chief Accounting Officer announced his resignation after just a month with the company and following headlines that its Chief People Officer will not be returning from her leave.
Looking at other markets, U.S. Treasuries sold off on Friday after the release of the August jobs report, sending yields higher across the curve. The yield on the Fed-sensitive 2-yr note jumped six basis points to 2.69%, and the yield on the benchmark 10-yr note also rose six basis points, closing at 2.94%. Elsewhere, the U.S. Dollar Index rallied 0.4% to 95.34, and WTI crude futures slipped 0.1% to $67.76/bbl.
Reviewing the Employment Situation report for August, which was Friday's only economic report:
August nonfarm payrolls increased by 201,000 while the Briefing.com consensus expected an increase of 187,000. The prior month's increase was revised to 147,000 from 157,000. Nonfarm private payrolls rose by 204,000 while the Briefing.com consensus expected an increase of 175,000. The previous month's increase was revised to 153,000 from 170,000. Average hourly earnings increased 0.4% (Briefing.com consensus +0.2%), while the previous month's increase was left unrevised at 0.3%. The average workweek was reported at 34.5 (Briefing.com consensus 34.5). The unemployment rate stayed at 3.9% (Briefing.com consensus 3.9%).
The wage growth should be regarded as good news, yet the key takeaway for the market is that it will keep the Fed in a tightening gear, which most likely includes two more rate hikes before the year is done.
Looking ahead, investors will receive just one economic report, the Consumer Credit report for July, on Monday.
Nasdaq Composite +14.5% YTD
Russell 2000 +11.6% YTD
S&P 500 +7.4% YTD
Dow Jones Industrial Average +4.8% YTD
Week In Review: Three-Week Rally Comes to an End as Tech Shares Slide
Investors returned from the extended Labor Day weekend in a selling mood, pulling stocks away from last week's record highs. The S&P 500 ended the week with a loss of 1.0%, while the tech-heavy Nasdaq Composite dropped 2.6%. The Dow Jones Industrial Average showed relative strength, but still finished lower by 0.2%.
The week kicked off with Amazon (AMZN) becoming the second U.S. company, after Apple (AAPL), to reach a market cap of $1 trillion and with Nike (NKE) unveiling a controversial ad for the 30th anniversary of its "Just Do It" campaign that features Colin Kaepernick, the former San Francisco 49ers quarterback credited with starting the national anthem protests. Amazon soon fell back after touching the $1 trillion milestone on Tuesday though, ending the week with a market cap of $952 billion.
On the Gulf Coast, residents braced for Tropical Storm Gordon to make landfall, which it did on Tuesday evening. Oil prices rallied in anticipation of the storm disrupting crude production, but gave back all of those gains after the storm turned out to be less damaging than feared. Oil prices then fell further on Thursday when the EIA's weekly inventory report showed a 4.3 million barrel drop in crude stockpiles, but a 1.8 million barrel jump in inventories of gasoline. In total, WTI crude futures lost 2.9% this week, settling Friday at $67.76/bbl, and the oil-sensitive energy sector lost 2.3%.
The top-weighted information technology sector also underperformed this week, dropping 2.9%. Within the group, social media names were in focus after Facebook's (FB) COO, Sheryl Sandberg, and Twitter's (TWTR) CEO, Jack Dorsey, testified before the Senate Intelligence Committee on Wednesday morning, defending their efforts to prevent election meddling. Mr. Dorsey also appeared before the House Energy and Commerce Committee in the afternoon, rebuking allegations that Twitter promotes certain political ideologies. The hearings didn't produce any new information of note, but that didn't prevent Facebook and Twitter shares from tumbling 2.3% and 6.1% on Wednesday, respectively.
On the trade front, U.S.-China trade tensions resurfaced at the tail end of the week, as many thought the White House would impose tariffs on $200 billion worth of Chinese goods on Thursday at midnight following the end of a public comment period. That didn't happen, but President Trump did raise the stakes on Friday, saying that he's got another tranche of tariffs on $267 billion of Chinese goods "ready to go" if Beijing retaliates to the $200 billion tranche.
On a related note, trade talks between the U.S. and Canada resumed this week after the two sides failed to reach an agreement last Friday, but investors were skeptical that a deal would get done after President Trump tweeted on Saturday that there's "no political necessity to keep Canada in the new NAFTA deal." As of Friday's closing bell, officials still had not reached an agreement.
In economic data, the Employment Situation report for August crossed the wires on Friday morning, causing some knee-jerk selling due to a higher-than-expected increase in average hourly earnings (+0.4% actual vs +0.2% Briefing.com consensus), which ignited some fears that inflation might be picking up. However, the realization that the economy is still strong, evidenced by a larger-than-expected increase in nonfarm payrolls (+201K actual vs +187K Briefing.com consensus) and an unemployment rate of 3.9%, helped keep losses in check.
As for the Fed, Friday's jobs report virtually locked in a September rate hike and increased the chances of a December rate hike to 79.8% from 72.8% on Thursday.
S&P Falls Again As Tech Shares Weigh For Second Day In A Row
06-Sep-18 16:20 ET
Dow +20.88 at 25995.87, Nasdaq -72.45 at 7922.75, S&P -10.55 at 2877.79
https://www.briefing.com/investor/markets/stock-market-update/2018/9/6/s-and-p-falls-again-as-tech-shares-weigh-for-second-day-in-a-row.htm
[BRIEFING.COM] The S&P 500 fell for the fourth time in five sessions on Thursday, with the typically high-flying technology sector underperforming for the second day in a row. The S&P 500 finished lower by 0.4%, while the tech-heavy Nasdaq tumbled 0.9%. The blue-chip Dow outperformed, however, tacking on 0.1%.
Thursday's session began on a flat note, but technology shares soon began selling off, pulling the S&P 500 into negative territory. At its worst mark of the day, the S&P 500 was down 0.7%. Tech giants like Facebook (FB 162.53, -4.65), Apple (AAPL 223.10, -3.77), and Alphabet (GOOG 1171.44, -15.04) lost between 1.3% and 2.8%, and their FAANG peer Amazon (AMZN 1958.31, -36.51) dropped 1.8%.
Chipmakers were also a drag on the tech space, which finished lower by 0.8%, with Micron (MU 44.65, -4.89) pacing the retreat after announcing that NAND pricing declined in the third quarter, triggering concerns about end demand/excess supply that go hand-in-hand with remarks about pricing declines. MU shares lost 9.9%.
Meanwhile, the energy sector (-1.9%) was the worst-performing group, weighed down by a drop in the price of crude oil. WTI crude futures settled lower by 1.4% at $67.81/bbl, with nearly all of that loss coming after the release of the EIA's weekly inventory report, which showed a 4.3 million barrel drop in crude stockpiles, but a 1.8 million barrel jump in inventories of gasoline.
The heavily-weighted financial sector (-0.6%) also declined, as did the consumer discretionary space (-0.3%), but six of the seven remaining sectors finished in the green. The lightly-weighted telecom services sector (+0.7%) finished atop the day's leaderboard, and the industrial space (+0.3%) was another notable outperformer.
In Washington, U.S. and Canadian officials continued to negotiate on trade, and the world awaited news from the White House, which could impose another round of tariffs on Chinese goods as soon as a public comment period ends at midnight. This round of duties will target $200 billion worth of goods, including furniture, tires, bicycles, and lighting products. Beijing has vowed to retaliate.
Elsewhere, U.S. Treasuries rallied on Thursday, sending the benchmark 10-yr yield two basis points lower to 2.88%; the U.S. Dollar Index slipped 0.1% to 94.98; and the CBOE Volatility Index, which is often referred to as the "investor fear gauge" jumped 4.2% to 14.49, touching its highest level in three weeks.
Reviewing Thursday's big batch of economic data, which included the August ADP Employment Change report, the revised readings for Q2 Productivity and Unit Labor Costs, the weekly Initial Claims report, July Factory Orders, and the August ISM Services Index:
The ADP National Employment Report showed an increase of 163,000 in August (Briefing.com consensus 186,000), and the July reading was revised to 217,000 (from 219,000).
The ADP reading is seen as a prelude to the BLS's nonfarm payrolls figure (Briefing.com consensus 187,000), which will be released on Friday.
Second quarter unit labor costs were revised to -1.0% (Briefing.com consensus -0.9%) from -0.9% in the preliminary reading, and Q2 productivity was left unrevised at +2.9%, as expected.
The key takeaway from the revised report is the same as the advance estimate: labor costs look to be in check, which will facilitate a gradual tightening path for the Federal Reserve.
The latest weekly initial jobless claims count totaled 203,000, while the Briefing.com consensus expected a reading of 214,000. Today's tally was below the unrevised prior week count of 213,000. As for continuing claims, they declined to 1.707 million from a revised count of 1.710 million (from 1.708 million).
The key takeaway from the report is that it is consistent with a tight labor market, as employers appear reluctant to cut payrolls.
The Factory Orders report for July showed a decrease of 0.8% (Briefing.com consensus -0.6%), and the June reading was revised to +0.6% from +0.7%.
The key takeaway from the report is that a decline in shipments of nondefense capital goods excluding aircraft will weigh on Q3 GDP estimates, but today's reading was consistent with the Advance Durable Orders report for July, meaning the decline should have been expected.
The ISM Services Index for August ticked up to 58.5 (Briefing.com consensus 56.5) from an unrevised reading of 55.7 in July.
The key takeaway from the report is that a solid rebound from a July pullback indicates continued health in the non-manufacturing sector.
Looking ahead, investors will receive the Employment Situation report for August on Friday, with the Briefing.com consensus expecting an increase of 187,000 in nonfarm payrolls, an increase of 0.2% in average hourly earnings, and an unemployment rate of 3.9%, unchanged from July.
Nasdaq Composite +14.8% YTD
Russell 2000 +11.7% YTD
S&P 500 +7.7% YTD
Dow Jones Industrial Average +5.2% YTD
Tech Shares Lead S&P Modestly Lower
05-Sep-18 16:25 ET
Dow +22.51 at 25974.99, Nasdaq -96.07 at 7995.20, S&P -8.12 at 2888.34
https://www.briefing.com/investor/markets/stock-market-update/2018/9/5/tech-shares-lead-s-and-p-modestly-lower.htm
[BRIEFING.COM] The S&P 500 dropped for the third time in four sessions on Wednesday, losing 0.3%, as technology and consumer discretionary shares weighed, overpowering gains most elsewhere. The tech-heavy Nasdaq showed relative weakness, tumbling 1.2%, while the blue-chip Dow outperformed, tacking on 0.1%.
Facebook's (FB 167.18, -3.98) COO, Sheryl Sandberg, and Twitter's (TWTR 32.73, -2.11) CEO, Jack Dorsey, testified before the Senate Intelligence Committee on Wednesday morning, defending their efforts to prevent election meddling. Mr. Dorsey also appeared before the House Energy and Commerce Committee in the afternoon, rebuking allegations that Twitter promotes certain political ideologies.
The hearings didn't produce any new information of note, but that didn't prevent Facebook and Twitter shares from tumbling 2.3% and 6.1%, respectively.
Those losses coincided with a broad tech retreat that forced the top-weighted information technology sector to the bottom of the sector standings. The tech space, which represents a quarter of the broader market alone, lost 1.5%, overshadowing gains from eight of the other ten groups. The consumer discretionary space similarly lost 1.1%, with Amazon (AMZN 1994.82, -44.69) dropping 2.2%.
Given the underperformance of information technology and consumer discretionary, which are by far the best-performing sectors year-to-date, and the relatively flat performance of U.S. Treasuries, with the benchmark 10-yr yield closing unchanged at 2.90%, Wednesday's outing appeared to be nothing more than a natural pullback following Wall Street's latest run to new record highs.
On the upside, countercyclical sectors outperformed, with consumer staples and utilities closing atop the sector standings with respective gains of 1.2% and 1.3%. The lightly-weighted telecom services sector (+0.8%) was the next-best performing group, and the trade-sensitive industrial sector (+0.6%) also showed relative strength.
In Washington, trade talks between the U.S. and Canada quietly resumed on Wednesday, producing no new headlines of note. Meanwhile, investors looked ahead to Thursday when the White House could announce its decision regarding another round of tariffs -- this one targeting $200 billion worth of Chinese goods.
Elsewhere, West Texas Intermediate crude futures tumbled 1.5% to $68.75/bbl, hitting their lowest level in a week, after a weaker-than-expected Tropical Storm Gordon hit the Gulf Coast overnight, doing less to disrupt crude production than anticipated. The oil-sensitive energy sector finished with a loss of 0.1%.
Reviewing Wednesday's economic data, which was limited to the July Trade Balance and the weekly MBA Mortgage Applications Index:
The July trade balance report showed a deficit of $50.1 billion (Briefing.com consensus -$50.6 billion). The June deficit was revised to $45.7 billion from $46.3 billion.
The key takeaway from the report is twofold: (1) the widening deficit will create a drag on Q3 GDP growth and (2) the July report is going to fan the Trump Administration's flames about trade matters as it showed an increase in the deficit with both the European Union and China.
The weekly MBA Mortgage Applications Index slipped 0.1% to follow last week's decrease of 1.7%.
Looking ahead, investors will receive several pieces of economic data on Thursday, including the August ADP Employment Change report, the revised readings for Q2 Productivity and Unit Labor Costs, the weekly Initial Claims report, July Factory Orders, and the August ISM Services Index.
Nasdaq Composite +15.8% YTD
Russell 2000 +12.5% YTD
S&P 500 +8.0% YTD
Dow Jones Industrial Average +5.1% YTD
Modest Losses to Start Holiday-Shortened Week
04-Sep-18 16:30 ET
Dow -12.34 at 25952.48, Nasdaq -18.29 at 8091.27, S&P -4.80 at 2896.46
https://www.briefing.com/investor/markets/stock-market-update/2018/9/4/modest-losses-to-start-holidayshortened-week.htm
[BRIEFING.COM] Stocks opened the holiday-shortened week on a modestly lower note, pulling back from last week's record highs amid continued uncertainty over U.S.-Canada trade relations. The S&P 500 finished with a loss of 0.2%, but did close in the upper half of its daily range. Meanwhile, the Dow slipped 0.1%, and the Nasdaq lost 0.2%.
Trade talks between the U.S. and Canada are set to resume on Wednesday after the two sides failed to reach an agreement to replace NAFTA on Friday as planned. The negotiations looked promising early last week, but appear to have soured since, with President Trump tweeting over the weekend that there's "no political necessity to keep Canada in the new NAFTA deal."
That tweet helped give the bears an advantage on Tuesday, which ended with eight of eleven sectors closing in negative territory. The lightly-weighted telecom services (-1.1%), real estate (-0.9%), and materials (-0.8%) groups were the worst performers, and the health care space (-0.7%) also showed notable weakness.
The top-weighted technology sector (-0.3%) finished in the red as well, with social media giant Facebook (FB 171.16, -4.57) dropping 2.6% following a downgrade at MoffetNathanson and ahead of Wednesday's appearance on Capitol Hill, during which the company will attempt to answer questions regarding political censorship and Russian propaganda.
Meanwhile, in the consumer discretionary sector, Nike (NKE 79.60, -2.60) fell 3.2% after the athletic shoe and apparel maker unveiled an ad for the 30th anniversary of its "Just Do It" slogan that features Colin Kaepernick, the former San Francisco 49ers quarterback credited with starting the controversial national anthem protests.
However, the consumer discretionary's largest component, Amazon (AMZN 2039.51, +26.80), became just the second U.S. company to achieve a market cap of $1 trillion, although AMZN shares did trim their gains after hitting the milestone, going from +1.9% to +1.3% and cutting the company's market cap to $995 billion by the close.
The consumer discretionary sector finished higher by 0.3%, and the financials (+0.5%) and utilities (+0.6%) groups also ended in the green.
Away from equities, crude oil went on a wild ride on Tuesday, going from +2.3% to -1.0% before settling with a loss of 0.3% at a price of $69.82/bbl. The volatility came as investors tried to gauge the impact of Tropical Storm Gordon, which is expected to make landfall on the Gulf Coast tonight, possibly as a hurricane.
Lastly, the U.S. Dollar Index advanced 0.3% to 95.35, hitting its highest level in over a week, and U.S. Treasuries sold off, sending yields higher across the curve. The yield on the benchmark 10-yr Treasury note jumped five basis points to 2.90%, hitting its highest level in three weeks.
Reviewing Tuesday's economic data, which was limited to the ISM Index for August and the Construction Spending report for July:
The ISM Index for August increased to 61.3 from an unrevised reading of 58.1 in July, while the Briefing.com consensus expected a reading of 57.6.
The key takeaway from the report is that manufacturing activity is robust and consistent with a strong economy.
Construction Spending increased 0.1% in July, while the Briefing.com consensus expected an increase of 0.5%. The June reading was revised to -0.8% from -1.1%.
The key takeaway from the report is that weakness in nonresidential private construction spending was the primary reason for the tepid growth overall.
Looking ahead, investors will receive the July Trade Balance, Auto and Truck Sales for August, and the weekly MBA Mortgage Applications Index on Wednesday.
Nasdaq Composite +17.2% YTD
Russell 2000 +12.9% YTD
S&P 500 +8.3% YTD
Dow Jones Industrial Average +5.0% YTD
InvestmentHouse - Canada/US Go at it Again Starting Wednesday (Weekend Newsletter)
https://www.investmenthouse.com/frblog.php
- Stocks rally to new highs midweek, test modestly into Friday.
- Canada/US fail to reach trade agreement but will go at it again starting
Wednesday.
- NASDAQ near the upper channel line, SOX as well.
- NASDAQ leaders may test soon, but others in NASDAQ and in more industrial
areas are close if not already there on tests.
The week saw new highs or higher highs through Wednesday on all the indices
followed by a modest test to end the week and the month. That leaves the
indices set up quite well for a new upside move to start the new month.
SP500 0.39, 0.01%
NASDAQ 21.18, 0.26%
DJ30 -22.10, -0.09%
SP400 0.26%
RUTX 0.48%
SOX 0.58%
NASDAQ 100 0.16%
VOLUME: NYSE +35%, NASDAQ -6%. NYSE trade surged above average for the
first time since 7/31. NASDAQ trade fell to just below average.
ADVANCE/DECLINE: NYSE +1.2:1, NASDAQ +1.6:1
Oh yes, the new month. September. The month most associated with losses.
Well, in 2017 SP500 rallied 48 points (1.9%), NASDAQ 1%. Didn't tear the
cover off the ball thanks to a late month dip, but hardly living up to
September's unsavory reputation.
Of course, whenever the market rallies for as long as this one has and is
punching out new highs, the worry is about market tops. Not without reason.
The economy is strong with 4.2% Q2 GDP and the Atlanta Fed calling for 4.6%
this quarter. Yet, the recent data has softened. I believe it is just a
soft spot in the expansion, but of course the doom websites and authors are
saying we are at a 2000 and 2007 type of top.
Some headlines today from those sites:
'The decoupling has never been greater'
'Once the bubbles pop, we're all broke'
Typical daily headlines. What most people do not know and what is bandied
about by the global elite -- and even discussed by some great true
economists such as Milton Friedman -- is the ultimate fix, the ultimate
reset button, if it becomes necessary.
The worry is not the current and pending aggregate debt on the books of the
world's countries, but the layer upon layer of tied derivative debt in the
form of derivatives, credit default swaps (insurance on insurance), etc.
Trillions upon trillions of dollars of debt and insurance tied to one
another. If it breaks, the tidal wave of cascading debt could throw
civilization into chaos.
Thus, the kill switch, the reset button, is a global cancellation of debt.
All debt. One time, get out of jail, start over from zero balance.
Everybody; it would not be acceptable to the proletariat (that is you and
me, anyone not in the power broker elite) if only the elites were allowed to
reset. They might try, they might say if they are not saved no one will
survive, but they did that in the financial crisis and it won't happen again
because now the poor slobs are onto it.
Anyway, I hate to sound as if there is no need to worry because the ultimate
bailout is there. To the contrary, it would be frightening, ugly, and
involve a lot of suffering before it was done, but even free market greats
are for it if necessary. Why? Because Friedman and others realize that the
problems are caused not by the free market but by the interference into the
markets that are the genesis of this kind of layered insurance, etc. to
protect positions. Government involvement always exacerbates a problem by
factors of tens.
More to the point for the current day, however, is the FOMC and its interest
rate policy. Thus far it is not showing any desire to slow its rate hiking.
Bullard voiced some concern, stating the Fed should stay put the rest of the
year, but the minutes and Powell himself said the economy is strong and that
hikes will continue as planned. The Fed has paid some lip service to the
yield curve, but you hear comments from the administration (Mnuchin) stating
the yield curve is not an economic indicator but a market indicator. Well,
a yield curve inversion invariably precedes a market turnover, and the
market turnover typically predicts an economic slowdown to come.
Thus, FOMC overplaying its hand remains a worry for the market's future.
For now, the market is not pricing it in. Indeed, some are saying the
recent highs show the market is pricing in the cessation of the FOMC's rate
hiking.
Well, I am simply not smart enough to say that is the case. What I can say
is the market shows good leadership with some prior leaders coming back
after some damage in late July, joining other sectors that started to rise
when they started to fall. That kind of rotation is market healthy.
With the moves to new highs the past week, many of our plays were hitting
our close to target levels. We banked some solid gain on AAPL, AMZN, SQ, V,
VRSN, GRUB, ROKU, etc., etc. After the current test of the move to higher
highs we will see if some of these same stocks as well as others present new
upside entries for the next move upside.
NEWS/ECONOMY
Trade dominated headlines again, Friday whether Canada would join the
US/Mexico deal. 'Off the record' comments from the President were released
and Canada was reportedly outraged regarding the President's lack of respect
for the Canadians. Could be that has to do with its PM and his prior
comments about the President.
Whatever. The end result was no deal Friday. Canadian sources reported no
deal and that the talks were over. That news killed an attempted move
higher by US stocks following a softer open. Then the US reported that the
talks had concluded for the day without a deal but would resume on
Wednesday. Okay, not so harsh. Stocks did manage a very respectable
recovery in the last two hours.
China trade: China continues to make personal attacks on Trump, the sure
sign it has no substantive reasons it should maintain the fiction it is an
emerging economy and thus entitled to emerging economy preferential
treatment. China an emerging economy? That is the same as Heddy Lamar --
That's Hedley -- in 'Blazing Saddles' attempting to pass himself off as a
student to receive a discount to the movies.
In any event, China said that Trump's tweets are "from some alternative
universe." What universe is that? Where the world's number 2 GDP country
considers itself an emerging economy? Is this how China justifies stealing
other countries' IP? I have to laugh. China is so proud of how smart it is,
yet much of the tech it has is tech it stole either through espionage in
terms of government tech (weapons, etc.) or from its 'partnerships' in terms
of company IP. So smart, so advanced, but it feels it must get ahead by
stealing from others. Where is the pride in that? Where is the face saving
in that? There is none. China is full of BS, it knows it, and thus the
personal attacks because it has no argument to counter the question why do
you consider yourself still an emerging economy in need of assistance? I
would LOVE to ask them that question and then press them on it.
THE MARKET
CHARTS
NASDAQ: Just over two weeks upside off the 50 day MA with a series of new
highs from the prior Friday to the intraday high Thursday. Friday NASDAQ
was still up thanks to AAPL, AMZN, MSFT and company. Slowing the move
higher as it does its imitation of a pause after a solid surge higher
starting with the Monday gap higher. Near the upper channel line (8180,
closed at 8110) and that appears to be exerting some influence, slowing the
move and starting something of a consolidation.
RUTX: One of the best performers Friday, not slowing but accelerating to a
new high after a sluggish Tuesday to Thursday. Always love to see the small
caps as upside trendsetters.
SP400 and SP500 are very similar, breaking to new highs on the week then
testing back Thursday and Friday. Holding the breakouts, nice modest tests
to near the 10 day EMA, setting up the next move higher.
DJ30: Similar to SP500 though DJ30 has not hit a new high on the move
though it is hitting higher rally highs. Still remains just over 100 points
off the January all-time high.
SOX: SOX ran into the upper trendline of its 6 month triangle on the Monday
high then spent the rest of the week bumping at it. Didn't drop away, just
hanging in below the TL. Best action would be a drop to near the 50 day MA,
a higher low, then a surge back upside for the breakout.
LEADERSHIP
FAANG: AAPL, AMZN carried the load on the week, each continuing upside even
into Friday. FB was up but not ripping higher. NFLX is trying to break
through the 50 day SMA in something of a cup with handle. GOOG looked great
and started the move higher after a test, but then Friday dropped hard
through the 20 day EMA.
Software: Solid on the week, most taking a breather late week. FFIV
continued its rally into Wednesday then tested modestly. VRSN, ADBE ditto.
VMW looks as if it is ready to break higher. RHT may be through its issues
after that June gap lower. NOW off a bit to end the week after a strong
surge into Wednesday. DATA solid, moving back to the late July high. MSFT
a new high on the week.
Semiconductors: NVDA posted a strong week of recovery; a test back this
week gives a potential entry point. XLNX tested late week after an
excellent move higher. AMD in a nice test of its surge. LSCC moved well
Friday after a good early week surge. Still waiting for AAOI, SIMO to move.
One we were watching, SMTC did so, surging almost 10 points Thursday-Friday.
Drugs/Healthcare: A quiet week after those good runs to end July and into
mid-August. MRK in a 2 week test. PFE a 2 week test to the 20 day EMA.
BMY also in a lateral test. LLY in a flat lateral move as well. SRPT
started upside Wednesday could not continue it to Friday but looks quite
good.
Financial: Still in the test after an upside move Monday. JPM, BAC, C all
testing after that move. V put in a new high on the week, ending with a
pair of doji. GS up Monday, off Tuesday to Friday, giving up the move A
step forward, a step backward.
Industrials: A few moved well, e.g. HON into midweek then a modest test to
Friday. EMR held up well, added some Friday. ETN rallied, tested well into
Friday. These look good. CMI so-so, holding the 50 day EMA. CAT still
working on its pattern.
Retail: Overall solid with some good moves, some others not so great. TJX
posting a nice run higher through Friday with a new high. COST surged
Friday out of a consolidation. ROST holding up well and TGT holding its gap
and consolidation. WSM tested back to the upper gap point and started
higher Friday. WMT still looks good in its pullback to test its earnings
gap.
Transports: AAL moved higher early week then slid laterally in a tight
range; still looks good. CSX in rails tested back to the 20 day EMA on the
week. ODFL (trucking) surged Wednesday, flopped to the 50 day MA Friday,
then recovered decently.
Misc: SQ put in an outstanding week, may need a breather after 2+ weeks
upside. PYPL broke higher as well, tested at the end of the week. DIS
still going nowhere. ROKU surged early week, gapped lower Wednesday on an
AMZN threat, holding near the 10 day EMA.
MARKET STATS
DJ30
Stats: -22.10 points (-0.09%) to close at 25964.82
Nasdaq
Stats: +21.17 points (+0.26%) to close at 8109.54
Volume: 1.9B (-5.47%)
Up Volume: 1.21B (+438.09M)
Down Volume: 662.27M (-547.73M)
A/D and Hi/Lo: Advancers led 1.61 to 1
Previous Session: Decliners led 1.36 to 1
New Highs: 142 (+7)
New Lows: 29 (-15)
S&P
Stats: +0.39 points (+0.01%) to close at 2901.52
NYSE Volume: 830.912M (+35.44%)
A/D and Hi/Lo: Advancers led 1.16 to 1
Previous Session: Decliners led 1.8 to 1
New Highs: 94 (-20)
New Lows: 46 (-16)
SENTIMENT
VIX: 12.86; -0.67. Still range bound and that is fine. The only thing
really to fear is if VIX rises as the market rises, not the case now.
VXN: 16.04; +0.02
VXO: 11.16; -0.52
Put/Call Ratio (CBOE): 1.03; +0.21
Bulls and Bears:
Bulls rallied again, effectively at the 60 level associated with pullbacks.
Bears are elevated but still quite low. At this level of bulls it is time
to start watching how the leaders perform. Thus far they are fine.
Bulls: 59.6 versus 57.7
Bears: 18.3 versus 18.3
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 59.6 versus 57.7
57.7 versus 57.3 versus 54.9 versus 54.5 versus 54.9 versus 55.3 versus 52.4
versus 47.1 versus 47.6 versus 52.0 versus 55.5 versus 52.9 versus 50.0
versus 49.1 versus 46.6 versus 43.1 versus 43.6 versus 48.0 versus 43.6
versus 42.2 versus 49.5 versus 55.5 versus 54.9 versus 48.6 versus 48.1
versus 48.5 versus 41.9 versus 54.4 versus 66.00 versus 64.7 versus 66.7
versus 64.4 versus 61.9 versus 64.1 versus 64.2 versus 62.3 versus 61.5
versus 63.5 versus 64.4 versus 63.5 versus 62.3 versus 60.6 versus 60.4
versus 57.5 versus 54.3 versus 50.5 versus 47.1
Bears: 18.3 versus 18.3
18.3 versus 18.6 versus 18.8 versus 18.6 versus 18.5 versus 18.5 versus 18.6
versus 18.4 versus 17.6 versus 17.8 versus 17.7 versus 19.2 versus 19.2
versus 19.4 versus 19.4 versus 20.6 versus 20.8 versus 19.6 versus 19.8
versus 18.6 versus 17.5 versus 16.8 versus 15.7 versus 15.5 versus 14.4
versus 14.6 versus 14.4 versus 15.5 versus 12.6 versus 12.8 versus 12.7
versus 13.5 versus 15.2 versus 15.1 versus 15.2 versus 15.1 versus 15.1
versus 15.4 versus 15.4 versus 14.4 versus 14.4 versus 15.1 versus 15.2
versus 15.1 versus 17.0 versus 17.1 versus 19.0 versus 20.2
OTHER MARKETS
Bonds: 2.86% versus 2.857%. Gapped below the 200 day SMA Tuesday as bonds
sold, yields rose. Friday gapped over the 200 day SMA but then gave it up
and lost ground. Back to the 50 day SMA where it held after the gap lower.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.857%
versus 2.882% versus 2.882% versus 2.846% versus 2.813% versus 2.828% versus
2.821% versus 2.819% versus 2.819% versus 2.864% versus 2.871% versus 2.879%
versus 2.882% versus 2.873% versus 2.928% versus 2.963% versus 2.977% versus
2.977% versus 2.945% versus 2.95% versus 2.986% versus 3.005% versus 2.962%
versus 2.975% versus 2.958% versus 2.982% versus 2.965%
EUR/USD: 1.16029 versus 1.1664. Dollar rallied back Thursday and Friday,
driving the pair down to the 50 day MA after a 3 week run higher.
Historical: 1.1664 versus 1.17035 versus 1.1691 versus 1.16802 versus
1.16216 versus 1.15390 versus 1.15709 versus 1.158 versus 1.1487 versus
1.1437 versus 1.13765 versus 1.13731 versus 1.13479 versus 1.14052 versus
1.1413 versus 1.1526 versus 1.16186 versus 1.16001 versus 1.15572 versus
1.15683 versus 1.15864 versus 1.1662 versus 1.1689 versus 1.17074 versus
1.16558 versus 1.17324 versus 1.17385 versus 1.16846 versus 1.16989 versus
1.17214 versus 1.1651 versus 1.16514 versus 1.16603 versus 1.1709 versus
1.1685 versus 1.16608 versus 1.1672 versus 1.17288 versus 1.17578 versus
1.17439 versus 1.1689
USD/JPY: 111.082 versus 110.962. Still in the range around the 50 day MA.
Tried to break higher Wednesday then sold off Thursday. Friday sold below
the 50 day MA then reversed for a modest gain. Still range bound.
Historical: 110.962 versus 111.734 versus 111.19 versus 111.081 versus
111.249 versus 111.351 versus 110.766 versus 109.92 versus 110.49 versus
110.935 versus 110.818 versus 111.229 versus 110.737 versus 110.840 versus
111.07 versus 111.361 versus 111.344 versus 111.254 versus 111.621 versus
111.628 versus 111.744 versus 110.990 versus 110.995 versus 110.791 versus
110.871 versus 111.235 versus 111.084 versus 111.451 versus 112.732 versus
112.783 versus 112.896 versus 112.337 versus 112.631 versus 112.093 versus
110.911 versus 110.973 versus 110.474 versus 110.666 versus 110.40 versus
110.854 versus 110.687 versus 110.523 versus 110.223 versus 110.097 versus
109.678 versus 109.980 versus 109.895 versus 110.376 versus 110.03 versus
109.783 versus 110.668 versus 110.578 versus 110.247 versus 110.381 versus
110.314 versus 109.466 versus 109.705 versus 110.164 versus 109.878 versus
109.90 versus 109.53 versus 108.767
Oil: 69.80, -0.45. Rallied through the 50 day SMA Wednesday and Thursday,
faded modestly Friday. Good break higher, now how it holds the 50 day MA is
key.
Gold: 1206.70, +1.70. After rallying through the 20 day EMA the prior
Friday, XGLD spent the week testing in a tight flag. Not a bad set up to
break higher, but why would it break higher if the Fed has things under
control? That said, gold has trended lower now for 5 months.
MONDAY
Tons of data coming out this week starting with the ISM and construction
Tuesday, ADP, Productivity revision, factory orders Thursday, and the Jobs
Report Friday.
More trade issues as the US and Canada resume on Wednesday. China will
surely have some more commentary about Trump given it has no favorable facts
to support its trade positions. Larry Kudlow said Friday that China had no
interest in talking; thus the personal attack campaign is at least
explained.
As for the market, stocks and the indices rallied to higher highs then faded
Thursday and Friday. The trends are still in place, buyers came in to push
stocks to higher highs, then they returned after a test to push them higher.
A good test in progress, a bit more would not be bad.
After the test we look to play upside as stocks rebound. Some are already
testing such as AMD, WSM, VRSN, ADBE, NANO, DOCU. We will let them develop
and as they break higher we can move in to catch the next run.
Trade remains an issue if just for short periods. NASDAQ is near the upper
trendline and that may stall some of the moves from big names such as AAPL,
AMZN. If so, however, a test then sets those stocks for some new entries as
well.
Yes, keep in mind the bulls indicator, that it is September, and the Fed is
on a hiking mission, but at this juncture you look at the action of solid
patterns and take the cues from there.
Have a great weekend and Labor Day!
Stocks Hold Steady Despite No U.S.-Canada Trade Deal
31-Aug-18 16:30 ET
Dow -22.10 at 25964.82, Nasdaq +21.17 at 8109.56, S&P +0.39 at 2901.26
https://www.briefing.com/investor/markets/stock-market-update/2018/8/31/stocks-hold-steady-despite-no-uscanada-trade-deal.htm
[BRIEFING.COM] Friday's trading session -- the last session ahead of an extended Labor Day weekend -- was an eventful one in terms of trade-related headlines, but a largely uneventful one for the major averages, which finished roughly flat. The S&P 500 (unch) added less than a point, the Nasdaq Composite (+0.3%) advanced modestly, and the Dow Jones Industrial Average (-0.1%) finished slightly lower.
All eyes were on Washington, where U.S. and Canadian officials were scrambling to get a trade deal done by President Trump's end of Friday deadline. The two sides weren't able to reach an agreement, but the White House then said talks will extend into next week. The extension was unexpected, as President Trump has said he'd be willing to move on without Canada if a deal wasn't in place by Friday.
Nonetheless, the news helped the market recover modest losses from earlier in the day, which were extended after The Toronto Star released "off the record" remarks that President Trump made during a Bloomberg interview on Thursday, including an acknowledgement that he's not making any compromises in the trade talks with Canada.
U.S. Trade Representative Robert Lighthizer announced late in the afternoon that President Trump has officially notified Congress that he wants to sign a trade agreement with Mexico, which agreed to a bilateral deal with the U.S. on Monday, and potentially Canada, in 90 days. The deals are aimed at replacing the North American Free Trade Agreement, which has been in place since 1994.
As for the 11 S&P 500 sectors, almost all of them finished within 0.5% of their unchanged marks. The energy sector (-0.7%) was the lone exception, falling in tandem with the price of crude oil; WTI crude futures slid 0.5% to $69.84/bbl. Energy finished August at the bottom of the sector standings with a monthly loss of 3.8%; for comparison, the S&P 500 added 3.0%.
In earnings news, lululemon athletica (LULU 154.93, +17.93) and Ulta Beauty (ULTA 260.00, +15.59) advanced 13.1% and 6.4%, respectively, after releasing their quarterly results, but Big Lots (BIG 43.05, -4.81) dropped 10.1% after reporting lower-than-expected profits and guidance for FY19.
Looking at other markets, U.S. Treasuries advanced, pushing yields lower across the curve, with the benchmark 10-yr yield slipping one basis point to 2.85%; the U.S. Dollar Index climbed 0.4% to 95.05, its best level in a week; and the CBOE Volatility Index, often referred to as the "investor fear gauge", slid 3.2% to 13.10.
Reviewing Friday's economic data, which included the Chicago PMI for August and the final reading for the University of Michigan Consumer Sentiment Index for August:
The Chicago PMI for August hit 63.6 (Briefing.com consensus 63.0), down from an unrevised 65.5 in July.
Despite the dip, the key takeaway from the August report is that manufacturing activity in the Chicago Fed region remains robust.
The final reading of the University of Michigan Consumer Sentiment Index for August ticked up to 96.2 (Briefing.com consensus 95.5) from 95.3 in the preliminary reading.
U.S. markets will be closed on Monday in celebration of Labor Day.
Nasdaq Composite +17.5% YTD
Russell 2000 +13.4% YTD
S&P 500 +8.5% YTD
Dow Jones Industrial Average +5.0% YTD
Week In Review: Going Deeper Into Record Territory
After returning to record territory last Friday, the S&P 500 trekked even higher this week, adding 0.9% in total. The tech-heavy Nasdaq outperformed, adding 2.1%, and the Dow also advanced, tacking on 0.7%. Investors dealt with a flurry of trade-related headlines this week, especially in regards to NAFTA negotiations.
The U.S. and Mexico reached a bilateral trade deal on Monday, a headline that sent Wall Street to new all-time highs. Canada then entered the discussions to try to work out a deal with the United States, but the two sides weren't able to reach an agreement by President Trump's Friday deadline. However, the White House said late on Friday that talks will resume next week.
In other trade-related news, Wall Street registered its only loss of the week on Thursday following reports that President Trump wants to move forward with tariffs on $200 billion worth of Chinese goods as early as next week. In addition, the president said in a Bloomberg interview that the EU's offer to eliminate auto tariffs does not go far enough and compared the EU's trade policies to those of China.
Meanwhile, on the earnings front, investors once again received quarterly results from a number of retailers this week, including results from well-known companies like Dollar General (DG), Best Buy (BBY), lululemon athletica (LULU), Dollar Tree (DLTR), Ulta Beauty (ULTA), Tiffany & Co (TIF), and Burlington Stores (BURL).
The results came in mostly better-than-expected, but guidance was more mixed, leaving the SPDR S&P Retail ETF (XRT) with a modest weekly gain of 0.3%.
Away from earnings, Amazon (AMZN) climbed to new records and crossed the $2000 mark for the first time ever after Morgan Stanley raised its target price for the online retail giant to $2500 -- a new Street high. Meanwhile, Apple (AAPL) also hit new records, helped by investing legend Warren Buffett, who said he's recently bought more shares of the world's largest tech company.
Tesla (TSLA) also made headlines, moving lower after its CEO, Elon Musk, announced that he's abandoned plans to take the electric automaker private.
As for the sector standings, seven groups finished the week in the green and four groups finished in the red. The top-performing sectors were technology (+2.0%), consumer discretionary (+1.8%), and health care (+1.0%). Conversely, telecoms (-1.7%), consumer staples (-0.5%), and utilities (-0.6%) finished at the back of the pack.
Also of note, there were some important pieces of economic data released this week, including the second estimate of Q2 GDP (+4.2% actual vs +4.0% Briefing.com consensus) and the July reading of the core PCE Price Index (+0.2% actual vs +0.2% Briefing.com consensus), which is the Fed's preferred measure of inflation. Neither report elicited much of response from the stock market though.
With August now in the books, it still appears very likely that the Fed will raise rates at its September meeting, with the CME FedWatch Tool placing the chances at 98.4%.
Retreating From Record Highs
30-Aug-18 16:25 ET
Dow -137.65 at 25986.92, Nasdaq -21.32 at 8088.39, S&P -12.91 at 2900.87
https://www.briefing.com/investor/markets/stock-market-update/2018/8/30/retreating-from-record-highs.htm
[BRIEFING.COM] Stocks pulled back from record highs on Thursday, extending losses in the afternoon on headlines that President Trump wants to impose tariffs on $200 billion worth of Chinese goods as soon as next week. The S&P 500 and the Dow fell 0.4% and 0.5%, respectively, while the tech-heavy Nasdaq held up a little better, shedding 0.3%.
To be clear, sources said that President Trump hasn't made his final decision regarding the aforementioned round of tariffs -- which, at $200 billion, would be the largest tranche thus far -- but the possibility was apparently enough to spook the market. On a related note, NAFTA negotiations continued in Washington, with the U.S. and Mexico trying to reach an agreement with Canada by the end of the week.
Losses were broad-based on Thursday, with 10 of 11 sectors settling in the red. The lightly-weighted materials sector (-1.3%) was the worst-performing group, but the financials (-0.8%), industrials (-0.8%), and consumer discretionary (-0.6%) spaces also showed notable weakness. The utilities sector (+0.1%) was the lone advancer.
Despite the broad weakness, most FAANG names showed relative strength. Amazon (AMZN 2002.38, +4.28) crossed the $2000 mark for the first time ever, adding 0.2%, and Facebook (FB 177.64, +1.74), Apple (AAPL 225.03, +2.05), and Netflix (NFLX 370.98, +2.94) advanced between 0.8% and 1.0% apiece.
In earnings news, retailers dominated the lineup once again. Dollar Tree (DLTR 79.78, -14.68), Michaels Stores (MIK 17.01, -2.96), and Abercrombie & Fitch (ANF 22.55, -4.67) fell between 14.8% and 17.2% in reaction to their quarterly results, while Guess? (GES 24.23, +1.29) and Signet Jewelers (SIG 67.68, +13.03) rallied 5.6% and 23.8%, respectively.
Looking at other markets, U.S. Treasuries advanced on Thursday, sending yields lower across the curve, with the benchmark 10-yr yield dropping two basis points to 2.86%. Meanwhile, the U.S. Dollar Index ticked up 0.2% to 94.62, ending a four-session slide, and West Texas Intermediate crude futures climbed 1.0% to $70.22/bbl.
Reviewing Thursday's economic data, which included July Personal Income, Personal Spending, and PCE Prices and the weekly Initial Claims report:
Personal income climbed 0.3% in July (Briefing.com consensus +0.4%) following an unrevised increase of 0.4% in June. Meanwhile, personal spending rose 0.4% (Briefing.com consensus +0.4%) following an unrevised increase of 0.4%. The PCE Price Index rose 0.1% in July, and the core PCE Price Index, which excludes food and energy, increased 0.2% (Briefing.com consensus +0.2%).
The key takeaway from the report is twofold: (1) the spending increase puts Q3 GDP on a solid growth track and (2) the year-over-year increase in the PCE Price Index (+2.3% vs. +2.2% prior) and the core PCE Price Index (+2.0% vs. +1.9% prior) will keep the Federal Reserve on its tightening track in September.
The latest weekly initial jobless claims count totaled 213,000, while the Briefing.com consensus expected a reading of 214,000. Today's tally was above the unrevised prior week count of 210,000. As for continuing claims, they declined to 1.708 million from a revised count of 1.728 million (from 1.727 million).
The key takeaway from the report is the recognition that the four-week moving average of 212,250 for initial claims is the lowest since December 13, 1969, underscoring the strength in the labor market.
Looking ahead, the Chicago PMI for August and the final reading for the University of Michigan Consumer Sentiment Index for August will be released on Friday.
Nasdaq Composite +17.2% YTD
Russell 2000 +12.8% YTD
S&P 500 +8.5% YTD
Dow Jones Industrial Average +5.1% YTD
Another Record-Setting Day
29-Aug-18 16:30 ET
Dow +60.55 at 26124.57, Nasdaq +79.65 at 8109.71, S&P +16.52 at 2913.78
https://www.briefing.com/investor/markets/stock-market-update/2018/8/29/another-recordsetting-day.htm
[BRIEFING.COM] Wednesday was another record-setting day on Wall Street with the S&P 500 (+0.6%), the Nasdaq Composite (+1.0%), and the small-cap Russell 2000 (+0.4%) closing at all-time highs for the fourth day in a row. The Dow Jones Industrial Average (+0.2%) finished at a seven-month high, coming within 2.0% of its January 26 record.
Gains were broad-based on Wednesday, with eight of eleven sectors finishing in the green. The consumer discretionary and information technology sectors were the top-performing groups, benefiting from a rise in most FAANG names, including Amazon (AMZN 1998.10, +65.28, +3.4%) and Apple (AAPL 222.98, +3.28, +1.5%), both of which finished at new all-time highs.
Amazon shares nearly broke the $2000 mark after Morgan Stanley raised its target price for the internet retail giant to $2500 -- a new Street high.
Meanwhile, the energy sector (+0.6%) also had a positive session, helped by a rise in crude prices. West Texas Intermediate crude futures finished higher by 1.4% at $69.50/bbl, extending gains after the Department of Energy's weekly inventory report showed that U.S. crude stockpiles decreased by 2.6 million barrels last week.
The trade-sensitive industrial sector (+0.1%) struggled to stay afloat despite both President Trump and Canadian Prime Minister Justin Trudeau expressing optimism over U.S.-Canada trade talks, which they are looking to wrap up by Friday. In turn, the heavily-weighted financial sector (-0.02%) underperformed, as did the telecom services (-0.8%) and real estate (-0.1%) sectors.
In earnings news, retailers were in focus once again, with American Eagle (AEO 25.50, -1.78, -6.5%), Dick's Sporting Goods (DKS 35.60, -0.76, -2.0%), and Express (9.93, -0.06, -0.6%) all dropping in reaction to their quarterly results. Conversely, Shoe Carnival (SCVL 41.74, +4.83, +13.1%) spiked after reporting better-than-expected earnings, revenues, and guidance.
Looking at other markets, U.S. Treasuries finished Wednesday roughly flat, with the yield on the benchmark 10-yr Treasury note closing unchanged at 2.88%. Meanwhile, the U.S. Dollar Index slid for a fourth straight session, dropping 0.2% to 94.47, and the CBOE Volatility Index declined 3.2% to 12.10.
Reviewing Wednesday's economic data, which included the second estimate of Q2 GDP, July Pending Home Sales, and the weekly MBA Mortgage Applications Index:
The second estimate of second quarter GDP pointed to an expansion of 4.2%, while the Briefing.com consensus expected a reading of +4.0%. The first estimate came in at +4.1%.
The key takeaway from the report is that it included a downward revision to personal spending growth (from 4.0% to 3.8%) that was offset by a higher estimate for nonresidential investment growth, government spending, and a downward revision to imports, which are a subtraction in the calculation of GDP.
Pending Home Sales declined 0.7% in July (Briefing.com consensus +0.5%). Today's reading follows an unrevised 0.9% increase in June.
The weekly MBA Mortgage Applications Index decreased 1.7% to follow last week's increase of 4.2%.
Looking ahead, investors will receive the weekly Initial Claims report and July Personal Income, Personal Spending, and PCE Prices on Thursday.
Nasdaq Composite +17.5% YTD
Russell 2000 +13.1% YTD
S&P 500 +9.0% YTD
Dow Jones Industrial Average +5.7% YTD
Little Changed
28-Aug-18 16:25 ET
Dow +14.38 at 26064.02, Nasdaq +12.14 at 8030.06, S&P +0.78 at 2897.26
https://www.briefing.com/investor/markets/stock-market-update/2018/8/28/little-changed.htm
[BRIEFING.COM] The S&P 500 (unch) eked out a very narrow victory on Tuesday, closing at a new record high for the third session in a row. The Nasdaq Composite (+0.2%) and the Russell 2000 (unch) also notched new records, and the Dow Jones Industrial Average (+0.1%) finished at its best level since early February.
It was a range-bound day of trading, with the S&P 500 keeping between -0.1% and +0.2%. Seven of eleven sectors finished in the red, but losses were pretty modest. The top-weighted technology sector (+0.2%) was an advancer, helping to mitigate losses from energy (-0.5%), materials (-0.4%), and consumer staples (-0.3%).
As for individual stocks, retail earnings were in focus once again. Best Buy (BBY 77.57, -4.09) tumbled 5.0% after downbeat Q3 guidance overshadowed upbeat Q2 results. Meanwhile, DSW (DSW 32.70, +5.50) spiked 20.2% and Tiffany & Co (TIF 131.07, +1.29) added 1.0% after both companies beat top and bottom line estimates.
Looking at other markets, U.S. Treasuries moved lower, sending yields higher across the curve, with the benchmark 10-yr yield climbing four basis points to 2.88%. Meanwhile, West Texas Intermediate crude futures slid 0.4% to $68.58/bbl, and the U.S. Dollar Index slipped 0.1% to 94.62, testing its August low.
In Washington, Canada came back to the NAFTA negotiating table on Tuesday after the U.S. and Mexico reached a bilateral trade agreement on Monday. President Trump has warned that he could proceed without Canada, but U.S. officials are optimistic that a deal can be reached by the end of the week.
Reviewing Tuesday's economic data, which included Advanced International Trade in Goods and Advanced Wholesale Inventories for July, the S&P Case-Shiller Home Price Index for June, and the Consumer Confidence Index for August:
The Advance report for International Trade in Goods for July showed a deficit of $72.2 billion, and the Advance report for Wholesale Inventories for July rose 0.7%.
The Case-Shiller 20-City Index increased 6.3% in June (Briefing.com consensus +6.4%), and the May increase was left unrevised at 6.5%.
The consumer confidence reading for August increased to 133.4 (Briefing.com consensus 126.5) from the prior month's revised reading of 127.9 (from 127.4).
The key takeaway from the report is that the high confidence levels should support solid consumer spending in the near term, particularly since consumers have a better outlook for their short-term income prospects.
Looking ahead, investors will receive the second estimate of Q2 GDP, July Pending Home Sales, and the weekly MBA Mortgage Applications Index on Wednesday.
Nasdaq Composite +16.3% YTD
Russell 2000 +12.6% YTD
S&P 500 +8.4% YTD
Dow Jones Industrial Average +5.4% YTD
More Records Following U.S.-Mexico Trade Deal
27-Aug-18 16:25 ET
Dow +259.29 at 26049.64, Nasdaq +71.92 at 8017.92, S&P +22.05 at 2896.48
https://www.briefing.com/investor/markets/stock-market-update/2018/8/27/more-records-following-usmexico-trade-deal.htm
[BRIEFING.COM] Wall Street extended Friday's push into record territory on Monday, with the S&P 500 (+0.8%) registering its second straight record close. The tech-heavy Nasdaq (+0.9%) and the small-cap Russell 2000 (+0.2%) also notched new records, while the blue-chip Dow (+1.0%) finished roughly 2.0% below its January 26 all-time high.
News of a trade deal between the U.S. and Mexico helped underpin Monday's advance, removing some of the trade uncertainty that's plagued the market at times this year. With a U.S.-Mexico deal in place, Canada will now come to the negotiating table as the three nations look to fully replace their three-way NAFTA deal.
Monday's gains were broad-based, with nine of eleven sectors finishing in the green. The top-performing groups were financials (+1.3%), industrials (+1.2%), and materials (+1.5%); the top-weighted technology sector (+1.0%) also outperformed, with Advanced Micro (AMD 25.26, +1.28, +5.3%) extending a 12-yr high.
Conversely, the lightly-weighted utilities (-0.6%) and real estate (-0.1%) sectors finished at the back of the pack.
In corporate news, Tesla (TSLA 319.27, -3.55, -1.1%) slid after its CEO, Elon Musk, announced that he's abandoned plans to take the electric automaker private -- which he controversially floated as a possibility on August 7, saying that he's secured funding for a deal at a price of $420 per share.
Away from equities, U.S. Treasuries fell on Monday, sending yields higher across the curve; the benchmark 10-yr yield climbed two basis points to 2.85%. Meanwhile, the U.S. Dollar Index slid 0.5% to 94.65, challenging its August low, and WTI crude futures ticked up 0.2% to $68.87/bbl, hitting a three-week high.
Investors did not receive any economic data on Monday, but will receive several reports on Tuesday, including Advanced International Trade in Goods and Advanced Wholesale Inventories for July, the S&P Case-Shiller Home Price Index for June, and the Consumer Confidence Index for August.
Nasdaq Composite +16.1% YTD
Russell 2000 +12.6% YTD
S&P 500 +8.4% YTD
Dow Jones Industrial Average +5.4% YTD
InvestmentHouse - New Highs on Four Indices (Weekend Newsletter)
https://www.investmenthouse.com/frblog.php
- New High Anxiety takes a back seat Friday.
- NASDAQ gets help from recovering mega caps as it and SP500 move to new
highs, joining SP400, RUTX.
- Software reasserts itself along with a few NASDAQ large caps.
- Industrial-side stocks still in good position, just take a pause on the
week after good moves.
- Economic data continues its recent softening but the majority of the FOMC
is not willing to take notice.
New highs on four indices: SP500, NASDAQ, RUTX, SP400. The midcaps led the
charge to the new highs on the week, hitting it Tuesday followed by RUTX.
SP500, NASDAQ took a bit more time, but got there -- barely. New High
Anxiety stepped aside for the session, but these were not great breaks for
the big cap indices. Perhaps they will follow the RUTX, SP400 lead and put
some mileage on the new highs next week.
DJ30 and SOX were not dogs, they just have farther to go. DJ30 cleared the
late February peak Tuesday, the penultimate high before getting to the
January high, gave it up, but then rebounded Friday. SOX rallied well
Tuesday through Friday, clearing the 50 day MA's with the Friday gap and
rally, holding the gains to the close. As noted, not new highs, but not bad
at all.
Notably, no new high for NASDAQ 100. It is not the big techs, or at least
not a lot of them, moving to highs.
SP500 17.71, 0.62%
NASDAQ 67.52, 0.86%
DJ30 133.37, 0.52%
SP400 0.40%
RUTX 0.50%
SOX 1.46%
NASDAQ 100 0.97%
VOLUME: NYSE -2%, NASDAQ +1%. Volume remained lower on NYSE, below average
all week and very low Wednesday to Friday -- no surge in buying though the
prior week some upside sessions were marked with rising volume. NASDAQ
volume elevated Thursday to just below average after a very low volume prior
5 sessions, and it remained elevated Friday on the breakout move. Better
volume is good, but this was not great volume on a breakout.
ADVANCE/DECLINE: NYSE +2.3:1, NASDAQ +1.8:1. No great shakes on NASDAQ
with its breakout; not a lot of stocks moving to new highs. NYSE was not
bad as the larger and smaller cap indices rallied evenly.
Rah, rah for the new highs. Lots of ebullient spirits Friday post-close, a
bit too ebullient for a Friday. New highs do that, even if they are on
light trade. Then again, the market has moved with light trade for about .
. . ever. So it seems.
There are still plenty of stocks in good patterns, many in the formerly
forgotten group that have received rotation money the past 2 months.
Friday, however, some of the prior leaders that broke came back into their
own. Software had improved, and it continued improving Friday as FFIV,
VRSN, ADBE and others rallied. NVDA continued its heady recovery and NFLX
broke through resistance on volume. V came to life. PYPL also. AMZN and
AAPL were up but massive disappointments given some of the other moves in
the market. Others moving well moved well again, e.g. AMD, DOCU, ROKU.
Moving from all sides of the market, though I note the 'old economy' stocks,
while up in many cases, were not surging.
Lots of somewhat euphoria about the new highs but we only bought one
position (TRMB), took some gain on AMD and DOCU. We will see if the new
highs hold next week as the DJ30-like stocks move up off their tests. For
now with the breakouts, the upside is still predominant, and if they hold we
will get plenty of opportunities.
CHARTS
NASDAQ: Just over a week from the 50 day MA test, NASDAQ finally popped a
new high again after that late July high and its half-session half life.
Perhaps this fate will be better. Hey, NASDAQ held the 50 day EMA for the
third time and this time, unlike early August, punched out a new high.
SP500: A new high Tuesday intraday could not hold. A test of the 10 day
EMA into Thursday, then Friday a gap and rally to that high. Bravo.
Volume -- weak. Can malign it all you want, but it is a new high after a
quick intraday 50 day MA test 8 sessions back. Now it shows if it can hold.
SP400: New high Tuesday on a Thursday to Tuesday run. Held the move
Wednesday, Thursday, then was up again Friday to a higher closing high.
Good sharp break, and now a quick test, looking good.
RUTX: Same action as SP400 with a new high Tuesday. Then RUTX did a bit
better, extending the high Wednesday and again Friday. Key group,
economically sensitive, blah, blah, blah -- you know the drill. Good move,
staying power is the key.
DJ30: Higher high on Tuesday, clearing the late February peak, then faded,
testing the 10 day EMA Thursday. Friday a nice break higher though still
below the Tuesday close. Held the break over the prior highs and now it can
work on the January all-time high. Still plenty of room to work to that
point, and that is good as it does not have to make a break through any
other resistance.
SOX: Tossed a pair of doji at the lower trendline of the triangle Friday
and Monday, then a set of solid moves higher. Broke through the 200 day SMA
Tuesday, made it to the 50 day as of Thursday, then a gap through the 50 day
and rally Friday. Now trading inside the gap zone of the early August gap
lower. The upper gap zone is 1389 (closed at 1376ish).
LEADERSHIP
A week where some of the leaders in the prior rally reversed breaks in their
uptrends, some surging to higher highs (e.g. software, NVDA), others
clearing some important near term resistance (e.g. NFLX), and others trying
to become leaders tested though remain set up very well (e.g. PFE, EMR,
JNJ). The market looks to have leadership.
fAang: AMZN, AAPL toyed with new highs but just could not find sustained
bids to close the week. Modest gains, nothing that great. NFLX rallied
through the 50 day EMA. GOOG worked laterally all week, started upside
Friday though volume still low. FB went really nowhere.
Software: Some great new moves from TTWO, FFIV, VRSN. ADBE close to a new
high. VMW gapped lower on earnings, but managed a decent comeback. CRM
broke higher Friday to a nice new high. MSFT is even trying to move up
after a 50 day MA test.
Drugs/Healthcare: Good looks. PFE, MRK, LLY still in good lateral moves
testing the 10 day EMA near support. SRPT is still interesting. JNJ tested
the 10 day EMA after a good move, starting upside. UNH tested and is
bouncing. Not bad.
Industrials: Mixed performances. HON upon the week, faded modestly Friday.
EMR tested the 10 day, started to bounce. CMI gapped lower, reversed to
flat. UTX testing after failing to break to a new high early week.
Chips: NVDA a new high. AMD an 11+ year new high. XLNX fighting back to
the late July high. TXN continues to recover, moving up through the 50 day
MA. INTC trying to bounce off the late July low. Improving but sporadic.
Financial: V broke higher, clearing to a new high. C, JPM, BAC in decent
tests. GS is interesting, setting up a short inverted head and shoulders
over the 50 day MA's.
Retail: Another week showing some big earnings surges (e.g. WSM, TJX, TGT),
earnings selloffs (e.g. GPS). Some gapped lower and recovered, e.g. ROST.
Others just moved higher, e.g. BBY, RH. WMT looks ready to move back
upside.
Transports: CSX still moving higher. Airlines still in good setups, e.g.
AAL, DAL.
Misc: PYPL surged higher after dormancy. SQ continued its weeklong move
higher above the 10 day EMA. GRUB continued its move, breaking to a new
high. DOCU hit a higher high, we took some gain after a solid week. DIS
still testing in a lateral move.
MARKET STATS
DJ30
Stats: +133.37 points (+0.52%) to close at 25790.35
Nasdaq
Stats: +67.52 points (+0.86%) to close at 7945.98
Volume: 1.89B (+0.53%)
Up Volume: 1.35B (+628.29M)
Down Volume: 512.05M (-627.95M)
A/D and Hi/Lo: Advancers led 1.76 to 1
Previous Session: Decliners led 1.42 to 1
New Highs: 194 (+31)
New Lows: 34 (+5)
S&P
Stats: +17.71 points (+0.62%) to close at 2874.69
NYSE Volume: 609.624M (-1.62%)
A/D and Hi/Lo: Advancers led 2.29 to 1
Previous Session: Decliners led 1.87 to 1
New Highs: 112 (+19)
New Lows: 38 (-4)
SENTIMENT
VIX: 11.99; -0.42
VXN: 15.16; -0.63
VXO: 10.98; -0.06
Put/Call Ratio (CBOE): 0.92; -0.11
Bulls and Bears:
Bulls continue upside toward the 60 level that is associated with pullbacks.
Bears faded modestly but are still holding the 2018 move higher.
Bulls: 57.7 versus 57.3
Bears: 18.3 versus 18.4
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 57.7 versus 57.3
57.3 versus 54.9 versus 54.5 versus 54.9 versus 55.3 versus 52.4 versus 47.1
versus 47.6 versus 52.0 versus 55.5 versus 52.9 versus 50.0 versus 49.1
versus 46.6 versus 43.1 versus 43.6 versus 48.0 versus 43.6 versus 42.2
versus 49.5 versus 55.5 versus 54.9 versus 48.6 versus 48.1 versus 48.5
versus 41.9 versus 54.4 versus 66.00 versus 64.7 versus 66.7 versus 64.4
versus 61.9 versus 64.1 versus 64.2 versus 62.3 versus 61.5 versus 63.5
versus 64.4 versus 63.5 versus 62.3 versus 60.6 versus 60.4 versus 57.5
versus 54.3 versus 50.5 versus 47.1
Bears: 18.3 versus 18.4
18.4 versus 18.6 versus 18.8 versus 18.6 versus 18.5 versus 18.5 versus 18.6
versus 18.4 versus 17.6 versus 17.8 versus 17.7 versus 19.2 versus 19.2
versus 19.4 versus 19.4 versus 20.6 versus 20.8 versus 19.6 versus 19.8
versus 18.6 versus 17.5 versus 16.8 versus 15.7 versus 15.5 versus 14.4
versus 14.6 versus 14.4 versus 15.5 versus 12.6 versus 12.8 versus 12.7
versus 13.5 versus 15.2 versus 15.1 versus 15.2 versus 15.1 versus 15.1
versus 15.4 versus 15.4 versus 14.4 versus 14.4 versus 15.1 versus 15.2
versus 15.1 versus 17.0 versus 17.1 versus 19.0 versus 20.2
OTHER MARKETS
Bonds: 2.813% versus 2.828%. Bonds are rallying, yields are falling even
as the stock market hits new highs. TLT gapped lower, tested the 200 day on
the low, then rallied back up to a recovery high and earning the July peaks.
Bond yields should be rising, not falling, particularly with Powell saying
the Fed should and will keep hiking. Perhaps it is a case of the market
knowing the Fed always overshoots. Perhaps.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.828%
versus 2.821% versus 2.819% versus 2.819% versus 2.864% versus 2.871% versus
2.879% versus 2.882% versus 2.873% versus 2.928% versus 2.963% versus 2.977%
versus 2.977% versus 2.945% versus 2.95% versus 2.986% versus 3.005% versus
2.962% versus 2.975% versus 2.958% versus 2.982% versus 2.965%
EUR/USD: 1.16216 versus 1.15390. Euro up for the second week and Friday
actually cleared the 50 day MA's on the close.
Historical: 1.15390 versus 1.15709 versus 1.158 versus 1.1487 versus 1.1437
versus 1.13765 versus 1.13731 versus 1.13479 versus 1.14052 versus 1.1413
versus 1.1526 versus 1.16186 versus 1.16001 versus 1.15572 versus 1.15683
versus 1.15864 versus 1.1662 versus 1.1689 versus 1.17074 versus 1.16558
versus 1.17324 versus 1.17385 versus 1.16846 versus 1.16989 versus 1.17214
versus 1.1651 versus 1.16514 versus 1.16603 versus 1.1709 versus 1.1685
versus 1.16608 versus 1.1672 versus 1.17288 versus 1.17578 versus 1.17439
versus 1.1689 versus 1.1665 versus 1.16388 versus 1.1638 versus 1.15634
versus 1.15602 versus 1.16517 versus 1.17031 versus 1.16572 versus 1.16072
versus 1.15762 versus 1.1586 versus 1.15746 versus 1.2624 versus 1.16245
versus 1.15678 versus 1.17973 versus 1.17454 versus 1.17761 versus 1.17737
versus 1.17987 versus 1.1774 versus 1.1762 versus 1.1697 versus 1.166 versus
1.16993
USD/JPY: 111.249 versus 111.351. Reversed off a lower August low Monday
then climbed through the 50 day SMA. Friday tested, still holding the 50
day.
Historical: 111.351 versus 110.766 versus 109.92 versus 110.49 versus
110.935 versus 110.818 versus 111.229 versus 110.737 versus 110.840 versus
111.07 versus 111.361 versus 111.344 versus 111.254 versus 111.621 versus
111.628 versus 111.744 versus 110.990 versus 110.995 versus 110.791 versus
110.871 versus 111.235 versus 111.084 versus 111.451 versus 112.732 versus
112.783 versus 112.896 versus 112.337 versus 112.631 versus 112.093 versus
110.911 versus 110.973 versus 110.474 versus 110.666 versus 110.40 versus
110.854 versus 110.687 versus 110.523 versus 110.223 versus 110.097 versus
109.678 versus 109.980 versus 109.895 versus 110.376 versus 110.03 versus
109.783 versus 110.668 versus 110.578 versus 110.247 versus 110.381 versus
110.314 versus 109.466 versus 109.705 versus 110.164 versus 109.878 versus
109.90 versus 109.53 versus 108.767
Oil: 68.72, +0.89. Rallied from the 200 day SMA to the 50 day SMA the past
two weeks. Moved through the 50 day Friday but could not hold all of that
move. Kind of head and shoulder-ish setup from May.
Gold: 1213.30, _19.30. Trying to break its downtrend from the April high.
Moved upside in a normal downtrend bounce through Wednesday, started to roll
over Thursday, then spiked over the 20 day EMA Friday. Trade? No one
believes Powell? Weaker US economic data?
MONDAY
Consumer Confidence, second GDP read, Personal income and spending, Chicago
PMI are up for next week. The Fed is also getting chatty though there is
not much that will change here given Powell's Jackson Hole commentary.
Friday Bullard defied Powell, stating the Fed should 'stand pat' on rake
hikes for the rest of the year. Ms. Mester, however, raised her GDP
expectations and said the gradual hikes were appropriate.
Classic Fed miscalculation. Economic data has softened on the leading edge
the past 3 weeks with regional PMI's missing, housing looking quite weak,
Durables Orders dropping to 11 month lows (though business investment rose a
nice 1.4%) -- perhaps just a soft patch, but the Fed is acting rather
fatalistic in its need to hike rates. It said it would give deference to
the yield curve, but bonds are rallying as the Fed hikes and stock indices
hit record highs. The Fed is making its same old mistakes: it sees an
overall still strong economy, stocks still strong, and it ignores the yield
curve. When it cannot ignore the curve any longer, it starts making up
reasons the yield curve doesn't mean anything this time. When more reasons
bonds are 'wrong' are heard from the Fed, you know the Fed is going to
overshoot. Okay, that is poor wording. We know the Fed ALWAYS overshoots;
it is more a question of the timing.
With the stock indices hitting new highs, worrying about the Fed seems
rather absurd. Near term it is. Nonetheless, you keep an eye on bonds as
stocks rally, and as bonds and stocks rally you watch how the stronger
stocks act. Reversals from highs, breakdowns, etc. are indications. The
market may still be attempting a top, new highs be damned. Don't assume the
new highs are locked in. The action of SP400 and RUTX is encouraging as
they hit highs, tested, and then put in additional gains. NASDAQ is still
problematic, however, and there is no guarantee it holds its new high.
As noted earlier, given the recovery by some big names and the new highs in
SP500 and NASDAQ, the play is still mostly upside. The rotation stocks
rallied, put in modest tests last week, and look ready to move again. If
chips and techs want to play along the market has plenty of ammunition.
We are still looking at more AAPL and a GOOG position and will see what
other NASDAQ and tech stocks want to come along to the upside. Of course
the more industrial plays still have good looks and we will be ready to play
those as they break back upside off their tests.
Have a great weekend!
S&P Notches First Record Close Since January
24-Aug-18 16:30 ET
Dow +133.37 at 25790.35, Nasdaq +67.52 at 7946.00, S&P +17.71 at 2874.43
https://www.briefing.com/investor/markets/stock-market-update/2018/8/24/s-and-p-notches-first-record-close-since-january.htm
[BRIEFING.COM] Friday was a record-setting day for the stock market, with the S&P 500 (+0.6%) notching its first record close (2874.69) since January 26. The Nasdaq (+0.9%) also registered a fresh record finish, as did the small-cap Russell 2000 (+0.5%). The Dow (+0.5%) advanced, but finished about 3.0% below its January record high.
The market extended opening gains after Fed Chairman Jerome Powell didn't say anything upsetting in his speech at the Kansas City Fed's annual economic symposium in Jackson Hole, Wyoming. Mr. Powell reiterated that gradual rate hikes remain appropriate, adding that he doesn't see any signs that inflation is getting out of hand.
On the international front, investors brushed off news that two days of trade talks between the U.S. and China ended on Thursday without any visible sign of progress. That result was expected as President Trump said beforehand that he didn't believe much would come from the negotiations.
Separately, President Trump tweeted on Friday afternoon that he's asked Secretary of State Mike Pompeo not to go to North Korea because there has not been sufficient progress with respect to the decentralization of the Korean Peninsula. The stock market had a muted reaction to the tweet.
Wall Street's gains were broad-based on Friday with 10 of 11 sectors advancing.
The lightly-weighted materials sector (+1.2%) was the top-performing group, followed closely by the top-weighted technology sector (+1.1%). Within the tech space, software company Autodesk (ADSK 157.20, +20.89) spiked 15.3% after reporting better-than-expected earnings and revenues on Thursday evening.
In other earnings news, retailers dominated the headlines once again with Gap (GPS 29.65, -2.79) and Foot Locker (FL 48.32, -4.88) tumbling 8.6% and 9.2%, respectively, and Buckle (BKE 26.55, -1.25) dropping 4.5% in reaction to their quarterly results. Conversely, Ross Stores (ROST 95.09, +0.06) ticked up 0.1%.
The consumer staples sector (-0.2%) was the lone decliner, but financials (+0.3%), industrials (+0.4%), and utilities (+0.4%) also underperformed.
Looking at other markets, U.S. Treasuries finished slightly lower, pushing the benchmark 10-yr yield up one basis point to 2.83%. Meanwhile, the U.S. Dollar Index gave back nearly all of Thursday's rebound, dropping 0.5% to 95.05, and West Texas Intermediate crude futures jumped 1.2% to $68.66/bbl.
Reviewing Friday's economic data, which was limited to July Durable Goods Orders:
July durable goods orders declined 1.7% (Briefing.com consensus -0.6%), and the prior month's reading was revised to +0.7% (from +1.0%). Excluding transportation, durable orders increased 0.2% (Briefing.com consensus +0.4%) to follow the prior month's revised reading of +0.1% (from +0.4%).
The key takeaway from the report is that the headline decrease masked a 1.4% increase in orders for nondefense capital goods, excluding aircraft, which is a positive sign about business spending
Looking ahead, investors will not receive any notable economic data on Monday.
Nasdaq Composite +15.1% YTD
Russell 2000 +12.4% YTD
S&P 500 +7.5% YTD
Dow Jones Industrial Average +4.3% YTD
Week In Review: Back to Record Territory
The S&P 500 advanced 0.6% this week, closing Friday at a new record high for the first time since January 26. Political uncertainty, trade ambiguity, and strengthened expectations for two more rate hikes this year all failed to dissuade motivated buyers, who pushed stocks higher in three of the week's five sessions.
As for the other major averages, the Nasdaq and the Russell 2000 also notched new records, adding 1.7% and 1.9%, respectively, while the Dow climbed 0.5%.
The week started on a mildly positive note, with stocks ticking higher on Monday and Tuesday, but investors were cautious over the next two sessions, largely due to the legal woes of President Trump's former campaign manager, Paul Manafort, and longtime personal lawyer, Michael Cohen.
Mr. Manafort was convicted of tax and bank fraud on Tuesday afternoon, while Mr. Cohen pleaded guilty to a range of charges, including tax fraud and excessive campaign contributions, and implicated the president directly by saying that Mr. Trump directed him to pay two women hush money "for the principal purpose of influencing the election."
It's too early to say what these developments will mean for President Trump's political future, but it's worth noting that the president chose to say, in regards to the situation, that the market would crash "if I ever got impeached" and that "I don't know how you can impeach somebody who has done a great job."
Moving on to the trade front, two days of trade talks between the U.S. and China wrapped up on Thursday without any visible sign of progress. President Trump said beforehand that he wasn't expecting much to come out of the talks, which marked the first official negotiations since a breakdown nearly three months ago.
In monetary policy, President Trump reiterated his displeasure with the Fed on Monday, saying he was "not thrilled" with Fed Chair Jerome Powell for raising rates.
Two days later, the Fed released the minutes from the July/August FOMC meeting, which only strengthened the expectation that the U.S. central bank will hike rates at its September meeting, with officials saying in the minutes that it would likely "soon" be appropriate to raise rates.
Then, on Friday, Fed Chairman Powell gave a speech at the Kansas City Fed's annual economic symposium in Jackson Hole, Wyoming, saying that gradual rate hikes remain appropriate. Mr. Powell also expressed confidence in the economy and said he doesn't see any signs of inflation getting out of hand.
Seven of eleven sectors advanced this week, with cyclical groups showing relative strength. The energy sector (+2.6%) was the top performer -- rebounding from last week's 3.6% tumble -- helped by an increase in crude prices; West Texas Intermediate crude futures climbed 4.2% this week to $68.66 per barrel.
Meanwhile, the consumer discretionary sector (+2.0%) also outperformed amid a steady flow of retail earnings. TJX (TJX) jumped 4.7% on Tuesday after reporting better-than-expected results, while Lowe's (LOW) and Target (TGT) added 5.8% and 3.2%, respectively, on Wednesday after also beating estimates.
On the downside, the four declining sectors were consumer staples (-1.8%), utilities (-1.4%), telecom services (-0.7%), and real estate (-1.1%).
Another Dip Ahead of Jackson Hole
23-Aug-18 16:20 ET
Dow -76.62 at 25656.98, Nasdaq -10.64 at 7878.48, S&P -4.84 at 2856.72
https://www.briefing.com/investor/markets/stock-market-update/2018/8/23/another-dip-ahead-of-jackson-hole.htm
[BRIEFING.COM] Stocks dipped for the second day in a row on Thursday in another range-bound day of trading on Wall Street. The benchmark S&P 500 index inched away from its elusive January 26 record close, ending the session lower by 0.2%, and the Nasdaq Composite and the Dow Jones Industrial Average lost 0.1% and 0.3%, respectively.
There's been a cautious tone in the market over the last two trading sessions as investors digest the political implications for President Trump after his former campaign manager, Paul Manafort, was convicted of tax and bank fraud and after his longtime lawyer, Michael Cohen, pleaded guilty to a range of charges, implicating Mr. Trump directly.
Meanwhile, two days worth of U.S.-China trade negations have been happening in the background. The two nations enacted a new round of tariffs on $16 billion worth of each others' goods overnight, giving investors little hope that anything material will result from this round of talks, which are scheduled to wrap up Thursday.
In addition, a Friday speech from Fed Chairman Jerome Powell at the annual Jackson Hole Symposium has given investors yet another reason to pause just a stone's throw from record territory. Mr. Powell, who has maintained a relatively low profile since taking office in early February, will take the podium at 10:00 AM ET.
10 of 11 sectors finished Thursday in negative territory, but, thankfully for the bulls, the top-weighted technology group was the lone exception. The tech space, which represents roughly a quarter of the broader market, advanced 0.2%. Within the group, chipmaker Advanced Micro (AMD 22.29, +1.39) jumped 6.7%, hitting a 12-year high, after Rosenblatt raised its target to $30 from $27.
As for the laggards, losses were pretty modest overall, with most groups shedding less than 0.5%. The financials (-0.5%), energy (-0.5%), and lightly-weighted materials (-0.7%) groups were the worst performers. However, the energy space is still up 1.8% for the week, a rebound it desperately needed after taking a 3.6% hit last week.
In earnings news, L Brands (LB 28.25, -3.64) tumbled 11.4%, hitting a seven-year low, after lower-than-expected guidance overshadowed above-consensus Q2 results. Conversely, Williams-Sonoma (WSM 72.94, +10.33) spiked 16.5% to a nearly three-year high after beating both top and bottom line estimates.
Looking at other markets, U.S. Treasuries finished flat, with the benchmark 10-yr yield closing unchanged at 2.82%. WTI crude futures also closed flat, settling at $67.84/bbl, after rallying 3.1% on Wednesday, and the U.S. Dollar Index jumped 0.6% to 95.55, putting a five-session losing streak to rest.
Reviewing Thursday's economic data, which included July New Home Sales, weekly Initial Claims, and the FHFA Housing Price Index for June:
New Home Sales in July hit an annualized rate of 627,000, which is below the Briefing.com consensus of 645,000. The June reading was revised to 638,000 (from 631,000).
The key takeaway from the report is that the average and median selling prices increased despite the slower sales pace observed in July.
The latest weekly initial jobless claims count totaled 210,000, while the Briefing.com consensus expected a reading of 217,000. Today's tally was below the unrevised prior week count of 212,000. As for continuing claims, they declined to 1.727 million from a revised count of 1.729 million (from 1.721 million).
The key takeaway from the report is that low initial claims activity remains consistent with a tight labor market.
The FHFA Housing Price Index rose 0.2% in June, and the May increase was left unrevised at 0.2%.
On Friday, investors will receive just one economic report -- July Durable Goods Orders (Briefing.com consensus -0.6%).
Nasdaq Composite +14.1% YTD
Russell 2000 +11.8% YTD
S&P 500 +6.9% YTD
Dow Jones Industrial Average +3.8% YTD
Holding Steady
22-Aug-18 16:25 ET
Dow -88.69 at 25733.60, Nasdaq +29.92 at 7889.12, S&P -1.14 at 2861.56
https://www.briefing.com/investor/markets/stock-market-update/2018/8/22/holding-steady.htm
[BRIEFING.COM] The S&P 500 held steady on Wednesday, finishing just a tick below its flat line, in what was a range-bound day of trading. Investors had several headlines to work through, including criminal convictions of two former advisers to President Trump and the resumption of trade talks between the U.S. and China.
As for the other major averages, the blue-chip Dow Jones Industrial Average slid 0.3%, and the tech-heavy Nasdaq Composite climbed 0.4%, notching its fifth straight advance. Meanwhile, the small-cap Russell 2000 ticked up 0.3%, closing at a new record high for the second day in a row.
Futures were lower ahead of Wednesday's open after President Trump's former campaign manager, Paul Manafort, was convicted of tax and bank fraud on Tuesday evening, and after the president's longtime lawyer, Michael Cohen, pleaded guilty to a range of charges, adding that Mr. Trump directed him to pay two women hush money.
However, the bearish bias soon faded after the opening bell, with energy shares getting a notable boost.
The energy sector was Wednesday's top-performing group with a gain of 1.2%, helped by a sharp rise in crude prices, with WTI crude futures rallying 3.1% to $67.87/bbl. The crude rally was strengthened by the weekly EIA inventory report, which showed that U.S. crude stockpiles declined by 5.8 million barrels last week.
Meanwhile, the top-weighted technology sector (+0.5%) rebounded after lagging for the past week, and the consumer discretionary sector (+0.1%) finished slightly higher, helped by Lowe's (LOW 105.52, +5.78) and Target (TGT 85.94, +2.67), which added 5.8% and 3.2%, respectively, after reporting above-consensus earnings.
On the downside, seven of eleven groups finished in the red, with the lightly-weighted telecom services space (-2.0%) at the back of the pack. The trade-sensitive industrial group (-0.9%) also struggled as the U.S. and China kicked off the latest round of trade talks in Washington.
As of Wednesday's close, there wasn't any new news regarding the discussions, which mark the first negotiations since a breakdown in the process nearly three months ago. The White House doesn't believe much will come out of the negotiations and still expects the next tranche of tariffs to go into effect at midnight.
On the Fed front, the U.S. central bank released the minutes from the July/August FOMC meeting on Wednesday afternoon, revealing little to no new information.
In short, the Fed appears to be on track to hike rates at its September meeting, with many participants saying it would likely "soon" be appropriate to raise rates. Also of note, officials pointed to ongoing global trade tensions as the biggest threat to an otherwise strong U.S. economy.
Reviewing Wednesday's economic data, which was limited to July Existing Home Sales and the weekly MBA Mortgage Applications Index:
Existing home sales decreased 0.7% in July to an annualized rate of 5.34 million units (Briefing.com consensus 5.40 million). The June reading was left unrevised at 5.38 million.
The key takeaway from the report is that supply constraints continue acting as a drag on overall sales. The lower inventory -- and high prices on available inventory -- is crimping affordability, especially for first-time buyers. All prospective buyers are facing affordability pressures resulting from home prices increasing at a faster pace than income.
The weekly MBA Mortgage Applications Index increased 4.2% to follow last week's drop of 2.0%.
On Thursday, investors will receive weekly Initial Claims, the FHFA Housing Price Index for June, and July New Home Sales.
Nasdaq Composite +14.3% YTD
Russell 2000 +12.2% YTD
S&P 500 +7.0% YTD
Dow Jones Industrial Average +4.1% YTD
Flirting With Record Territory
21-Aug-18 16:30 ET
Dow +63.60 at 25822.29, Nasdaq +38.17 at 7859.20, S&P +5.91 at 2862.70
https://www.briefing.com/investor/markets/stock-market-update/2018/8/21/flirting-with-record-territory.htm
[BRIEFING.COM] The S&P 500 notched its fourth straight advance on Tuesday, adding 0.2%, and touched a new intraday record (2873.23) before pulling back in the afternoon, eventually settling 0.4% below its January 26 record close (2872.87). The benchmark index kept within a pretty narrow range, hovering between +0.2% and +0.6%.
As for the other major averages, the Dow Jones Industrial Average finished with a gain of 0.3%, and the Nasdaq Composite added 0.5%. The small-cap Russell 2000 outperformed, soaring 1.1%, to finish at a new record high (1718.05) for the first time since June 20.
Tuesday's session began on an upbeat note as investors looked ahead to renewed U.S.-China trade talks, which will kick off on Wednesday. President Trump said he doesn't believe the mid-level negotiations will lead to much of anything, but the market has been optimistic nonetheless.
The bullish bias then weakened a bit after the S&P 500 posted a new intraday record around midday. The top-weighted technology sector led the leg lower, trimming its gain notably; the group was up as much as 0.8%, but finished higher by just 0.1%. Tuesday's tech reversal added to a week's worth of struggles; tech has lost 0.7% since last Tuesday, while the S&P 500 has gained 0.8%.
News that President Trump's longtime personal lawyer, Michael Cohen, has struck a plea deal with federal prosecutors also weighed in the afternoon. The deal does not currently include cooperation with investigators, according to The New York Times, but might still have implications for the president, who worked closely with Mr. Cohen for more than a decade.
The consumer discretionary (+0.9%) and industrials (+0.8%) sectors were the top-performing groups on Tuesday, with consumer discretionary benefiting from the latest batch of corporate earnings. Retailers TJX (TJX 106.46, +4.81) and Kohl's (KSS 80.20, +1.35) jumped 4.7% and 1.7%, respectively, after reporting better-than-expected earnings and revenues. Meanwhile, homebuilder Toll Brothers (TOL 39.52, +4.79) spiked 13.8% after also beating on the top and bottom lines.
In total, seven of eleven sectors finished in the green, with most advancers adding between 0.4% and 0.7%.
On the downside, the consumer staples (-0.8%), utilities (-0.7%), and real estate (-0.9%) groups finished at the back of the pack. Within the consumer staples space, J.M. Smucker (SJM 108.20, -7.67) and Coty (COTY 11.52, -0.88) lost 6.6% and 7.1%, respectively, after issuing disappointing guidance.
Away from equities, the U.S. Dollar Index slid for a fifth straight session, dropping 0.6% to 95.16, after President Trump reiterated his displeasure with the Fed in exclusive interview with Reuters released on Monday, saying he was "not thrilled" with Fed Chair Jerome Powell for raising rates. Treasuries also moved lower, pushing the benchmark 10-yr yield two basis points higher to 2.84%.
As for economic data, investors did not receive any notable reports on Tuesday.
Nasdaq Composite +13.9% YTD
Russell 2000 +11.9% YTD
S&P 500 +7.1% YTD
Dow Jones Industrial Average +4.5% YTD
Wall Street Extends Winning Streak Amid Trade Optimism
20-Aug-18 16:30 ET
Dow +89.37 at 25758.69, Nasdaq +4.68 at 7821.03, S&P +6.92 at 2856.79
https://www.briefing.com/investor/markets/stock-market-update/2018/8/20/wall-street-extends-winning-streak-amid-trade-optimism.htm
[BRIEFING.COM] The S&P 500 advanced 0.2% on Monday, closing higher for a third straight session. The benchmark index is now just 0.6% below its January 26 record high. As for the other major averages, the Dow climbed 0.4% on Monday, hitting its best level since early February, and the tech-heavy Nasdaq added 0.1%.
Optimism ahead of resumed trade talks between the U.S. and China, which are set to kick off on Wednesday, helped fuel the bullish bias on Wall Street and helped push stocks higher across the globe. China's Shanghai Composite rallied 1.1% on Monday, rebounding from a two-year low, and Germany's export-heavy DAX led the way in Europe with a gain of 1.0%.
Eight of eleven S&P sectors finished Monday in the green, with consumer discretionary (+0.6%), industrials (+0.6%), energy (+0.7%), and materials (+0.7%) being the top performers. However, the top-weighted information technology sector (-0.2%) underperformed, keeping the S&P 500 in check.
Within the tech space, giants like Apple (AAPL 215.46, -2.12), Microsoft (MSFT 106.87, -0.71), and Facebook (FB 172.50, -1.30) lost between 0.7% and 1.0%. Chipmakers also trailed the broader market, with Dow component Intel (INTC 46.50, -0.60) sliding 1.3%. The Philadelphia Semiconductor Index lost 0.1%.
On the M&A front, SodaStream (SODA 142.11, +12.26) spiked 9.4% after the Israeli company, which is best known for its at-home carbonated drink maker, agreed to be acquired by beverage and snack giant PepsiCo (PEP 114.84, -0.12, -0.1%) for $144 per share, in cash, or roughly $3.2 billion.
Away from equities, U.S. Treasuries rallied on Monday -- somewhat unusual considering the uptick in equities -- pushing yields lower across the curve; the benchmark 10-yr yield slid five basis points to 2.82%. In currencies, investors kept an eye on the Turkish lira, which lost 1.2% against the U.S. dollar, dropping for a second straight session.
In Washington, President Trump reiterated his displeasure with the Fed, saying he was "not thrilled" with Fed Chair Jerome Powell for raising rates. The president also accused China and the EU of being currency manipulators. Reuters reported the headlines minutes before the close, sending stocks slightly below their session highs.
As for economic data, investors didn't receive any notable reports on Monday, and Tuesday's calendar is also blank.
Nasdaq Composite +13.3% YTD
Russell 2000 +10.6% YTD
S&P 500 +6.9% YTD
Dow Jones Industrial Average +4.2% YTD
InvestmentHouse - Market Avoids Friday Drop (Weekend Newsletter)
https://www.investmenthouse.com/frblog.php
- Market avoids Friday drop, puts together a 2-session move higher.
- DJ30 leads upside as money rotates to its stocks, but SP400 does not look
bad. Promising even.
- Tech leaders topping but rotation allows the move to continue even if some
leaders drop out of the picture.
- Still many upside plays in the 'other' sectors.
Friday delivered upside as word is out the US and China have agreed to
restart trade negotiations with Trump and Xi meeting sometime in late
summer/early fall. For the market, holding talks is much better than
trading insults, and thus Friday was an up session.
SP500 9.44, 0.33%
NASDAQ 9.82, 0.13%
DJ30 110.59, 0.43%
SP400 0.49%
RUTX 0.43%
SOX -0.73%
NASDAQ 100 0.04%
VOLUME: NYSE +8%, NASDAQ -7%. Volume on the week showed overall
distribution on NASDAQ, a mix of distribution and accumulation on NYSE.
ADVANCE/DECLINE: NYSE 2.3:1, NASDAQ 1.4:1. Solid enough on NYSE, but
NASDAQ is showing the bleed as upside breadth is weak on a market upside
session.
Up, but nothing new, nothing game changing. The indices are still in the
same patterns with all trending higher, all holding support other than SOX.
DJ30 has done more than hold support, rallying nicely higher off the 50 day
MA. The others? They have held support but are not really making any kind
of serious move higher -- the same kind of slow one day up, one day back
action.
That leaves the indices still in good enough position, but not showing the
kind of chops that indicate they are ready to make that solid break higher.
Perhaps they can win by attrition, holding out with steady slow moves a la
the turtle versus the hare.
While the indices outside of DJ30 are slowly edging higher, many stocks are
in very good patterns and are in position to move higher. Money is moving
their way and thus the good setups and initial moves. We picked up several
positions and are looking for more.
Tires and markets
I bought some new tires for my truck this morning. Kept the pressure right,
rotated them when I should. They still wore out. In due time.
What the hell, right? Okay, here is the tie: the market is rotating out of
most of the big leaders that carried the indices to new highs through
January and then again in July. Drugs, industrials, personal products,
retail, credit services, specialty services (e.g. Match) and other areas are
receiving money while FAANG, semiconductors, large tech and to a lesser
extent tech in general are losing money.
Again, how does that tie into my tire story? It suggests that while the
loss of the big tech and FAANG stocks has some saying the market has topped
and can only fall, that kind of 'if not rallying then it must be falling'
theory is not only wrong but loses you money. It ignores the rotation
clearly taking place. I talked about the possibility of rotation as the
July volatility hit; it took some time but is clearly taking place.
The point: rotation does not equal a market top, and rotation can last for
quite some time as money moves to certain sectors and pushes them higher.
It can push them higher for a long time, and then move to another area and
push those stocks higher. This can go on for a long time dependent upon the
economy. At some point even rotation won't work -- the tires are worn out.
For now, the stocks moving higher look quite good, i.e. they have good
patterns, have room to run, are making good moves and . . . holding onto the
moves. That is the upside promise in this market.
What about a resurrection of the leaders that fell and damaged their
patterns? It can happen; we even have an upside play on GOOG again in case.
The odds typically do not favor those kind of moves, at least not without
some significant bases. Perhaps I am wrong, perhaps they can rejuvenate
themselves as they have done several times in this long rally. Thing is,
the Fed stimulus they received each time they faded is no longer being
injected and indeed removed. Thus if they fall and no one is there as a
backstop to bounce them back, they need a base to reset.
Of course, some are predicting the Fed will be forced into QE in 2019, that
the economy is currently slowing and will force the Fed's hand. That
remains to be seen, but it is also is next year -- the rotation into the new
sectors is occurring now and has plenty of time to work.
So, we are still looking to play upside in those stocks turning upside. We
already have a number of positions in them and look to add more. We also
have downside positions on some big names that are bleeding money. This
week there are a lot of solid upside plays on the report because there are a
lot of solid upside plays in those areas receiving the money. There will
come a time when we will play 90% downside, but with the rotation setting up
good patterns that can make us money, upside will still be the dominant play
with some downside included as we have now.
THE MARKET
For the most part the stock indices managed to avoid a downside Friday, but
as noted, they did not do much to help their rise outside of DJ30.
CHARTS
DJ30: Not the powerful move as on Thursday when WMT BA and company blasted
it higher, but DJ30 did continue a solid move off the 50 day MA test that
saw a hammer doji Wednesday that bounced it higher. DJ30 is back near the
top of the channel formed off the March and April lows that acted as the
bottom of the current 8 month base. Working higher, looking better than
most.
SP500: Similar to the Dow, moving up near the top of its uptrend channel
that has built the right side of its 8 month base. The late week gains have
SP500 filling the downside gap from a week back. Okay, rebounded from the
island reversal, at the late July high, at the all-time high (more or less).
Critical time once again here at the prior high.
NASDAQ: Trying to get off the 50 day MA, less than impressive in the
attempts. The major volume on the week was in the Wednesday selling to the
50 day MA. Low trade on the rather weak bounce attempt. Still trending
higher, but not a lot of life as upside volume wanes along with MACD.
SOX: Dropped to the trendline formed from the February and May lows.
Tapped it, rebounded to cut the losses after a pretty nasty gap lower
Wednesday and again Friday. Nice hammer doji Friday so SOX could bounce,
but a number of key big cap chips continue to struggle, e.g. INTC, AMAT,
MU -- big names weighing the index down.
SP400: Back near the highs again after a test of the 50 day MA starting
Monday. Back and forth each session, then a back to back rise to end the
week. That puts SP400 right in the range of the highs, and frankly, it was
a good solid move from a higher low at solid support. Promising . . . as it
was in early July, mid-July, early August.
RUTX: Similar to SP400, RUTX tested the 50 day MA on the week and moved
back up. Thursday saw a gap higher, a selloff, then a rebound. Friday
added a bit more. Not as great as the SP400 action, but, dare I say it . .
. promising?
LEADERSHIP
Rotation is taking money out of fAang and tech. Happens. Other areas are
the beneficiary.
fAang: Only one cap letter, and that is AAPL. AAPL moved up to new highs
on the week post earnings. FB, NFLX are selling off, GOOG sold off, gapping
to the 50 day EMA and a doji Friday. AMZN looks pretty darn good with its
own doji at the 10 day EMA; looking at playing it downside, but this is a
nice test setup for a rebound. No new upside play on it this weekend, but
it would not take much to convince us to move in upside if AMZN holds and
rises from here.
Software: Key names dropping out, e.g. ADBE, VRSN, DATA, NOW. Others are
hanging in, indeed looking good; COUP, FFIV, MSFT, TTWO.
Drugs/Healthcare: More sweet action. PFE surged Friday on the third day
off the 10 day EMA test. LLY, BMY, MRK enjoyed good weeks. Many smaller
biotechs are setting up well along with medical instrumentation and other
healthcare related areas.
Industrials: Some nice moves indeed. EMR up Friday on solid volume. HON,
CMI coming off 50 day MA tests with solid action. Even CAT came to life.
Financial: Banks are hanging in around support but not making moves upside
yet. C at the 50 day MA, BAC, JPM testing at the 20 day MA. GS recovered
on the week after the dump lower the prior week; only about half the gain
recouped. V showing good volume Friday on a modest move.
Retail: A solid week with some earnings shooting stocks higher, e.g. WMT,
JWN. DLTR and DG still climbing. COST broke higher again Friday, ROST in a
nice test, TJX in a test over the 10 day EMA after a new high. RH is forming
a nice handle to a 10 week base.
Chips: Some key names really struggling but in their travails may be ready
to bounce, e.g. INTC. MU down hard but bounced a bit Friday. AMAT did not
rebound after its gap lower on earnings. NVDA gapped below the 50 day MA
and sold off hard. AMD broke higher again Friday; nice. XLNX tested the
200 day SMA on the week, looks ready to bounce.
Transports: Rails continues upside. CSX trending higher up the 10 day EMA
all week. KSU, after a flop on Monday, rebounded all the loss with a good
move Friday.
Misc: SQ testing still. GRUB handing on at the 20 day EMA. DIS still
looks good at the 20 day EMA. DOCU looks solid, forming a handle.
MARKET STATS
DJ30
Stats: +110.59 points (+0.43%) to close at 25669.32
Nasdaq
Stats: +9.81 points (+0.13%) to close at 7816.33
Volume: 1.85B (-6.57%)
Up Volume: 994.39M (-115.61M)
Down Volume: 828.69M (-18.21M)
A/D and Hi/Lo: Advancers led 1.41 to 1
Previous Session: Advancers led 2.39 to 1
New Highs: 101 (+9)
New Lows: 74 (+2)
S&P
Stats: +9.44 points (+0.33%) to close at 2850.13
NYSE Volume: 761.53M (+8.11%)
A/D and Hi/Lo: Advancers led 2.3 to 1
Previous Session: Advancers led 2.92 to 1
New Highs: 105 (+11)
New Lows: 50 (-1)
SENTIMENT
VIX: 12.64; -0.81
VXN: 15.86; -0.57
VXO: 11.19; -0.75
Put/Call Ratio (CBOE): 1.04; +0.10
Bulls and Bears:
Recovery in bulls continues with a solid advance pushing bulls back up in
the top of the range. Bears remain elevated from the lows, but flat-lining
a bit the past several weeks.
Bulls: 57.3 versus 54.9
Bears: 18.4 versus 18.6
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 57.3 versus 54.9
54.9 versus 54.5 versus 54.9 versus 55.3 versus 52.4 versus 47.1 versus 47.6
versus 52.0 versus 55.5 versus 52.9 versus 50.0 versus 49.1 versus 46.6
versus 43.1 versus 43.6 versus 48.0 versus 43.6 versus 42.2 versus 49.5
versus 55.5 versus 54.9 versus 48.6 versus 48.1 versus 48.5 versus 41.9
versus 54.4 versus 66.00 versus 64.7 versus 66.7 versus 64.4 versus 61.9
versus 64.1 versus 64.2 versus 62.3 versus 61.5 versus 63.5 versus 64.4
versus 63.5 versus 62.3 versus 60.6 versus 60.4 versus 57.5 versus 54.3
versus 50.5 versus 47.1
Bears: 18.4 versus 18.6
18.6 versus 18.8 versus 18.6 versus 18.5 versus 18.5 versus 18.6 versus 18.4
versus 17.6 versus 17.8 versus 17.7 versus 19.2 versus 19.2 versus 19.4
versus 19.4 versus 20.6 versus 20.8 versus 19.6 versus 19.8 versus 18.6
versus 17.5 versus 16.8 versus 15.7 versus 15.5 versus 14.4 versus 14.6
versus 14.4 versus 15.5 versus 12.6 versus 12.8 versus 12.7 versus 13.5
versus 15.2 versus 15.1 versus 15.2 versus 15.1 versus 15.1 versus 15.4
versus 15.4 versus 14.4 versus 14.4 versus 15.1 versus 15.2 versus 15.1
versus 17.0 versus 17.1 versus 19.0 versus 20.2
OTHER MARKETS
Bonds: 2.864% versus 2.871%. Bonds have returned to just below the 200 day
SMA as of Friday, rallying for 2+ weeks off the selloff from late July.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.871%
versus 2.879% versus 2.882% versus 2.873% versus 2.928% versus 2.963% versus
2.977% versus 2.977% versus 2.945% versus 2.95% versus 2.986% versus 3.005%
versus 2.962% versus 2.975% versus 2.958% versus 2.982% versus 2.965%
EUR/USD: 1.1437 versus 1.13765. Sold off through Tuesday then started a
recovery to the 10 day EMA as of the Friday close. Oversold, needed to
bounce.
Historical: 1.13765 versus 1.13731 versus 1.13479 versus 1.14052 versus
1.1413 versus 1.1526 versus 1.16186 versus 1.16001 versus 1.15572 versus
1.15683 versus 1.15864 versus 1.1662 versus 1.1689 versus 1.17074 versus
1.16558 versus 1.17324 versus 1.17385 versus 1.16846 versus 1.16989 versus
1.17214 versus 1.1651 versus 1.16514 versus 1.16603 versus 1.1709 versus
1.1685 versus 1.16608 versus 1.1672 versus 1.17288 versus 1.17578 versus
1.17439 versus 1.1689 versus 1.1665 versus 1.16388 versus 1.1638 versus
1.15634 versus 1.15602 versus 1.16517 versus 1.17031 versus 1.16572 versus
1.16072 versus 1.15762 versus 1.1586 versus 1.15746 versus 1.2624 versus
1.16245 versus 1.15678 versus 1.17973 versus 1.17454 versus 1.17761 versus
1.17737 versus 1.17987 versus 1.1774 versus 1.1762 versus 1.1697 versus
1.166 versus 1.16993
USD/JPY: 110.49 versus 110.935. Volatile. Sold off the prior Friday below
the 50 day MA's. Recovered into Tuesday, but then turned right back over.
Historical: 110.935 versus 110.818 versus 111.229 versus 110.737 versus
110.840 versus 111.07 versus 111.361 versus 111.344 versus 111.254 versus
111.621 versus 111.628 versus 111.744 versus 110.990 versus 110.995 versus
110.791 versus 110.871 versus 111.235 versus 111.084 versus 111.451 versus
112.732 versus 112.783 versus 112.896 versus 112.337 versus 112.631 versus
112.093 versus 110.911 versus 110.973 versus 110.474 versus 110.666 versus
110.40 versus 110.854 versus 110.687 versus 110.523 versus 110.223 versus
110.097 versus 109.678 versus 109.980 versus 109.895 versus 110.376 versus
110.03 versus 109.783 versus 110.668 versus 110.578 versus 110.247 versus
110.381 versus 110.314 versus 109.466 versus 109.705 versus 110.164 versus
109.878 versus 109.90 versus 109.53 versus 108.767
Oil: 65.21, -0.25. Dropped to the 200 day SMA as of the Wednesday close,
held that level through Friday but that is about all.
Gold: 1184.20, -0.20. Sold off on the week, dropping away from the 10 day
EMA. Sharp drop, threw a doji, perhaps an oversold rebound.
Positive Trade Headlines Fuel Late Uptick
17-Aug-18 16:25 ET
Dow +110.59 at 25669.32, Nasdaq +9.81 at 7816.35, S&P +9.44 at 2849.87
https://www.briefing.com/investor/markets/stock-market-update/2018/8/17/positive-trade-headlines-fuel-late-uptick.htm
[BRIEFING.COM] The S&P 500 advanced 0.3% on Friday, securing a weekly gain of 0.6%, helped by a Wall Street Journal report that Chinese and U.S. negotiators are planning talks to try to end their trade disagreement ahead of multilateral meetings between President Trump and President Xi in November. The Dow added 0.4% on Friday, and the Nasdaq ticked up 0.1%.
Friday's gains were broad-based, with all 11 S&P sectors closing in the green. The industrials (+0.6%), materials (+0.7%), consumer staples (+0.7%), and real estate (+1.0%) sectors were the top performers, while consumer discretionary (+0.1%), financials (+0.2%), and technology (+0.2%) finished at the back of the pack.
Stocks opened roughly flat and stayed largely unchanged until the afternoon when the WSJ report crossed the wires, pushing the market to new highs.
In corporate news, Tesla (TSLA 305.50, -29.95) tumbled 8.9% following a New York Times interview with its CEO, Elon Musk, in which he discussed his personal struggles, calling this past year "the most difficult and painful" of his career. The NYT also reported that some of Tesla's board members are concerned over Mr. Musk's use of Ambien and recreational drugs.
On the earnings front, NVIDIA (NVDA 244.82, -12.62) and Applied Materials (AMAT 43.77, -3.66) tumbled 4.9% and 7.7%, respectively, after they reported worse-than-expected guidance, which overshadowed their better-than-expected earnings. The Philadelphia Semiconductor Index lost 0.7%.
Conversely, Nordstrom (JWN 59.18, +6.90) spiked 13.2% after reporting above-consensus earnings and guidance for FY19, and Deere (DE 140.59, +3.24) climbed 2.4% despite missing bottom-line estimates and issuing below-consensus guidance for the current quarter.
Away from stocks, the Turkish lira lost 3.6% against the U.S. dollar, ending its three-session rebound, and U.S. Treasuries spent most of the day in the green, but finished the session little changed. The yield on the benchmark 10-yr Treasury note finished flat at 2.87%.
Reviewing Friday's economic data, which included July Leading Indicators and the preliminary reading of the University of Michigan Consumer Sentiment Index for August:
The Conference Board's Leading Economic Index increased 0.6% in July (Briefing.com consensus +0.5%), and the June reading was left unrevised at +0.5%.
The key takeaway from the report is that it points to a sustained pace of economic expansion for the foreseeable future.
The preliminary reading of the University of Michigan Consumer Sentiment Index for August slipped to 95.3 (Briefing.com consensus 97.8) from 97.9 in July.
The key takeaway from the report is that the overall decline was driven by concerns about the prices of large household durables.
Looking ahead, investors will not receive any economic data on Monday.
Nasdaq Composite +13.2% YTD
Russell 2000 +10.3% YTD
S&P 500 +6.6% YTD
Dow Jones Industrial Average +3.8% YTD
Week In Review: Hodgepodge of Headlines Helps Fuel Rebound
The S&P 500 advanced 0.6% this week -- recouping last week's modest decline -- amid a host of retail earnings, more volatility in the Turkish lira, and another (minor) chapter in the U.S.-China trade war saga. The blue-chip Dow outperformed the S&P 500, rallying 1.4%, but the tech-heavy Nasdaq lagged, losing 0.3%.
Retailers stepped up to the earnings plate this week, with Walmart (WMT), Home Depot (HD), Macy's (M), Nordstrom (JWN), Advance Auto (AAP), and J.C. Penney (JCP) all reporting their quarterly results. The market's reaction to the reports was mixed.
In the session immediately following their respective earnings releases, Walmart spiked 9.3%, Home Depot lost 0.5%, Macy's plunged 16.0%, Nordstrom spiked 13.2%, Advance Auto climbed 7.8%, and J.C. Penney plunged 27.0%. On a related note, the July Retail Sales report came in better-than-expected, showing a month-over-month increase of 0.5% (Briefing.com consensus +0.1%).
Non-retail names reporting earnings this week included Cisco Systems (CSCO), NVIDIA (NVDA), and Deere (DE). Cisco Systems and Deere rallied in the session immediately following their releases, adding 3.0% and 2.4%, respectively, but market-darling NVIDIA tumbled, losing 4.6%, after disappointing guidance overshadowed upbeat results.
In other corporate news, Tesla's (TSLA) chief executive, Elon Musk, attempted to clarify last week's tweet about taking Tesla private, saying that his claim that funding has been secured is based on repeated conversations with Saudi Arabia's sovereign wealth fund. Mr. Musk also did a high-profile interview with The New York Times, in which he discussed his personal struggles, calling this past year "the most difficult and painful" of his career. Tesla shares ended the week lower by 14.1%.
In currencies, the Turkish lira followed up last Friday's 16% plunge with another slide on Monday, touching a new all-time low against the U.S. dollar, but then rebounded for the next three sessions. That streak ended with another tumble on Friday, but the currency still finished with a weekly gain of 6.1%.
On the trade front, reports that the U.S. and China will resume trade talks by the end of the month helped equities rally on Thursday. The talks will mark the first official negotiations since a breakdown two months ago, but it's worth noting that the talks are expected to be between low-level officials. In addition, The Wall Street Journal reported late on Friday that Chinese and U.S. negotiators are planning talks to try to end their trade disagreement ahead of multilateral meetings between President Trump and President Xi in November.
Elsewhere, West Texas Intermediate crude futures tumbled 2.5% to $65.94 per barrel this week, touching a fresh two-month low on Wednesday after the Energy Information Administration's weekly inventory report showed an unexpected build of 6.8 million barrels. The drop in oil prices weighed on the energy group, which finished at the bottom of the sector standings with a loss of 3.6%.
Most S&P 500 sectors finished the week in positive territory, with less-risky, countercyclical groups -- including consumer staples (+3.2%), utilities (+2.5%), and telecom services (+3.7%) -- leading the charge. The top-weighted technology sector underperformed, shedding 0.2%, but remains 2018's top-performing group with a year-to-date gain of 15.6%.
Bears Regain Control Following Tuesday Rebound
15-Aug-18 16:20 ET
Dow -137.51 at 25162.41, Nasdaq -96.78 at 7774.13, S&P -21.59 at 2818.11
https://www.briefing.com/investor/markets/stock-market-update/2018/8/15/bears-regain-control-following-tuesday-rebound.htm
[BRIEFING.COM] Stocks dropped for the fifth time in six sessions on Wednesday as tensions between the U.S. and Turkey tightened and as oil prices tumbled to a two-month low, weighing on energy shares. The S&P 500 finished lower by 0.8% after being down as much as 1.3% intraday. The Dow and the Nasdaq lost 0.5% and 1.2%, respectively.
Turkey was in focus once again after the country doubled tariffs on some U.S. imports -- including cars, alcohol, and tobacco. The U.S. and Turkey are feuding over the detainment of American pastor Andrew Brunson, who is accused of supporting a group blamed for an attempted coup in 2016.
The Turkish lira extended Tuesday's rebound though, adding 6.8% against the U.S. dollar, after plunging around 25% against the greenback on Friday and Monday combined. The U.S. Dollar Index, which measures the dollar's strength against a basket of other currencies, finished flat, keeping near a more than one-year high.
Late-afternoon reports that Turkey is now ready to discuss its issues with the United States helped Wall Street pare losses before the closing bell.
Meanwhile, West Texas Intermediate crude futures dropped 3.0% to $65.07/bbl after the Energy Information Administration's weekly inventory report showed an unexpected build of 6.8 million barrels. The drop in oil prices weighed on the energy sector (-3.5%), which finished well behind the 10 other S&P groups.
Cyclical sectors -- including energy -- underperformed in general, with consumer discretionary (-1.2%), materials (-1.6%), and technology (-1.1%) all losing more than the S&P 500. Conversely, the countercyclical consumer staples (+0.4%), utilities (+0.8%), and telecom (+0.7%) sectors finished in the green, and real estate (+0.9%) also outperformed.
In earnings news, Macy's (M 35.15, -6.67) plunged 16.0% after concerns over its overall sales activity outweighed better-than-expected second quarter earnings and above-consensus guidance for the fiscal year. The sell off extended to other retailers, sending the SPDR S&P Retail ETF (XRT 50.45, -1.41) lower by 2.7%.
Elsewhere, U.S. Treasuries rallied amid the risk-off sentiment, sending yields lower across the curve. The yield on the 2-yr note slipped two basis points to 2.61%, and the yield on the benchmark 10-yr note gave up five basis points, falling to 2.85%. Meanwhile, the CBOE Volatility Index spiked 11.6% to 14.85, a fresh six-week high.
Reviewing Wednesday's big batch of economic data, which included July Retail Sales, the preliminary reading for Q2 Productivity and Unit Labor Costs, the Empire Manufacturing Index for August, Industrial Production and Capacity Utilization for July, Business Inventories for June, the NAHB Housing Market Index for August, and the weekly MBA Mortgage Applications Index:
July retail sales rose 0.5% (Briefing.com consensus +0.1%), while the June increase was revised to 0.2% from 0.5%. Excluding autos, retail sales increased 0.6% in July (Briefing.com consensus +0.3%), and the June increase was revised to 0.2% from 0.4%.
The key takeaway from the report is that the downward revisions to June mitigated the July headline surprise. That point notwithstanding, core retail sales, which exclude autos, gasoline station, building materials, and food services sales, were up 0.5%, which is a positive input for Q3 GDP forecasts.
The preliminary unit labor costs declined 0.9% during the second quarter, while the Briefing.com consensus expected an increase of 0.5%. The preliminary productivity reading showed an increase of 2.9%, while the Briefing.com consensus expected an increase of 2.0%.
The key takeaway from the report is that labor costs look to be in check, which will facilitate a gradual tightening path for the Federal Reserve.
The Empire Manufacturing Survey for August rose to 25.6 (Briefing.com consensus 20.0) from the prior month's unrevised reading of 22.6.
Industrial Production rose 0.1% in July (Briefing.com consensus +0.4%), while the June increase was revised to 1.0% (from +0.6%). Meanwhile, Capacity Utilization stayed at 78.1% (Briefing.com consensus 78.3%), unchanged from a revised reading of 78.1% in June (from 78.0%).
The key takeaway from the report is that it showed continued strength in manufacturing output, which offset declines in mining and utilities production.
Business Inventories rose 0.1% in June (Briefing.com consensus +0.1%). The May reading was revised to +0.3% from +0.4%.
The key takeaway from the report is that business sales continued to outpace inventory growth, which is a favorable trend that carries the potential to lead to a better pricing environment for businesses.
The NAHB Housing Market Index for August came in at 67 (Briefing.com consensus 67), down from 68 in July.
The weekly MBA Mortgage Applications Index decreased 2.0% to follow last week's drop of 3.0%.
Looking ahead, investors will receive July Housing Starts and Building Permits, weekly Initial Claims, and the Philadelphia Fed Index for August on Thursday.
Nasdaq Composite +12.6% YTD
Russell 2000 +8.8% YTD
S&P 500 +5.4% YTD
Dow Jones Industrial Average +1.8% YTD
S&P Ends Losing Streak As Lira Rebounds
14-Aug-18 16:15 ET
Dow +112.22 at 25299.92, Nasdaq +51.19 at 7870.91, S&P +18.03 at 2839.70
https://www.briefing.com/investor/markets/stock-market-update/2018/8/14/s-and-p-ends-losing-streak-as-lira-rebounds.htm
[BRIEFING.COM] The S&P 500 rebounded on Tuesday, ending its four-session losing streak with a gain of 0.6%. The Nasdaq and the Dow also advanced, adding 0.7% and 0.5%, respectively. The major averages quickly extended modest opening gains, but then trended sideways for the final five hours of trading, ending near their session highs.
Tuesday's rebound on Wall Street coincided with a rebound in the Turkish lira, which had plunged nearly 25% against the U.S. dollar in the prior two sessions. The lira added about 8% against the greenback on Tuesday, helping to ease concerns over the financial health of lenders with heavy exposure to Turkey.
However, the dollar finished higher overall, evidenced by a 0.4% increase in the U.S. Dollar Index, which finished at a more than one-year high (96.56). That strength weighed on the dollar-denominated WTI crude futures, which were up as much as 1.7%, but finished lower by 0.3% at $67.05/bbl.
All 11 S&P sectors advanced on Tuesday, with financials (+0.9%) and consumer discretionary (+1.0%) leading the charge. The top-weighted information technology sector (+0.6%) got off to a slow start, slipping into negative territory shortly after the opening bell, but eventually strengthened to finish in line with the broader market. Utilities was the worst-performing sector, but still added 0.2%.
Home Depot (HD 193.10, -1.04) and Advance Auto (AAP 156.13, +11.29) kicked off a retail-heavy earnings week by reporting better-than-expected results on Tuesday morning, but the reaction was mixed; Home Depot lost 0.5%, while Advance Auto spiked 7.8%. Retailers finished higher overall though, evidenced by a 2.3% increase in the SPDR S&P Retail ETF (XRT 51.86, +1.15).
Meanwhile, in the bond market, U.S. Treasuries sold off on Tuesday, pushing yields higher across the curve. The yield on the benchmark 10-yr Treasury note advanced two basis points to 2.90%, while the yield on the Fed-sensitive 2-yr Treasury note climbed three basis points to 2.63%.
Reviewing Tuesday's economic data, which included July Import/Export Prices and the NFIB Small Business Optimism Index for July:
Import prices were flat in July after declining a revised 0.1% in June (from -0.4%). Excluding oil, import prices slid 0.3% in July after slipping an unrevised 0.3% in June. Export prices decreased 0.5% in July after rising a revised 0.2% in June (from +0.3%). Excluding agriculture, export prices were flat in July after rising an unrevised 0.4% in June.
The key takeaway from the report is that it seemingly reflects some of the effects of a stronger dollar as nonfuel import prices declined month-over-month in both June and July.
The NFIB Small Business Optimism Index for July came in at 107.9, which is above the unrevised June reading of 107.2.
Looking ahead, investors will receive a big batch of data on Wednesday that includes the weekly MBA Mortgage Applications Index, July Retail Sales, the preliminary reading for Q2 Productivity and Unit Labor Costs, the Empire Manufacturing Index for August, Industrial Production and Capacity Utilization for July, Business Inventories for June, and the NAHB Housing Market Index for August.
Nasdaq Composite +14.0% YTD
Russell 2000 +10.2% YTD
S&P 500 +6.2% YTD
Dow Jones Industrial Average +2.4% YTD
S&P Registers Fourth Straight Decline
13-Aug-18 16:25 ET
Dow -125.44 at 25187.70, Nasdaq -19.40 at 7819.72, S&P -11.35 at 2821.67
https://www.briefing.com/investor/markets/stock-market-update/2018/8/13/s-and-p-registers-fourth-straight-decline.htm
[BRIEFING.COM] The S&P 500 notched its fourth straight loss on Monday, sliding 0.4%, as the Turkish lira extended Friday's tumble, causing further concerns over the financial health of lenders with heavy exposure to the economically-struggling country. The Nasdaq slipped 0.3%, and the Dow declined 0.5%.
Turkey's central bank tried to shore up the country's financial system, but it did little to stop the lira's free fall. After dropping nearly 16.0% against the dollar on Friday, the lira fell another 8.7% on Monday, hitting a new all-time low and extending its five-month decline to roughly 80%. India's rupee, another emerging market currency, also hit a new all-time low against the dollar, losing 1.3%.
On Wall Street, most S&P sectors finished in negative territory. Financials, energy, and materials were the worst-performing sectors, losing between 1.0% and 1.2% apiece. However, no other group declined more than 0.5%. Health care (unch) and utilities (+0.1%) were the only groups to finish in the green.
The top-weighted technology sector got off to a solid start, adding as much as 0.9%, but weakened as the day wore on, eventually settling lower by 0.2%. Still, the group's relatively upbeat performance helped keep the S&P 500's loss in check. Within the group, tech giant Apple (AAPL 208.87, +1.34) was a top performer, adding 0.7%.
In corporate news, the CEO of Tesla (TSLA 356.41, +0.92, +0.3%), Elon Musk, attempted to clarify last week's tweet about taking Tesla private, saying that his claim that funding has been secured is based on repeated conversations with Saudi Arabia's sovereign wealth fund. Meanwhile, President Trump encouraged boycotting Harley-Davidson (HOG 41.38, -1.87, -4.3%) if it moves its manufacturing overseas.
Elsewhere, U.S. Treasuries sold off, sending the benchmark 10-yr yield two basis points higher to 2.88%; West Texas Intermediate crude futures lost as much as 2.8% in intraday trading before closing lower by 0.5% at $67.28/bbl; and the CBOE Volatility Index spiked 13.4% to 14.92, hitting its highest level in more than five weeks.
Investors did not receive any economic data on Monday.
Nasdaq Composite +13.3% YTD
Russell 2000 +9.1% YTD
S&P 500 +5.6% YTD
Dow Jones Industrial Average +1.9% YTD
InvestmentHouse - US Markets and Dollar are Solid (Weekend Newsletter)
https://www.investmenthouse.com/frblog.php
- Painfully slow session Thursday is triggered Friday by lira, falls from
the highs.
- Trump takes advantage of Turkey's bad policies and diving lira, doubles
steel and aluminum tariffs.
- World markets, currencies struggling, but US markets and dollar are solid.
For now.
- US in a good position but the Fed can louse it up as . . . always.
- Once again new and higher highs are tossed. Indices remain in nice
uptrends, but the New High Anxiety and damaged leader patterns are vexing.
The lira? More tariffs? Or, was it High Anxiety?
Friday the lira was a turkey, crashing as Turkey's problems go from bad to
worse. Even so, Erdogan told the Turks to convert any dollars to lira,
blustering 'they have got their dollars, we have got our people, our right,
our Allah.'
World markets were sharply lower and US futures followed. Then, still
before the US bell, Trump added to Turkey's woes, apparently seeing an
opportunity to affect the release of the American pastor held captive by our
'ally.' Trump moved to double the recently enacted tariffs to 50% on steel,
20% on aluminum. You have to hand it to Trump: he plays for keeps, and
while he keeps those across the negotiating table off balance, when he sees
an opening, he takes it.
So stocks were going to open lower. They did. I predicted the indices
would close higher than they opened. That would have been easily correct if
the market only traded for the first two hours of the session. They gapped
lower and immediately rose, recovering to 11:35ET. Then they gave it all
back and more, selling lower and lower to mid-afternoon. A late bounce
managed to close SP500, NASDAQ, SP400 over the open -- barely. It was not
much and certainly not the kind of recovery we had in mind.
SP500 -20.30, -0.71%
NASDAQ -52.67, -0.67%
DJ30 -196.09, -0.77%
SP400 -059%
RUTX -0.24%
SOX -2.47%
NASDAQ 100 -0.79%
VOLUME: NYSE +27%, moving back to average. NASDAQ +3%, back above average
on a gap down to the 10 day EMA.
ADVANCE/DECLINE: NYSE -2:1, NASDAQ -3:2.
So what really happened Friday? The lira provided perhaps an unexpected
catalyst and reason, but what happened in the bigger picture? Once again
the stock indices fell victim to selling when near highs, aka New High
Anxiety.
Last week I talked, and indeed others as well, about tops and bottoms being
a process versus a singular event. While NASDAQ and company are still
trending higher, every time they approach the highs they get knocked down.
Thus far, they get knocked down, they get up again, just can't seem to keep
them down. That is always the case . . . until they can't get up again.
For now this is just one of those 'get knocked down' sessions in a still
continuing uptrend. But again, a top is a process where there is
distribution on several occasions, particularly at the higher highs. After
a week and more of upside depending upon the index, they were at or close to
new highs. As noted, the lira could have acted as the trigger but the
result was another move back hear highs that was pushed down. With many
stocks across many sectors hit, you have to keep in mind that a top could be
in process.
CHARTS
Not a collapse, not a reversal. The indices are still in uptrends, some in
better shape than others, still trying to hit and hold new highs, still
struggling each time they get there. One step forward, a half step
backward, right? This is the most frustrating uptrending market in recent
memory.
NASDAQ: The focus of most attention, NASDAQ came close to a new high this
time around, didn't hit it, then gapped downside to the 10 day EMA Friday.
Rising, above average volume so once again some distribution as NASDAQ backs
down from the highs. No trend break, not even close, but if the sellers
take it down each time it hits this level, that eventually forms serious
resistance and a top.
SP500: Very similar action to NASDAQ, gapping downside to the 20 day EMA
after moving to a higher high over the late July peak. Gapped down, tight
range on the session, volume moving up to average for the first time in two
weeks. Still in the upper range of its channel formed as it moved off the
bottom of the base. As with NASDAQ, still trending upside, no issue with
breaking the uptrend but some high volume selling at the higher high.
SOX: Gapped below the 50 day MA's, back to the middle of its pattern. It
did not hold the 50 day MA and use that as a higher low to make the breakout
run. SOX is key, the move was not great, the pattern still holds. Watch to
see if it reloads and can make a move upside.
DJ30: Gapped lower through the 10 day EMA, landing on the 20 day EMA.
Higher volume but still below average. No real issues, in the upper half of
the channel, still working on a pattern, a pretty good one.
SP400: From a higher high gapping to the 20 day EMA and a doji. Nice
uptrend, holding near support. Great trend. But, three times in the past
two months SP400 has been right here, eked out a higher high, but was
immediately shoved back.
RUTX: Fourth straight doji over the 10 day EMA, quite frankly ignoring the
overall market selling. This is actually encouraging action for the small
caps, also a very important index economically.
LEADERSHIP
FAANG: FB fell below the 200 day MA, possibly failing its rebound attempt
after the earnings gap lower. AAPL on the other hand is in a tight lateral
range as the 10 day EMA rises to meet it; good looking for the upside. AMZN
faded just modestly, showing a doji, still solid. GOOG gapped lower to the
10 day EMA. Hardly a bad pattern. NFLX still dancing around laterally just
below the 10 day EMA. Problematic.
Software: The group could make a comeback to leadership status. TTWO is
looking great in the recovery, breaking to a new high. Could lead the group.
FFIV is another recovering software stock, breaking higher into the week
then trying to form a handle. VMW working in a tight lateral pattern after
breaking higher out of its flag. UIS testing a very nice post-earnings run;
could be a new play. DATA is at the 10 day EMA, could be putting in a
possible entry. NOW is not that bad either. ADBE, VRSN still trying to
hang on after recovering but still unable to move upside.
Financial: Some very ugly action as bonds surged and yields dropped.
Reason: if the lira and Turkey is contagion, bonds will continue as a safe
haven. C gapped to the 50 day EMA, losing 2.39%. JPM is not bad, gapping
lower to the 20 day EMA and a doji. BAC shows the same action. GS gapped
lower to the 50 day SMA. V is not bad, holding a lateral move over the 10
day EMA.
Industrial: More trouble. CAT gapped lower to support at 135. CMI faded in
a handle on the week after a good initial move, holding the 20 day EMA. EMR
in a great 1-2-3 test of its earnings surge. UTX held up decently, holding
the 20 day EMA. HON gapped to a dojij, holding over the late May/early June
peaks. Not bad. The group struggled, but not a rout.
Drugs: PFE finally testing the strong move, fading as the 10 day EMA rises
to meet it. MRK testing the 10 day EMA as well. BMY still stuck at the 200
day MA. BCRX in biotech took off late week. ARWR in the same group is
solid. Still a solid group of course and will see if we get entries off
these tests.
Chips: INTC downgraded and several chips struggled though not AMD, INTC's
main rival. TXN gapped below the 50 day MA's. XLNX fell to test near the
200 day SMA on the low. QRVO fell to the 20 day EMA, nothing major. MXIM
sold lower as well. Very familiar action though not a lot of breakdowns.
Retail: Some up, some down, still some good patterns. KSS moved higher on
volume. M held fine over near support. DDS faded a bit, but fine. RH off
just a bit. JWN tried to surge, faded. HD faded to again test the 50 day
EMA. Most, as noted, remain fine.
Transports: Rails held up well, e.g. CGX, CNI, RAIL, KSU.
Misc: GRUB still solid. SQ ditto at the 20 day EMA. DIS testing the 20
day EMA. WOW posted a nice gap and run higher.
MARKET STATS
DJ30
Stats: -196.09 points (-0.77%) to close at 25313.14
Nasdaq
Stats: -52.67 points (-0.67%) to close at 7839.11
Volume: 2.1B (+2.94%)
Up Volume: 656.98M (-330.79M)
Down Volume: 1.4B (+370M)
A/D and Hi/Lo: Decliners led 1.51 to 1
Previous Session: Advancers led 1.1 to 1
New Highs: 92 (-22)
New Lows: 105 (+39)
S&P
Stats: -20.30 points (-0.71%) to close at 2833.28
NYSE Volume: 826.278M (+27.38%)
A/D and Hi/Lo: Decliners led 1.97 to 1
Previous Session: Advancers led 1.01 to 1
New Highs: 70 (-45)
New Lows: 88 (+53)
SENTIMENT
VIX: 13.16; +1.89
VXN: 16.22; +1.31
VXO: 11.85; +1.72
Put/Call Ratio (CBOE): 1.20; +0.35
Bulls and Bears:
Market in a recovery mode so the bulls recovered a bit, bears fell a bit,
but no significant change on the week. That likely changes some after
Friday.
Bulls: 54.9 versus 54.5
Bears: 18.6 versus 18.8
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 54.9 versus 54.5
54.5 versus 54.9 versus 55.3 versus 52.4 versus 47.1 versus 47.6 versus 52.0
versus 55.5 versus 52.9 versus 50.0 versus 49.1 versus 46.6 versus 43.1
versus 43.6 versus 48.0 versus 43.6 versus 42.2 versus 49.5 versus 55.5
versus 54.9 versus 48.6 versus 48.1 versus 48.5 versus 41.9 versus 54.4
versus 66.00 versus 64.7 versus 66.7 versus 64.4 versus 61.9 versus 64.1
versus 64.2 versus 62.3 versus 61.5 versus 63.5 versus 64.4 versus 63.5
versus 62.3 versus 60.6 versus 60.4 versus 57.5 versus 54.3 versus 50.5
versus 47.1
Bears: 18.6 versus 18.8
18.8 versus 18.6 versus 18.5 versus 18.5 versus 18.6 versus 18.4 versus 17.6
versus 17.8 versus 17.7 versus 19.2 versus 19.2 versus 19.4 versus 19.4
versus 20.6 versus 20.8 versus 19.6 versus 19.8 versus 18.6 versus 17.5
versus 16.8 versus 15.7 versus 15.5 versus 14.4 versus 14.6 versus 14.4
versus 15.5 versus 12.6 versus 12.8 versus 12.7 versus 13.5 versus 15.2
versus 15.1 versus 15.2 versus 15.1 versus 15.1 versus 15.4 versus 15.4
versus 14.4 versus 14.4 versus 15.1 versus 15.2 versus 15.1 versus 17.0
versus 17.1 versus 19.0 versus 20.2
OTHER MARKETS
Bonds: 2.873% versus 2.928%. Bonds gapped upside in a flight to safety,
closing just over the 50 day SMA. Could be working on the right shoulder of
a head and shoulders top spanning late May to present. Those often set up,
don't often lead to major selling.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.928%
versus 2.963% versus 2.977% versus 2.977% versus 2.945% versus 2.95% versus
2.986% versus 3.005% versus 2.962% versus 2.975% versus 2.958% versus 2.982%
versus 2.965%
EUR/USD: 1.1413 versus 1.1526. Sharp break lower, moving through the late
May low as well as the late 2017 lows. The euro just broke lower from a 13
month head and shoulders. Wow. Serious break lower.
Historical: 1.1526 versus 1.16186 versus 1.16001 versus 1.15572 versus
1.15683 versus 1.15864 versus 1.1662 versus 1.1689 versus 1.17074 versus
1.16558 versus 1.17324 versus 1.17385 versus 1.16846 versus 1.16989 versus
1.17214 versus 1.1651 versus 1.16514 versus 1.16603 versus 1.1709 versus
1.1685 versus 1.16608 versus 1.1672 versus 1.17288 versus 1.17578 versus
1.17439 versus 1.1689 versus 1.1665 versus 1.16388 versus 1.1638 versus
1.15634 versus 1.15602 versus 1.16517 versus 1.17031 versus 1.16572 versus
1.16072 versus 1.15762 versus 1.1586 versus 1.15746 versus 1.2624 versus
1.16245 versus 1.15678 versus 1.17973 versus 1.17454 versus 1.17761 versus
1.17737 versus 1.17987 versus 1.1774 versus 1.1762 versus 1.1697 versus
1.166 versus 1.16993
USD/JPY: 110.840 versus 111.07. Doji at support. Against all other
currencies, the dollar is soaring.
Historical: 111.07 versus 111.361 versus 111.344 versus 111.254 versus
111.621 versus 111.628 versus 111.744 versus 110.990 versus 110.995 versus
110.791 versus 110.871 versus 111.235 versus 111.084 versus 111.451 versus
112.732 versus 112.783 versus 112.896 versus 112.337 versus 112.631 versus
112.093 versus 110.911 versus 110.973 versus 110.474 versus 110.666 versus
110.40 versus 110.854 versus 110.687 versus 110.523 versus 110.223 versus
110.097 versus 109.678 versus 109.980 versus 109.895 versus 110.376 versus
110.03 versus 109.783 versus 110.668 versus 110.578 versus 110.247 versus
110.381 versus 110.314 versus 109.466 versus 109.705 versus 110.164 versus
109.878 versus 109.90 versus 109.53 versus 108.767
Oil: 67.63, +0.82. Bouncing off some support at 66.
Gold: 1219.00, -0.90.
MONDAY
Earnings winding down, data ratcheting up. Back end loaded on the week:
retail sales, Empire manufacturing and Philly Fed, industrial production and
capacity, housing starts, leading indicators, Michigan sentiment.
Data is important as it is important the US economy remain strong as it
tackles the trade and other issues from the rogues such as China (don't
agree? Just look at the South China Sea aggression), Iran, Russia, North
Korea, Turkey. Peace through strength -- economic strength as it pays for
everything else.
The July CPI core inflation clocked in at 2.4% year/year with real wages up
just 0.1% a -0.2% move year/year. That is a problem because of the Fed.
The Fed will fear inflation more than it does the yield curve. Ironic is it
not? The Fed desperately wanted to create inflation, and now it has it but
is acting to prevent what it wanted to the point it will stall out the
expansion. Insanity. The Fed likes to say IT prevents the swings.
Baloney. It CAUSES swings that it feels it must then fight. And we need
the Fed for what? Creating cycles it must then fight, kind of like a
firefighter starting fires so they can be extinguished, justifying the need
for more firefighters.
In any event, the economy must be strong for the market as well. Shocks
such as the lira drop should be temporary as it only underscores the US
strength vis- -vis other countries. The dollar is showing that as well.
Thus, in theory, the market should hold and continue higher if the economy
is going to do the same. Ah, but the Fed. The market is a forecaster, not
follower. New highs being sold on higher volume. Leaders sacked as well, a
few recovering to higher highs, most not. New movers trying to be leaders
now struggling again. The trend remains but it could very well be the
bucking at new highs suggesting economic issues ahead thanks to the Fed
tightening into a flat yield curve -- as it always does.
The market action last week was hard on stocks that started moving up,
trying to turn to leaders. They are not wrecked, but many are at support
they have to hold and rebound off if the upside is to continue. MMM, SWK
are examples as they formed ABCD consolidations.
The New High Anxiety makes it more treacherous moving into upside, but then
again you have good moves from TTWO and many software stocks look better
along with AAPL for example. So, we look at some of those upside. Still.
Also, looking at NFLX downside already and likely add FB to that with some
others if the numbers work.
Many are dismissing the trouble at new highs, letting moves by AAPL and a
few others trowel over the cracks others are showing. They may turn out
100% correct in ignoring those other stocks, but we have seen tops start
this way before. Heck, they all start this way with some of the big horses
missing revenues and even bottom line earnings. They are symptomatic of a
larger problem, and when such huge market cap stocks roll over, the market
does as well. That does not mean other stocks cannot take their place;
sometimes it is simply time for new leadership and the money rotates
elsewhere.
Sometimes. Often when the powerful leaders break, everything typically
breaks as well and resets. The confluence of the Fed, the balky market, and
the almost blind confidence that things can only remain good can be
treacherous.
Accordingly, we have to be cautious but we also cannot for certain say a top
is definitely forming; no one can. Thus, we still look at possible upside
from leaders still leaders and in great patterns, such as AAPL, UIS, TTWO,
perhaps FFIV, perhaps others. Also, watching for falling starts, e.g. FB,
NFLX. Looking both ways, the effect of this kind of market.
Turkish Lira Rattles Investors Around the Globe
10-Aug-18 16:15 ET
Dow -196.09 at 25313.14, Nasdaq -52.67 at 7839.12, S&P -20.30 at 2833.02
https://www.briefing.com/investor/markets/stock-market-update/2018/8/10/turkish-lira-rattles-investors-around-the-globe.htm
[BRIEFING.COM] A plunging Turkish lira sent shock waves through global equity markets on Friday, causing concerns over the financial health of lenders with heavy exposure to the economically-struggling country. The S&P 500 lost 0.7%, dropping into the red for the week (-0.3%), and the Nasdaq (-0.7%) and the Dow (-0.8%) suffered similar declines.
The lira was down nearly 16% against the U.S. dollar at Wall Street's closing bell, weighed down by continued tensions between the U.S. and Turkey, which made no progress during talks this week regarding the detainment of American pastor Andrew Brunson, who is accused of supporting a group blamed for an attempted coup in 2016.
Trying to stop the bleeding, Turkey's president, Recep Tayyip Erdogan, encouraged citizens to convert their holdings of gold and foreign currencies into lira on Friday morning. However, President Trump swiftly responded by turning up the pressure, announcing that he's authorized a doubling of tariffs on Turkish steel and aluminum.
Stock markets in Europe and Asia ended Friday with sizable losses, although China's tariff-ridden Shanghai Composite finished flat. Investors in the U.S. flocked to the Treasury market, sending yields lower across the curve. The benchmark 10-yr yield, for instance, dropped eight basis points to 2.86%, a fresh three-week low.
The drop in yields -- and, more specifically, the flattening of the yield curve -- weighed on the financial sector (-1.2%), which finished with materials (-1.4%) at the bottom of the sector standings. 10 of 11 sectors finished in the red, with energy (+0.3%) being the lone exception, helped by a 1.3% rise in WTI crude futures ($67.67/bbl).
Within the tech space (-0.8%), chipmakers were particularly weak with Intel (INTC 48.85, -1.29) losing 2.6% after being downgraded to 'Sell' from 'Neutral' at Goldman, and Microchip (MCHP 87.41, -10.67) tumbling 10.9% after issuing disappointing revenue guidance. The PHLX Semiconductor Index declined by 2.5%.
Friday's batch of corporate earnings -- which also included results released Thursday evening -- was the last heavy batch of the Q2 earnings season. In addition to Microchip, Dropbox (DBX 31.05, -3.38) declined after reporting its results, losing 9.8%, but both Planet Fitness (PLNT 51.94, +3.15) and Overstock.com (OSTK 41.65, +3.05) rallied, adding 6.5% and 7.9%, respectively.
Looking ahead, next week's earnings lineup is retail-heavy with Walmart (WMT 90.18, +1.17), Home Depot (HD 196.30, -1.78), Macy's (M 39.97, -0.59), Nordstrom (JWN 52.58, +0.03), J.C. Penney (JCP 2.42, -0.01), Advance Auto (AAP 146.35, -1.44), and Dillard's (DDS 85.83, -2.34) all on the docket.
Reviewing Friday's economic data, which included the Consumer Price Index for July and the July Treasury Budget:
Total CPI increased 0.2% (Briefing.com consensus +0.2%) in July, and core CPI, which excludes food and energy, also rose 0.2% (Briefing.com consensus +0.2%). On a year-over-year basis, total CPI is up 2.9% (vs +2.9% in June) and core CPI is up 2.4% (vs +2.3% in June).
The key takeaway from the report is that consumer inflation trends are running above the Federal Reserve's longer-run inflation target, which will keep the Federal Reserve inclined to raise the target range for the fed funds rate.
The Treasury Budget for July showed a deficit of $76.9 billion versus a deficit of $42.9 billion for July 2017.
The Treasury Budget data is not seasonally adjusted, so the July deficit cannot be compared to the $74.9 billion deficit registered in June.
Investors will not receive any economic data on Monday.
Nasdaq Composite +13.6% YTD
Russell 2000 +9.9% YTD
S&P 500 +6.0% YTD
Dow Jones Industrial Average +2.4% YTD
Week In Review: Rattled by the Lira
The S&P 500 started the week on a positive note, extending last week's winning streak and coming within 0.5% of its January 26 record high. However, the index struggled in the back half of the week, especially on Friday amid a sharp drop in the Turkish lira, eventually settling with a weekly loss of 0.3% -- its first weekly loss since late June.
As for the other major averages, their performances were mixed, with the tech-heavy Nasdaq climbing 0.4% and the blue-chip Dow dropping 0.6%.
Eight of eleven S&P sectors declined this week, with industrials (-1.0%), materials (-0.9%), consumer staples (-1.9%), and real estate (-1.9%) leading the retreat. On the flip side, consumer discretionary (+0.8%), information technology (+0.3%), and telecom services (+0.7%) were the three advancing groups.
In corporate news, Tesla (TSLA) rallied on Tuesday after CEO Elon Musk tweeted that he's considering taking the company private for $420/share and has already secured funding to do so. However, shares gave back nearly all of those gains following headlines that the SEC is investigating whether Mr. Musk's funding claim is truthful.
Meanwhile, on the earnings front, Dow component Walt Disney (DIS) slid 2.2% on Wednesday after missing quarterly earnings estimates, and Snap (SNAP) tumbled 6.8% during the same session after its better-than-expected results were overshadowed by a decline in daily active users (DAUs). This week's wave of Q2 reports was the last big wave of the Q2 earnings season.
The week was light in terms of economic data, but investors did receive some influential readings on inflation. The July Consumer Price Index and the July core Consumer Price Index, which excludes the volatile categories of food and energy, came in as expected, both showing month-over-month increases of 0.2%. On a year-over-year basis, total CPI is up 2.9% and core CPI is up 2.4%.
In short, the report showed that consumer inflation trends are running above the Fed's longer-run target, providing further support for additional rate hikes this year.
The Turkish lira took center stage on Friday, dropping more than 15% against the U.S. dollar. That drop, which comes after the U.S. and Turkey failed to reach an agreement regarding the release of American pastor Andrew Brunson, created concerns over the financial health of banks with heavy exposure to economically-struggling Turkey.
Out of desperation to stabilize the currency, Turkey's president, Recep Tayyip Erdogan, asked citizens to convert their holdings of gold and foreign currencies, especially the U.S. dollar, into lira. U.S. President Donald Trump responded by increasing economic pressure, doubling tariffs on steel and aluminum imports from Turkey.
Little Changed Following Quiet Day of Trading
08-Aug-18 16:20 ET
Dow -45.16 at 25583.75, Nasdaq +4.66 at 7888.33, S&P -0.75 at 2857.44
https://www.briefing.com/investor/markets/stock-market-update/2018/8/8/little-changed-following-quiet-day-of-trading.htm
[BRIEFING.COM] The S&P 500 finished Wednesday slightly lower, ending its four-session winning streak with an uneventful, range-bound performance. The benchmark index lost less than 0.1%, remaining within 0.5% of its January 26 record high. The Nasdaq ticked higher, adding 0.1%, while the Dow shed 0.2%.
Sector movement was relatively modest, as no group advanced or declined more than 0.8%. The financials (+0.3%) and technology (+0.3%) spaces were among the top performers, using their influence to balance losses elsewhere. The two groups are heavily-weighted, representing around 40% of the broader market combined.
On the flip side, the energy (-0.8%) and consumer staples (-0.8%) sectors finished at the back of the pack. The energy sector declined with crude prices after the EIA's weekly crude inventory report showed a smaller-than-expected draw of 1.4 million barrels. WTI crude futures dropped 3.2% to $66.94/bbl, a six-week low.
In earnings news, Walt Disney (DIS 113.98, -2.58) lost 2.2% after missing bottom-line estimates; CVS Health (CVS 68.17, +2.72) rallied 4.2% after beating profit estimates and raising the low end of its guidance for FY18; and Snap (SNAP 12.23, -0.89) dropped 6.8% after reporting a decline in daily active users.
Away from equities, U.S. Treasuries ended Wednesday flat, with the yield on the benchmark 10-yr note finishing unchanged at 2.97%. The U.S. Dollar Index ticked down 0.1% to 94.92, and the CBOE Volatility Index slid 1.8% to 10.73, hitting a fresh seven-month low.
On the data front, Wednesday's lone economic report, the weekly MBA Mortgage Applications Index, showed a decrease of 3.0%. Looking ahead, investors will receive the Producer Price Index for July, the weekly Initial Claims report, and the Wholesale Inventories report for June on Thursday.
Nasdaq Composite +14.3% YTD
Russell 2000 +9.9% YTD
S&P 500 +6.9% YTD
Dow Jones Industrial Average +3.5% YTD
Record Territory In Sight Following Fourth Straight Victory
07-Aug-18 16:20 ET
Dow +126.73 at 25628.91, Nasdaq +23.99 at 7883.67, S&P +8.05 at 2858.19
https://www.briefing.com/investor/markets/stock-market-update/2018/8/7/record-territory-in-sight-following-fourth-straight-victory.htm
[BRIEFING.COM] Stocks advanced for a fourth straight session on Tuesday, with the S&P 500 climbing 0.3% to 2858. The benchmark index is now within 0.5% of its January 26 record high. The tech-heavy Nasdaq Composite climbed 0.3% as well, and the blue-chip Dow Jones Industrial Average rose 0.5%.
The S&P 500 largely trended sideways from start to finish, keeping between +0.2% and +0.5%. Gains were broad-based, with seven of eleven sectors finishing in the green. Economically-sensitive groups led the way, with energy (+0.7%) and industrials (+0.7%) being the top performers.
The top-weighted information technology sector got off to a good start, but fell back in line with the broader market as Apple (AAPL 207.11, -1.96, -0.9%) dropped for the first time since its July 31 earnings release -- which fueled a wave of buying, helping to push the company's market cap above $1 trillion.
Four sectors finished in negative territory, with consumer staples (-0.6%) being the weakest performer. Dean Foods (DF 8.04, -1.43, -15.1%) weighed on the space after its above-consensus earnings and revenues were overshadowed by disappointing guidance for FY18.
In other earnings news, Marriott (MAR 124.43, -4.85, -3.8%), Weight Watchers (WTW 78.53, -13.68, -14.8%), and Zillow (ZG 49.40, -9.60, -16.3%) all tumbled after reporting their quarterly results, while Emerson (EMR 74.66, +3.04, +4.2%), Etsy (ETSY 43.84, +1.41, +3.3%), and Mosaic (MOS 31.70, +1.60, +5.3%) advanced.
Tesla (TSLA 379.57, +37.58, +11.0%) became the focal point of an otherwise quiet session after Elon Musk tweeted that he's considering taking the company private for $420/share and has already secured funding to do so. Shares were halted after an initial spike, but added to their gains when trading resumed, hitting an 11-month high.
Away from equities, Treasuries tumbled on Tuesday, sending yields higher across the curve, with the benchmark 10-yr yield jumping three basis points to 2.97%. Meanwhile, the U.S. Dollar Index slipped from a 13-month high, dropping 0.2% to 95.00, and the CBOE Volatility Index slid 3.1% to 10.92 -- its lowest level since January.
Reviewing Tuesday's economic data, which was limited to the June Consumer Credit report and the June Job Openings and Labor Turnover Survey:
The Consumer Credit report for June showed an increase of $10.2 billion (Briefing.com consensus $15.5 billion). May credit growth was revised to $24.3 billion from $24.6 billion.
The June Job Openings and Labor Turnover Survey showed that job openings increased to 6.662 million from a revised 6.659 million (from 6.638 million) in May.
Looking ahead, Wednesday's lone economic report, the weekly MBA Mortgage Applications Index, will cross the wires at 7:00 AM ET.
Nasdaq Composite +14.2% YTD
Russell 2000 +10.0% YTD
S&P 500 +6.9% YTD
Dow Jones Industrial Average +3.7% YTD
Stocks End Quiet Monday Session Modestly Higher
06-Aug-18 16:30 ET
Dow +39.60 at 25502.18, Nasdaq +47.66 at 7859.68, S&P +10.05 at 2850.14
https://www.briefing.com/investor/markets/stock-market-update/2018/8/6/stocks-end-quiet-monday-session-modestly-higher.htm
[BRIEFING.COM] Stocks drifted higher on Monday, underpinned by a halfhearted effort from the bulls, who looked a little tired following last week's advance -- the fifth straight weekly advance for the S&P 500. All three major averages finished in the green, with the S&P 500 adding 0.4%, the tech-heavy Nasdaq climbing 0.6%, and the Dow ticking up 0.2%.
9 of 11 sectors advanced, with the lightly-weighted real estate (-0.2%) and telecom (-0.1%) spaces being the two laggards, but gains were modest overall. The consumer discretionary (+0.7%) and information technology (+0.6%) groups finished atop the sector standings, but no other space added more than 0.4%.
In individual stocks, T-Mobile US (TMUS 66.30, +4.75) and Sprint (S 6.18, +0.56) spiked 7.7% and 10.0%, respectively, after the NY Post reported that U.S. antitrust officials, who are currently reviewing T-Mobile's plan to buy Sprint for $26 billion, believe that three national 5G wireless providers are needed to ensure robust competition.
Meanwhile, on the earnings front, Tyson Foods (TSN 59.64, +1.89) rallied 3.3% after reporting better-than-expected earnings, but Newell Brands (NWL 22.76, -3.81) -- which owns brands like Rubbermaid, Coleman, and Sharpie -- tumbled 14.3% after reporting a 12.8% year-over-year drop in revenues.
Several FAANG names outperformed on Monday, including Facebook (FB 185.69, +7.91), Amazon (AMZN 1847.75, +24.46), and Netflix (NFLX 350.92, +7.83), which added 1.3%-4.5% apiece. Facebook was particularly strong, but still remains about 14.6% below the record high it hit on July 25 ahead of its disappointing Q2 earnings release.
Looking at other markets, U.S. Treasuries moved mostly higher, pushing the yield on the benchmark 10-yr note down two basis points to 2.94%. Meanwhile, the U.S. Dollar Index climbed 0.2% to 95.19, a 13-month high, and West Texas Intermediate crude futures advanced 0.8% to $69.03 per barrel.
On the data front, investors did not receive any reports on Monday. However, looking ahead to Tuesday, the June Job Openings and Labor Turnover Survey will be released at 10:00 AM ET, and the June Consumer Credit report will cross the wires at 3:00 PM ET.
Nasdaq Composite +13.9% YTD
Russell 2000 +9.7% YTD
S&P 500 +6.6% YTD
Dow Jones Industrial Average +3.2% YTD
InvestmentHouse - FOMC Remains Hawkish (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
- The past week had all the key players present: Fed, Trade, Economy, and of
course, the market indices.
- FOMC remains hawkish, even more so, and that is THE market driver now
regardless of the trade issues.
- Techs enjoyed a recovery thanks to some salvaging earnings, but once that
driver is through, the money rotation likely continues.
The past week showed some of all the market sides. The week started
continuing the prior week selling, some sharp selling at that. Wednesday
saw the FOMC rate decision where the Fed was more hawkish (and with at best
two rate hikes before inversion, it is cutting it close) but not so much the
market dropped, instead just holding steady. Thursday the hammer fell with
Trump wanting to increase tariffs from 10% to 25% on the first $200B in
tariffs on Chinese goods. Stocks flopped -- then surged back up intraday.
142 points low to close on the Dow? No! On NASDAQ. The trade issues were
no match for AAPL's earnings as the company's line of cash cow products
produces tons of income even if the company can no longer come up with
innovations.
Friday was jobs Friday and it was a clinker of sorts, though revisions to
the two prior months more than made up the difference. 157K jobs versus the
190K expected (248K June, from 213K). Disappointing, but then again,
Toys-R-Us finally closed its operations in its slow, Ivan Ilyich-like death.
That bled 32,000 jobs from the report. Added back in and, voila, 189K, just
1K off expectations. Tomato, tomato. Everything else status quo as well.
Wages +2.7% year/year. Participation 62.9%. 57K more of those
manufacturing jobs that would never come back came back. 3 month average is
224K per month.
What did stocks do? Not much. After AAPL's big day, NASDAQ was quiet
though TTWO came back to life -- for most of the session. SP500 and DJ30
added some decent 0.5%ish gains. The midcaps were up modestly, RUTX lost a
half percent. Kind of status quo in terms of the action of late outside of
that trade dispute ramp up.
SP500 13.13, 0.46%
NASDAQ 9.32, 0.12%
DJ30 135.42, 0.54%
SP400 0.26%
RUTX -0.52%
SOX 0.20%
NASDAQ 100 0.32%
VOLUME: NYSE -8%, NASDAQ -4%.
ADVANCE/DECLINE: NYSE 1.4:1, NASDAQ -1.4:1. That somewhat tells the tale of
the tape.
Friday basically started a slow reversion back to the recent action that has
seen money move from growth toward the more stoic, and though I hate the
phrase, 'old economy,' stocks. Now those stocks were rattled by the midweek
renewed trade dustup, but they started their recovery Thursday and Friday.
Indeed, many are nicely poised to break higher, e.g. CMI, UTX, et al.
Financials are also rebounding. The rotation continues though it was not
violent last week.
Bigger picture, the stock indices are showing decent patterns, particularly
SP500 and DJ30 as they trek higher to find the prior all-time highs as have
the other indices. SOX remains interesting, quietly building a good pattern
with no one really watching. Very important development for the upside if
SOX can breakout higher.
That said, there is still that rotation that has taken some money from the
growth areas. Those indices are still holding near their highs, but clearly
volatility hit them as they tried to make clean breaks to new highs.
Indeed, NASDAQ broke to a new high with a nice move but was almost
immediately rebuffed, redirected, rejected. Thanks to AAPL's earnings it is
trying to bounce, but again, even that bounce shows the back and forth large
swing volatility.
Moreover, there is the Fed. Wednesday it made clear it is still hiking, and
indeed was even more hawkish, repeatedly using the word 'strong' or a
variation thereof throughout its statement. Who can forget the eloquent and
elegant wording that household spending and business investment 'grew
strongly.' Ah, sheer poetry. The Fed is hiking, and while it clearly knows
what the yield curve is because it discussed it in prior minutes, the math
is getting to the end game. Meaning: At most, the Fed has two 25BP rate
hikes before the bond yield curve totally flattens or inverts. Thus, if the
Fed has designs to keep hiking, something has got to give or else the oldest
and most reliable of economic indicators will indicate a recession coming.
That is why a few very smart people are closely watching over the next six
or so months. That is why we (and I am not saying I am in that group of
very smart people) are so concerned with the RUTX, SP400 and indeed NASDAQ
action. RUTX is very economically sensitive, and as I have noted, has the
worst pattern of the group. Maybe it is just time for small caps to no
longer lead the move. Maybe they just hit a new high, it is summer, and
they need to come back in as do most stocks this time of year. This story
won't be told in a few weeks but in several months, and so, as with others,
we watch closely and try to see where the money is going and gravitate that
direction.
That is why we have picked up positions in the SP500 and DJ30 areas and are
looking at more. Doesn't mean there are no plays in growth areas; of course
there are. The economy is still growing and so are these stocks. Unlike 4
months ago, however, now it is clear there is money moving to other areas
and some of that money is leaving other areas. So, as always, we watch for
sectors and groups showing good accumulation patterns, patterns that tell
you money is moving in. Oh, and of course, watching for those showing
distribution patterns, i.e. money moving out.
Of course, as we watch where money is migrating to and from, we look for
plays to take advantage of those. Right now the macro picture is as stated
above: FOMC is in the background but dominating. That is seen in the
weakness in small caps and to a lesser extent the midcaps. Trade plays a
role as you see in the industrial side hiccups when trade hits the
headlines, BUT the migration of money continues afterward. After NASDAQ
earnings from the big names have emptied their ammo, that migration likely
continues. Then it is up to the Fed whether it goes too far and throws
everything into recession with too many hikes, inverting the curve and
making the same mistakes as Greenspan and indeed all Feds before it.
THE MARKET
CHARTS
NASDAQ: NASDAQ started the week testing the 50 day MA in the middle of its
7+ month uptrend channel. It fell from the new high in very volatile action
as big NASDAQ FAANG names missed earnings. GOOG tried to salvage things
with its good results, and NASDAQ gapped higher only to reverse and then
sell off into Monday. AAPL is now trying to do the repair work, and
Thursday it was working. Friday was a pause session. A test of good
support in a good uptrend channel. A good initial bounce from that support.
Now, will other stocks step in to fill the NFLX, cloud void, e.g. MSFT and
company? That is the question.
SP500: SP500 got the shakes as well late the prior week and into Monday,
but it held the 20 day EMA near the top of its channel, then Thursday pulled
that intraday low to high reversal. Friday it added some more but on low
volume. SP500 is still fighting to find a new high over the January peak,
another 33ish points away. When it gets there, when it catches the car (as
a dog, right?), what will it do? Volatility like NASDAQ and the growth
sectors, or just power on through? Don't forget, even if it is getting new
money or money from the small caps, it too is about to hit the same new
highs.
DJ30: The Dow struggled more on the trade issues than SP500, but it handled
them well enough. Gapped lower Thursday, sold to the 20 day EMA for the
first visit there in four weeks, but recovered intraday to hold the 10 day
EMA. Friday DJ30 bounced from there. No volume, but it too is in its
uptrend channel that is just part of the larger cup base formed off the
January all-time high. DJ30 has over 1100 points to gain to meet that high,
and that, given all the trouble the other indices have had when they hit new
highs, is quite comforting for more upside.
SP400: Continued the Thursday move off the 50 day MA after a week at that
level. Modest Friday gain as SP400 encroaches on the highs from the past
two months. Held the 50 day MA and bounced again, but can it breakout to a
real new high this time around after showing so much indecision at the new
highs for three weeks? Hmm.
RUTX: After a major selloff the prior Friday, RUTX was the black sheep this
Friday as it posted a sizable loss. Bounced Tuesday to Thursday, managing
to recapture the 50 day MA's, stalling Friday when trying to move past the
10 and 20 day EMA. Perhaps it will stretch the pattern laterally into a
pennant/triangle; you can see that trying to develop, and that would be a
positive. For now, still cautious to skeptical about RUTX' prospects.
SOX: The quiet index that is working on a 6 month triangle, holding at the
50 day MA's the past week and a bit more. I hear no one talking about the
group; that is how quiet they are. That is a good indication, i.e. when no
one is bad mouthing, when no one is singing their praises. Just forgotten
until they make a break. Triangles are basically neutral. They can produce
big upside, they can produce big downside. They are a pattern to watch,
however, because when they do break, the tend to break big. In addition,
this is SOX. SOX is often a harbinger for the rest of the market. Is it a
surprise the indices have been stuck for the past 6 weeks as SOX has slid
laterally in its base?
LEADERSHIP
FAANG: AAPL up modestly Friday after its big 1-2 WED/THURS surge. FB was
up the last two days of the week, but it is still below the late July
post-gap highs and the 200 day SMA. Looks miserable and not really a
pattern to play yet. AMZN is solid enough, bouncing nicely Thursday on some
decent trade. The Friday test toward the 10 day EMA may morph into a good
entry for us this week. NFLX recovered Tuesday to Friday, but showing a
doji below the 10 day EMA. If it fails here, NFLX is entering a downtrend.
GOOG is not bad, similar to AMZN, working laterally over the 20 day MA after
filling the earnings gap. We have a play on it if it starts back up.
Software: Showed improvement on the week only to mostly louse it up after
Friday. TTWO helped out, gapping upside on earnings. It managed to fade 6
points off the high, however, gapping past the prior high but unable to hold
that gap intraday and make it a breakaway gap. UIS continued to perform on
through Friday with a solid week after earnings. VMW is back, looking good
in its pattern, just needs to deliver. DATA looked good until Friday when
it flopped back to the 50 day MA. NOW struggled to recover the 50 day MA's.
MSFT looks quite good, one of the bright spots in what was a really solid
leadership group.
Financial: Rebounding after the Tuesday/Wednesday issues. JPM, BAC
bouncing, C looking like a good entry. GS trying to hold the test together
at the 50 day MA. V recovering off the 50 day MA with some good volume then
so-so volume.
Industrial: Still some great setups, e.g. CMI, UTX, IR. MMM starting to
recover, SWK and HON trying to bounce off the 10 day EMA Rocked by the
renewed trade issues, now they need to show they can resume back upside.
Drugs: Big names still moving. PFE is has a rocket strapped to it, and LLY
is similar. Still waiting for BMY to make its move. JNJ moved through the
200 day MA but flipped intraday. Still solid. AGN gapped upside Friday but
light trade. Providing SP500 plenty of support.
Chips: Some very interesting patterns setting up. AMD, XLNX we have plays
on, ready to enter. AMAT may be turning the corner. QCOM strong. LSCC in
a nice pennant. MU may try something as it too is forming a triangle off
that solid May rally.
Retail: Suddenly some key names turn choppy, e.g. M, KORS. TJX, COST, ROST
still holding up well enough, however.
MARKET STATS
DJ30
Stats: +136.42 points (+0.54%) to close at 25462.58
Nasdaq
Stats: +9.33 points (+0.12%) to close at 7812.01
Volume: 2.03B (-3.79%)
Up Volume: 913.67M (-446.33M)
Down Volume: 1.1B (+389.39M)
A/D and Hi/Lo: Decliners led 1.41 to 1
Previous Session: Advancers led 1.57 to 1
New Highs: 95 (-1)
New Lows: 73 (-27)
S&P
Stats: +13.13 points (+0.46%) to close at 2840.35
NYSE Volume: 702.683M (-8.30%)
A/D and Hi/Lo: Advancers led 1.43 to 1
Previous Session: Advancers led 1.46 to 1
New Highs: 113 (+23)
New Lows: 31 (-32)
SENTIMENT
VIX: 11.64; -0.55
VXN: 15.81; -0.50
VXO: 10.14; -0.72
Put/Call Ratio (CBOE): 0.90; -0.07
Bulls and Bears:
A bit of market volatility boosted bears to their highest in 8 weeks. Bulls
held on to their recent levels, unwilling to leave the 50 range the past 8
weeks. That leaves bulls well off the highs, but still near the top of the
historic range that leads to pullbacks.
Bulls: 54.5 versus 54.9
Bears: 18.8 versus 18.6
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 54.5 versus 54.9
54.9 versus 55.3 versus 52.4 versus 47.1 versus 47.6 versus 52.0 versus 55.5
versus 52.9 versus 50.0 versus 49.1 versus 46.6 versus 43.1 versus 43.6
versus 48.0 versus 43.6 versus 42.2 versus 49.5 versus 55.5 versus 54.9
versus 48.6 versus 48.1 versus 48.5 versus 41.9 versus 54.4 versus 66.00
versus 64.7 versus 66.7 versus 64.4 versus 61.9 versus 64.1 versus 64.2
versus 62.3 versus 61.5 versus 63.5 versus 64.4 versus 63.5 versus 62.3
versus 60.6 versus 60.4 versus 57.5 versus 54.3 versus 50.5 versus 47.1
Bears: 18.8 versus 18.6
18.6 versus 18.5 versus 18.5 versus 18.6 versus 18.4 versus 17.6 versus 17.8
versus 17.7 versus 19.2 versus 19.2 versus 19.4 versus 19.4 versus 20.6
versus 20.8 versus 19.6 versus 19.8 versus 18.6 versus 17.5 versus 16.8
versus 15.7 versus 15.5 versus 14.4 versus 14.6 versus 14.4 versus 15.5
versus 12.6 versus 12.8 versus 12.7 versus 13.5 versus 15.2 versus 15.1
versus 15.2 versus 15.1 versus 15.1 versus 15.4 versus 15.4 versus 14.4
versus 14.4 versus 15.1 versus 15.2 versus 15.1 versus 17.0 versus 17.1
versus 19.0 versus 20.2
OTHER MARKETS
Bonds: 2.95% versus 2.986%. Bonds sold Wednesday after testing the 10 day
EMA Tuesday. Looked as it should be with the Fed hiking rates as the 10
year moved over 3% on the Wednesday close. Then they recovered into Friday,
closing near the 10 day EMA. A failure here means a downtrend is
establishing and consummates a head and shoulders formed from late May.
Again, that is as it should be. Yields should rise, need to rise, to prevent
a Fed induced inversion.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.986%
versus 3.005% versus 2.962% versus 2.975% versus 2.958% versus 2.982% versus
2.965% versus 2.952% versus 2.962% versus 2.895% versus 2.838% versus 2.88%
versus 2.86% versus 2.856% versus 2.829% versus 2.849% versus 2.853% versus
2.867% versus 2.867% versus 2.824% versus 2.835% versus 2.833% versus 2.871%
versus 2.86% versus 2.84% versus 2.833% versus 2.877% versus 2.882% versus
2.895% versus 2.899% versus 2.937% versus 2.889% versus 2.915% versus 2.922%
versus 2.933% versus 2.977% versus 2.963% versus 2.952% versus 2.948% versus
2.928% versus 2.974% versus 2.935% versus 2.944% versus 2.902% versus 2.86%
versus 2.857% versus 2.79% versus 2.931% versus 2.992% versus 2.982% versus
3.063% versus 3.056% versus 3.06% versus 3.123% versus 3.096% versus 3.069%
EUR/USD: 1.15683 versus 1.15864. Faded all week to the bottom of the 5
week range. Still an overall basing process that looks as if it will break
higher, but wants more information about the trade issues with the EU,
China.
Historical: 1.15864 versus 1.1662 versus 1.1689 versus 1.17074 versus
1.16558 versus 1.17324 versus 1.17385 versus 1.16846 versus 1.16989 versus
1.17214 versus 1.1651 versus 1.16514 versus 1.16603 versus 1.1709 versus
1.1685 versus 1.16608 versus 1.1672 versus 1.17288 versus 1.17578 versus
1.17439 versus 1.1689 versus 1.1665 versus 1.16388 versus 1.1638 versus
1.15634 versus 1.15602 versus 1.16517 versus 1.17031 versus 1.16572 versus
1.16072 versus 1.15762 versus 1.1586 versus 1.15746 versus 1.2624 versus
1.16245 versus 1.15678 versus 1.17973 versus 1.17454 versus 1.17761 versus
1.17737 versus 1.17987 versus 1.1774 versus 1.1762 versus 1.1697 versus
1.166 versus 1.16993
USD/JPY: 111.254 versus 111.621. Bounced off the 50 day MA Tuesday, then
faded back almost to the 50 day MA as of Friday. Trying to breakaway, just
not able to do it yet.
Historical: 111.621 versus 111.628 versus 111.744 versus 110.990 versus
110.995 versus 110.791 versus 110.871 versus 111.235 versus 111.084 versus
111.451 versus 112.732 versus 112.783 versus 112.896 versus 112.337 versus
112.631 versus 112.093 versus 110.911 versus 110.973 versus 110.474 versus
110.666 versus 110.40 versus 110.854 versus 110.687 versus 110.523 versus
110.223 versus 110.097 versus 109.678 versus 109.980 versus 109.895 versus
110.376 versus 110.03 versus 109.783 versus 110.668 versus 110.578 versus
110.247 versus 110.381 versus 110.314 versus 109.466 versus 109.705 versus
110.164 versus 109.878 versus 109.90 versus 109.53 versus 108.767
Oil: 68.49, -0.47. Broke over the 50 day MA to start the week, immediately
gave it up and floundered around to close the week. Massive weakness after
hitting $75.00/bbl, and the pattern the past three months is now bearish
with a potential head and shoulders forming.
Gold: 1223.20, +3.10. Now working laterally the past three weeks, but
still below the 10 day EMA as that nearest of resistance is keeping it in
check. A break lower from here confirms the downtrend.
Stocks Climb on Jobs Report Friday, Extending Weekly Gains
03-Aug-18 16:25 ET
Dow +136.42 at 25462.58, Nasdaq +9.33 at 7812.02, S&P +13.13 at 2840.09
https://www.briefing.com/investor/markets/stock-market-update/2018/8/3/stocks-climb-on-jobs-report-friday-extending-weekly-gains.htm
[BRIEFING.COM] Stocks added to their weekly gains on Friday as investors took the July Employment Situation report in stride, pushing the S&P 500 higher by 0.5%. The Dow Jones Industrial Average advanced 0.5% as well, and the tech-heavy Nasdaq ticked up 0.1%. Small caps struggled though, sending the Russell 2000 lower by 0.5%.
The monthly jobs report showed the economy added 157K nonfarm payrolls last month, less than the 190K that the Briefing.com consensus was expecting. However, the June increase was upwardly revised to 248K from 213K, helping to offset the disappointing headline number for July. Meanwhile, average hourly earnings increase 0.3% as expected, and the unemployment rate ticked down to 3.9%.
In short, the July Employment Situation report was essentially the same 'Goldilocks' report that the market cheered in June when accounting for the revisions and the fact that the year-over-year increase in average hourly earnings held steady at 2.7%. Equity futures slipped following the release, but the reaction was pretty mild overall.
The S&P 500 opened the session a tick higher and trended sideways for much of the morning before climbing to new highs in the afternoon. Countercyclical sectors, which are generally seen as less risky, led the charge, with consumer staples (+1.2%) closing near the top of the sector standings, helped by Kraft Heinz (KHC 64.48, +5.08, +8.6%), which rallied after beating both top and bottom line estimates.
In other earnings news, CBS (CBS 53.16, +0.44, +0.8%), Take-Two (TTWO 123.41, +10.17), DISH Network (DISH 34.20, +4.34, +14.5%), and GoPro (GPRO 7.05, +1.06, +17.7%) rallied after their releases, while Activision Blizzard (ATVI 71.32, -2.74, -3.7%) and Shake Shack (SHAK 56.34, -7.60, -11.9%) sold off.
The top-weighted technology sector held the broader market back in early action but eventually picked up the pace, closing higher by 0.3%. Energy was the only sector to finish Friday in negative territory, losing 0.5% and extending its weekly loss to 1.8% -- the worst among the 11 sectors.
Looking at other markets, U.S. Treasuries climbed on Friday, sending yields lower across the curve; the benchmark 10-yr yield dropped three basis points to 2.95%. Meanwhile, West Texas Intermediate crude futures slid 0.8% to $68.48 per barrel, and the U.S. Dollar Index finished flat at 95.00, just below a 13-month high.
Reviewing Friday's economic data, which included the Employment Situation report for July, the June Trade Balance, and the July ISM Services Index:
July nonfarm payrolls increased by 157,000 while the Briefing.com consensus expected an increase of 190,000. The prior month's increase was revised to 248,000 from 213,000. Nonfarm private payrolls rose by 170,000 while the Briefing.com consensus expected an increase of 187,000. The previous month's increase was revised to 234,000 from 202,000. Average hourly earnings increased 0.3% (Briefing.com consensus +0.3%), while the previous month's increase was left unrevised at 0.2%. The average workweek was reported at 34.5 (Briefing.com consensus 34.5), and the unemployment rate slipped to 3.9% from 4.0% (Briefing.com consensus 3.9%).
The key takeaway from the Employment Situation Report for July is that it is essentially the same Goldilocks report the market cheered in June when accounting for the upward revisions to nonfarm payrolls in May and June and the fact that the year-over-year increase in average hourly earnings held steady at 2.7%.
The June trade balance report showed a deficit of $46.3 billion (Briefing.com consensus -$45.6 billion). The May deficit was revised to $43.2 billion from $43.1 billion.
The key takeaway from the report comes in the recognition that the year-to-date goods and services deficit is up $19.6 billion, or 7.2%, from the same period in 2017 when the trigger on tariffs had yet to be pulled.
The ISM Services Index for July ticked down to 55.7 (Briefing.com consensus 58.5) from an unrevised reading of 59.1 in June.
The key takeaway from the report is that it is a July number, and considering the size of the non-manufacturing sector, a cooling off there could feed expectations for a cooling off in third quarter real GDP growth.
Looking ahead, investors will not receive any notable economic data on Monday.
Nasdaq Composite +13.2% YTD
Russell 2000 +9.0% YTD
S&P 500 +6.2% YTD
Dow Jones Industrial Average +3.0% YTD
Week In Review: Apple Becomes First $1 Trillion Company
Stocks climbed this week as investors digested the Fed's latest policy directive and Apple's (AAPL) quarterly earnings report, which helped boost the company's market cap above the unprecedented $1 trillion mark. The S&P 500 advanced 0.8%, and the tech-heavy Nasdaq rose 1.0%. The Dow lagged though, adding just 0.1%.
The Fed left interest rates unchanged as expected on Wednesday, keeping its target range at 1.75% to 2.00%, and characterized the economy as strong, signaling that the central bank is still on track to raise rates two more times this year. The next rate hike will likely come in September, with the CME FedWatch Tool placing the chances at 93.6%.
Overseas, the Bank of Japan and the Bank of England also held policy meetings this week. The BoJ decided to leave its ultra-loose monetary policy intact, but the BoE voted to raise rates for just the second time in a decade and surprised some by saying it anticipates raising rates further despite the looming uncertainty over Brexit.
In Washington, President Trump ordered his top trade representative to consider increasing proposed tariffs on $200 billion worth of Chinese goods to 25% from 10%. Beijing threatened to retaliate with tariffs on about $60 billion worth of American goods. The news didn't have much impact on U.S. markets, but China's Shanghai Composite lost 4.6% for the week, retesting a nearly two-and-a-half year low.
On the earnings front, Apple gobbled up all the attention after releasing its fiscal Q3 results on Tuesday evening. The world's largest tech company beat earnings and revenue estimates and issued positive guidance for Q4, helping to restore faith in FAANG names after a disappointing report from Facebook (FB) last week.
In response, Apple shares rallied 5.9% on Wednesday and then another 2.9% on Thursday, making Apple the first ever company with a market cap of $1 trillion.
Tesla (TSLA) shares also soared, spiking 16.2% on Thursday, after above-consensus revenues, reaffirmed guidance, and an apology from CEO Elon Musk for last quarter's abrasive earnings call helped the electric automaker overcome a larger-than-expected earnings per share loss of $3.06.
As for economic data, the July Employment Situation report was released on Friday, showing a below-consensus increase in nonfarm payrolls (157K actual vs 190K Briefing.com consensus). However, the June increase was upwardly revised to 248K from 213K, helping to offset the disappointing headline figure. Average hourly earnings increased 0.3%, as expected, and the unemployment rate ticked down to 3.9%.
The key takeaway from the report is, when accounting for the revisions and the fact that the year-over-year increase in average hourly earnings held steady at 2.7%, it's essentially the same 'Goldilocks' report that the market cheered last month.
S&P Climbs As Apple Becomes First $1 Trillion Company
02-Aug-18 16:25 ET
Dow -7.66 at 25326.16, Nasdaq +95.40 at 7802.69, S&P +13.86 at 2826.96
https://www.briefing.com/investor/markets/stock-market-update/2018/8/2/s-and-p-climbs-as-apple-becomes-first-1-trillion-company.htm
[BRIEFING.COM] The stock market stumbled out of the gate on Thursday due to concerns over U.S.-China trade relations, but found its footing as Apple (AAPL 207.39, +5.89, +2.9%) extended its post-earnings rally, becoming the first company ever to reach a market cap of $1 trillion. The S&P 500 finished higher by 0.5%, erasing an opening loss of around 0.6%.
Meanwhile, the tech-heavy Nasdaq Composite rallied 1.2%, coming within 1.7% of its July 25 record high; the blue-chip Dow Jones Industrial Average finished flat, weighed down by materials giant DowDuPont (DWDP 66.44, -1.52, -2.2%), which sold off despite reporting upbeat earnings; and the small-cap Russell 2000 added 0.8%.
In other notable earnings news, electric automaker Tesla (TSLA 349.54, +48.70, +16.2%) soared after above-consensus revenues, reaffirmed guidance, and an apology from CEO Elon Musk for last quarter's abrasive earnings call helped overshadow the company's larger-than-expected earnings per share loss of $3.06.
The U.S. equity market was an outlier on Thursday, outdoing Asian and European markets, which finished solidly lower. The weakness overseas -- and in early trading on Wall Street -- was attributed to the White House's confirmation that it's considering raising proposed tariffs on $200 billion worth of Chinese goods to 25% from 10%.
Separately, in the UK, the Bank of England hiked rates for just the second time in a decade and surprised some by saying it anticipates raising rates further despite the looming uncertainty over Brexit. The British pound dropped 0.8% against the U.S. Dollar following the decision, retesting an 11-month low.
Back on Wall Street, seven of eleven sectors finished in the green, led by information technology (+1.4%) and consumer staples (+1.1%). On the downside, the materials (-0.7%), energy (-0.5%), and real estate (-0.5%) spaces closed at the bottom of the standings, and the heavily-weighted financial space (unch) was another notable laggard.
The S&P 500 once again found technical support at the 2800 level, which provided support on numerous occasions throughout the month of July. The S&P 500 is back in positive territory for the week (+0.3%) going into Friday's session, which will feature the release of the potentially market-moving July jobs report.
Reviewing Thursday's economic data, which was limited to weekly Initial Claims and June Factory Orders:
The latest weekly initial jobless claims count totaled 218,000, while the Briefing.com consensus expected a reading of 220,000. Today's tally was above the unrevised prior week count of 217,000. As for continuing claims, they declined to 1.724 million from a revised count of 1.747 million (from 1.745 million).
The key takeaway from the report is that it was little changed, underscoring for market participants that the low level of initial claims activity fits the framework of a tight labor market.
The Factory Orders report for June showed an increase of 0.7% (Briefing.com consensus +0.6%), and the May reading was left unrevised at +0.4%.
The key takeaway from the report is that shipments of nondefense capital goods excluding aircraft were weaker than reported in the Advance Durable Goods Orders report. That understanding could lead to a softening in forecasts for the second estimate of Q2 GDP.
On Friday, investors will receive the Employment Situation report for July at 8:30 AM ET, which the Briefing.com consensus expects will show the addition of 190,000 nonfarm payrolls. The June Trade Balance will also be released at 8:30 AM ET, while the ISM Services Index for July will cross the wires at 10:00 AM ET.
Nasdaq Composite +13.0% YTD
Russell 2000 +9.6% YTD
S&P 500 +5.8% YTD
Dow Jones Industrial Average +2.5% YTD