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Apple Soars On Earnings; Fed Leaves Rates Unchanged
01-Aug-18 16:20 ET
Dow -81.37 at 25333.82, Nasdaq +35.50 at 7707.29, S&P -2.93 at 2813.10
https://www.briefing.com/investor/markets/stock-market-update/2018/8/1/apple-soars-on-earnings-fed-leaves-rates-unchanged.htm
[BRIEFING.COM] Equities had a mixed outing on Wednesday as investors took in the latest batch of corporate earnings and digested the Fed's latest policy directive. The S&P 500 and the Dow Jones Industrial Average finished with modest losses, shedding 0.1% and 0.3%, respectively, while the tech-heavy Nasdaq Composite climbed 0.5%.
The Fed left interest rates unchanged as expected, 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 91.2%.
On the corporate front, Apple (AAPL 201.50, +11.21) 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 171.65, -0.93) last week.
Apple shares rallied 5.9%, hitting a new record high and pushing the company's market cap to $990 billion -- within striking distance of the unprecedented $1 trillion mark. Underpinned by Apple, the information technology sector finished atop the sector standings, adding 1.0%. Only two other groups -- real estate (+0.7%) and health care (+0.1%) -- finished in the green.
The financial sector (unch) got off to a good start, rising as much as 1.1%, but tumbled back to its flat line following news that Fidelity will be offering new index funds with zero fees, creating concerns over the future profitability of competitors like BlackRock (BLK 479.45, -23.31, -4.6%) and T. Row Price (TROW 117.27, -1.81, -1.5%).
Meanwhile, the trade-sensitive industrial sector (-1.3%) slid following reports that the White House is considering upping planned tariffs on $200 billion worth of Chinese goods to 25% from 10%, and the energy sector (-1.3%) tumbled amid a drop in oil prices; WTI crude declined 1.5% to $67.68/bbl, a six-week low, after the weekly EIA inventory report showed an unexpected build of 3.8 million barrels.
In other news, Cigna (CI 182.93, +3.51) climbed 2.0% and Express Scripts (ESRX 74.44, -5.02) lost 6.3% following reports that activist investor Carl Icahn has built a sizable stake in Cigna and plans to vote against its planned purchase of Express Scripts. Also of note, Pandora Media (P 7.73, +0.99) spiked 14.7% on earnings.
Elsewhere, Treasuries sold off on Wednesday, even before the Fed's rate decision, with longer-dated issues showing relative weakness. The yield on the benchmark 10-yr Treasury note climbed four basis points to 3.00%, and the 2-yr yield ticked up one basis point to 2.68%. Yields move inversely to prices.
Reviewing Wednesday's economic data, which included the ADP Employment Change report for July, the Construction Spending report for June, the ISM Index for July, and the weekly MBA Mortgage Applications Index:
The ADP National Employment Report showed an increase of 219,000 in July (Briefing.com consensus 175,000), and the June reading was revised to 181,000 from 177,000.
The ADP reading is seen as a prelude to the BLS's nonfarm payrolls figure (Briefing.com consensus 190,000), which will be released on Friday.
The ISM Index for July decreased to 58.1 from an unrevised reading of 60.2 in June, while the Briefing.com consensus expected a reading of 59.4.
The key takeaway from the report is that manufacturing demand is strong, evidenced by the 15th straight month the New Orders Index has been 60% or higher.
Construction spending declined 1.1% in June (Briefing.com consensus +0.2%), and the May reading was revised to +1.3% from +0.4%.
The key takeaway from the report is that the upward revision to spending in May mitigated most of the headline disappointment for June, which implies the June downturn is not as bad as it appears at first blush.
The weekly MBA Mortgage Applications Index decreased 2.6% to follows last week's downtick of 0.2%.
Looking ahead, investors will receive the weekly Initial Claims report and the Factory Orders report for June on Thursday.
Nasdaq Composite +11.6% YTD
Russell 2000 +8.7% YTD
S&P 500 +5.2% YTD
Dow Jones Industrial Average +2.5% YTD
Stocks End Losing Streak Ahead of Apple Earnings, Fed Decision
31-Jul-18 16:20 ET
Dow +108.36 at 25415.19, Nasdaq +41.78 at 7671.79, S&P +13.69 at 2816.03
https://www.briefing.com/investor/markets/stock-market-update/2018/7/31/stocks-end-losing-streak-ahead-of-apple-earnings-fed-decision.htm
[BRIEFING.COM] Stocks broke a three-session losing streak on Wednesday, with industrial shares leading the charge. The major averages extended modest opening gains throughout the morning, but slipped a bit in the final stretch, closing a step below their session highs. The S&P 500 added 0.5%; the Dow climbed 0.4%; the Nasdaq rose 0.6%; and the small-cap Russell 2000 jumped 1.1%.
Reports that the U.S. and China are trying to restart trade talks helped underpin the broader market, especially the trade-sensitive industrial sector (+2.1%), which closed atop the sector standings. Investors were also paying close attention to the information technology sector (+0.3%), which was a bit erratic after tumbling for three sessions in a row, trading between -0.4% and +1.0%.
Apple's (AAPL 190.29, +0.38) earnings, which were scheduled to be released after the close, also likely contributed to tech's fickle behavior. Investors were hoping that Apple, which is the largest company in the world by market cap, can get the tech sector back on track following last week's disappointing results and guidance from social media giant Facebook (FB 172.58, +1.52).
In total, eight of eleven sectors finished in the green. The health care group (+1.0%) was a notable outperformer, helped by Pfizer (PFE 39.93, +1.34), which rallied 3.5% after reporting better-than-expected earnings and guidance. Meanwhile, in the consumer staples sector (+0.5%), Procter & Gamble (PG 80.88, +0.68) finished higher by 0.9% after also beating bottom-line estimates.
On the downside, the financial sector (-0.7%) struggled on Tuesday, cutting its July gain to 5.2% -- still much better than the S&P 500 (+3.6%). The energy sector (-0.3%) dropped amid a decline in crude prices -- WTI crude -2.0% to $68.70/bbl -- and the lightly-weighted telecom services group (-0.8%) also lagged.
In other news, Chipotle Mexican Grill (CMG 433.66, -31.81) dropped 6.8% after reports of another food-borne illness incident in Powell, Ohio; the Bank of Japan decided to leave its ultra-loose monetary policy intact; and the Fed kicked off a two-day policy meeting in Washington.
Reviewing Tuesday's big batch of economic data, which included Personal Income, Personal Spending, and PCE Prices for June, the Employment Cost Index for Q2, the Chicago PMI for July, the Conference Board's Consumer Confidence Index for July, the S&P Case-Shiller Home Price Index for May:
Personal income climbed 0.4% in June (Briefing.com consensus +0.4%) following an unrevised increase of 0.4% in May. Meanwhile, personal spending rose 0.4% in June (Briefing.com consensus +0.5%) following a revised increase of 0.5% in May (from 0.2%). The PCE Price Index rose 0.1% in June (Briefing.com consensus +0.1%), and the core PCE Price Index, which excludes food and energy, increased 0.1% (Briefing.com consensus +0.2%). Year-over-year, the core PCE Price Index is up 1.9%, unchanged from the last reading.
The key takeaway from the Personal Income and Spending Report for June is that it didn't produce any real surprises. That means it is the type of report that should keep the Federal Reserve inclined to think that it can continue to raise interest rates.
The second quarter Employment Cost Index rose 0.6%, while the Briefing.com consensus expected an increase of 0.7%.
The key takeaway from the report is that wages and salaries, and benefit costs, are trending higher. That will support an inflation narrative and the thinking that the Federal Reserve will remain inclined to keep gradually raising interest rates.
The Chicago PMI for July hit 65.5 (Briefing.com consensus 62.0), up from an unrevised 64.1 in June.
The key takeaway from the report is the understanding that the Prices Paid Indicator hit its highest level (82.1) since September 2008, which is indicative of pipeline inflation.
The consumer confidence reading for July increased to 127.4 (Briefing.com consensus 126.6) from the prior month's revised reading of 127.1 (from 126.4).
The key takeaway from the report is the Conference Board's indication that a back-to-back decline in the Expectations Index suggests consumers do not anticipate growth accelerating.
The Case-Shiller 20-City Index increased 6.5% in May (Briefing.com consensus +6.5%), and the April increase was revised to 6.7% from 6.6%.
Looking ahead, investors will receive on Wednesday the ADP Employment Change report for July, the Construction Spending report for June, the ISM Index for July, and the weekly MBA Mortgage Applications Index. In addition, the Fed will release its latest policy directive (2:00 PM ET), and July auto sales will be released throughout the day.
Nasdaq Composite +11.1% YTD
Russell 2000 +8.8% YTD
S&P 500 +5.3% YTD
Dow Jones Industrial Average +2.8% YTD
Tech Pulls S&P Lower For Third Straight Session
30-Jul-18 16:20 ET
Dow -144.23 at 25306.83, Nasdaq -107.41 at 7630.01, S&P -16.22 at 2802.34
https://www.briefing.com/investor/markets/stock-market-update/2018/7/30/tech-pulls-s-and-p-lower-for-third-straight-session.htm
[BRIEFING.COM] Stocks dropped for a third straight session on Monday, with tech shares again pacing the retreat. Both the S&P 500 and the Dow Jones Industrial Average lost 0.6% apiece, while the tech-heavy Nasdaq Composite tumbled 1.4%. The averages opened flat, but slipped into the afternoon, settling just above session lows.
The technology sector -- which is the heaviest sector by weight, representing a quarter of the broader market -- was undoubtedly the worst-performing group on Monday, losing 1.8%. More than half of its components shed at least 1.0%, with Twitter (TWTR 31.38, -2.74) losing 8.0%, Netflix (NFLX 334.96, -20.25) dropping 5.7%, and Facebook (FB 171.06, -3.83) tumbling 2.2%.
Monday's tech tumble followed similar declines on Thursday and Friday -- which were set in motion by Facebook's 19% plunge last Thursday following disappointing earnings/guidance -- and points to continued profit taking following a strong run ahead of earnings season; the tech sector added 7.9% from July 3 to July 25.
Elsewhere, Amazon (AMZN 1779.22, -38.05, -2.1%) fell with its FAANG peers, helping to secure a loss for the consumer discretionary sector (-0.8%). The industrial sector (-0.9%) also struggled following an intraday reversal from Caterpillar (CAT 139.75, -2.81), which went from +2.8% to -2.0% despite reporting upbeat earnings and guidance.
On a positive note, the energy sector (+0.8%) advanced, helped by a rise in crude prices; WTI crude climbed 2.1% to $70.10/bbl. The lightly-weighted telecom sector (+2.0%) also had a solid performance, helped by AT&T (T 32.00, +0.92), which jumped 3.0% after being upgraded at Bank of America/Merrill Lynch. Financials (unch) and health care (+0.1%) also outperformed.
Away from equities, U.S. Treasuries finished flat to modestly lower, pushing the back end of the yield curve slightly higher; the yield on the benchmark 10-yr Treasury note climbed two basis points to 2.98%. Meanwhile, the U.S. Dollar Index dropped 0.3% to 94.16, and the CBOE Volatility Index spiked 8.8% to 14.19, a three-week high.
Reviewing Monday's economic data, which was limited to Pending Home Sales for June:
Pending Home Sales increased 0.9% in June (Briefing.com consensus +0.2%). Today's reading follows an unrevised 0.5% decrease in May.
On Tuesday, investors will receive several economic reports, including the Employment Cost Index for Q2, PCE Prices for June, Personal Income and Personal Spending for June, the S&P Case-Shiller Home Price Index for May, the Chicago PMI for July, and the Conference Board's Consumer Confidence Index for July.
Nasdaq Composite +10.5% YTD
Russell 2000 +7.7% YTD
S&P 500 +4.8% YTD
Dow Jones Industrial Average +2.4% YTD
InvestmentHouse - Volatile Week for Growth (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
- AMZN beats big on EPS, gaps higher with NASDAQ, but flip the gains.
- Not breakdowns, but a volatile week for growth puts those indices at risk.
- SP500, DJ30 pause, still look solid.
- FAANG stocks may have started to saturate their markets.
- GDP solid, but not as solid as expectations. Combined with the action in
growth indices there could be some trouble.
- GDP at 4.1% dragged a whole 1% lower thanks to a surprise drop in
inventories.
I cannot say Friday was a reversal session in terms of the market, certainly
not for SP500 and DJ30, but I can say it was not good action, particularly
for NASDAQ and growth.
Think about it. AMZN exploded EPS expectations and GDP grew at 4.1%. It
would appear the market had what it needed, i.e. arguably the major stock
more than doubling EPS expectations and GDP surging the most since 2014.
Yet, after a higher open, all indices closed lower, with NASDAQ -1.46% as
AMZN gave up 63 points open to close, giving up a breakout to a new high.
Again, it was not a definitive reversal, but a gift to the market was
refused.
SP500 -18.62, -0.66%
NASDAQ -114.77, -1.46%
DJ30 76.01, -0.30%
SP400 -22.22, -1.11%
RUTX -1.89%
SOX -6.18, -0.45%
VOLUME: NYSE -7.4%, NASDAQ -4%. NYSE trade well below average as there was
no selling just a lack of bids. NASDAQ trade was lower but still well above
average as it sold, a sign that NASDAQ stocks are being unloaded.
ADVANCE/DECLINE: NYSE -2.1:1, NASDAQ -3.4:1. Definitely escalating negative
breadth on the downside.
Not a definitive reversal, but there are issues. Macro and more micro.
First, the micro (the macro will just be a repeat of this past week's
discussion anyway). AMZN earnings. Yes, EPS was amazing at $5.07 versus
2.50 expected. With 49% of all online sales, AMZN has now clearly become
profitable after all those years of plowing everything back into the
company. Fantastic. Just as revenues slow. Yes, AMZN missed on its top
line ($52.89B vs $53.4B). Sure, it is only a tiny 0.51B less, but then AMZN
had to go and warn that Q3 revenue would be light of expectations.
Time to back up. What is going on there? NFLX top line lower and warned
with subscriber growth lower than expected. FB missed the top line and
guided revenues lower with daily and monthly usage lower. GOOG posted just
a slight top line beat; GOOG was the best of the bunch and at least it was
rewarded. AAPL is still to come, but last quarter AAPL already reported
that iPhone sales were lower than expected. With the issues with China I am
not expecting that to change this past quarter.
AAPL has now become the old MSFT: no new tech of its own, just living off
past glory. Tim Cook has had what seems to be many, many years at the helm
and while AAPL is super profitable, it is living off the prior successes.
No new products since Steve Jobs' death. Just iPhone sales growth until
AAPL's i8 and i10 fiasco and the absurd $1000+ phone. Like the 1990's that
owed their success to the tax cuts and regulation reduction in the 1980's.
Clinton was smart: he didn't get in the way of the expansion -- until the
end. I call it the Pittsburg Steelers syndrome from the 1970's. People
said anyone could have quarterbacked that team and won. Not saying I agree
with the premise, but it illuminates the idea: riding on what other's built.
I touched on this earlier in the week: market penetration by FAANG companies
is reaching plateau level. It happens in all retailers and let's face it,
these companies are retailers. FB sells its data. Three times it denied
its existence, but in the end it turns out it sold data to dozens and dozens
and dozens of companies and countries -- even the Russians heaven forbid.
AAPL sells iPhones. NFLX sells movies and shows. GOOG is the outlier.
What happens with retailers is they are growth stocks as long as they are
entering new markets and opening new stores. Once they move toward market
saturation, growth over and the stock price reflects it. SBUX, CHS, CMG,
ZUMZ -- the list is miles long because it happens to every retailer. Now
FAANG stocks are hitting this wall. AAPL through a lack of creativity, NFLX
and FB through numbers. At 49% you have to wonder just how much more AMZN
can do. That is why it is branching out into other areas a la GOOG.
For the NASDAQ you have to consider that its horsemen are peaking out in
terms of growth. Dell, CSCO, HPQ, INTC -- the hardware makers had their own
similar issues when their markets became saturated. Others over the next
several years will emerge to take their place as new areas of tech appear.
And these stocks won't disappear from the leaderboard for quite some time.
It is never linear at first, but when it starts it is inevitable unless they
reinvent the company. AAPL could actually come out with something useful
other than the next iteration of the iPhone. AMZN moves into new areas such
as space travel.
In any event, near term some of these leaders are no longer the same buy on
the dips that they were. NFLX, AAPL, FB in our book have lost that tag.
While we said get used to buying these in the second half of 2017 due to the
market conditions, now we are going to have to be very selective with these
stocks. That also means NASDAQ will likely struggle as it finds
replacements. Near term it is very likely NASDAQ has peaked for now.
Second is the macro discussed all last week: the market action on NASDAQ and
the small and midcap indices suggests distribution given the volatile day to
day swings at or near new highs. Sellers are at least as aggressive as the
buyers at these levels. Our concern is the growth indices are starting to
undergo distribution (selling out by big money) as an indication the Q2 4.1%
GDP is the high water mark for the near term. That remains to be seen, but
RUTX and SP400 have faltered at the prior highs, and if they sell
aggressively that suggests the domestic economics are deteriorating.
Also in the macro is the Fed, for now still in the background. It is hiking
and its last statement and minutes indicate it plans to keep hiking even if
the yield curve remains flat and threatens inversion. Despite its hiking,
the long end overall remains weak when it should rise. That also suggests
weakening economic activity. If the Fed does what it usually does, i.e.
hike into a slowdown, it is a real threat to tank the nice economic
expansion.
I don't mean to sound like a downer, but just recognizing what the various
markets are showing. The industrial side, the NYSE large caps and the like,
can still get money from a peaking growth side and continue their relatively
new moves off the lows. Again we are looking at plays in those areas this
weekend in addition to a spread of downside plays on areas appearing to be
losing money. It could be we see the more vicious rotation where money is
taken from some sectors and placed in others, causing the drop of the sector
losing the money. That looks to be the situation the past couple of weeks.
NEWS/ECONOMY
GPD, Q2: Not bad, not as good as expected, but the headline understates the
strong activity.
The 4.1% was a miss of the 4.4% expected (and 5+% whisper). That was in
itself a disappointment, but look at why not 5%: inventories showed a
surprise large drop as sales outstripped production. Thus inventories fell,
and a big part of GDP fell. Indeed, the drop in inventories pulled a full
1% off of the overall GDP. Thus, if inventories were as expected, GDP would
boast +5.1%.
As noted, inventories did not drop because manufacturers are sitting on
their hands. Sales ramped up more than expected and pulled inventories
lower. Further, imports rose as they tend to do when the US consumer is in
good spirits and consuming -- Personal Consumption jumped 4.0% versus 0.5%
in Q1. Looking good, Billy Ray. Feeling good Louis. That combined action
pulled a 5+% GDP down to a 'mere' 4.1%.
GDP Q2: 4.1 vs 4.4 exp vs 2.2 Q1 (from 2.0). Nice revision.
Personal Consumption: 4.0% vs 0.5% Q1
Price Index: 3.0 vs 2.2 exp vs 2.0 prior
PCE: 2.0 vs 2.2 vs 2.2 prior
Business Investment: 7.3% vs 11.5% Q1
Government Spending 2.1%.
MARKET
CHARTS
NASDAQ: Back and forth all week over the 10 day EMA as it hit new highs
then immediately sold back. After a doji at the 10 day EMA Thursday, NASDAQ
gapped upside gratis AMZN, but then reversed to take out the 20 day EMA and
touch the bottom of the two week lateral range on the low. Not a breakdown
as noted earlier, but definitely rejected at the new high, not just Friday,
but Tuesday and Thursday as well.
SP400: Not a breakdown either, but definitely sellers in the mix as it sold
hard Tuesday and Friday, both days closing near the 50 day MA. Still near
the all time highs in its three week lateral range, still fending off a
breakdown, but clearly it was sold as it tried for new highs.
RUTX: RUTX tapped the prior highs on the Tuesday intraday high then
reversed. A modest bounce into Thursday was pounded lower Friday, dropping
RUTX all the way back to the 50 day MA. Not a breakdown here either, and
just as with the other indices RUTX could use this test of support to rally
back upside. Did this in early July after the last June beat down. Would
maintain that trend if it did. It never, however, reached a definitive new
high on the move, turning lower instead. That shows a weaker move and RUTX
has to prove it can continue back upside.
SP500: Broke to a higher recovery high Wednesday then faded into Friday and
a test of the 10 day EMA on the close. Down but lower volume and SP500
remains in good position to take on the all-time high from late January.
DJ30: Surpassed the June high on the week, leaving the late February peak
and the January all-time high still out there. That is good; plenty of room
to run with the new money coming DJ30's way. Near term DJ30 is almost at
the upper channel line from the uptrend that started in March. It may want
to test a bit more before resuming the move and that run at those prior
highs. Overall DJ30 continues to look good in its recovery.
SOX: A slow process but SOX continues its attempt to rise off the 5 week
crawl up the 200 day SMA. It is just hanging on, but it is hanging on.
LEADERSHIP
Leaders in FAANG, software struggle as financial, drugs, some industrial
sectors, certain transports, certain large cap food are performing.
FAANG: continue to struggled despite AMZN beating the bottom line and
gapping upside. It gave up most of that gain. GOOG faded to the 10 day
EMA, still solid on its earnings gap. FB not recovering from the Thursday
bomb gap below the 200 day SMA. NFLX still struggling below the 50 day MA.
AAPL touched a higher high Thursday, reversed that day, then flopped to the
20 day EMA Friday. Not a good looking group.
Financial: Good week, still moving higher as of Friday, e.g. JPM, C, BAC,
GS. V announced results, held up reasonably well, then dropped some Friday.
Still very solid overall.
Drugs: Strong week for the old big names, e.g. PFE, LLY. BMY, MRK moved
well early week but then struggled Friday with moves lower. Others that
have moved well, e.g. ARWR sold harder Friday. JNJ jumped nicely into
Friday, testing the 200 day SMA.
Industrials: Great week for some though Friday was lower. UTX surged into
Friday but turned lower on the close. BA was decent off the 50 day MA. HON
surged all week, paused Friday. TEX poses an interesting pattern, and CMI
looks as if it is setting up to move higher through the 50 day MA.
Metals: Very improved. NUE may try the breakout from a big triangle. AKS,
SID working well. STLD looks decent in a test at the 50 day MA. We will
see if this group can lead.
Software: A good group but under fire. ADBE sold hard Friday to the 20 day
EMA. DATA sold to the same level on a volume jump. TTWO gapped lower below
the 20 day MA but held decently. VRSN surged on earnings then gave it all
back, managing to hold the 10 day EMA. ATVI broke down hard last week. NOW
very volatile to end the week.
Energy: As volatile as ever. CVX came off the 200 day SMA and was solid
Friday. Others struggled, e.g. APC, APA, MRO. GPOR broke lower. Still
very mixed.
MARKET STATS
DJ30
Stats: -76.01 points (-0.30%) to close at 25451.06
Nasdaq
Stats: -114.77 points (-1.46%) to close at 7737.42
Volume: 2.19B (-3.95%)
Up Volume: 652.38M (-467.62M)
Down Volume: 1.52B (+390M)
A/D and Hi/Lo: Decliners led 3.4 to 1
Previous Session: Advancers led 1.21 to 1
New Highs: 76 (-46)
New Lows: 106 (+39)
S&P
Stats: -18.62 points (-0.66%) to close at 2818.82
NYSE Volume: 753.915M (-7.36%)
A/D and Hi/Lo: Decliners led 2.1 to 1
Previous Session: Advancers led 1.43 to 1
New Highs: 71 (-66)
New Lows: 40 (+9)
SENTIMENT
VIX: 13.03; +0.89
VXN: 18.72; +1.85
VXO: 11.54; +0.31
Put/Call Ratio (CBOE): 1.05; +0.31
Bulls and Bears:
Modest moves with bulls holding near 55, bears near 18.6. Not telling a lot
right now, but bigger picture, bulls remain off the highs over 6 hit early
2018.
Bulls: 54.9 versus 55.3
Bears: 18.6 versus 18.5
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 55.3
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 18.5
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: 2.958 versus 2.982%. Bonds rallied despite good economic data.
Historical: the last sub-2% rate was in November 2016 (1.867%). 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: 1.16558 versus 1.17324
Historical: 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: 110.995 versus 110.791.
Historical: 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: 68.69, -0.92. Struggling after recovering to the 50 day MA.
Gold: 1223.00, -2.70. Moved up to the 10 day EMA on the week, then
stalled, gapping lower Friday.
Tech Tumble Trims Weekly Gains
27-Jul-18 16:20 ET
Dow -76.01 at 25451.06, Nasdaq -114.77 at 7737.42, S&P -18.62 at 2818.56
https://www.briefing.com/investor/markets/stock-market-update/2018/7/27/tech-tumble-trims-weekly-gains.htm
[BRIEFING.COM] Stocks started Friday stable, but began tumbling in the afternoon, with tech shares pacing the broad-based retreat.
The tech-heavy Nasdaq dropped 1.5%, ending the week lower by 1.1%. The S&P 500 and the Dow also declined, losing 0.7% and 0.3%, respectively, but managed to keep in positive territory for the week (+0.6%; +1.6%). The small-cap Russell 2000 underperformed (-1.9%), extending its weekly loss to 2.0%.
All eyes were on Amazon (AMZN 1817.27, +9.27) coming into Friday's session, with investors hoping that its better-than-expected Q2 earnings report could restore some faith in FAANG names, which lost a lot of momentum on Thursday due to Facebook's (FB 174.89, -1.37) earnings-induced plunge.
Amazon was up around 4.0% in pre-market trading, but weakened substantially intraday, trimming its gain to just 0.5% by the closing bell. The petering out didn't do much good for the bulls, which, just a few days ago, were looking to ride another FAANG-led rally back into record territory.
The top-weighted technology sector finished a ways behind the ten other groups on Friday, losing 2.0%. Intel (INTC 47.68, -4.48, -8.6%) weighed heavily on the group as concerns over its slow roll out of next-generation chips overshadowed its better-than-expected Q2 earnings report. Twitter (TWTR 34.12, -8.82) was also a drag on the tech space, plunging 20.5%, after reporting a decline in monthly active users and disappointing guidance.
No other sector lost more than 0.9%, and three groups -- financials (+0.2%), consumer staples (+0.2%), and telecoms (+1.9%) -- actually finished in the green.
Health care (-0.7%) ended near the bottom of the sector standings, with Merck (MRK 63.49, -0.52, -0.8%) slipping despite upbeat earnings results. Energy (-0.5%) was another decliner following a mixed post-earnings performance from Chevron (CVX 125.97, +2.02, +1.6%) and Exxon Mobil (XOM 81.92, -2.32, -2.8%).
Elsewhere, U.S. Treasuries finished the week with a modest rally, pushing yields lower across the curve; the benchmark 10-yr yield slipped two basis points to 2.96%. Meanwhile, WTI crude futures broke a three-day win streak, dropping 1.3% to $68.72/bbl, and the U.S. Dollar Index ticked down 0.1% to 94.45.
Reviewing Friday's economic data, which included the preliminary reading of Q2 GDP and the final reading for the July University of Michigan Consumer Sentiment Index:
Advance second quarter GDP pointed to an expansion of 4.1%, in line with the Briefing.com consensus, and the prior month's reading was revised to 2.2% from 2.0%. The GDP Deflator came in at +3.0%, which is above the Briefing.com consensus estimate of 2.1%.
The key takeaway from the report is that real GDP growth was the strongest it has been since the third quarter of 2014. The key concern for some, though, is that it may not be sustainable given that export growth was likely juiced by pre-tariff activity.
The final reading of the University of Michigan Consumer Sentiment Index for July ticked up to 97.9 (Briefing.com consensus 97.1) from 97.1 in the preliminary reading.
The key takeaway from the report is that confidence remained at high levels due to favorable job and income prospects, offsetting growing concerns it seems about the potential impact of tariffs on the domestic economy.
Looking ahead, investors will receive Pending Home Sales for June on Monday.
Nasdaq Composite +12.1% YTD
Russell 2000 +8.3% YTD
S&P 500 +5.4% YTD
Dow Jones Industrial Average +3.0% YTD
Week In Review: Facebook Flop Steals Trade-Deal Thunder
Stocks moved mostly higher this week, sending the S&P 500 within 1.5% of its January 26 record high, with investors focused on a potential U.S.-EU trade deal and the latest batch of Q2 earnings, which featured results from high-flying FAANG names like Facebook (FB), Amazon (AMZN), and Alphabet (GOOG).
The S&P 500 advanced 0.6%, and the Dow Jones Industrial Average climbed 1.6%. The tech-heavy Nasdaq struggled, however, losing 1.1%, due in large part to Facebook's 19% plunge on Thursday -- which marked the biggest-ever one-day drop in market value for a U.S.-listed company (-$119.1 billion).
Facebook tumbled in response to its Q2 earnings report, which showed below-consensus revenues and slowing user growth, due in part to the #DeleteFacebook movement following the Cambridge Analytica data scandal. In addition, the social media giant also issued below-consensus revenue guidance. However, Google's parent company Alphabet and internet-retail behemoth Amazon helped balance things out with better-than-expected results.
Still, the top-weighted technology sector, which houses most FAANG names, was the worst-performing group this week, diving 1.2%. Conversely, financials was among the top-performing spaces with a gain of 2.0%, benefiting from a rise in interest rates; the yield on the benchmark 10-yr Treasury note climbed six basis points to 2.96%.
On the data front, the preliminary reading for second quarter GDP showed an annualized increase of 4.1%, in line with the Briefing.com consensus estimate and the best reading since the third quarter of 2014. Consumer spending was the main engine of growth, increasing 4.0% and contributing 2.69 percentage points.
In politics, President Trump met with European Commission President Jean-Claude Juncker at the White House on Wednesday. Stocks spiked that afternoon on headlines that Mr. Trump has secured trade concessions from the EU, including a pledge to import more soybeans and natural gas from the U.S. and to improve market access for U.S. medical devices. The two sides also decided to table auto tariffs while they continue to negotiate.
The European Central Bank decided on Thursday to keep its key policy rate unchanged, as expected, and reiterated that net asset purchases will likely cease at the end of December, with the reinvestment of principal payments continuing for an extended period of time thereafter.
Looking ahead, the Federal Reserve will release its latest policy directive on Wednesday. The market isn't expecting a rate hike, but investors will be interested to see what the central bank has to say about future rate increases this year; currently, the market is anticipating two additional hikes by year's end.
Facebook Suffers Worst One-Day Drop Ever
26-Jul-18 16:20 ET
Dow +112.97 at 25527.07, Nasdaq -80.05 at 7852.19, S&P -8.63 at 2837.18
https://www.briefing.com/investor/markets/stock-market-update/2018/7/26/facebook-suffers-worst-oneday-drop-ever.htm
[BRIEFING.COM] The major averages had a mixed outing on Thursday, with Facebook (FB 176.26, -41.24, -19.0%) pulling the Nasdaq away from its all-time high. The tech-heavy index loss 1.0%, while the benchmark S&P 500 declined 0.3%. The Dow Jones Industrial Average outperformed, adding 0.4%, as did the small-cap Russell 2000 (+0.6%).
Facebook plunged 19.0%, marking its worst one-day drop since going public in 2012, after the social media giant's Q2 earnings report showed lower-than-expected revenue, slowing user growth, and weaker-than-expected guidance. Fellow FAANG stock Amazon (AMZN 1808.00, -55.61, -3.0%) also declined in front of its Thursday evening earnings release, but most other FAANGs held up relatively well. The top-weighted technology sector, which houses Facebook, finished way behind the ten other groups, closing lower by 1.6%.
Elsewhere within the tech space, Visa (V 142.50, -0.14, -0.1%) finished roughly flat despite beating earnings and revenue estimates, while chipmakers rallied after Qualcomm (QCOM 63.58, +4.16, +7.0%) reported its quarterly results and announced the end of its attempt to acquire NXP Semi (NXPI 92.81, -5.56, -5.7%) due to complications with Chinese regulators. Advanced Micro (AMD 18.35, +2.30, +14.3%) also rose on better-than-expected earnings.
In addition to technology, the consumer discretionary (-0.5%), health care (-0.2%), and financials (-0.1%) sectors also finished in negative territory. McDonald's (MCD 156.14, -2.75, -1.7%) weighed on the consumer discretionary group despite an upbeat earnings report, and Biogen (BIIB 344.74, -39.09, -10.2%) weighed on the health care space despite positive trial results for an Alzheimer's drug that it's working on with Japanese pharma firm Eisai.
As for the remaining seven sectors, they all finished in the green. The energy (+1.0%), and utilities (+1.1%) groups were the top performers, followed closely by the industrial space (+0.8%). Within the industrial group, airlines rallied following better-than-expected earnings from Southwest Air (LUV 56.70, +4.41, +8.4%) and Alaska Air (ALK 64.76, +5.65, +9.6%). Dow components 3M (MMM 207.96, +3.58, +1.8%), Caterpillar (CAT 142.58, +2.1%), and Boeing (BA 359.32, +3.40, +1.0%) also had strong outings.
Elsewhere, U.S. Treasuries sold off on Thursday, sending yields higher across the curve; the benchmark 10-yr yield, for instance, climbed four basis points to 2.98%, its highest level in two months. The U.S. Dollar Index jumped 0.6% to 94.56 amid the rise in rates, and WTI crude futures ticked up 0.4% to $69.58 per barrel.
In Europe, the ECB decided to keep its key policy rate unchanged, as expected. The central bank also reiterated that net asset purchases will likely cease at the end of December, with the reinvestment of principal payments continuing for an extended period of time thereafter.
Reviewing Thursday's economic data, which included Durable Goods Orders for June, weekly Initial Claims, and the advance readings for June Wholesale Inventories and International Trade in Goods:
June durable goods orders rose 1.0%, which is less than the 3.2% increase expected by the Briefing.com consensus. The prior month's reading was revised to -0.3% (from -0.6%). Excluding transportation, durable orders increased 0.4% (Briefing.com consensus +0.4%) to follow the prior month's revised reading of +0.3% (from -0.3%).
The key takeaway from this report, however, was that orders and shipments for nondefense capital goods orders, excluding aircraft, were up 0.6% and 1.0%, respectively, which is a good indication for business spending and a positive input for Q2 GDP forecasts.
The latest weekly initial jobless claims count totaled 217,000, while the Briefing.com consensus expected a reading of 215,000. Today's tally was above the revised prior week count of 208,000 (from 207,000). As for continuing claims, they declined to 1.745 million from a revised count of 1.753 million (from 1.751 million).
The key takeaway from this report is that initial claims remain low and consistent with a tight labor market.
The Advance report for International Trade in Goods for June showed a deficit of $68.3 billion, and the Advance report for Wholesale Inventories for June was flat at 0.0%.
Looking ahead, investors will receive on Friday the advance reading of Q2 GDP and the final reading for the July University of Michigan Consumer Sentiment Index.
Nasdaq Composite +13.7% YTD
Russell 2000 +10.4% YTD
S&P 500 +6.1% YTD
Dow Jones Industrial Average +3.3% YTD
Stocks Spike In Final Stretch On U.S.-EU Trade Deal
25-Jul-18 16:30 ET
Dow +172.16 at 25414.10, Nasdaq +91.47 at 7932.24, S&P +25.67 at 2845.81
https://www.briefing.com/investor/markets/stock-market-update/2018/7/25/stocks-spike-in-final-stretch-on-useu-trade-deal.htm
[BRIEFING.COM] The S&P 500 (+0.9%) advanced for a third straight session on Wednesday, extending its weekly gain to 1.6%. The Dow (+0.7%) and the Nasdaq (+1.2%) also climbed, with the Nasdaq hitting a new record. Stocks held modest gains with 30 minutes left in the session, but spiked to new highs following headlines that President Trump has secured trade concessions from the EU.
President Trump met with European Commission President Jean-Claude Juncker at the White House on Thursday afternoon. As mentioned above, the sides reached a trade deal, but the details were still being worked out at the closing bell. The U.S. and the EU have reportedly agreed to lower industrial tariffs on both sides, and the EU has pledged to import more soybeans and liquefied natural gas and to give U.S. medical devices better market access.
As for auto tariffs, which Mr. Trump had previously threatened to impose on EU vehicles, no new information was available as of 4:00 PM ET. The Wall Street Journal reported that the two sides were still trying to fine tune language in a common statement. Mr. Trump and Mr. Juncker will conclude their meeting with a joint press conference.
The latest batch of Q2 earnings invoked a mixed reaction from investors. Coca-Cola (KO 46.09, +0.83, +1.8%) and UPS (UPS 120.20, +7.76, +6.9%) both rallied after reporting their results, while AT&T (T 30.25, -1.43, -4.5%), Boeing (BA 355.92, -2.35, -0.7%), and Texas Instruments (TXN 113.22, -0.58, -0.5%) sold off.
Automakers General Motors (GM 37.65, -1.83) and Fiat Chrysler (FCAU 17.00, -2.28) also came under pressure, tumbling 4.6% and 11.8%, respectively, after both companies issued disappointing guidance for the fiscal year. GM narrowly beat earnings estimates, while Fiat Chrysler came up short.
As for the sector standings, 10 of 11 groups finished in the green, with the lightly-weighted telecom space (-2.9%) being the lone exception. The top-weighted technology sector (+1.5%) was the best performer, helped by a reversal in chipmakers; the Philadelphia Semiconductor Index was down as much as 1.3%, but finished higher by 0.5%. Industrials (+1.3%) and health care (+1.2%) also outperformed, while the rest added between 0.3% and 1.0%.
Elsewhere, U.S. Treasuries finished mostly higher, pushing the benchmark 10-yr yield lower by one basis point to 2.94%. The U.S. Dollar Index dropped 0.4% to 94.00, and WTI crude futures rallied 1.1% to $69.31 per barrel after the EIA reported an unexpected draw of 6.1 million barrels.
Reviewing Wednesday's economic data, which was limited to New Home Sales for June and the weekly MBA Mortgage Applications Index:
New Home Sales in June hit an annualized rate of 631,000, which is below the Briefing.com consensus of 670,000. The May reading was revised to 666,000 (from 689,000).
The key takeaway from the report is that the June decline represented the largest monthly drop since December, and it took place despite a decline in median and average selling prices.
The weekly MBA Mortgage Applications Index decreased 0.2% after sliding 2.5% last week.
Looking ahead, investors will receive several economic reports on Thursday, including Durable Goods Orders for June, the advance readings for June Wholesale Inventories and International Trade in Goods, and the weekly Initial Claims report.
Nasdaq Composite +14.9% YTD
Russell 2000 +9.8% YTD
S&P 500 +6.5% YTD
Dow Jones Industrial Average +2.8% YTD
S&P Weathers Intraday Reversal
24-Jul-18 16:25 ET
Dow +197.65 at 25241.94, Nasdaq -1.11 at 7840.77, S&P +13.42 at 2820.14
https://www.briefing.com/investor/markets/stock-market-update/2018/7/24/s-and-p-weathers-intraday-reversal.htm
[BRIEFING.COM] It was an erratic day of trading on Wall Street, with tech shares being the primary source of volatility. The tech-heavy Nasdaq Composite jumped 1.1% at the start of Tuesday's session, touching a new intraday record, but gave it all back, settling a tick below its flat line. The S&P 500 and the Dow also reversed course intraday, but managed to tack on 0.5% and 0.8%, respectively, nonetheless. Small caps struggled, pushing the Russell 2000 lower by 1.1%.
Investor sentiment was unmistakably bullish at the opening bell after Google's parent company Alphabet (GOOG 1248.08, +42.58) soundly beat profit estimates for the second quarter. Shares of the tech giant quickly shot up 5.0%, helping to send the top-weighted technology sector to the top of the sector standings in the process.
The tech group was up as much as 1.5% on Tuesday, but started to fade as Alphabet came off its highs and as chipmakers tumbled into negative territory. Alphabet still settled with a solid gain of 3.5%, but the Philadelphia Semiconductor Index lost 1.1% after being up as much as 1.2%.
There wasn't a news-driven catalyst behind Tuesday's tech reversal; rather, it was most likely driven by profit-taking activity amid the technology sector's continued outperformance. The tech space is up 16.6% year-to-date, piling that on top of last year's 36.9% surge.
Including technology, nine sectors advanced on Tuesday. The top-performer was the lightly-weighted telecom services space (+1.8%), followed by energy (+1.3%) and materials (+1.3%). Most other groups finished with gains between 0.2% and 0.9%. Consumer discretionary (-0.3%) and real estate (-0.3%) declined.
In addition to Alphabet, a number of companies reported their quarterly results. The reactions were mostly positive: Verizon (VZ 51.51, +0.76, +1.5%), United Tech (UTX 134.24, +4.87, +3.8%), 3M (MMM 200.68, +1.84, +0.9%), Lockheed Martin (LMT 322.57, +4.24, +1.3%), Eli Lilly (LLY 93.35, +4.47, +5.0%), Biogen (BIIB 372.84, +14.71, +4.1%), and Harley-Davidson (HOG 44.63, +3.18, +7.7%) all advanced, while Whirlpool (WHR 128.82, -21.89, -14.5% ) and JetBlue (JBLU 17.79, -2.02, -10.2%) dropped.
Elsewhere, U.S. Treasuries finished Tuesday on a mostly higher note, pushing yields lower; the yield on the benchmark 10-yr note slipped two basis points to 2.95%. The 2-yr note was lower for much of the session, but eventually rebounded to keep its yield unchanged at 2.62%. Meanwhile, the U.S. Dollar Index finished flat at 94.38.
Reviewing Tuesday's economic data, which was limited to the FHFA Housing Price Index for May:
The FHFA Housing Price Index rose 0.2% in May (Briefing.com consensus +0.4%), and the April increase was revised to 0.2% from 0.1%.
Looking ahead, investors will receive New Home Sales for June and the weekly MBA Mortgage Applications Index on Wednesday.
Nasdaq Composite +13.6% YTD
Russell 2000 +9.4% YTD
S&P 500 +5.5% YTD
Dow Jones Industrial Average +2.1% YTD
Financials Nudge S&P Higher
23-Jul-18 16:25 ET
Dow -13.83 at 25044.29, Nasdaq +21.67 at 7841.88, S&P +5.15 at 2806.72
https://www.briefing.com/investor/markets/stock-market-update/2018/7/23/financials-nudge-s-and-p-higher.htm
[BRIEFING.COM] Financial shares helped to nudge the market a tick higher on Monday, underpinned by a steepening of the yield curve. The S&P 500 and the Nasdaq Composite tacked on 0.2% and 0.3%, respectively, but the Dow underperformed, shedding 0.1%. Action was range-bound, with the S&P 500 keeping between -0.2% and +0.2%.
Most sectors finished Monday in negative territory -- eight of eleven to be exact -- but losses were modest for the most part, and the three top-performing groups -- financials, technology, and health care -- just so happen to be heavily-weighted, comprising over 50% of the broader market combined.
The financial sector easily finished atop the sector standings, rallying 1.3%. Its outperformance came amid a sell off in the U.S. Treasury market that resulted in a five-point jump in the 2-10 spread; the 2-yr yield climbed two basis points to 2.62%, and the benchmark 10-yr yield shot up seven basis points to 2.97% -- its highest level in over a month.
Meanwhile, the technology sector finished in second place with a gain of 0.5%, and the health care space added 0.2%. The tech sector got off to a slow start, losing as much as 0.6%, but chipmakers helped lead an intraday rebound. The Philadelphia Semiconductor Index was down 1.8% at the opening bell, but finished with a gain of 0.2%.
On the downside, industrials (-0.6%) and utilities (-0.6%) finished at the bottom of the sector standings. Within the industrial space, Illinois Tool Works (ITW 136.26, -10.60) tumbled 7.2% after an in-line earnings report was overshadowed by worse-than-expected guidance for the fiscal year.
In other earnings news, oilfield-services company Halliburton (HAL 41.54, -3.66) dropped 8.1% after reporting below-consensus profits, but toymaker Hasbro (HAS 106.04, +12.11) spiked 12.9% after beating both top and bottom line estimates. The two names were the worst-performing and best-performing S&P 500 components, respectively.
It's also worth noting that President Trump responded to a warning from Iranian president Rouhani with a warning of his own, tweeting that Iran will "suffer consequences the likes of which few throughout history have ever suffered before" if it threatens the U.S. again.
Reviewing Monday's economic data, which was limited to Existing Home Sales for June:
Existing home sales decreased 0.6% in June to an annualized rate of 5.38 million units (Briefing.com consensus 5.45 million). The May reading was revised to 5.41 million (from 5.43 million).
The key takeaway from the report remains the same: notable supply constraints continue to act as a drag on overall sales. The limited inventory -- and the high prices on available inventory -- is crimping affordability, particularly for first-time buyers; moreover, all prospective buyers are feeling affordability pressures from home prices rising faster than income.
On Tuesday, investors will receive the FHFA Housing Price Index for May.
Nasdaq Composite +13.6% YTD
Russell 2000 +10.6% YTD
S&P 500 +5.0% YTD
Dow Jones Industrial Average +1.3% YTD
InvestmentHouse - President Sets Off Expiration 'Fireworks' (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
- Expiration 'fireworks' not about the market, but about the President.
- Market initially overcomes Trump on China trade, Trump on the Fed, but
slides on his lawyer's tape discussing a Playboy model payoff.
- High to low action, but a very quiet expiration.
- Large cap indices set up to move higher and with copious amounts of
earnings results coming, the will have the ammo if they want to move.
- Finding plays not just ahead of earnings is a bit challenging right now,
but some non-tech areas do look promising for the first time in a long time.
Stocks started mixed, but with the uptrend they found bids and rallied
positive, cruising into midmorning.
This despite Trump telling Joe Kernen China was a currency manipulator,
undermining the gains in the US. As a result, Trump stated he was 'ready to
go' on $500B of tariffs that would cover all Chinese goods.
Trump also had a beef with the Fed, stating Powell was a good man, but
raising rates at this juncture when the US was making good progress was only
driving up the dollar and making debt service costlier.
Oh my did the media go berserk. I had to change the channel away from CNBC
even sooner than usual, moving over to a fairly liberal Bloomberg that was,
by comparison, much tamer, much more attached to reality than the CNBC
non-Kernen anchors. The female CNBC 'news anchor' was beside herself
calling the President's positions 'crazy,' also noting that the President
wanted to CONTROL other agencies, giving the attorney general as an example.
Well, of all the nerve, the President wanting to control an agency that is
under the Executive Branch, i.e. an agency CONTROLLED by the President. The
result of our schools forgoing teaching our children what the Constitution
actually says even with respect to the very basic, three-branch governmental
system, is showing. It was so bad that even some of the liberal guests
(e.g. Jared Bernstein, former VP Biden's economic advisor) had to chime in
and say the President's comments were just not that bad.
I know, I know, this sounds like a personal problem, but it is really a
problem for everyone. News reporting that is passing itself off as unbiased
but always taking the same side on every story, pursuing only one line of
questioning. Failure of our education system to instill in our children the
most basic understanding of why we are the country we are and how we formed
and what truths we hold dear. Thus, we end up electing a socialist in New
York who wants the federal government to oust private ownership of companies
in favor of government control. A person who does not understand that the
unemployment rate does not move lower because someone has two jobs instead
of one. We are creating incredibly ignorant young adults, and equally
ignorant young adults are electing them to office. My son fumes when I say
such things, but he is well-versed in US history and economic history and is
in the incredibly small minority of his peers who understand economic cause
and effect.
The point: the market didn't care about Trump's tweets. China is
manipulating its currency lower, despite the condition and its pledge upon
joining the WTO that it would not, and it appears investors are taking this
as a sign China is losing the trade war, a war that really has not yet
started, that Trump has not yet begun to fight.
But, I digress.
Then at midmorning, another story hit. Was it the Fed Chair resigning after
Trump's tweets? No. A conflict erupting in the South China Sea? No. A
political assassination by the Russians and no doubt personally ordered by
Putin? No. Bill Clinton grope and sexually harass another woman? No! The
NYT reported TRUMP, having paid a Playboy model claiming to have had an
affair with Trump, was the one abusing women. Apparently there is a tape
that Trump's lawyer made in a discussion between Cohen and Trump where this
was discussed, a tape that was part of the items picked up in the FBI's raid
of Cohen's office. How this is not attorney-client privilege and EVER got
out from the wholly unbiased, apolitical, justice-seeking, of highest
probity FBI is a complete mystery. As you can see, once again, the laws of
the US are no longer applied equally.
Stocks peaked for the day on this news and started a gradual downtrend into
the Friday close.
SP500 -2.66, -0.09%
NASDAQ -5.10, -0.07%
DJ30 -6.38, -0.03%
SP400 -0.53%
RUTX -0.26%
SOX -0.49%
NASDAQ 100 -0.03%
VOLUME: NYSE +12%, NASDAQ -4%. NYSE trade moved above average, NASDAQ
remained below average and actually fell. Expiration Friday so higher
volume on NYSE was nothing special. Lower volume on NASDAQ was rather
surprising.
ADVANCE/DECLINE: NYSE -1.1:1, NASDAQ -1.1:1. Rather boring expiration.
All of the July expiration 'fireworks' had nothing to do with stocks.
Charlie 'the blabbermouth' Gasparino on FoxBusiness, panting and drooling
with excitement, openly mused this was perhaps just a teaser.
Perhaps, but this is nothing new for Trump, is it? Same kind of allegations
(or more) during the campaign. And it mattered . . . not. Everyone knew
Trump was no Boy Scout. Those that voted for him were tired of the same
old, same old, and knew Trump was not a best buddy. I heard one woman say
he was a pig, but she was not voting for pastor but for someone who would
change the business as usual DC crapola. Thus, I would be surprised if this
has ANY impact on Trump over a week from now. His policies are popular with
his voters and with many independents, and they seem to realize the flaws,
the 'pig-like' actions are part of the package. They don't care, they voted
to put a new sheriff into DC town, someone like Wyatt Earp to be hard-nosed
and clean things up.
I don't mean to make this sound like some kind of gushing over Trump. It is
not. I am distilling what I have heard from several republican friends
about their support for Trump even if these kind of things are revealed.
Hey, the democrats still loved Bill Clinton for doing the same or worse, so
I can at least understand the sentiment.
The question for us is whether this means much other than a fade from the
highs on one expiration Friday. Doubt it. If tape after tape after tape
emerges painting Trump as a beast, then yes it has impact. Other than that,
the Friday fade back to flat by the indices is likely about all those Trump
haters will get out of this, at least in terms of the market action.
So, after that somewhat digression I have to say that the market action
Friday, while disappointing, was not a reversal. It was a damn boring
session, but not a reversal. Sometimes boring can be good as when stocks or
indices are working on bases. The quiet lets them go about their business,
and then things get noisy when the post a breakout move.
Of course the action Friday left the indices unchanged. After good moves
Thursday, promising moves toward the prior highs, SP400 and RUTX faded, RUTX
part of the move, SP400 all of its move. Not reversals, but leaving SP400
and RUTX still below the key prior peaks.
NASDAQ, SP500 and DJ30 lost some ground but that is fine. They all rallied
higher the past two weeks or more and needed a break. They are taking that
break with very modest fades. SP500 and DJ30 look exceptionally good on
this test, and given the patterns we anticipate a turn back upside in the
not too distant future.
Earnings season is here with dozens reporting next week. We are still
looking at playing some pre-earnings moves, but the primary interest for new
positions is the counterpunching after the earnings release and the stock
shows its break. These results could help break DJ30 and SP500 back to
their upside moves. BA, UTX are setting up well and announces results, an
important industrial stock. CELG announces and it has also put in a good
pattern as have many large biotechs. AMZN, AMGN, INTC announce Thursday.
Plenty of important earnings are ahead this week, earnings that could power
the large cap indices higher.
THE MARKET
CHARTS
DJ30: The Dow is in a 2-day fade after almost 3 weeks upside that
approached but didn't really threaten the early June peak. The banks and
some industrials perked up the past week, fading back to end the week,
setting up the same as the Dow. DJ30 looks set up very well to continue
higher, and some earnings this week could be the driver.
SP500: SP500 broke through the June and March highs and is now testing as
well, fading Thursday and Friday, waiting for the 10 day EMA to catch up.
Set up well, waiting on earnings.
NASDAQ: Rallied to a new high early week then slid laterally into Friday.
NASDAQ big names continue to push upside. The big change was the demise of
NFLX and its near-term trend. Gapped lower on earnings, recovered off the
lows but then stalled out. Other big names are in modest pullbacks similar
to DJ30 stocks, i.e. fading Thursday and Friday to test near support. MSFT
reported strong results, INTC is set to release results in the coming week.
NASDAQ continues in its uptrend.
SP400: Showed promise Thursday with a break higher to match the early July
peak. Faded Friday. Made a shallow test after the prior July high, is
rebounding as it needed to do, but it has not made the new breakout yet.
Critical for SP400 to make that move.
RUTX: As noted Thursday, RUTX' pattern is not as solid as SP400 with the
twin peaks. It tested the 20 day EMA off that second peak and has rebounded
Tuesday to Thursday, putting in a strong move Thursday. Friday it stalled,
fading just modestly. RUTX may bounce around here for a few sessions, but
it needs to make the breakout.
SOX: Trying to make a move off the 200 day SMA stick, SOX moved higher but
struggled after reaching the 50 day SMA. Looks as if it will put in a
higher low over the 50 day EMA and continue the break higher. INTC's
earnings will have something to do with that.
LEADERSHIP
FAANG: NFLX changed character on the week with its earnings miss. FB
continued its slow climb up the 10 day EMA. It announces results this week.
AMZN rallied to a new high, faded late week but is in very good position as
are many of the big name market leaders. GOOG is the same, surging early in
the week then fading to test the 10 day EMA. Very good positioning. AAPL
remains the forgotten stock of the group, in a 2 week tight lateral range.
Software: Some members of the group struggled, e.g. VMW, FFIV. Others
added to moves though slowed late week: DATA, ADBE; VRSN, TTWO. MSFT
announced solid results, gapped higher, faded much of the move. Good
earnings setting the stage.
Financial: Banks picked it back up Friday after a Thursday loss. JPM, BAC
up on strong volume. C looks good. V and MA put up modest Friday numbers
but look very good with V heading into earnings the coming week.
Industrials: BA tested more, setting up well ahead of earnings. UTX is
putting in an excellent test ahead of its results. HON exploded higher
Friday on huge trade with excellent earnings. TEX in a weeklong test back
to the 200 day SMA.
Energy: Down week for the group with oil falling as well. Many are testing
key support after 1 to 2 weeks of testing. APC ended at the 50 day MA, a
support it has used often. EOG showing a doji over the 50 day MA's, ESV at
that level as well. GPOR testing the 200 day. DO didn't make it; Friday it
broke sharply lower below the 50 day MA.
Drugs/Biotechs: MYGN broke higher again on the week. CELG, AMGN look very
good in pullbacks testing moves, earnings ahead this week. AGN solid in a
200 day SMA test. JNJ gapped upside Tuesday, could not hold and filled the
gap back at the 50 day MA. It could make its move upside as well.
Retail: Good week, sloppy finish Friday. ROST, TJX, FOSL all look good,
struggled Friday. RH, solid looking, needs to bounce. M broke higher
nicely, paused Friday.
Chips: As with many other areas, some very good setups heading into
earnings, e.g. TXN, SLAB. TSM powered higher to the 200 day SMA on its
earnings. Others were hit -- the story of the group, i.e. very bifurcated.
QRVO sold hard, SWKS dumped on its results.
MARKET STATS
DJ30
Stats: -6.38 points (-0.03%) to close at 25058.12
Nasdaq
Stats: -5.10 points (-0.07%) to close at 7820.20
Volume: 1.78B (-4.3%)
Up Volume: 721.95M (-111.22M)
Down Volume: 1.03B (+30M)
A/D and Hi/Lo: Decliners led 1.11 to 1
Previous Session: Advancers led 1.17 to 1
New Highs: 130 (+12)
New Lows: 39 (-7)
S&P
Stats: -2.66 points (-0.09%) to close at 2801.83
NYSE Volume: 816.81M (+11.48%)
A/D and Hi/Lo: Decliners led 1.13 to 1
Previous Session: Advancers led 1.49 to 1
New Highs: 90 (+9)
New Lows: 32 (-8)
SENTIMENT
VIX: 12.86; -0.01
VXN: 17.11; -0.24
VXO: 11.41; +0.05
Put/Call Ratio (CBOE): 0.98; +0.08
Bulls and Bears:
Bulls popped back up like a cork from 47.1 after the rise and drop. Got
overdone to the downside as everyone turned negative just as the market
bounced. Now is it too high? Not really. It was over 60 recently; a bit of
room but not much.
Bulls: 55.3 versus 52.4
Bears: 18.5 versus 18.5
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: 55.3 versus 52.4
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: 18.5 versus 18.5
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: 2.895% versus 2.838%. Yields surged as bonds crashed. Trump
lamented the Fed's rate hikes and to many that only cemented another hike in
September as the Fed would have to show its 'independence.' Certainly
looked as if the market was heading that way.
Historical: the last sub-2% rate was in November 2016 (1.867%). 22.838%
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: 1.17214 versus 1.1651. Euro jumped back up on the Trump comments.
Historical: 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 versus 1.16643 versus 1.15446 versus 1.17148 versus 1.17096 versus
1.17022 versus 1.17826 versus 1.1786 versus 1.17714 versus 1.1802 versus
1.1811 versus 1.18272 versus 1.19358 versus 1.19411 versus 1.1913 versus
1.18533 versus 1.18672 versus 1.19150 versus 1.19619 versus 1.1983 versus
1.1978 versus 1.19896 versus 1.20741 versus 1.21291 versus 1.21788 versus
1.2163 versus 1.22232
USD/JPY: 111.451 versus 112.732. Dollar dropped hard against the yen as
well.
Historical: 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: 68.26, +0.51. A tough prior week, then oil bounced back to the 50 day
MA into Friday. Still not a great pattern.
Gold: 1231.10, +7.10. With all the turmoil, gold shot higher. That still
leaves it in the downtrend, rebounding but just toward the 10 day EMA.
MONDAY
Large cap indices set up well. Small and midcaps near the old highs in a
very important test of those. Earnings are queued up, ready to drive the
action.
Will the earnings provide a catalyst? Most are good with good guidance.
There are some guidance misses and warnings, however, and some analysts are
talking around this being the near term peak in results. No doubt weak
guidance from big names dampens enthusiasm.
As discussed Thursday, this earnings season we are a bit reluctant to ride
too many through earnings or take on new positions with the intention of
holding then through the results. Typically that is not our favorite play
and with some guidance issues it becomes even less so. Picking good entries
after earnings is the preferred method as the skeletons are out of the
closet. Banks are an example. JNJ has filled the earnings gap higher.
Looking for those as vehicles to use when SP500, DJ30 and NASDAQ bounce from
these nice little tests.
Have a great weekend!
Flat Week Ends With Flat Friday Session
20-Jul-18 16:25 ET
Dow -6.38 at 25058.12, Nasdaq -5.10 at 7820.21, S&P -2.66 at 2801.57
https://www.briefing.com/investor/markets/stock-market-update/2018/7/20/flat-week-ends-with-flat-friday-session.htm
[BRIEFING.COM] Stocks finished a range-bound Friday session little changed, shrugging off potentially rattling comments from President Trump. The S&P 500 and the Nasdaq Composite both lost 0.1%, while the Dow Jones Industrial Average finished unchanged. Friday's stumble left the S&P 500 flat for the week.
In a CNBC interview aired on Friday morning, President Trump said he is ready to put tariffs on $500 billion worth of Chinese goods -- approximately the entire amount of goods shipped to the U.S. from China in 2017. Later, in a tweet, the president doubled down on his criticism of the Fed, saying rate hikes hurt what his administration has accomplished, and reiterated his concern over a strengthening dollar.
The U.S. Dollar Index tumbled 0.8% to 94.20 in response to the president's comments, retreating from a 12-month high.
Microsoft (MSFT 106.27, +1.87) headlined the earnings front, climbing 1.8% on the back of a better-than-expected quarterly report. Its outperformance helped the top-weighted technology sector get off to a good start -- the group was up as much as 0.7% -- but the bullish momentum faded as the day wore on. The tech group finished higher by 0.1%.
Elsewhere on the earnings front, Honeywell (HON 153.13, +5.59) and Capital One (COF 97.23, +1.86) also rallied on better-than-expected results, adding 3.8% and 2.0%, respectively. However, General Electric (GE 13.12, -0.61) declined 4.4% despite beating estimates, and Skechers (SKX 26.27, -6.98) plunged 21.0% after missing estimates and issuing disappointing guidance.
The consumer staples sector (+0.6%) was the top-performing group on Friday, and financials (+0.2%) eked out a slim victory. Meanwhile, eight of the eleven sectors finished in the red, with utilities (-0.8%) and real estate (-0.9%) being the weakest performers. No other space lost more than 0.5%.
In the bond market, Treasuries sold off in a curve-steepening trade, with the 2-yr yield climbing one basis point to 2.60% and the 10-yr yield climbing five basis points to 2.90%. Some analysts saw the increased 2-10 spread as a sign that investors believe President Trump's criticism of the Fed could slow down the pace of rate hikes.
The S&P 500 tested the 2800 level several times on Friday, but it held through each attempt, with the low of the day coming in at 2800.01.
Investors did not receive any economic data on Friday. Looking ahead, Existing Home Sales for June is the lone release on Monday.
Nasdaq Composite +13.3% YTD
Russell 2000 +10.5% YTD
S&P 500 +4.8% YTD
Dow Jones Industrial Average +1.4% YTD
Week In Review: Investors Shrug Off Headline-Heavy Week
There were a heap of headlines out of Washington this week, but Wall Street kept its cool, finishing little changed. The S&P 500 finished flat, while the Dow Jones Industrial Average finished a tick higher (+0.2%), and the Nasdaq Composite finished a tick lower (-0.1%). The small-cap Russell 2000 outperformed, rallying 0.6%.
President Trump capped a week-long trip to Europe on Monday by meeting with Russian president Vladimir Putin in Helsinki, Finland. The leaders met for roughly four hours, discussing a wide range of topics, including arms control, the future of Syria, and, of course, Russian interference in the 2016 U.S. election, which Mr. Putin again denied.
Mr. Trump faced criticism for appearing to reject his own intelligence agencies' conclusion that Russia meddled in the election in favor of Mr. Putin's plea of innocence. President Trump later clarified his remarks, replacing the word would with wouldn't in the following statement referring to Russian interference: "I don't see any reason why it would be [Russia]."
On to U.S.-China trade relations, NEC Director Larry Kudlow said on Wednesday that he believes some lower-ranking Chinese officials would like to reach a trade deal, but Chinese President Xi is refusing to compromise. China's foreign ministry responded to Mr. Kudlow's comment, calling it "shocking" and "bogus."
Back to Mr. Trump, the president did an exclusive interview with CNBC on Thursday in which he criticized the Fed, saying he's "not thrilled" about interest rate hikes, and said he is willing to slap tariffs on $500 billion worth of Chinese goods -- virtually every Chinese product coming into the U.S. -- if necessary. Mr. Trump also commented on the strengthening dollar, saying it puts the U.S. at a disadvantage.
The president followed up that interview with a tweet on Friday, saying "China, the European Union and others have been manipulating their currencies and interest rates lower, while the U.S. is raising rates while the dollars gets stronger and stronger with each passing day - taking away our big competitive edge...Tightening now hurts all that we have done."
Mr. Trump's comments on the Fed were particularly controversial as presidents typically refrain from speaking on monetary policy in an effort to protect the Fed's independence. The White House issued a follow-up statement after the CNBC clip aired on Thursday, clarifying that Mr. Trump respects the Fed's independence.
On a separate -- but related -- note, Fed Chair Jerome Powell gave Congress his semiannual update on the economy and monetary policy, speaking before both the Senate Banking Committee and the House Financial Services Committee. Mr. Powell's testimony provided no new information; he simply reinforced the view that improving economic conditions should allow the Fed to continue hiking rates gradually.
Whew. With all of that in mind, let's turn away from Washington and towards this week's trading on Wall Street.
The second quarter earnings season heated up this week with several influential names reporting their latest results. Netflix (NFLX) dropped sharply on Tuesday -- although shares did rebound notably intraday -- after the streaming media company missed subscriber growth estimates. Ahead of earnings, Netflix was up more than 100% on the year.
Fellow tech names Microsoft (MSFT), IBM (IBM), and eBay (EBAY) also reported their quarterly results this week. Microsoft and IBM rallied after beating earnings estimates, but eBay tumbled after reporting below-consensus results. The top-weighted technology sector finished the week with a gain of 0.1%, extending its yearly advance to 15.4%.
Several financial giants also reported earnings this week, including Bank of America (BAC), Goldman Sachs (GS), and Morgan Stanley (MS), all of which topped estimates. The positive results helped the heavily-weighted financial sector climb 2.2% and finish atop the week's sector standings.
In other corporate news, Comcast (CMSA) said it will not counter Disney's (DIS) offer for 21st Century Fox's (FOXA) entertainment assets, and Amazon (AMZN) held its annual Prime Day, saying the 36-hour special was its biggest shopping event ever -- even despite having to deal with some technical glitches.
Energy was the worst-performing sector this week, losing 1.9%, as crude oil extended last week's tumble; WTI crude futures dropped 3.9% to $68.23/bbl and are now 8.0% below the nearly three-and-a-half year high they've touched several times this month. Fears that the U.S. may give some countries waivers to continue buying oil from Iran was one of several factors weighing on the commodity.
Dow Breaks Five-Day Winning Streak
19-Jul-18 16:25 ET
Dow -134.79 at 25064.50, Nasdaq -29.15 at 7825.31, S&P -11.13 at 2804.23
https://www.briefing.com/investor/markets/stock-market-update/2018/7/19/dow-breaks-fiveday-winning-streak.htm
[BRIEFING.COM] U.S. equities stumbled on Thursday, breaking a five-session winning streak for the Dow Jones Industrial Average, which finished with a loss of 0.5%. The S&P 500 and the Nasdaq Composite declined as well, losing 0.4% apiece, but the small-cap Russell 2000 managed to advance, adding 0.6%.
Trading was choppy at times, but much of the day was spent in a sideways trend. The S&P 500 traded between 2812.05 (-0.1%) and 2799.77 (-0.6%).
Investors received a heavy dose of corporate news, most of which was earnings related. IBM (IBM 149.24, +4.72, +3.3%) and Taiwan Semi (TSM 39.81, +1.40, +3.6%) climbed after reporting their quarterly results, but American Express (AXP 100.17, -2.81, -2.7%), eBay (EBAY 34.11, -3.84, -10.1%), Travelers (TRV 125.18, -4.82, -3.7%), BNY Mellon (BK 52.73, -2.91, -5.2%), Philip Morris (PM 80.90, -1.25, -1.5%), and Alcoa (AA 41.56, -6.40, -13.3%) all sold off.
Outside of earnings, Walt Disney (DIS 112.13, +1.44, +1.3%) rallied following news that Comcast (CMSA 34.91, +0.87, +2.6%) will not counter Disney's offer for 21st Century Fox's (FOXA 46.65, -0.03, -0.1%) entertainment assets. Conversely, AbbVie (ABBV 89.95, -4.45, -4.7%) fell after Citron Research called it "the next great drug short."
Nine of eleven sectors finished Thursday in the red, with financials (-1.4%) pacing the retreat, trimming its weekly gain to a still impressive 2.0%. The telecom services space (-1.1%) was the next-worst performer, but no other group lost more than 0.6%. On the flip side, utilities (+0.9%) and real estate (+1.0%) were the two advancers.
U.S. Treasuries rallied on Thursday, pushing yields lower across the curve; the benchmark 10-yr yield dropped three basis points to 2.85%.
In Washington, President Trump criticized the Fed in a recorded CNBC interview, saying he's "not thrilled" about interest rate hikes. Mr. Trump's comments were seen as controversial as presidents typically refrain from speaking on monetary policy. The White House quickly issued a response to the criticism, saying the president respects the Fed's independence.
During the same interview, Mr. Trump also commented on the strengthening dollar, saying it puts the U.S. at a disadvantage. The U.S. Dollar Index was up 0.4% at a 12-month high before the president's comments, but gave it all back and then some in a knee-jerk response. The Index was back in the green at Wall Street's closing bell, however, up 0.2% at 95.00.
Trade-related matters were also on radar after President Trump threatened "tremendous retribution" against the European Union if his meeting with EU officials next week doesn't produce positive results. Separately, China's foreign ministry responded to Wednesday comments made by NEC Director Larry Kudlow, saying Mr. Kudlow's assertion that Chinese President Xi is refusing to compromise on Beijing's trade policies was "shocking" and "bogus."
With today's losses, the S&P 500 enters Friday's session with a slim weekly gain of 0.1%.
Reviewing Thursday's economic data, which included weekly Initial Claims, the Philadelphia Fed Index for July, and the Conference Board's Leading Economic Index for June:
The latest weekly initial jobless claims count totaled 207,000, while the Briefing.com consensus expected a reading of 220,000. Today's tally was below the revised prior week count of 215,000 (from 214,000). As for continuing claims, they increased to 1.751 million from a revised count of 1.743 million (from 1.739 million).
The key takeaway from this report is that it covers the period in which the survey for the employment situation report for July is conducted, so the low level of claims is bound to feed expectations for another month of strong nonfarm payrolls growth.
The Philadelphia Fed Survey for July rose to 25.7 (Briefing.com consensus 22.0) from an unrevised 19.9 in June.
The key takeaway from the report, though, may be that the diffusion index for future general activity decreased for the fourth straight month, falling from 34.8 to 29.0.
The Conference Board's Leading Economic Index increased 0.5% in June (Briefing.com consensus +0.4%), and the May reading was revised to 0.0% from +0.2%.
The key takeaway from the report is that strength among the leading indicators remained widespread; however, the 2.5% increase in the index over the first half of 2018 was slower than the 3.2% growth rate seen over the second half of 2017.
Looking ahead, investors will not receive any economic data on Friday.
Nasdaq Composite +13.4% YTD
Russell 2000 +10.8% YTD
S&P 500 +4.9% YTD
Dow Jones Industrial Average +1.4% YTD
Financials, Industrials Push Market Slightly Higher
18-Jul-18 16:25 ET
Dow +79.40 at 25199.29, Nasdaq -0.67 at 7854.46, S&P +6.07 at 2815.36
https://www.briefing.com/investor/markets/stock-market-update/2018/7/18/financials-industrials-push-market-slightly-higher.htm
[BRIEFING.COM] The market ticked higher on Wednesday, with financial and industrial shares doing the heavy lifting. The S&P 500 and the Dow advanced 0.2% and 0.3%, respectively, but the tech-heavy Nasdaq lagged, closing just a tick below its unchanged mark and narrowly missing a new record. The small-cap Russell 2000 added 0.3%.
Two sectors stood out on Wednesday -- financials and industrials. They were the only sectors to register a gain or loss of more than 1.0%, closing higher by 1.5% and 1.1%, respectively. Consumer staples was the weakest sector, losing 0.7%, but no other group advanced or declined more than 0.5%.
The financial sector was helped by Warren Buffet's Berkshire Hathaway (BRK.B 200.44, +10.03), which rallied 5.3% after eliminating a restriction on its ability to buy back its own shares. Morgan Stanley (MS 50.56, +1.38) was also a positive influence, climbing 2.8% on better-than-expected Q2 results. U.S. Bancorp (USB 50.72, -0.58) declined 1.1%, however, despite beating bottom-line estimates.
Meanwhile, in the industrial space, transports were particularly strong following upbeat earnings and guidance from CSX (CSX 69.00, +4.56) and United Continental (UAL 79.00, +6.38); the two companies added 7.1% and 8.8%, respectively. Likewise, industrial supplier Grainger (GWW 338.99, +34.03) spiked 11.2% after also beating earnings estimates and raising its guidance.
In other corporate news, the EU hit Alphabet (GOOG 1195.88, -2.92) with a $5 billion antitrust fine for allegedly using its Android mobile operating system to stifle competition, and Papa John's (PZZA 53.60, +2.06) shares spiked 4.0% on a Wall Street Journal report that its founder and recently ousted chairman held merger talks with Wendy's (WEN 17.77, +0.34).
Fed Chair Jerome Powell wrapped up his semiannual appearance on Capitol Hill on Wednesday, testifying before the House Financial Services Committee. His appearance didn't produce any new insights into monetary policy, but Mr. Powell did express concern about cryptocurrencies, which he believes pose serious risks to investors.
In trade-related news, NEC Director Larry Kudlow said in an interview with CNBC that trade talks with China have stalled, but the administration is making "good progress" in negotiations with Mexico. The market's reaction was largely muted -- somewhat surprising considering the knee-jerk reactions that trade-related headlines have gotten as of late.
WTI crude futures were volatile on Wednesday, reversing a loss of 2.6% to finish higher by 1.6% at $68.70 per barrel. The reversal, which came despite the government's weekly inventory report showing a build of 5.8 million barrels, was helped by reports of an Iranian-backed Houthi movement attack on a Saudi Aramco refinery in Riyadh.
Reviewing Wednesday's economic data, which included June Housing Starts and Building Permits, the latest issue of the Fed's Beige Book, and the weekly MBA Mortgage Applications Index:
Housing starts declined to a seasonally adjusted annualized rate of 1.173 million units in June (Briefing.com consensus 1.318 million), down from a revised 1.337 million units in May (from 1.350 million). Building permits declined to a seasonally adjusted 1.273 million in June (Briefing.com consensus 1.330 million), down from an unrevised 1.301 million in May.
The key takeaway from the report is that it reflects weakness at a time when there should be strength. The assumption embedded in the weak starts figure is that it likely reflects the difficulty builders are having finding labor, as well as the constraints they are facing with higher land, labor, and material costs.
According to the Fed's Beige Book, economic activity continued to expand across the United States, with 10 of the 12 Federal Reserve Districts reporting moderate or modest growth. The outliers were the Dallas District, which reported strong growth driven in part by the energy sector, and the St. Louis District where growth was described as slight.
The weekly MBA Mortgage Applications Index decreased 2.5% after also declining 2.5% last week.
Looking ahead, the weekly Initial Claims report, the Philadelphia Fed Index for July, and the Conference Board's Leading Economic Index for June will be released on Thursday.
Nasdaq Composite +13.8% YTD
Russell 2000 +10.2% YTD
S&P 500 +5.3% YTD
Dow Jones Industrial Average +1.9% YTD
Stock Market Shakes Off Netflix Disappointment
17-Jul-18 16:20 ET
Dow +55.53 at 25119.89, Nasdaq +49.40 at 7855.13, S&P +11.12 at 2809.29
https://www.briefing.com/investor/markets/stock-market-update/2018/7/17/stock-market-shakes-off-netflix-disappointment.htm
[BRIEFING.COM] Today started with a whimper, but it eventually unfolded with a bang as the stock market overcame the shock of a reporting disappointment from growth-stock darling Netflix (NFLX 379.48, -21.00, -5.2%). Remarkably, it was Netflix that helped turn the tide of negative sentiment and fostered a broad-based rebound effort that was led by the information technology (+0.8%), consumer staples (+0.8%), and health care (+0.5%) sectors.
Overall gains were modest in scope, yet they were big with respect to engendering some confidence in the notion that the S&P 500 may be poised to take a run at the all-time high it hit in January (2872.87).
The Nasdaq Composite increased 0.6% and closed at a new record high; the Russell 2000 and S&P Midcap 400 Index advanced 0.5%; the S&P 500 jumped 0.4%; and the Dow Jones Industrial Average added 0.2%.
Netflix was the top story stock of the day. It had been down as much as 14.1% after reporting disappointing subscriber growth for the second quarter and issuing disappointing third quarter guidance. Shares of NFLX, however, started to rebound as quickly as they fell at the opening bell.
That reversal was tied to some supportive remarks from analysts and a prevailing belief that the subscriber growth shortfall is likely to be a one-quarter issue; moreover, it was aided by a desire to own the stock at lower prices by investors who had missed the stock's run this year. Prior to the company's report after Monday's close, shares of NFLX were up 109% in 2018.
The turnaround in the broader market mirrored the intraday turnaround in NFLX, which cut its losses substantially by the closing bell.
The buy-the-dip spirit soon spread to counterparts included in the "FAANG" cohort -- Facebook (FB 209.99, +2.76, +1.3%), Apple (AAPL 191.45, +0.54, +0.3%), Amazon.com (AMZN 1843.93, +21.44, +1.2%), and Alphabet (GOOG 1198.80, +14.94, +1.3%) -- which made a big difference for the tone in the broader market
Amazon.com for its part got an extra turnaround push on reports suggesting the company saw a huge year-over-year jump in Prime Day sales.
The turn in trading sentiment was captured in the Invesco QQQ Trust (QQQ 180.27, +1.09, +0.6%), which had been down 1.1% and closed with a 0.6% gain.
Beyond Netflix, Dow components Goldman Sachs (GS 231.02, -0.42, -0.2%), Johnson & Johnson (JNJ 129.11, +4.42, +3.5%), and UnitedHealth (UNH 250.34, -6.64, -2.6%) also were in the news for delivering earnings results. They all topped consensus earnings estimates, yet the reaction to their reports was mixed.
Elsewhere, Capitol Hill was a focal point today as Fed Chairman Powell appeared before the Senate Banking Committee to deliver his semiannual monetary policy report.
Mr. Powell covered a range of topics in the Q&A portion of the testimony, yet there was nothing that was ultimately surprising in his remarks, which included a contention that there were growing concerns among business contacts about trade issues.
The Fed chair reiterated the view that improving economic conditions should allow for continued gradual rate hikes. On a related note, the yield on the 2-yr note increased one basis point to 2.61% and the U.S. Dollar Index increased 0.5% to 94.97.
Market participants seemed to appreciate Mr. Powell's calm, but confident, delivery, and the recognition that his remarks didn't introduce any volatility into the marketplace.
That connection also went hand-in-hand with the intraday reversal.
The weakest-performing sectors on Tuesday were the real estate (-0.6%), energy (-0.4%), telecom services (-0.4%), and utilities (-0.1%) sectors. The best-performing sector was the materials sector (+1.3%), yet its small weighting in the S&P 500 minimized its influence as a major market driver.
Reviewing today's economic data, which included Industrial Production and Capacity Utilization for June and the NAHB Housing Market Index for July:
Industrial Production rose 0.6% in June (Briefing.com consensus +0.5%), while the May decrease was revised to 0.5% (from -0.1%). Meanwhile, Capacity Utilization ticked up to 78.0% (Briefing.com consensus 78.3%) from a revised reading of 77.7% in May (from 77.9%).
The key takeaway from the report is that manufacturing output bounced back sharply, reflecting good underlying demand, after a fire at a truck assemblies parts supplier undercut output levels in May.
The NAHB Housing Market Index for July remained at 68 (Briefing.com consensus 69), unchanged from June.
Wednesday's economic calendar will feature the Housing Starts and Building Permits Report for June. In addition, Fed Chairman Powell will appear before the House Financial Services Committee at 10:00 a.m. ET for the second, and final, day of his semiannual monetary policy report to the Congress.
Nasdaq Composite +13.8% YTD
Russell 2000 +9.9% YTD
S&P 500 +5.1% YTD
Dow Jones Industrial Average +1.6% YTD
Financials and Energy Collide; S&P Ends Little Changed
16-Jul-18 16:20 ET
Dow +44.95 at 25064.36, Nasdaq -20.26 at 7805.73, S&P -2.88 at 2798.17
https://www.briefing.com/investor/markets/stock-market-update/2018/7/16/financials-and-energy-collide-s-and-p-ends-little-changed.htm
[BRIEFING.COM] Stocks opened the week with a sleepy performance on Monday that ended with a slim loss of 0.1% for the S&P 500. The Nasdaq Composite also declined, losing 0.3%, but the Dow Jones Industrial Average managed to add 0.2%. The Russell 2000 underperformed, dropping 0.5%.
President Trump capped a week-long trip to Europe by meeting with Russian president Vladimir Putin in Helsinki, Finland. The leaders met for roughly four hours, discussing a wide range of topics, including arms control, the future of Syria, and, of course, Russian interference in the 2016 U.S. election, which Mr. Putin again denied. The market had a muted reaction to the summit.
Back on the home front, energy (-1.2%) was the worst-performing sector on Monday amid another dive in crude prices. WTI crude futures dropped 3.8% to $68.34/bbl and are now 7.8% below the nearly three-and-a-half year high they touched last week. The widely-cited catalyst was a Friday comment from Treasury Secretary Mnuchin, who said some countries may receive waivers to continue buying oil from Iran. However, several other factors -- including restored Libyan production -- were also at play.
Conversely, the heavily-weighted financial sector (+1.8%) rallied, easily closing atop of the day's leaderboard. Bank of America (BAC 29.78, +1.23) led the way, rallying 4.3% on better-than-expected Q2 earnings, but BlackRock (BLK 503.96, -3.13) lost 0.6% despite also beating on the bottom line.
The consumer discretionary (+0.2%) and telecom (+0.5%) sectors also advanced, but the eight other groups (including energy) finished in the red.
In the bond market, U.S. Treasuries declined on Monday, sending yields higher across the curve. Both the 2-yr yield and the benchmark 10-yr yield climbed three basis points, closing at 2.60% and 2.86%, respectively. That leaves the 2-10 spread at 26 basis points, its lowest level in over a decade.
Reviewing Monday's economic data, which included June Retail Sales, the July Empire Manufacturing Index, and May Business Inventories:
June retail sales rose 0.5% (Briefing.com consensus +0.5%), while the May increase was revised to 1.3% from 0.8%. Excluding autos, retail sales increased 0.4% in June (Briefing.com consensus +0.3%), and the May increase was revised to 1.4% from 0.9%.
The key takeaway from the report is that it substantiates the widely-held views that an increase in consumer spending is going to factor prominently in driving a strong acceleration in Q2 GDP growth.
The Empire Manufacturing Survey for July declined to 22.6 (Briefing.com consensus 21.0) from the prior month's unrevised reading of 25.0.
Business Inventories rose 0.4% in May (Briefing.com consensus +0.4%). The April reading was left unrevised at +0.3%.
The inventories-to-sales ratio dipped to 1.34 from 1.35 and was down from 1.39 one year ago.
Looking ahead, Industrial Production and Capacity Utilization for June and the NAHB Housing Market Index for July will be released on Tuesday. As for earnings, Charles Schwab (SCHW), Goldman Sachs (GS), Johnson & Johnson (JNJ), and UnitedHealth (UNH) will report before the opening bell.
Nasdaq Composite +13.1% YTD
Russell 2000 +9.3% YTD
S&P 500 +4.7% YTD
Dow Jones Industrial Average +1.4% YTD
InvestmentHouse - Stocks Turn Pensive Ahead of Big Earnings Week (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
MARKET SUMMARY
- Stocks turn a bit pensive ahead of a big earnings week.
- NFLX downgrade bandwagon getting pretty full, helping spook overall bids.
- President says US/UK strike an 'ambitious' trade deal
- President calls EU a foe economically, along with Russia, China.
- NASDAQ, RUTX, SP400 testing back from the highs. How they react off this
test is obviously key.
- Don't forget SP500, DJ30: they are getting some money and will it be at
the detriment of other indices?
After good breakouts Thursday with NASDAQ and NASDAQ moving to new highs and
SP500 clearing important resistance, stocks were pensive Friday. NFLX was
downgraded on valuation more than once just ahead of its Monday earnings
because . . . it could actually miss expectations. Wow, a stock could
actually miss earnings expectations? Duh. Yet, they act as if it is an
impossibility.
Of course it is not. Just ask the banks announcing on Friday. C missed the
top line, WFC missed the top and bottom line. Looks as if they are going to
have to get over getting free money from the Fed and then buying bonds for a
guaranteed return. WFC might actually have to start making loans again and
not just come on CNBC and falsely claim the banks are open for business to
lend to small businesses. That was the biggest farce ever. You would go to
WFC and you would be directed to a SBA loan; no way WFC was touching that --
it had risk attached to it. Now, with the Fed not so generous with the free
money, banks have to make money the old fashioned way, e.g. loans, jacking
up fees, etc.
Anyway, NFLX was hit hard, falling from the new closing high hit early week.
NFLX' action helped stymie NASDAQ's upside move, but didn't kill it.
Instead, a week of heavy earnings for NASDAQ is ahead, and it very much
looked as if the downgrades and bank earnings misses had bids pulling back
Friday after some good moves higher earlier week.
Not across the board of course. AMZN continued its new move while FB and
GOOG added more upside. Overall, however, Friday saw the action cool as the
indices turned in mixed sessions.
SP500 3.02, 0.11%
NASDAQ 2.06, 0.03%
DJ30 94.52, 0.38%
SP400 -0.02%
RUTX -0.19%
SOX -0.40%
VOLUME: NYSE -7%, NASDAQ -10%. Volume remained low and below average on
NYSE, an issue for the move higher. That is, however, no change from what
it has shown. NASDAQ trade faded after a good Thursday on that breakout.
Volume is still quite low overall after showing some good volume on the move
higher through late June.
ADVANCE/DECLINE: NYSE -1.03:1, NASDAQ -1.2:1.
Interestingly, the week did see some changes but also more of the same. As
noted, SP500 broke through important resistance while NASDAQ moved to a new
all-time high. DJ30 showed a bit more life as well as the large cap NYSE
finally blipped a pulse.
At the same time, RUTX and SP400, clear leaders to this point, finished the
week a bit weaker, testing the 10 day EMA Wednesday through Friday. Thus
far normal tests for leading indices though you have to keep an eye on RUTX
as it ran into the June high with a head of steam then faded. Of course it
also rallied 6 of 7 sessions to get back up to that level, so a test of near
support is nothing in itself surprising. It is just one to watch in the
week ahead as earnings start to come out.
NEWS/ECONOMY
Friday the news was relative light. The President's trip to the UK yielded
news that the type of Brexit, hard or otherwise, would not inhibit new trade
agreements between the US and UK. Thus, an 'ambitious trade deal' was
proclaimed. How ambitious remains to be seen as the UK cannot even figure
out what it wants to do with Brexit right now.
After the UK meetings the President was reported to have called the EU an
enemy. Well, he said the EU is a foe for what it does to the US in trade.
He also said Russia is a foe and that China is an economic foe. That is
true, but not many are yet accustomed to the President's direct style of
calling things as he sees them as part of his preparation for negotiations.
The horror of it all. Right. It may not be what people are used to, i.e.
the 'dignified diplomacy' of the past, but it is not designed to be. It is
designed to throw the 'foe' off balance and make it difficult to anticipate
the next step. It is a kind of chaos style but with very definite methods
and goals.
Thus, when I hear this I just watch and listen with interest because the old
dignified diplomacy got us nothing. No, that is not correct. It got us
poor deals for the US, and attempts to alter those deals have failed. These
tactics appear to be somewhat successful. At the NATO summit, for example,
Trump obtained agreement on issues the prior President had asked for but got
nothing in return. We will see if there is further success.
The big story for the week, however, is earnings. That will drive much of
the action with NFLX reporting Monday after the close to establish the pace.
THE MARKET
CHARTS
NASDAQ: New high Thursday, then flat Friday as NFLX sold and the bids
faded. Nonetheless, a solid indication. The next key move is how NASDAQ
reacts to that new high, i.e. can it hold and resume or whether it reverses.
NASDAQ took a break to test the 10 day EMA just before the break higher; it
is rested to make the move and thus it should hold if it is for real.
SP500: Nice break higher Thursday as well, then Friday a modest rise on no
volume an important move upside and now this week with the earnings we see
if this important move from midrange off the January high holds and then
continues.
DJ30: Also came to life last week, indeed the past two weeks, but the Dow
is still well off the June peak that itself was well off the January peak.
About midrange for the trading range with a lot of work ahead of it.
SP400: Early June SP400 matched the January all-time high. SP400 faded to
the 50 day MA to end June and rallied back upside. SP400 broke to a new
all-time high at the first of the week. It then faded back to the 10 day
EMA to tend the week. This is the lick log for SP400, i.e. if it can hold
this shallow test of the break higher and make good on that new all-time
high.
RUTX: RUTX shows very similar action to SP400. They both led the move
higher so acting in tandem is not surprising. RUTX touched the prior high
from June Monday then faded to the 10 day EMA Thursday and Friday. As with
SP400, a test makes sense, but it has to hold near support and then make a
new move higher.
SOX: Still trending up the 200 day SMA but struggling to make serious
headway. SOX rallied off the 200 day the prior week through Tuesday last
week. Then it had issues, gapping back below the 50 day MA's it cleared
Tuesday. Higher low, used the 200 day as support, now has to hold and rally
again. AVGO upset things as it dove on the CA acquisition announcement, but
it is not the only cause. Some chips look great, some do not.
LEADERSHIP
FAANG: AMZN had the big week, up 4 of 5 sessions. FB put in a series of
new highs but is not exploding higher. NFLX had the downgrades Friday that
punished it ahead of Monday earnings. It is hanging in near the 20 day EMA.
AAPL broke upside but then moved laterally. GOOG, as with AMZN, enjoyed a
big move higher, clearing the June peak.
Software/Cloud: MSFT powered to a new high two sessions straight. DATA was
strong all week. ATVI surged to a new high, paused Friday. TTWO broke to a
higher recovery high as well. VRSN moved to a new high. Some very solid
moves. VMW still trying to hold near support and bounce. NTNX moved up to
the 50 day EMA and is trying to hold that move.
Chips: Some of the recent leaders took Friday off, e.g. TXN, NVDA, AMD.
AVGO still struggled after its huge Thursday gap lower.
Financial: V enjoyed a big week to a new high though was off a bit Friday.
Banks still struggle whether JPM or C or WFC.
Drugs/Biotechs: Still on the edge of some good moves by the big names, e.g.
AGN, GILD. CELG started a move, MYGN gapped and we are waiting for it to
set up a bit better. JNJ flopped to the 10 day EMA but may set up off that
test.
Energy/Oil: The setups remain good but these stocks also go back and forth
in decent patterns. APC testing the 20 day. DO looks as if it can break
higher. EOG remains in great shape to move. Some good looks looking for a
good move.
Industrials/Machinery: Improving. UTX broke higher Thursday and Friday.
MTW looks very interesting and HON looks to be moving up on volume. On the
other hand, DE flopped.
MISC: SQ, PYPL down Friday but still look good. IQ continues looking very
good. ULTA is breaking higher.
MARKET STATS
DJ30
Stats: +94.52 points (+0.38%) to close at 25019.41
Nasdaq
Stats: +2.06 points (+0.03%) to close at 7825.98
Volume: 1.73B (-10.36%)
Up Volume: 733.51M (-646.49M)
Down Volume: 959.55M (+434.88M)
A/D and Hi/Lo: Decliners led 1.22 to 1
Previous Session: Advancers led 1.43 to 1
New Highs: 101 (-10)
New Lows: 50 (-5)
S&P
Stats: +3.02 points (+0.11%) to close at 2801.31
NYSE Volume: 632.726M (-7.08%)
A/D and Hi/Lo: Decliners led 1.03 to 1
Previous Session: Advancers led 1.61 to 1
New Highs: 99 (+5)
New Lows: 31 (-9)
SENTIMENT
VIX: 12.18; -0.40
VXN: 16.88; -0.24
VXO: 11.06; -0.38
Put/Call Ratio (CBOE): 0.98; +0.06
Bulls and Bears:
After the plummet in bulls they post an impressive 5.3 point rally. As soon
as they were falling the market rallied. How quickly did those bulls
return? Fast. A bit worrisome as it indicates some froth in the move.
Bears remained stagnant.
Bulls: 52.4 versus 47.1
Bears: 18.5 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: 52.4 versus 47.1
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 versus 49.5 versus 49.5 versus 48.1
versus 50.5 versus 57.5 versus 60.0 versus 60.2 versus 57.8 versus 50.0
versus 52.5 versus 54.9 versus 51.5 versus 50.00 versus 55.8 versus 50.00
versus 51.9 versus 58.1 versus 58.7 versus 58.5 versus 54.7 versus 51.9
versus 56.3 versus 55.8 versus 49.5
Bears: 18.5 versus 18.6
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: 2.829% versus 2.849%. TLT broke over the 200 day SMA on the week
and advanced Friday. Bond yields drop, bonds rally, yield curve continues
to be flat.
Historical: the last sub-2% rate was in November 2016 (1.867%). 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: 1.1685 versus 1.16608. Euro faded on the week but showed some
strength Friday. Still working in a 5 week lateral range. Looks to be in a
bottoming process over the past 8 weeks.
Historical: 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 versus 1.16643 versus 1.15446 versus 1.17148 versus
1.17096 versus 1.17022 versus 1.17826 versus 1.1786 versus 1.17714 versus
1.1802 versus 1.1811 versus 1.18272 versus 1.19358 versus 1.19411 versus
1.1913 versus 1.18533 versus 1.18672 versus 1.19150 versus 1.19619 versus
1.1983 versus 1.1978 versus 1.19896 versus 1.20741 versus 1.21291 versus
1.21788 versus 1.2163 versus 1.22232
USD/JPY: 112.337 versus 112.631. Faded a bit to end the week after a surge
Monday to Thursday that broke the dollar out of a 7 week lateral move.
Historical: 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: 71.01, +0.68. After breaking to a higher high to end June, oil tested
laterally but starting Wednesday was dropped hard to the 50 day MA.
Gold: 1241.20, -5.40. Putting in a double bottom over the past two weeks
with MACD rising. Gold could be prepping a new upside attempt.
MONDAY
Earnings should be the driving story on the week with NFLX starting it off
Monday afternoon. As noted, NFLX was rattled in price because others on
Friday joined UBS' Thursday call that NFLX might miss its earnings if it
does not get the overseas subscriptions. Yes, and if it is cloudy the sun
won't likely show for the day. Earnings are always hit or miss; even if
earnings are beaten a stock can still decline. It could be, and I said so
Thursday and Friday, that there are those attempting to get NFLX lower ahead
of earnings with the specific notion of moving in on the dip. Fake news?
That would be the case, but hard to prove this kind of gamesmanship.
In any event, we will watch NFLX and see if we can pick up a few more
positions at a good price. Very aggressive given earnings, but NFLX gapped
upside on its April earnings. Even though it peaked on that day, that still
provides a nice gain.
On the week, earnings will flow, the yield curve will remain flat, and trade
issues are still out there with China 'going high' while the US 'goes low.'
Give me a break, China. That didn't work in the 2016 elections; think it
will work for you? And in what way?
Earnings are key, but they will just provide the impetus for NASDAQ, SP400,
and RUTX that are testing back after reaching prior or new highs. How they
hold and rebound -- or not -- tells the story of these attempts at prior
highs. They tested them, backed off, and now holding near support,
regrouping. The next moves will tell the tale for them.
At the same time, watch SP500 and DJ30. Some money is moving their way.
Will it continue moving in even if the growth areas break higher off their
tests? Or, will money leave the growth areas and move to the large cap NYSE
stocks? Those will be important notes to watch for, important tells,
regarding existing positions.
Stocks Tick Higher Despite Bank Underperformance
13-Jul-18 16:30 ET
Dow +94.52 at 25019.41, Nasdaq +2.06 at 7825.99, S&P +3.02 at 2801.05
https://www.briefing.com/investor/markets/stock-market-update/2018/7/13/stocks-tick-higher-despite-bank-underperformance.htm
[BRIEFING.COM] Stocks eked out a slim victory on Friday following a range-bound day of trading on lighter-than-usual volume. The S&P 500 (+0.1%) hit some technical resistance at the 2800 level, which it hasn't been able to conquer since early February. The Dow Jones Industrial Average (+0.4%) did modestly better, and the Nasdaq Composite finished flat.
Big banks, including JPMorgan Chase (JPM 106.36, -0.49), Citigroup (C 67.00, -1.51), and Wells Fargo (WFC 55.36, -0.67), unofficially kicked off the Q2 earnings season Friday morning. The results were mixed; JPMorgan and Citi beat profit estimates, but Well Fargo came up short. The three lenders slid between 0.5% and 2.2% in the aftermath, and the influential financial sector declined 0.5%.
The top-weighted technology space also lagged, finishing a tick below its unchanged mark. Within the space, Dow component Cisco Systems (CSCO 41.78, -1.80) dropped 4.1% following news that Amazon (AMZN 1813.03, +16.41) is mulling entry into the data switches market; AMZN rallied 0.9%, hitting a new record high.
Meanwhile, telecom services (-0.8%) was the worst performer, led lower by AT&T (T 31.67, -0.56), which lost 1.7% following news that the DOJ has appealed the company's acquisition of Time Warner.
On the flip side, industrials (+0.6%), energy (+0.6%), and consumer staples (+0.6%) finished at the top of the sector standings. The energy space was helped by a rebound in the price of crude oil, which plunged 5.0% on Wednesday. WTI crude futures advanced 1.1% on Friday to $71.03 per barrel.
President Trump was in the UK on Friday, fielding questions from reports in a joint press conference with Prime Minister Theresa May and stopping for tea with Queen Elizabeth II. Mr. Trump reaffirmed the United States' "special relationship" with the UK and said the U.S. will pursue a free trade deal with the UK once it leaves the EU.
U.S. Treasuries rallied on Friday, pushing yields lower across the curve; the yield on the benchmark 10-yr Treasury note slipped two basis points to 2.83%. Meanwhile, the U.S. Dollar Index finished slightly lower (-0.1%) at 94.47, and the CBOE Volatility Index declined 2.9% to 12.22.
Reviewing Friday's economic data, which included June Import/Export Prices and the preliminary reading of the University of Michigan Consumer Sentiment Index for July:
Import prices slid 0.4% in June after rising a revised 0.9% in May (from +0.6%), and import prices excluding oil slid 0.3% in June after rising an unrevised 0.2% in May. Export prices increased 0.3% in June after rising an unrevised 0.6% in May, and export prices excluding agriculture rose 0.4% in June after rising a revised 0.6% in May (from +0.5%).
The key takeaway from the report is that the year-over-year changes show an uptick in inflation trends, just like the PPI and CPI reports for June did.
The preliminary reading of the University of Michigan Consumer Sentiment Index for July slipped to 97.1 (Briefing.com consensus 97.8) from 98.2 in June.
The key takeaways from the report are twofold: (1) it revealed negative concerns about the impact of trade tariffs are rising among the top third of the income distribution, who account for half of consumer spending and (2) consumers under the age of 45 are anticipating the largest income gains since July 2000.
Looking ahead, investors will receive on Monday the Retail Sales report for June, the Empire State Manufacturing Index for July, and the Business Inventories report for May. Bank of America (BAC) and BlackRock (BLK) will report earnings before the open, and Netflix (NFLX) will report after the close.
Nasdaq Composite +13.4% YTD
Russell 2000 +9.9% YTD
S&P 500 +4.8% YTD
Dow Jones Industrial Average +1.2% YTD
Week In Review: Entering Earnings Season on a Positive Note
Wall Street advanced for the second week in a row, with the Nasdaq (+1.8%) touching a new record and the S&P 500 (+1.5%) hitting its best level since the big drop in early February. The Dow Jones Industrial Average (+2.3%) outperformed its peers, returning to positive territory for the year, but the small-cap Russell 2000 (-0.4%) struggled.
Stocks started the week on a positive note, rallying on Monday and Tuesday, but sold off on Wednesday after the White House escalated its ongoing trade dispute with Beijing, publishing a new list of tariffs. This round of duties is the largest yet, calling for a 10% tariff on $200 billion worth of Chinese goods, but it won't be official for at least two months. As it did with earlier tariffs, China promised to retaliate.
Meanwhile, NATO leaders held a two-day summit in Brussels this week. President Trump dominated the headlines, criticizing Germany for approving a major gas deal with Russia and taking a hard stance on increased military spending. Member states recommitted to a military spending target of 2% of GDP by 2024, prompting Mr. Trump to verbally confirm his commitment to the alliance.
The U.S. president then jetted to the UK for a meeting with Prime Minister Theresa May. Before the meeting, Mr. Trump suggested that Ms. May's Brexit plan may prevent the U.S. from entering a bilateral trade deal with the UK, but he walked back those comments in a latter press conference, reaffirming the leaders' "special relationship."
Back on the home front, West Texas Intermediate crude futures tumbled from a three-and-a-half year high on Wednesday, plunging 5.0% in their worst daily performance in over a year. Investors shrugged off a bullish inventory report -- which showed a huge drop of 12.6 million barrels for the week ended July 6 -- and instead focused on resurgent Libyan supply and increased June output for Saudi Arabia.
The energy sector, which is sensitive to crude prices, finished behind the broader market, but still added 0.8%. Eight of eleven spaces finished the week in the green, with information technology (+2.3%), consumer discretionary (+2.1%), and industrials (+2.2%) being the top performers. Utilities (-1.2%), telecom services (-1.6%), and real estate (-0.8%) were the three decliners.Previous
In corporate news, big banks JPMorgan Chase (JPM), Citigroup (C), and Wells Fargo (WFC) unofficially kicked off the second quarter earnings season on Friday with mixed results; JPMorgan and Citigroup beat earnings estimates, but Wells Fargo missed. The financial sector lost 0.5% on Friday, but still finished the week with a gain of 1.1%.
Elsewhere, 21st Century Fox (FOXA) lost 4.0% on Wednesday following reports that Comcast (CMCSA) may forego countering Disney's (DIS) offer for Fox's entertainment assets and focus on upping its bid for British media company Sky instead; Broadcom (AVGO) tumbled 13.7% on Thursday after agreeing to acquire software company CA Tech (CA) for approximately $18.9 billion in cash; and AT&T (T) lost 1.7% on Friday after the Department of Justice appealed the company's acquisition of Time Warner.
In the bond market, U.S. Treasuries moved lower in another curve-flattening trade this week, bringing the 2-10 spread down two basis points to 26 bps -- its lowest level in more than a decade. The yield on the benchmark 10-yr note ticked up one basis point to 2.83%, while the yield on the 2-yr note climbed three basis points to 2.57%.
Stocks Tick Higher Despite Bank Underperformance
13-Jul-18 16:30 ET
Dow +94.52 at 25019.41, Nasdaq +2.06 at 7825.99, S&P +3.02 at 2801.05
https://www.briefing.com/investor/markets/stock-market-update/2018/7/13/stocks-tick-higher-despite-bank-underperformance.htm
[BRIEFING.COM] Stocks eked out a slim victory on Friday following a range-bound day of trading on lighter-than-usual volume. The S&P 500 (+0.1%) hit some technical resistance at the 2800 level, which it hasn't been able to conquer since early February. The Dow Jones Industrial Average (+0.4%) did modestly better, and the Nasdaq Composite finished flat.
Big banks, including JPMorgan Chase (JPM 106.36, -0.49), Citigroup (C 67.00, -1.51), and Wells Fargo (WFC 55.36, -0.67), unofficially kicked off the Q2 earnings season Friday morning. The results were mixed; JPMorgan and Citi beat profit estimates, but Well Fargo came up short. The three lenders slid between 0.5% and 2.2% in the aftermath, and the influential financial sector declined 0.5%.
The top-weighted technology space also lagged, finishing a tick below its unchanged mark. Within the space, Dow component Cisco Systems (CSCO 41.78, -1.80) dropped 4.1% following news that Amazon (AMZN 1813.03, +16.41) is mulling entry into the data switches market; AMZN rallied 0.9%, hitting a new record high.
Meanwhile, telecom services (-0.8%) was the worst performer, led lower by AT&T (T 31.67, -0.56), which lost 1.7% following news that the DOJ has appealed the company's acquisition of Time Warner.
On the flip side, industrials (+0.6%), energy (+0.6%), and consumer staples (+0.6%) finished at the top of the sector standings. The energy space was helped by a rebound in the price of crude oil, which plunged 5.0% on Wednesday. WTI crude futures advanced 1.1% on Friday to $71.03 per barrel.
President Trump was in the UK on Friday, fielding questions from reports in a joint press conference with Prime Minister Theresa May and stopping for tea with Queen Elizabeth II. Mr. Trump reaffirmed the United States' "special relationship" with the UK and said the U.S. will pursue a free trade deal with the UK once it leaves the EU.
U.S. Treasuries rallied on Friday, pushing yields lower across the curve; the yield on the benchmark 10-yr Treasury note slipped two basis points to 2.83%. Meanwhile, the U.S. Dollar Index finished slightly lower (-0.1%) at 94.47, and the CBOE Volatility Index declined 2.9% to 12.22.
Reviewing Friday's economic data, which included June Import/Export Prices and the preliminary reading of the University of Michigan Consumer Sentiment Index for July:
Import prices slid 0.4% in June after rising a revised 0.9% in May (from +0.6%), and import prices excluding oil slid 0.3% in June after rising an unrevised 0.2% in May. Export prices increased 0.3% in June after rising an unrevised 0.6% in May, and export prices excluding agriculture rose 0.4% in June after rising a revised 0.6% in May (from +0.5%).
The key takeaway from the report is that the year-over-year changes show an uptick in inflation trends, just like the PPI and CPI reports for June did.
The preliminary reading of the University of Michigan Consumer Sentiment Index for July slipped to 97.1 (Briefing.com consensus 97.8) from 98.2 in June.
The key takeaways from the report are twofold: (1) it revealed negative concerns about the impact of trade tariffs are rising among the top third of the income distribution, who account for half of consumer spending and (2) consumers under the age of 45 are anticipating the largest income gains since July 2000.
Looking ahead, investors will receive on Monday the Retail Sales report for June, the Empire State Manufacturing Index for July, and the Business Inventories report for May. Bank of America (BAC) and BlackRock (BLK) will report earnings before the open, and Netflix (NFLX) will report after the close.
Nasdaq Composite +13.4% YTD
Russell 2000 +9.9% YTD
S&P 500 +4.8% YTD
Dow Jones Industrial Average +1.2% YTD
Week In Review: Entering Earnings Season on a Positive Note
Wall Street advanced for the second week in a row, with the Nasdaq (+1.8%) touching a new record and the S&P 500 (+1.5%) hitting its best level since the big drop in early February. The Dow Jones Industrial Average (+2.3%) outperformed its peers, returning to positive territory for the year, but the small-cap Russell 2000 (-0.4%) struggled.
Stocks started the week on a positive note, rallying on Monday and Tuesday, but sold off on Wednesday after the White House escalated its ongoing trade dispute with Beijing, publishing a new list of tariffs. This round of duties is the largest yet, calling for a 10% tariff on $200 billion worth of Chinese goods, but it won't be official for at least two months. As it did with earlier tariffs, China promised to retaliate.
Meanwhile, NATO leaders held a two-day summit in Brussels this week. President Trump dominated the headlines, criticizing Germany for approving a major gas deal with Russia and taking a hard stance on increased military spending. Member states recommitted to a military spending target of 2% of GDP by 2024, prompting Mr. Trump to verbally confirm his commitment to the alliance.
The U.S. president then jetted to the UK for a meeting with Prime Minister Theresa May. Before the meeting, Mr. Trump suggested that Ms. May's Brexit plan may prevent the U.S. from entering a bilateral trade deal with the UK, but he walked back those comments in a latter press conference, reaffirming the leaders' "special relationship."
Back on the home front, West Texas Intermediate crude futures tumbled from a three-and-a-half year high on Wednesday, plunging 5.0% in their worst daily performance in over a year. Investors shrugged off a bullish inventory report -- which showed a huge drop of 12.6 million barrels for the week ended July 6 -- and instead focused on resurgent Libyan supply and increased June output for Saudi Arabia.
The energy sector, which is sensitive to crude prices, finished behind the broader market, but still added 0.8%. Eight of eleven spaces finished the week in the green, with information technology (+2.3%), consumer discretionary (+2.1%), and industrials (+2.2%) being the top performers. Utilities (-1.2%), telecom services (-1.6%), and real estate (-0.8%) were the three decliners.Previous
In corporate news, big banks JPMorgan Chase (JPM), Citigroup (C), and Wells Fargo (WFC) unofficially kicked off the second quarter earnings season on Friday with mixed results; JPMorgan and Citigroup beat earnings estimates, but Wells Fargo missed. The financial sector lost 0.5% on Friday, but still finished the week with a gain of 1.1%.
Elsewhere, 21st Century Fox (FOXA) lost 4.0% on Wednesday following reports that Comcast (CMCSA) may forego countering Disney's (DIS) offer for Fox's entertainment assets and focus on upping its bid for British media company Sky instead; Broadcom (AVGO) tumbled 13.7% on Thursday after agreeing to acquire software company CA Tech (CA) for approximately $18.9 billion in cash; and AT&T (T) lost 1.7% on Friday after the Department of Justice appealed the company's acquisition of Time Warner.
In the bond market, U.S. Treasuries moved lower in another curve-flattening trade this week, bringing the 2-10 spread down two basis points to 26 bps -- its lowest level in more than a decade. The yield on the benchmark 10-yr note ticked up one basis point to 2.83%, while the yield on the 2-yr note climbed three basis points to 2.57%.
Tech-Charged Rally Pushes Nasdaq to New Record
12-Jul-18 16:30 ET
Dow +224.44 at 24924.89, Nasdaq +107.30 at 7823.93, S&P +24.27 at 2798.03
https://www.briefing.com/investor/markets/stock-market-update/2018/7/12/techcharged-rally-pushes-nasdaq-to-new-record.htm
[BRIEFING.COM] Wall Street rebounded on Thursday, resuming its recent upward trend following a trade-induced sell off in the prior session. Stocks opened in the green and extended their gains throughout the day.
The major averages each achieved a notable milestone: the Nasdaq (+1.4%) finished at a new record, the S&P 500 (+0.9%) hit its best level since the big drop in early February, and the Dow (+0.9%) returned to positive territory for the year. Small caps underperformed, but the Russell 2000 (+0.4%) still managed a modest gain.
The top-weighted technology sector (+1.8%) led Thursday's broad-based advance. Within the space, influential names like Microsoft (MSFT 104.19, +2.21), Alphabet (GOOG 1183.48, +29.58), and Facebook (FB 206.92, +4.38) rallied to new record highs, adding more than 2.0% apiece. Apple (AAPL 191.03, +3.15) also had a good performance, adding 1.7%.
Chipmakers finished higher overall, but Broadcom (AVGO 209.98, -33.46) tumbled 13.7% after agreeing to acquire software company CA Tech (CA 44.15, +6.94) for approximately $18.9 billion in cash.
Industrials (+1.1%) and health care (+1.1%) were the next-best performing groups, with industrials benefiting from an above-consensus earnings report from Delta Air Lines (DAL 50.73, +0.89), which advanced 1.8%. The consumer discretionary space (+0.7%) finished in line with the broader market as Amazon (AMZN 1796.62, +41.62) rallied 2.4% to a new all-time high.
On the downside, the heavily-weighted financial sector (+0.2%) lagged, closing near the bottom of the sector standings amid another curve-flattening trade in the bond market. Treasuries ended modestly lower, pushing the benchmark 10-yr yield up one basis point to 2.85% and the 2-yr yield up two basis points to 2.60%. That left the 2-10 spread at 25 basis points, which is its lowest level since 2007. Meanwhile, the consumer staples group (-0.1%) was the lone decliner.
In central banking, Fed Chair Jerome Powell said in an interview with Marketplace.org that the economy is "in a good place," but noted that an escalation in tariffs between the U.S. and its trading partners could have a negative impact. Mr. Powell's comments didn't prompt any notable movement in the markets.
Overseas, President Trump wrapped up a two-day NATO summit in Brussels on Thursday morning, saying NATO withdrawal is now "unnecessary" after member states reaffirmed a commitment to spending 2% of their GDP on defense. The president then jetted to the UK for a meeting with Prime Minister Theresa May.
Reviewing Thursday's economic data, which included June CPI, weekly Initial Claims, and the June Treasury Budget:
Total CPI increased 0.1% (Briefing.com consensus +0.2%) in June, and core CPI, which excludes food and energy, rose 0.2% (Briefing.com consensus +0.2%). On a year-over-year basis, total CPI is up 2.9% (vs +2.8% in May) and core CPI is up 2.3% (vs +2.2% in May).
The key takeaway from the report is that consumer inflation is picking up and giving the Federal Reserve the data-based cover it is seeking to continue raising the fed funds rate.
The latest weekly initial jobless claims count totaled 214,000, while the Briefing.com consensus expected a reading of 225,000. Today's tally was below the revised prior week count of 232,000 (from 231,000). As for continuing claims, they decreased to 1.739 million from a revised count of 1.742 million (from 1.739 million).
The key takeaway from the report is that the low level of initial claims reflects a hesitancy on the part of employers to cut workers in an environment where end demand is solid and where it is becoming increasingly difficult to find qualified workers to fill higher-skilled positions.
The Treasury Budget for June showed a deficit of $74.8 billion versus a deficit of $90.2 billion for June 2017.
The Treasury Budget data is not seasonally adjusted, so the June surplus cannot be compared to the $146.8 billion deficit registered in May.
Looking ahead, big banks JPMorgan (JPM), Citigroup (C), and Wells Fargo (WFC) will unofficially kick off the second quarter earnings season on Friday morning, and investors will receive June Import/Export Prices and the preliminary reading of the University of Michigan Consumer Sentiment Index for July.
Nasdaq Composite +13.3% YTD
Russell 2000 +10.1% YTD
S&P 500 +4.7% YTD
Dow Jones Industrial Average +0.8% YTD
Trade Tensions Snap Win Streak
11-Jul-18 16:30 ET
Dow -219.21 at 24700.45, Nasdaq -42.59 at 7716.63, S&P -19.82 at 2773.76
https://www.briefing.com/investor/markets/stock-market-update/2018/7/11/trade-tensions-snap-win-streak.htm
[BRIEFING.COM] Stocks snapped a four-session winning streak on Wednesday as U.S.-China trade tensions retook center stage and as crude oil prices tumbled, weighing on energy shares. The S&P 500 dropped 0.7% to 2774, the Dow Jones Industrial Average declined 0.9% to 24700, and the Nasdaq Composite slid 0.6% to 7717.
The White House further escalated its ongoing trade dispute with Beijing on Tuesday evening, publishing a new list of tariffs. This round of duties is the largest yet, calling for a 10% tariff on $200 billion worth of Chinese goods, but it won't be official for at least two months. As it did with earlier tariffs, China promised to retaliate.
Meanwhile, in Brussels, a two-day NATO summit got off to a contentious start after President Trump criticized Germany for approving a major gas deal with Russia. NATO leaders later recommitted to a military spending target of 2% of GDP by 2024 at the urging of Mr. Trump, who was pushing for doubling the target to 4%.
Back on the home front, energy stocks tumbled as crude prices retreated from a three-and-a-half year high. Several factors contributed to the crude sell off, including a muted/negative response to a bullish inventory report, which showed a huge drop of 12.6 million barrels -- the biggest weekly drop since September 2016. WTI crude futures tumbled 5.0% to $70.38 per barrel, and the S&P 500's energy sector declined by 2.2%, closing at the bottom of the sector standings.
The industrials (-1.6%) and materials (-1.7%) spaces, both of which are sensitive to trade issues, were the next-worst performing groups, while most other spaces lost no more than 0.8%. Out of 11 groups, the utilities space (+0.9%) was the only one to finish in the green, continuing to rebound from Monday's 3.1% drop.
On the corporate front, shares of 21st Century Fox (FOXA 47.79, -1.98) lost 4.0% following reports that Comcast (CMCSA 33.77, +0.43) may forego countering Disney's (DIS 108.04, +2.01) offer for Fox's entertainment assets and focus on upping its bid for British media company Sky instead. Meanwhile, airlines tumbled after American Airlines (AAL 35.96, -3.16) issued a revenue growth warning; AAL shares ended lower by 8.1%.
Elsewhere, U.S. Treasuries finished mostly higher, pushing yields lower; the benchmark 10-yr yield dropped three basis points to 2.84%. The U.S. Dollar Index rallied 0.7% to 94.48, and the CBOE Volatility Index jumped 7.8% to 13.63 after hitting a three-month low on Tuesday.
Reviewing Wednesday's economic data, which included the June Producer Price Index, May Wholesale Inventories, and the weekly MBA Mortgage Applications Index:
Producer prices rose 0.3% in June (Briefing.com consensus +0.2%), and core producer prices increased 0.3% (Briefing.com consensus +0.2%). Year-over-year, producer prices are up 3.4% (vs +3.1% in May) and core producer prices have risen 2.8% (vs +2.4% in May).
The key takeaway from the report is that producers are facing increased cost pressures throughout all stages of production, which will fuel concerns about profit margin pressures if they don't pass those costs onto customers and concerns about consumer inflation pressures if they do.
May Wholesale Inventories rose 0.6% (Briefing.com consensus +0.5%). The April reading was left at +0.1%.
The key takeaway from the report is that sales growth outpaced inventories growth, which is a positive dynamic that can eventually help wholesalers regain pricing power if it persists.
The weekly MBA Mortgage Applications Index increased 2.5% after declining 0.5% last week.
Looking ahead, investors will receive the June Consumer Price Index, the weekly Initial Claims report, and the June Treasury Budget on Thursday.
Nasdaq Composite +11.8% YTD
Russell 2000 +9.7% YTD
S&P 500 +3.8% YTD
Dow Jones Industrial Average -0.1% YTD
Wall Street Gets Fourth Straight Win; Financials Lag
10-Jul-18 16:20 ET
Dow +143.07 at 24919.66, Nasdaq +3.00 at 7759.22, S&P +9.67 at 2793.58
https://www.briefing.com/investor/markets/stock-market-update/2018/7/10/wall-street-gets-fourth-straight-win-financials-lag.htm
[BRIEFING.COM] The market climbed for a fourth straight session on Tuesday, with the S&P 500 and the Dow adding 0.4% and 0.6%, respectively. The tech-heavy Nasdaq lagged, but still managed to eke out a narrow victory, and the small-cap Russell 2000 ended lower by 0.5% despite hitting a new intraday record in early trading.
10 of 11 sectors finished Tuesday in the green. Defensive groups, including consumer staples (+1.3%), utilities (+1.0%), and telecom services (+1.1%) led the charge after lagging on Monday. The energy (+0.7%) and materials (+0.8%) groups were also strong, but the heavily-weighted financial space (-0.4%) struggled following Monday's rally.
Financials' decline helped to keep the broader market in check, as did a mild performance from the top-weighted tech space (+0.2%) and losses in both transport and biotech stocks; the Dow Jones Transportation Average declined 0.3%, and the iShares Nasdaq Biotechnology ETF (IBB 116.61, -0.20) slipped 0.2%.
Biogen (BIIB 344.82, -9.18) paced the biotech retreat with a loss of 2.6% after Robert W. Baird downgraded the stock, arguing that last week's upbeat reaction to positive Alzheimer's drug data was overblown. Still, the heavily-weighted health care sector finished with a gain of 0.4%.
In earnings news, PepsiCo (PEP 112.89, +5.13) rallied 4.8%, hitting a four-month high, after reporting better-than-expected earnings for the second quarter.
Elsewhere, Treasuries finished flat to slightly lower, pushing yields a tick higher; the benchmark 10-yr yield, for instance, climbed to 2.87% from 2.86%. WTI crude futures were up more than 1.0% in early trading, but finished higher by just 0.3% at $74.12/bbl, and the CBOE Volatility Index declined 1.3% to 12.53, a three-week low.
President Trump left for Brussels on Tuesday morning for a two-day NATO summit, during which he'll likely push allies to ramp up their military spending. Mr. Trump will travel to Britain following the NATO meeting and then to Finland for a highly-anticipated meeting with Russian president Vladimir Putin.
Reviewing Tuesday's economic data, which included the Job Openings and Labor Turnover Survey for May and the NFIB Small Business Optimism Index for June:
The May Job Openings and Labor Turnover Survey showed that job openings increased to 6.638 million from a revised 6.840 million (from 6.698 million) in April.
The NFIB Small Business Optimism Index for June ticked down to 107.2 from 107.8 in the prior reading.
Looking ahead, investors will receive on Wednesday the June Producer Price Index, May Wholesale Inventories, and the weekly MBA Mortgage Applications Index.
Nasdaq Composite +12.4% YTD
Russell 2000 +10.4% YTD
S&P 500 +4.5% YTD
Dow Jones Industrial Average +0.8% YTD
Financials Pace Third Straight Advance
09-Jul-18 16:25 ET
Dow +320.11 at 24776.59, Nasdaq +67.81 at 7756.22, S&P +24.35 at 2783.91
https://www.briefing.com/investor/markets/stock-market-update/2018/7/9/financials-pace-third-straight-advance.htm
[BRIEFING.COM] Stocks rallied for a third consecutive session on Monday as investors shelved their trade war fears and set their sights on the Q2 earnings season, which will unofficially kick off on Friday. The S&P 500 and the Nasdaq advanced 0.9% apiece, and the Dow added 1.3%, climbing back into positive territory for the year (+0.2% YTD). The market started in the green and climbed steadily throughout the session.
Growth-sensitive sectors were the top-performing groups on Monday, underlining a risk-on attitude from market participants. Financials (+2.3%), industrials (+1.8%), and energy (+1.5%) finished atop the sector standings, while the top-weighted information technology space (+0.8%) struggled to keep pace -- although it did gain some ground in the afternoon.
On the downside, four groups -- mostly countercyclical -- finished in negative territory. The lightly-weighted utilities sector was particularly weak, tumbling 3.1%, following an impressive four-week run; the group surged 10.5% from June 12 to July 6.
In corporate news, Groupon (GRPN 4.83, +0.47) rallied 10.7% after Recode reported that the company is looking for a buyer, but Twitter (TWTR 44.14, -2.51) dropped 5.4% following a Washington Post report that the company has sharply escalated its battle against fake accounts, putting user growth at risk. Also of note, Dow component Pfizer (PFE 37.16, +0.05) finished roughly flat after President Trump singled the company out for high drug prices.
Elsewhere, U.S. Treasuries sold off, pushing yields higher across the curve; the benchmark 10-yr yield climbed three basis points to 2.86%. WTI crude futures rose 0.3% to $74.04 per barrel -- nearly a new three-and-a-half year high -- and the U.S. Dollar Index ticked up 0.1% to 93.82.
Overseas, the UK's Foreign Minister Boris Johnson, Brexit Minister David Davis, and Parliamentary Private Secretary to the Department of Transportation Chris Green resigned from government due to ideological differences with Prime Minister Theresa May.
Separately, President Trump said China may be "exerting negative pressure" on a deal between the U.S. and North Korea. Over the weekend, North Korean officials accused the U.S. of being "gangster-like" in its demand for denuclearization following two days of talks with Secretary of State Mike Pompeo.
Reviewing Monday's economic data, which was limited to the Consumer Credit report for May:
The Consumer Credit report for May showed an increase of $24.6 billion (Briefing.com consensus $12.4 billion). April credit growth was revised to $10.3 billion from $9.3 billion.
The key takeaway from the report is that the surge in credit expansion will serve as a catalyst for a strong pickup in consumer spending that should manifest itself in a strong Q2 GDP number.
Looking ahead, investors will receive the NFIB Small Business Optimism Index for June and the Job Openings and Labor Turnover Survey for June on Tuesday.
Nasdaq Composite +12.4% YTD
Russell 2000 +11.0% YTD
S&P 500 +4.1% YTD
Dow Jones Industrial Average +0.2% YTD
InvestmentHouse - Jobs Report Driving the Action? (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
- NASDAQ, SP500 get off the cusp, join RUTX with significant moves.
- Jobs report drive the action? Trade? No.
- Trade and FOMC are still a problem for the market.
- Wages a problem? Not a problem? The Fed IS a problem.
- Some key stocks break higher Friday, others are in position to follow.
This past week some significant moves were made. Thursday RUTX made the
clean break from the 50 day EMA. SP400 started following that session,
really stepping out more Friday. SP500 finally showed some pop as well,
jumping from an 8-session lateral consolidation and importantly topping the
May peak. Chips were up, DJ30 as well, but they did not make very
significant breaks higher. More work to be done for those, but as with
SP500, at least they have a road map to follow, i.e. the moves of the other
indices.
Leadership was not bad either. FAANG stocks shows some serious action. FB
to a new all-time closing high despite the continual reports on privacy
issues. GOOG rallied nicely off the 50 day EMA test. NFLX broke higher on
solid volume from a 1.5 week consolidation. AMZN is still in that same
consolidation. AAPL as well. Perhaps the latter two will follow the other
FAANG leads as we would like SOX and DJ30 to do as well.
FAANG was not the only game in town. Drugs/biotechs, energy, software, some
key chips (e.g. AMD), TWTR, some metals, some materials (TREX) -- not
garbage. Hey, someone had to be pushing the indices higher. Good to see
there was some quality there; oh sure, it was not the industrial machinery
or JPM (though the latter were higher), but these were solid stocks.
SP500 23.21, 0.85%
NASDAQ 101.96, 1.34%
DJ30 99.74, 0.41%
SP400 0.76%
RUTX 0.87%
SOX 1.22%
NASDAQ 100 1.50%
VOLUME: NYSE -18%, NASDAQ -1%. Okay, no volume blowout, but it was Friday
on a holiday week. Stocks such as NFLX, FB, TWTR moved higher on quite
solid volume for a low volume session.
ADVANCE/DECLINE: NYSE 2.9:1, NASDAQ 2.3:1. Not blowing away the downside
breadth shown on the worst selling, but not meaningless upside.
So was it the Jobs Report described as 'Goldilocks' by CNBC? Trade issues
improving? They didn't hurt, but they were not definitive.
Remember this: the moves Thursday and Friday were significant. Low volume
for sure and thus less impressive perhaps, but significant. That said,
there will still be ebb and flow from the issues of the day: trade
negotiations and the yield curve (aka the Fed).
NEWS/ECONOMY
Jobs Report: Good enough, but not great.
The doom/negative websites said to watch out for a jobs miss. The overly
bullish said expect huge. It was neither. It was not bad. It was more of the
same, i.e. an improving, decent jobs market but not producing wage growth.
Non-farm jobs: 213K vs 195K exp vs 244K prior (from 223K)
Unemployment Rate: 4.0% vs 3.8% expected vs 3.8% prior.
The increase resulted from more people entering the workforce looking for
jobs. This is, finally, a more normal reaction. Amazing isn't it how all
through the past 'recovery' nothing acted normal yet everyone said it was a
recovery. It wasn't. Now that we are having a recovery you see the numbers
reaction as they always do: more jobs and higher quality jobs are available,
those without jobs take heart and go looking for work. More people look
than can find jobs in a month and thus the unemployment rate rises. More
people reentering the workforce, not all of the new lookers find jobs,
unemployment rate rises. That is normal. That is healthy.
Wages: 0.2% vs 0.3% exp vs 0.3% prior. 2.7% year/year. Not rising as fast
as the other elements of the report. This is seen as a positive, i.e. the
Fed won't be compelled to hike rates as rapidly if wages are not rising and
'pushing' inflation as the Phillips Curve, Keynesian BS calls it. Wages
never, ever, in the history of the world, caused inflation. Wages rise out
of need for quality workers. The Fed fears that extra money will be pushed
into the market and if no more goods are made, then more money chases the
same amount of goods, the definition of inflation.
Problem is, as former Dallas Fed president McTeer noted, when the economy is
working such that wages would rise, supply rises and alleviates any demand
bottlenecks. The only thing that interrupts supply meeting demand? When
the Fed truncates money supply to the supply side and thus inhibits its
ability to meet demand. Thus, ironically and indeed tragically for the
average citizens involved, the Fed acts to prevent inflation, but the
actions it takes -- based on an 'indicator' that does not indicate what the
Fed thinks it does -- CAUSES the inflation as the supply of money to the
supply side is choked off.
Brilliant! The Fed never, ever understands this because it relies on a
model that worked only for 6 months in the entire economic history of the
world if it worked that long. It resorts to the standard Federal Reserve
Playbook Manual and takes steps that cause what it fears. Reminds me of the
movie 'Diehard' when the safe cracker says it will take a miracle to get
past the last lock. The FBI shows up and does the one thing that would let
them get past the last lock. The leader Hans proclaims to the safe cracker,
'You asked for a miracle? I give you the FBI.'
Looking at the yield curve flattening and the Fed hiking into that
flattening one has to wonder if the Fed should be in charge of anything
other than making sure there is enough security for the US gold stores.
Hell, the Fed is not even qualified for that. There should be a Fed, but
its ONLY duty should be to provide emergency liquidity when deemed necessary
and that should be automatically limited in time. Oh well. Trump won't
take on this project for now.
Workweek: 34.5 vs 34.5 exp vs 34.5 prior
U6: 7.8%. Rick Santelli at CNBC says this is the real unemployment rate.
When you factor in the 95Mish people out of the work force, I would hazard
it is MUCH higher, at least in real terms such as people who could work but
don't because they don't want to and don't have to because they can receive
benefits and live better than they did in the country they came from -- and
that includes people born in the US who have more disposable income taking
benefits than a person making close to $70K/year. See why there just might
be a problem?
Participation rate: 62.9% vs 62.7%.
More people coming back into the labor force, trying to weed down that 95.9M
people out of the workforce and get them into productive roles once again
versus reading the want ads, bed rest, and the other absurd things that
allowed them to collect unemployment or disability or some other 'aid.'
Where the Jobs Are:
Manufacturing +36K
Professional/Business: +50K
Healthcare: 25K
Construction 13K
Mining 5K
Retail -22K
Trade: US/China exchange $34B in trade tariff gifts on Friday. Trump
threatens billions, indeed hundreds of billions more. People wail and moan
and gnash their teeth. Changing the status quo can be trying, but do you
not do something that is right because it is difficult. I recall a
President saying we do these things not because they are easy, but because
they are hard. That problem with US leaders for the past 30 years is they
took the easy way out.
Trade Deficit:
Over past 3 months the deficit is down the most in 10 years. Currently the
read is the lowest since 10/2016. Seems to be going the way the President
wants it. We will see if that turns out to be a good thing.
Trade Tactics:
I continue hearing our feckless elected congressional officials cry about
the tactics used against our allies and non-allies regarding trade. They
want a kinder, gentler approach. We have HAD a kinder, gentler approach for
decades. That worked quite well -- for our 'allies.' They and our
non-allies (enemies?) have pantsed us. They don't care; they have a good
deal. So, do you continue to do what clearly has nil impact or do you
finally demand they change and if not, reap some of the pain we have to
endure? Our congressional leaders are, as stated, feckless. And imbeciles.
THE MARKET
CHARTS
RUTX: Finished the 50 day EMA test Monday with the reach lower and rebound
to positive, then extended that move each session. The definitive move was
Thursday as the market came back from the holiday. Friday RUTX extended
that move upside toward the prior high. Breakout, rally, test, new break
higher to a new high, then testing late June to key support. Now on an
impressive rebound.
SP400: Started higher Thursday, not as impressive as RUTX, but a solid move
upside. Friday was a more definitive move. Closing in on the prior high
(2008.97; closed at 1989.49) with a 50 day MA test and bounce.
NASDAQ: A significant move here as well though not until Friday. NASDAQ
broke from its 8 session lateral move over the 50 day MA. Not huge trade
but a key group of large cap techs along with small cap drugs posted solid
moves. NASDAQ closed at the early June interim high and the March high. Of
course it needs to keep powering upside to a new high.
SP500: Rallied out of its 8-session 50 day MA lateral move as well. Not
closing in on a new high, just the early June peak that was still below the
March lower high and well off the late January high at 2870. Okay, lots to
do still without any help from the financial stocks. That makes SP500's
attempt higher difficult, but it is holding where it has to and is at least
following.
DJ30: Works for now, but definitely a follower with its financial and
industrial components hurting it. Its drug components are helping, but even
with that help all DJ30 could do Friday was move back up through the 200 day
SMA.
SOX: Two days up off the 200 day SMA, similar to the move in early May.
Just has not made as much of the move, closing just below the 50 day MA's.
Some big names helped, e.g. AMD, TXN, but many were up but mostly a rebound
from selling to resistance.
LEADERSHIP
FAANG: FB new high. NFLX starting higher out of a 1.5 week consolidation.
GOOG rebounding past the recent recovery high. Decent. AAPL, AMZN still in
the same 1.5 week consolidation. NFLX moving toward earnings, FB as well.
Software: UIS found its stride. TTWO moved to a new recovery high. GLUU
started up off its 3 week lateral consolidation. VRSN continues working
higher though on low trade. Ditto DATA, but not losing sleep over that.
Even MSFT broke higher off the 50 day MA.
Chips: AMD posted a powerful move for us. NVDA is trying to come back from
below 450 day MA oblivion. 252 is a key level for it buy the way. QRVO
took Friday off but surged back Thursday. MXIM posted a nice late-week
recovery as well. SLAB looking frisky. MU, AMAT and others looking for
help.
Drugs/Biotechs: Some stocks coming up off tests while others try to turn
away from downtrends. ACAD trying to break higher. BIIB exploding upside
with a gap on strong alzheimer's drug results. CELG moving up through the
50 day MA. ARWR keeps moving higher for us. Have some new additions for
this coming week.
Energy/Oil: Still look good, still looking for a good move. APC held a 20
day EMA test. APA trending nicely up the 10 day EMA. MRO, COP still basing
in solid patterns. CXO breaking higher. Other possibilities as well, e.g.
WDC, EOG.
Retail: Some bouncing such as COST moving off the 20 day EMA. Ditto ROST.
Still waiting for RH to move higher.
Financials: Posted gains Friday, but gains with not a lot of meaning. WFC
looks as if it might actually attempt a break higher through the 200 day
SMA. BAC and JPM could do this as well, but they are not an imminent threat
to move through that resistance anytime soon. C can bounce as well. Sure
it can; anything can bounce for a bit. C does look, however, as if it has
done its time and put in something of a near term bottom.
MARKET STATS
DJ30
Stats: +99.74 points (+0.41%) to close at 24456.48
Nasdaq
Stats: +101.96 points (+1.34%) to close at 7688.39
Volume: 1.72B (-1.15%)
Up Volume: 1.35B (+60M)
Down Volume: 349.68M (-86.22M)
A/D and Hi/Lo: Advancers led 2.32 to 1
Previous Session: Advancers led 2.4 to 1
New Highs: 129 (+43)
New Lows: 21 (-16)
S&P
Stats: +23.21 points (+0.85%) to close at 2759.82
NYSE Volume: 664.553M (-17.67%)
A/D and Hi/Lo: Advancers led 2.87 to 1
Previous Session: Advancers led 2.81 to 1
New Highs: 138 (+60)
New Lows: 30 (-7)
SENTIMENT
VIX: 13.37; -1.60
VXN: 18.72; -1.63
VXO: 12.71; -2.25
Put/Call Ratio (CBOE): 1.00; +0.09
Bulls and Bears:
As noted last week with the sharp drop in bullish sentiment over the prior
two weeks, the sharp drop weighed for a move back up. Looks as if that move
started.
Bulls: 47.6 versus 52.0
Bears: 18.4 versus 17.6
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: 47.6 versus 52.0
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 versus 49.5 versus 49.5 versus 48.1 versus 50.5 versus 57.5
versus 60.0 versus 60.2 versus 57.8 versus 50.0 versus 52.5 versus 54.9
versus 51.5 versus 50.00 versus 55.8 versus 50.00 versus 51.9 versus 58.1
versus 58.7 versus 58.5 versus 54.7 versus 51.9 versus 56.3 versus 55.8
versus 49.5
Bears: 18.4 versus 17.6
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: 2.824% versus 2.835%. Bumped up into the 200 day SMA the prior week,
tested, then moved through the 200 day SMA Thursday and gapped upside
Friday. Bonds rallying as the Fed says it is hawkish. Goodness.
Historical: the last sub-2% rate was in November 2016 (1.867%). 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% versus 2.997% versus 2.97% versus 2.966% versus
3.006% versus 2.952% versus 2.948% versus 2.968% versus 2.954% versus 2.959%
versus 2.975% versus 3.0245% versus 3.00% versus 2.962% versus 2.96% versus
2.914% versus 2.867% versus 2.83%
EUR/USD: 1.17439 versus 1.1689. Euro breaking higher despite the jobs
report, despite a hawkish Fed. Coming off a double bottom, moving up
through the 50 day MA, so there is some technical foundation here.
Historical: 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 versus 1.16643 versus 1.15446 versus 1.17148 versus 1.17096 versus
1.17022 versus 1.17826 versus 1.1786 versus 1.17714 versus 1.1802 versus
1.1811 versus 1.18272 versus 1.19358 versus 1.19411 versus 1.1913 versus
1.18533 versus 1.18672 versus 1.19150 versus 1.19619 versus 1.1983 versus
1.1978 versus 1.19896 versus 1.20741 versus 1.21291 versus 1.21788 versus
1.2163 versus 1.22232
USD/JPY: 110.474 versus 110.666. Dollar off Friday but just testing a break
back up through the 200 day SMA and measuring a run at the May high.
Historical: 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 versus 108.699 versus 108.699 versus 109.385 versus 109.667 versus
109.502 versus 110.833 versus 110.95 versus 110.76 versus 110.935 versus
110.376 versus 110.246 versus 109.693 versus 109.384 versus 109.40 versus
109.746 versus 109.038 versus 109.022 versus 109.08 versus 109.175 versus
109.628 versus 109.91 versus 109.354 versus 109.051 versus 109.28 versus
109.373 versus 108.894 versus 108.728 versus 107.645 versus 107.404 versus
107.409 versus 107.027 versus 107.010
Oil: 73.80, +0.86. Testing the higher high with a 4-day lateral move. 10
day EMA has now caught up to it.
Gold: 1255.80, -3.00. Bounced up to the 10 day EMA Tuesday and Thursday,
stalled Friday with a doji. Key initial bounce. Fails here, chronic
weakness.
MONDAY
Ah, a full week. The market will show if the moves I deemed significant
from Thursday and Friday (even with low volume) will hold the move.
Substantive leadership helped drive the move, leaders from the prior rally.
RUTX broke higher first with SP400 and NASDAQ following. That gives the
move some credence. Now the move has to show staying power.
Building on the significance of the 'significant move' call, we are looking
at adding positions if the new plays and existing plays make significant
moves. We will also let existing positions continue to work, some
rebounding from the prior selling, others from our recent entry points.
Earnings are just ahead, indeed already starting, and stocks, after a
selloff, are stirring higher ahead of results. That may give us some nice
gains to take before individual announcements, and with the pullback there
could still be good upside even on the results announcement. We will see
how that plays out, but for now we are looking to enter more plays as they
continue making significant moves.
Have a great weekend!
Market Trades Trade Concerns for Labor Market Relief
06-Jul-18 16:15 ET
Dow +99.74 at 24456.48, Nasdaq +101.96 at 7688.41, S&P +23.21 at 2759.56
https://www.briefing.com/investor/markets/stock-market-update/2018/7/6/market-trades-trade-concerns-for-labor-market-relief.htm
[BRIEFING.COM] Apparently, a trade war started on Friday -- or so it was said -- yet the stock market acted as if there was a daisy stuck in the barrel of every trade threat. For the second day in a row, the stock market ignored the trade conflict between the U.S. and China (and other countries for that matter) and rallied around a pleasing employment report for June.
It was clear to see in the futures market this morning how the employment report was the inflection point for a shift in trading sentiment. Prior to its release at 8:30 a.m. ET, the S&P futures were down as many as seven points and signalling a modestly lower start for the broader market.
Following the release, they turned positive, and although the open to today's session was a bit tentative, the bulls soon took command of today's tape, ceding some ground only in a profit-taking retreat in the last 30 minutes of trading.
The catalyst for the upside bias was the recognition that the June employment report had a familiar Goldilocks hue to it. Specifically, it featured solid nonfarm payrolls growth (+213,000) and a subdued 2.7% year-over-year gain in average hourly earnings that kept inflation worries, and aggressive rate-hike worries, at bay.
The stock market wasn't the only beneficiary of that fairy-tale theme. The Treasury market also enjoyed the not-too-hot-not-too-cold narrative.
The 2-yr note yield, which is more sensitive to changes in the fed funds rate, fell three basis points to 2.53% while the 10-yr note yield, which is more sensitive to inflation, slipped one basis point to 2.83%.
Within the stock market, every sector was a winner.
Gains ranged from 0.3% (consumer staples) to 1.4% (health care). The latter was helped by a huge gain in Biogen (BIIB 357.48, +58.67, +19.6%), which surged after announcing encouraging, and surprising, Phase II trial results for its Alzheimer's drug.
A 1.2% increase in the information technology sector, which flowed from the outperformance of Apple (AAPL 187.97, +2.57, +1.4%), Facebook (FB 203.23, +4.78, +2.4%), Alphabet (GOOG 1140.17, +15.90, +1.4%), and Microsoft (MSFT 101.16, +1.40, +1.4%), solidified the upside bias and drove the outperformance of the Nasdaq Composite (+1.3%).
Trade matters were talked about widely. The U.S. and China both pressed ahead with tariffs on $34 billion worth of imported goods from each country, which was not a surprise, and President Trump suggested it's possible tariffs on more than $500 billion of Chinese goods could be levied over time if necessary.
The latter was a surprise, but judging by the stock market's performance, it was not unnerved by the remark.
Taking a closer look at today's economic data:
June nonfarm payrolls increased by 213,000 (Briefing.com consensus 195,000). Over the past three months, job gains have averaged 211,000 per month.
June private sector payrolls increased by 202,000 (Briefing.com consensus 192,000).
June unemployment rate was 4.0% (Briefing.com consensus 3.8%) versus 3.8% in May
June average hourly earnings were up 0.2% (Briefing.com consensus +0.3%), after increasing 0.3% in May. Over the last 12 months, average hourly earnings have risen 2.7%, versus 2.7% for the 12 months ending in May.
The average workweek in June was 34.5 hours (Briefing.com consensus 34.5) versus 34.5 hours in May June manufacturing workweek increased 0.1 hours to 40.9 hours Factory overtime increased 0.1 hours to 3.5 hours
The labor force participation rate was 62.9% in June, versus 62.7% in May
The key takeaway is that the data in aggregate were strong enough to excite the masses about the economic expansion continuing, but not so strong as to ignite any mass hysteria about inflation taking off and the Federal Reserve needing to clamp down fast and hard to contain it.
The trade deficit narrowed to $43.1 billion in May (Briefing.com consensus -$43.6 billion) from $46.1 billion in April, with exports increasing $4.1 billion more than April exports and imports increasing $1.1 billion more than April imports.
The key takeaway from the report is that net exports will be accounted for a positive component in Q2 GDP forecasts, as the second quarter average real trade deficit is 7.4% less than the first quarter average.
Monday's economic calendar will feature the Consumer Credit report (Briefing.com consensus $12.4 billion) for May.
Nasdaq Composite +11.4% YTD
Russell 2000 +10.3% YTD
S&P 500 +3.2% YTD
Dow Jones Industrial Average -1.1% YTD
Post-Fourth of July Fireworks for the Bulls
05-Jul-18 16:15 ET
Dow +181.92 at 24356.74, Nasdaq +83.75 at 7586.45, S&P +23.39 at 2736.35
https://www.briefing.com/investor/markets/stock-market-update/2018/7/5/postfourth-of-july-fireworks-for-the-bulls.htm
[BRIEFING.COM] The stock market took back on Thursday what it lost on Tuesday, and then some, in what has become a virtual seesaw of activity surrounding trade headlines -- real, perceived, or otherwise.
Today, the bulls won out, capitalizing on thin trading conditions, robust leadership from the S&P 500 information technology sector (+1.5%), and opportunistic reports that U.S. and EU officials may be deliberating over the possibility of eliminating all tariffs on auto imports to the EU and U.S.
It wasn't just a case of the information technology sector carrying the day, however. The gains were broad based and featured advances by 10 of 11 economic sectors. Solid gains were also registered by the consumer staples (+1.5%), health care (+1.1%), materials (+1.0%), and real estate (+1.4%) sectors.
The lone laggard was the energy sector (-0.2%), which fell in conjunction with oil prices ($73.04, -$1.28, -1.7%) after a bearish weekly inventory report. The energy sector's loss barely registered, however, as sellers lacked conviction overall in the post-Fourth of July trade.
Volume was on the light side, which was to be expected as many market participants remained on vacation -- or at least away from the stock market.
The participants who were involved today showed an affinity for the semiconductor stocks, which rallied around Micron (MU 52.84, +1.36, +2.6%) affirming its fiscal fourth quarter revenue outlook and some bargain-hunting activity following a rough patch for industry components over the last month.
The relative strength of the semiconductor stocks drove the outperformance of the information technology sector along with a cohort of familiar mega-cap names that included Apple (AAPL 185.40, +1.48, +0.8%), Facebook (FB 198.45, +5.72, +3.0%), and Alphabet (GOOG 1124.27, +21.38, +1.9%). The Philadelphia Semiconductor Index surged 2.7%.
By and large, the market seemed impervious to the understanding that the U.S. is poised to levy tariffs on $34 billion worth of Chinese goods, effective at midnight tonight, and that China is set to retaliate in kind with tariffs on a comparable amount of U.S. goods.
The insouciant trading behavior was viewed as a tacit sign that this tariff action has been priced in already and that the market still expects a full-fledged trade war to be avoided.
That perception could shift on the "next headline," but on Thursday the market traded on positive thoughts and not negative ones.
To that end, the FOMC Minutes for the June meeting were released at 2:00 p.m. ET. There weren't any notable surprises in the text, which is why there wasn't much reaction overall in the market to their release.
One passage that caught some added attention was an acknowledgement that contacts in many districts were concerned about the possible adverse effects of tariffs and other proposed trade restrictions and that contacts in some districts scaled back, or postponed, capital spending plans as a result of the uncertainty over trade policy.
Following a brief hiccup after the release of the Minutes, the major indices would all go on to reach new highs for the session, which were just a smidgen above today's closing prices.
Today's economic calendar featured four releases:
The MBA Mortgage Applications Index for the week ending June 30 (actual -0.5%; Prior -4.9%)
The ADP Employment Change Report for June (Actual 177,000; Briefing.com consensus 180,000; Prior revised to 189,000 from 178,000)
The key takeaway from the report is that it reflects difficulty for employers in finding qualified workers
The Initial Claims Report for the week ending June 30 (Actual 231,000; Briefing.com consensus 225,000; Prior revised to 228,000 from 227,000)
The key takeaway from this report is that there are no alarm bells ringing in it. The initial claims and continuing jobless claims levels continue to be low and encouraging, which is why the market keeps hitting the snooze button upon its release.
The ISM Non-Manufacturing PMI for June (Actual 59.1; Briefing.com consensus 58.3; Prior 58.6)
The key takeaway from the report is that it matched an uptick in the ISM Manufacturing Index for June, suggesting there was an acceleration in both manufacturing and non-manufacturing activity. That will help substantiate the belief that second quarter GDP growth is poised to pick up noticeably from the first quarter.
Friday's economic calendar will feature the Employment Situation Report for June and the Trade Balance Report for May.
Nasdaq Composite +9.9% YTD
Russell 2000 +9.2% YTD
S&P 500 +2.4% YTD
Dow Jones Industrial Average -1.4% YTD
Disappointing Finish
03-Jul-18 13:30 ET
Dow -132.36 at 24174.82, Nasdaq -65.01 at 7502.70, S&P -13.49 at 2712.96
https://www.briefing.com/investor/markets/stock-market-update/2018/7/3/disappointing-finish.htm
[BRIEFING.COM] The market ended an abbreviated Tuesday session on a disappointing note, falling victim to a late tech-led sell off. The S&P 500 ended lower by 0.5%, closing near its worst mark of the day and dropping about six points below its 50-day moving average. The Dow (-0.5%) and the Nasdaq (-0.9%) also slid, but the small-cap Russell 2000 added 0.3%.
Stocks opened Tuesday's session mostly higher, but the underperformance of the top-weighted technology (-1.4%) and financials (-1.1%) sectors -- which represent around 40% of the broader market combined -- kept the major averages in check.
Eventually those two sectors -- in addition to other cyclical groups like consumer discretionary (-0.6%), industrials (-0.4%), and materials (-0.3%) -- broke into a full-fledged retreat, overpowering gains from most countercyclical groups. Telecom services was the top-performing sector with a gain of 1.2%.
A Chinese court ruling that temporarily banned Micron (MU 51.48, -3.00) chip sales helped fuel a final leg of selling late in the session, further stoking fears of a trade war between the world's two largest economies. Micron shares lost 5.5%, and the Philadelphia Semiconductor Index finished lower by 1.8%.
Late losses were also likely fueled by a desire to limit risk exposure ahead of the Fourth of July holiday break; U.S. markets will reopen on Thursday.
In other corporate news, shares of Tesla (TSLA 310.86, -24.21) tumbled 7.2% on Tuesday following a Business Insider report that CEO Elon Musk ordered engineers to stop putting nearly finished Model 3s through a critical "brake and roll" test in an effort to achieve the company's long-elusive production target of 5,000 Model 3s per week. Separately, Facebook (FB 192.79, -4.57) shares lost 2.3% after The Washington Post reported that a federal investigation into the company's data breach with Cambridge Analytica has expanded.
Away from stocks, WTI crude futures had a volatile session, trading between -1.6% and +1.8%, before closing flat at $73.94 per barrel. News of supply disruptions in Libya and Canada helped fuel early gains, which were then rolled back following a subsequent report that Saudi Arabia is ready to use its spare capacity to maintain stability in the oil market.
Elsewhere, U.S. Treasuries rallied on Tuesday, pushing yields lower across the curve; the yield on the benchmark 10-yr Treasury note dropped to 2.83% from 2.87%. Meanwhile, the U.S. Dollar Index declined 0.2% to 94.41, and the CBOE Volatility Index jumped 4.9% to 16.37.
Tuesday's economic data was limited to Factory Orders for May:
The Factory Orders report for May showed an increase of 0.4% (Briefing.com consensus -0.2%). The April reading was revised to -0.4% from -0.8%.
The key takeaway from the report is that shipments of nondefense capital goods excluding aircraft were higher than what was seen in the Advance Durable Goods Orders Report for May. That improvement, though, was offset to large extent by a downward revision to April, so it shouldn't move the needle that much in terms of Q2 GDP growth prospects.
U.S. markets will be closed on Wednesday in celebration of the Fourth of July.
Nasdaq Composite +8.7% YTD
Russell 2000 +8.1% YTD
S&P 500 +1.5% YTD
Dow Jones Industrial Average -2.2% YTD
Late Rally Leaves Stocks in the Green
02-Jul-18 16:30 ET
Dow +35.77 at 24307.18, Nasdaq +57.38 at 7567.71, S&P +8.34 at 2726.45
https://www.briefing.com/investor/markets/stock-market-update/2018/7/2/late-rally-leaves-stocks-in-the-green.htm
[BRIEFING.COM] A tech-charged afternoon rally saved the U.S. equity market from kicking off the abbreviated Fourth of July week on a lower note. The S&P 500 advanced 0.3%, closing at its best mark of the day and about eight points above its 50-day moving average. The Dow added 0.2%, the Nasdaq jumped 0.8%, and the Russell 2000 climbed 0.7%.
Trade tensions were heightened on Monday morning after President Trump said over the weekend that he will not back down on China tariffs. Separately, the European Union warned that it would impose tariffs on nearly $300 billion worth of American goods if the U.S. follows through with duties on EU automobiles. Mr. Trump said U.S. and EU officials will be meeting fairly soon to try to "work something out."
On Wall Street, the trade war rhetoric led stocks lower at the opening bell; the S&P 500 was down as much as 0.7%. However, the market started retracing some losses soon thereafter, and then the top-weighted technology sector led a full-fledged rebound in the afternoon.
The tech space -- which represents a quarter of the broader market -- finished atop Monday's sector standings with a gain of 1.0%. Tech giants like Apple (AAPL 187.18, +2.07), Microsoft (MSFT 100.01, +1.40), Facebook (FB 197.36, +3.04), and Alphabet (GOOG 1127.46, +11.81) added between 1.1% and 1.6%.
In total, seven of eleven sectors finished in the green. The utilities space (+0.8%) closed right behind technology, and the heavily-weighted financial group (+0.7%) also had a strong outing. On the flip side, the energy sector (-1.6%) finished at the bottom of the leaderboard, with consumer staples (-0.5%) being the next-worst performer.
The energy sector's decline came amid a modest sell off in the crude oil futures market, which was under pressure after President Trump said he's struck a deal with Saudi Arabia to increase output by up to two million barrels per day. WTI crude futures ended lower by 0.3% at $73.94 per barrel.
In corporate news, Tesla (TSLA 355.07, -7.88) got off to a good start, adding as much as 6.4%, after CEO Elon Musk said the electric automaker hit its long-elusive production target of 5,000 Model 3 vehicles per week in the last seven days of the second quarter, but shares quickly reversed course, eventually ending lower by 2.3%.
Elsewhere, U.S. Treasuries slipped on Monday, pushing yields higher across the curve; the benchmark 10-yr yield climbed to 2.87% from 2.85%. Meanwhile, the U.S. Dollar Index rallied 0.5% to 94.70, and the CBOE Volatility Index was up as much as 23.2%, but finished lower by 2.1% at 15.76.
Reviewing Monday's economic data, which was limited to the ISM Manufacturing Index for June and the Construction Spending report for May:
The ISM Index for June increased to 60.2 from an unrevised reading of 58.7 in May, while the Briefing.com consensus expected a reading of 58.5.
The key takeaway from the report is that it reflects continued strength in the manufacturing sector with the Prices Index sitting just below its best level in more than seven years.
Construction Spending rose 0.4% in May, while the Briefing.com consensus expected an increase of 0.6%. The April reading was revised to +0.9% from +1.8%.
The key takeaway from the report is that, combined with the downward revision for April, construction spending will make a smaller contribution to Q2 GDP forecasts than what was originally expected.
Looking ahead, Tuesday's trading session will end early (1:00 PM ET), and markets will be closed on Wednesday for the Fourth of July.
Nasdaq Composite +9.6% YTD
Russell 2000 +7.8% YTD
S&P 500 +2.0% YTD
Dow Jones Industrial Average -1.7% YTD
InvestmentHouse - Stocks do Poor Job of Trying to Move Higher (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
- Stocks try to continue the Thursday move higher, do a poor job.
- Modest gains Friday fail to shake off the lack of bids, selling, leaving
the character the same heading into the third quarter.
- Indices, key stocks still holding important support, thus far still unable
to move higher.
Friday started out with promise with futures higher as a follow up to the
Thursday upside. While the indices managed to close positive (for the most
part -- RUTX lower), the upside was really nothing by the close. Just more
lateral movement over some key support for NASDAQ, RUTX, SP400, SP500 (50
day MA), the 200 day SMA for DJ30 and SOX. In short, nothing to change the
status of the market as it tries to find footing at key support to continue
the overall uptrend.
Alas, another week of indecisive action other than to hold support by the
indices and many leading stocks. That in itself is not bad, and after 2 to
4 weeks of fading off the most recent highs, that is not the bad action many
claim it to be, e.g. some saying it is the start of a new bear market.
Seriously? Perhaps they are brilliantly prescient, but as for the patterns
I see, there is some seriously good stocks in seriously good position. If
the bids return at these classic bounce points, some seriously good moves
could result.
That is the technical picture: testing important support after a move to new
highs for many indices and stocks, still in the upside trend as they test.
SP500 2.06, 0.08%
NASDAQ 6.62, 0.09%
DJ30 55.36, 0.23%
SP400 0.07%
RUTX -0.12%
SOX 0.16%
NASDAQ 100 0.13%
VOLUME: NYSE +21%, NASDAQ +1%.
ADVANCE/DECLINE: NYSE +1.4:1, NASDAQ +1.2:1.
As for the sentiment aspects, the past two weeks there was/is a lot of talk
about a market top. Of course stocks sold into this test during that time.
New highs in the indices, many new highs in stocks. That typically brings
out calls of a market top.
There is also news, but it is all superseded by the trade discussions,
predictions, fears, rumors, speculation, and weak opinionating. Likely the
most important news of all is not really news, but a story, the story of the
Fed. It remains in the background, ready, by its own words, to continue
hiking in order to be ready for the next crisis. Ironically, and indeed
unsurprisingly, the yield curve is flattening as the Fed says it continues
its path to normalize rates. The Fed typically overacts and causes the
slowdowns it fears. That it is bent on tightening as the yield curve
flattens of course raises investor concerns.
Thus the resolution at this key support we are still waiting for, remains,
to use the President's terminology, huge.
As for trade, Friday there were reports of more 'troubling' developments,
primarily AKIOS reporting Trump is seeking at WTO withdrawal. The White
House responded that was the President was not seeking a withdrawal. Talk
about a nondenial denial. Okay, perhaps the White House wants serious
changes to the US' involvement and willingness to acquiesce to certain
aspects. Good cop, bad cop again, all played by the same person.
Chicago PMI, June: 64.1 versus 61 expected versus 62.7 May
Michigan Sentiment, June: 98.2 versus 99.0 versus 99.3.
Personal Income, May: 0.4 versus 0.4 expected versus 0.2% April (from 0.3%)
Spending, May: 0.2 versus 0.4 expected versus 0.5 April (from 0.6%)
News, important news, but most of it eclipsed, of course, by the trade 'war'
news. And the Fed's ongoing rate hike campaign in the background.
CHARTS
To view, click on the following links:
http://investmenthouse1.com/ihmedia/f/charts/sp500.jpg
http://investmenthouse1.com/ihmedia/f/charts/NASDAQ.jpg
http://investmenthouse1.com/ihmedia/f/charts/DJ30.jpg
http://investmenthouse1.com/ihmedia/f/charts/RUTX.jpg
http://investmenthouse1.com/ihmedia/f/charts/SP400.jpg
http://investmenthouse1.com/ihmedia/f/charts/SOX.jpg
Still working at key support levels, trying to find footing. Or not. This
is, as noted, a continued key test for the indices.
RUTX: A pair of doji at the 50 day EMA, holding it Thursday and bouncing,
failing to hold an upside move Friday. RUTX has tested the second leg in
the rally that started with the mid-May breakout, holding at the 38%
Fibonacci retracement as well as that 50 day EMA. Excellent position to
bounce, now weighing the impact of the Fed as a negative versus the trade
issues that are a positive.
NASDAQ: Gapped higher, coughed up the move, closed basically flat. Still
over the 50 day MA, now for 5 sessions as it too assesses trade versus the
Fed. Now, if you look at the technical picture, NASDAQ is halfway in the
uptrend channel that is using the early 2016 trendline as the lower channel
line. Now for those of you who have been with us for a bit know that higher
lows at important support inside channels, horizontal trading ranges,
triangles, etc. can lead to breakouts from the patterns. Thus, this is a
positive at this level, but a potential one as NASDAQ will have to make the
move.
SP400: The midcaps also spent the week holding at the 50 day MA. As noted
Thursday, there is the possibility of a bounce to a right shoulder to a head
and shoulders pattern that, if formed, started in May. There is also the
potential for a larger double top from the January and June highs.
Obviously that makes this 50 day MA test very important. Nothing new there.
SP500: Very similar to SP400, also holding the 50 day MA the past week.
Also, a potential head and shoulders to watch for if the index bounces to
2750ish and stalls, it likely has to deal with some downside. Important
higher high at important support.
SOX: Still holding at the 200 day SMA, spending the week there after the
Monday drop. Again, SOX held the 200 day SMA for 2 weeks in late
April/early May, and now we see if it can make the break higher once again.
DJ30: Held 24,000 on the low for the week, trying to rebound as in April
and May. Important test, needs some financials to help out.
Summary: Held the week at key support, but now has to deal with a holiday
shortened week and the month of the summer earnings season. Calls are for
20% earnings growth. Very optimistic but again, the issue is trade, and in
the background the Fed and that flattening yield curve.
LEADERSHP
Energy continues to set up some good patterns with some breaking higher.
Not many, just some. Energy tends to do that, i.e. look good, be set up,
then fail to make a move. With hold surging it would appear a no brainer,
yet oil stocks don't always follow oil prices.
Names: These stocks are well-known or at least are institutionally known,
and continue looking good at the weekend as much as they did Thursday.
TWTR, TTWO, ROKU, VMW, AMZN, NFLX, BDX, IQ, ALXN, ARWR, VRSN, ADBE.
There are other stocks from other groups also setting up well. WSM, RH,
BBY, TJX, SUPN, SIMO, LSCC, PII, RACE -- a diverse group of very good
patterns testing.
Set up yes, but as noted last week, the patterns have to hold, have to
advance off this support. The indices can do it if the leaders and second
tier do so as well. They look good. As noted Thursday, they are not
slouches.
Friday some attempted to move, most held their ground. Still waiting for
definitive moves by these stocks or perhaps some new group emerges. All the
better. The patterns remain very good, the indices are not yet giving up
support. I am not intending to sound overly optimistic or Polly Anna, but
the market will show what it will do off this test. The yield curve is a
worry -- do not think we are discounting it. Again, however, I am not smart
enough to foretell the market move, just prepare for the probabilities.
Great leadership in good patterns, indices testing key support in the
patterns. We will see how they react this coming week or next. Yes, it
could take that long.
Have a great weekend and Fourth!
MARKET STATS
DJ30
Stats: +55.36 points (+0.23%) to close at 24271.41
Nasdaq
Stats: +6.62 points (+0.09%) to close at 7510.30
Volume: 2.2B (+0.79%)
Up Volume: 1.25B (-150M)
Down Volume: 914.06M (+142.72M)
A/D and Hi/Lo: Advancers led 1.19 to 1
Previous Session: Advancers led 1.23 to 1
New Highs: 63 (+15)
New Lows: 66 (-70)
S&P
Stats: +2.06 points (+0.08%) to close at 2718.37
NYSE Volume: 978.114M (+21.27%)
A/D and Hi/Lo: Advancers led 1.39 to 1
Previous Session: Advancers led 1.5 to 1
New Highs: 53 (+13)
New Lows: 62 (-94)
SENTIMENT
VIX: 16.09; -0.76
VXN: 20.88; -0.88
VXO: 15.26; -0.92
Put/Call Ratio (CBOE): 1.24; -0.08
Bulls and Bears:
Bulls continue falling back, the past week a very sharp drop while bears
rise put in a fairly significant move of their own. Bulls are off 7.9
points in 2 weeks, a big drop. Typically sentiment is inverse of trade.
Negative sentiment is rallying as stocks test key support. This weighs for
a move back upside.
Bulls: 47.6 versus 52.0
Bears: 18.4 versus 17.6
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: 47.6 versus 52.0
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 versus 49.5 versus 49.5 versus 48.1 versus 50.5 versus 57.5
versus 60.0 versus 60.2 versus 57.8 versus 50.0 versus 52.5 versus 54.9
versus 51.5 versus 50.00 versus 55.8 versus 50.00 versus 51.9 versus 58.1
versus 58.7 versus 58.5 versus 54.7 versus 51.9 versus 56.3 versus 55.8
versus 49.5
Bears: 18.4 versus 17.6
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 2.84%. TLT rallied through the 200 day SMA intraday,
gave it up, falling back to close below it. Important level.
Historical: the last sub-2% rate was in November 2016 (1.867%). 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% versus 2.997% versus 2.97%
versus 2.966% versus 3.006% versus 2.952% versus 2.948% versus 2.968% versus
2.954% versus 2.959% versus 2.975% versus 3.0245% versus 3.00% versus 2.962%
versus 2.96% versus 2.914% versus 2.867% versus 2.83% versus 2.829 versus
2.825% versus 2.781%
EUR/USD: 1.1638 versus 1.15634. Still working in its 3 week lateral move
below the 50 day EMA.
Historical: 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 versus 1.16643 versus 1.15446 versus
1.17148 versus 1.17096 versus 1.17022 versus 1.17826 versus 1.1786 versus
1.17714 versus 1.1802 versus 1.1811 versus 1.18272 versus 1.19358 versus
1.19411 versus 1.1913 versus 1.18533 versus 1.18672 versus 1.19150 versus
1.19619 versus 1.1983 versus 1.1978 versus 1.19896 versus 1.20741 versus
1.21291 versus 1.21788 versus 1.2163 versus 1.22232
USD/JPY: 110.687 versus 110.523. Broke over the 200 day SMA again on the
week but again stalled at 111.
Historical: 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 versus 108.699 versus 108.699 versus 109.385 versus
109.667 versus 109.502 versus 110.833 versus 110.95 versus 110.76 versus
110.935 versus 110.376 versus 110.246 versus 109.693 versus 109.384 versus
109.40 versus 109.746 versus 109.038 versus 109.022 versus 109.08 versus
109.175 versus 109.628 versus 109.91 versus 109.354 versus 109.051 versus
109.28 versus 109.373 versus 108.894 versus 108.728 versus 107.645 versus
107.404 versus 107.409 versus 107.027 versus 107.010
Oil: 74.14, +0.70. Impressive 2 week run to a higher high.
Gold: 1254.50, +3.50. Two week decline to near the December 2017 low,
bounced modestly Friday.
Disappointing Finish
29-Jun-18 16:30 ET
Dow +55.36 at 24271.41, Nasdaq +6.62 at 7510.33, S&P +2.06 at 2718.11
https://www.briefing.com/investor/markets/stock-market-update/2018/6/29/disappointing-finish.htm
[BRIEFING.COM] Stocks got off to a good start on Friday, but gave back nearly everything during the final hour of trading. The S&P 500 was up 1.0% at its best mark of the day, but ended with a gain of just 0.1%, closing a tick above its 50-day moving average. The Nasdaq also added 0.1%. The Dow climbed 0.2%.
Financials led the market higher out of the gate after the Fed cleared most big banks to increase their dividends and share buybacks. However, the heavily-weighted sector faded as the day went along, entirely retracing a gain of 1.8%, and ended lower by 0.1%.
Despite the disappointing finish, eight of eleven sectors closed Friday in the green. Energy (+0.7%) was the top-performing space as crude prices climbed for a fourth straight session. WTI crude futures advanced 1.0% to $74.12 per barrel, hitting a new three-and-a-half year high and locking in a weekly gain of 8.1%.
In corporate news, Nike (NKE 79.68, +7.98) spiked 11.1%, hitting a new all-time high, after reporting better-than-expected earnings and revenues and announcing a $15 billion share repurchase program. Conversely, General Motors (GM 39.40, -1.12) struggled, losing 2.8%, after warning President Trump that the proposed tariffs on imported vehicles could lead to "a smaller GM". It's worth noting that selling in the broader market started picking up around the same time that GM made the announcement, although it's unlikely that it was the sole cause as financials led the reversal.
In politics, Fox News correspondent Maria Bartiromo reported that President Trump is working on a phase two of his tax plan and is considering cutting the corporate tax rate to 20% from 21%. Separately, European Union leaders reached a deal on a migration, which has been an especially contentious issue since the Syrian refugee crisis.
Reviewing Friday's economic data, which included Personal Income, Personal Spending, and PCE Prices for May, the Chicago PMI for June, and the final reading of the University of Michigan Consumer Sentiment Index for June:
Personal income climbed 0.4% in May (Briefing.com consensus +0.4%) following a revised increase of 0.2% in April (from 0.3%). Meanwhile, personal spending rose 0.2% in May (Briefing.com consensus +0.4%) following a revised increase of 0.5% in April (from 0.6%). The PCE Price Index rose 0.2% in May (Briefing.com consensus +0.2%), and the core PCE Price Index, which excludes food and energy, increased 0.2% (Briefing.com consensus +0.2%). Year-over-year, the core PCE Price Index is up 2.0%, up from 1.8% in the last reading.
The key takeaway from the report is twofold: (1) Real PCE was flat, which is likely to prompt some downward revisions to Q2 GDP forecasts and (2) the price indexes are moving in the direction anticipated by the Fed, which means the Fed is also likely to keep moving the fed funds rate higher as anticipated.
The Chicago PMI for June hit 64.1 (Briefing.com consensus 61.0), up from an unrevised 62.7 in May.
The key takeaway from the report is that manufacturers are experiencing a slowdown in production activity on account of longer supplier lead times that have been impacted by elevated input prices.
The final reading of the University of Michigan Consumer Sentiment Index for June slipped to 98.2 (Briefing.com consensus 99.0) from 99.3 in the preliminary reading.
The key takeaway from the report is that the downshift from the preliminary reading was driven primarily by tariff concerns, yet favorable assessments of jobs and incomes were a mitigating influence that left the overall index little changed from the prior month.
Looking ahead to Monday, investors will receive the June ISM Manufacturing Index and the May Construction Spending report.
Nasdaq Composite +8.8% YTD
Russell 2000 +7.0% YTD
S&P 500 +1.7% YTD
Dow Jones Industrial Average -1.8% YTD
Week In Review: Trade Tensions Strike Again
U.S. equities declined for the second week in a row as investors continued to focus on U.S.-China trade tensions. The S&P 500 and the Dow Jones Industrial Average dropped 1.3% apiece, while the tech-heavy Nasdaq Composite slid 2.4%. Small caps were hit especially hard, sending the Russell 2000 lower by 2.5%.
Trade war fears weighed at the start of the week due to reports that the White House is looking to bar Chinese companies from investing in U.S. tech firms. The Trump administration first responded to the reports with a mixed message; Treasury Secretary Steven Mnuchin said the White House is targeting all countries, not just China, while President Trump's top trade adviser, Peter Navarro, said the administration doesn't have any plans to impose investment restrictions, regardless of country.
However, the administration eventually cleared things up, deciding to defer foreign investment regulation to the Committee on Foreign Investment in the United States (CFIUS). That decision was seen as a positive alternative to direct White House intervention and helped the equity market rebound in the second half of the week.
Separately, the U.S. State Department threatened to impose powerful sanctions on countries that don't cut oil imports from Iran to "zero" by November 4. That headline, paired with a larger-than-expected draw in U.S. crude inventories (9.9 million barrels), pushed crude prices back to a three-and-a-half year high. WTI crude futures added 8.1% for the week, closing at $74.12 per barrel.
Also out of Washington, Supreme Court Justice Anthony Kennedy announced his retirement, effective July 31. Although he identifies as a conservative, Mr. Kennedy has often sided with his liberal colleagues. His retirement gives President Trump the chance to strengthen the court's conservative majority.
In corporate news, Amazon (AMZN) made headlines after announcing a deal to acquire online pharmacy start-up PillPack. That news sent shares of drug distributors like CVS Health (CVS) and Walgreens Boots Alliance (WBA) solidly lower. Amazon also announced it is inviting entrepreneurs to form small companies to carry packages over the last leg of the delivery journey.
Elsewhere, General Electric (GE) announced plans to spin off its health care business and to sell its 62.5% stake in oil and gas company Baker Hughes (BHGE); Walt Disney (DIS) won DOJ approval to buy most of Fox's assets for $71.3 billion, subject to the condition that Disney sells 22 regional sports networks; and Nike (NKE) spiked to a new record on Friday after beating both top and bottom line estimates and announcing a new $15 billion share repurchase program.
As for this week's S&P sector standings, utilities (+2.3%), telecom services (+1.2%), real estate (+1.1%), and energy (+1.0%) were the top-performing groups, while the heavily-weighted technology (-2.2%), financials (-1.9%), consumer discretionary (-1.9%), and health care (-1.8%) sectors finished at the back of the pack.
Trimming Weekly Losses
28-Jun-18 16:25 ET
Dow +98.46 at 24216.05, Nasdaq +58.60 at 7503.71, S&P +16.68 at 2716.05
https://www.briefing.com/investor/markets/stock-market-update/2018/6/28/trimming-weekly-losses.htm
[BRIEFING.COM] Stocks rebounded on Thursday, reclaiming around a third of their weekly losses. The S&P 500 advanced 0.6%, but some late selling left it just a tick below its 50-day moving average. The Nasdaq did a little better, adding 0.8%, while the Dow and the Russell 2000 underperformed, climbing 0.4% and 0.3%, respectively.
There wasn't much going on at the macro level on Thursday, but there were plenty of corporate headlines.
Amazon (AMZN 1701.45, +40.94) received perhaps the most attention after announcing a deal to acquire online pharmacy start-up PillPack. CVS Health (CVS 65.78, -4.27) and Walgreens Boots Alliance (WBA 59.70, -6.56) tumbled 6.1% and 9.9%, respectively, in response to the news.
Package delivery giants FedEx (FDX 226.67, -3.08) and UPS (UPS 105.88, -2.50) also fell on Amazon-related news, dropping 1.3% and 2.3%, respectively, after the internet retail giant announced it is inviting entrepreneurs to form small companies to carry packages over the last leg of the delivery journey.
Elsewhere, Chipotle (CMG 428.36, -28.88) tumbled 6.3% after CEO Brian Niccol failed to provide future growth plan details in a conference call to investors, Starbucks (SBUX 48.54, -1.30) declined 2.6% after CFO Scott Maw announced his retirement (effective November 30), and tech consulting firm Accenture (ACN 164.50, +9.16)rallied 5.9% afterreporting above-consensus earnings and revenues for its fiscal third quarter and raising its profit guidance for FY18.
Nine of eleven S&P 500 sectors finished Thursday in positive territory, with energy (-0.1%) and utilities (unch) being the outliers. After leading Wednesday's sell off, the top-weighted technology (+1.1%) and financials (+0.9%) sectors were among the top-performing groups on Thursday, providing an extra boost to sentiment.
Away from equities, WTI crude futures hit $74.00/bbl for the first time since November 2014 before falling back to $73.37/bbl; still, that's a daily gain of 0.9%. Meanwhile, U.S. Treasuries finished modestly lower, leaving yields in the green. The benchmark 10-yr yield climbed to 2.85% from 2.83%.
Reviewing Thursday's economic data, which included the third estimate of first quarter GDP and the weekly Initial Claims report:
The third estimate of first quarter GDP pointed to an expansion of 2.0% (Briefing.com consensus 2.2%). The second estimate came in at 2.2%.
The key takeaway from the report is that personal spending was weak in the first quarter, yet the relevant takeaway today is that this is a dated number and a pickup in personal spending is a key reason why many Q2 GDP forecasts have a four-handle on them.
The latest weekly initial jobless claims count totaled 227,000, while the Briefing.com consensus expected a reading of 220,000. Today's tally was above the unrevised prior week count of 218,000. As for continuing claims, they declined to 1.705 million from a revised count of 1.726 million (from 1.723 million).
Looking ahead to Friday, investors will receive Personal Income, Personal Spending, and PCE Prices for May at 8:30 AM ET, the Chicago PMI for June at 9:45 AM ET, and the final reading of the University of Michigan Consumer Sentiment Index for June at 10:00 AM ET.
Nasdaq Composite +8.7% YTD
Russell 2000 +7.1% YTD
S&P 500 +1.6% YTD
Dow Jones Industrial Average -2.0% YTD
Good Start, Bad Finish
27-Jun-18 16:20 ET
Dow -165.52 at 24117.59, Nasdaq -116.54 at 7445.11, S&P -23.43 at 2699.37
https://www.briefing.com/investor/markets/stock-market-update/2018/6/27/good-start-bad-finish.htm
[BRIEFING.COM] Stocks ended Wednesday's session on a solidly lower note, despite getting off to a good start. The S&P 500 was up as much as 0.9%, but finished lower by 0.9%, closing below its 50-day moving average for the first time in seven weeks. The Dow declined 0.7%, and the Nasdaq and the Russell 2000 lost 1.5%-1.7% apiece.
Investors were in an upbeat mood at the opening bell following news that the White House will defer regulating foreign investment in U.S. technology firms to the Committee on Foreign Investment in the United States (CFIUS). That decision was seen as a less-aggressive alternative to reports earlier this week that the Trump administration would like to directly bar foreign investment in U.S. tech firms.
However, the bullish vibe soon petered out. There wasn't a news catalyst behind the shift in sentiment; rather, underwhelming performances from the information technology and financial sectors helped to turn the tide. The two spaces eventually finished at the bottom of the sector standings, losing 1.3%-1.5% apiece.
That marks the 13th straight loss for the heavily-weighted financial space, which has been suffering amid a flattening of the yield curve. The 2s10s spread declined by another three basis points on Wednesday, dropping to 32 bps -- its lowest level in more than a decade. The benchmark 10-yr yield tumbled five basis points to 2.83%.
As for the top-weighted tech space, its weak performance was likely the result of some end-of-quarter churn as managers look to re-balance their portfolios. Even with Wednesday's drop, the tech space has had an impressive quarter, rallying 5.6% -- much better than the S&P 500's three-month gain of 2.2%.
On the flip side, the energy sector was the top-performing space for the second day in a row, adding 1.3%, thanks to another crude rally. WTI crude futures soared 3.1% to $72.69/bbl, hitting a fresh three-and-a-half year high, after the weekly government inventory data showed a larger-than-expected draw of 9.9 million barrels.
In corporate news, shares of ConAgra Brands (CAG 35.45, -2.78) tumbled 7.3% after the company announced it will be acquiring Pinnacle Foods (PF 64.95, -2.91) for approximately $8 billion in cash and stock. Shares of Pinnacle Foods lost 4.3%.
Meanwhile, shares of 21st Century Fox (FOXA 48.80, +1.12) rallied 2.4% after Walt Disney (DIS 103.96, -0.30) won DOJ approval to buy most of Fox's assets for $71.3 billion. The deal is subject to the condition that Disney sells 22 regional sports networks.
Elsewhere, the U.S. Dollar Index soared 0.7% on Wednesday to 95.02, hitting a fresh 11-month high.
It's also worth noting that Supreme Court Justice Anthony Kennedy announced his retirement on Wednesday, effective July 31. Although he identifies as a conservative, Mr. Kennedy is considered a swing vote as he often sides with his liberal colleagues. His retirement gives President Trump the chance to strengthen the court's conservative majority.
Reviewing today's economic data, which included the Durable Goods Orders report for May, the advance readings for May Wholesale Inventories and International Trade in Goods, the Pending Home Sales report for May, and the weekly MBA Mortgage Applications Index:
May durable goods orders fell 0.6%, which is less than the 1.0% decrease expected by the Briefing.com consensus. The prior month's reading was revised to -1.0% (from -1.7%). Excluding transportation, durable orders decreased 0.3% (Briefing.com consensus +0.4%) to follow the prior month's revised increase of 1.9% (from 0.9%).
The key takeaway from the report is that the downturn in May appeared to be a simple pullback from a robust month of order activity, excluding transportation, in April. To wit, orders for fabricated metal products fell 1.2% after increasing 3.3% in April.
The Advance report for International Trade in Goods for May showed a deficit of $64.8 billion, and the Advance report for Wholesale Inventories for May showed an increase of 0.5%.
Pending Home Sales decreased 0.5% in May (Briefing.com consensus +0.8%). The May reading follows an unrevised 1.3% decrease in April.
The weekly MBA Mortgage Applications Index declined 4.9% to follow last week's rise of 5.1%.
On Thursday, investors will receive the third estimate for first quarter GDP and the weekly Initial Claims report.
Nasdaq Composite +7.9% YTD
Russell 2000 +6.8% YTD
S&P 500 +1.0% YTD
Dow Jones Industrial Average -2.4% YTD
Energy Leads Modest Rebound
26-Jun-18 16:30 ET
Dow +30.31 at 24283.11, Nasdaq +29.62 at 7561.65, S&P +5.99 at 2722.80
https://www.briefing.com/investor/markets/stock-market-update/2018/6/26/energy-leads-modest-rebound.htm
[BRIEFING.COM] Stocks rebounded modestly on Tuesday -- reclaiming less than a fifth of their Monday losses -- with energy shares leading the way, helped by a spike in oil prices. The S&P 500 ended higher by 0.2% after finding early support at its 50-day moving average. Small caps outperformed, pushing the Russell 2000 up 0.7%.
Late Monday comments from President Trump's top trade adviser Peter Navarro, who said the White House is not planning to restrict foreign investment as part of its trade actions against China or any other country, continued to be analyzed on Tuesday in the absence of any new developments in the ongoing U.S.-China trade feud.
The energy sector finished atop the S&P 500 sector standings with a gain of 1.4%. News that the U.S. State Department will start imposing powerful sanctions on companies that buy Iranian crude oil past the end of October prompted a crude oil rally -- which, in turn, sent energy stocks higher. WTI crude futures advanced 3.5% to $70.45 per barrel, hitting their highest level in five weeks.
Cyclical sectors, including energy (+1.4%), consumer discretionary (+0.7%), and information technology (+0.5%), finished mostly in the green, with financials (-0.4%) being an exception. Like financials, the countercyclical health care (-0.3%), telecom services (-0.4%), and consumer staples (-0.5%) spaces posted modest declines.
In corporate news, General Electric (GE 13.74, +0.99) spiked 7.8% after announcing plans to spin off its health care business and plans to sell its 62.5% stake in oil and gas company Baker Hughes (BHGE 33.13, +0.69). Also, GE was officially booted from the Dow on Tuesday, replaced by Walgreens Boots Alliance (WBA 66.57, -0.67).
Separately, homebuilder Lennar (LEN 51.61, +2.39) advanced 4.9% after reporting better-than-expected quarterly results, but Harley-Davidson (HOG 41.32, -0.25) slid 0.6% after a series of tweets from President Trump, who criticized the company's decision to move some of its operations overseas due to retaliatory EU tariffs.
Reviewing Tuesday's economic data, which included the Conference Board's Consumer Confidence Index for June and the Case-Shiller 20-City Index for April:
The consumer confidence reading for June decreased to 126.4 (Briefing.com consensus 127.1) from the prior month's revised reading of 128.8 (from 128.0).
The key takeaway from the report is that the downturn was driven by a downshift in the Expectations Index, which suggests, according to the Conference Board, that consumers don't anticipate the economy gaining much momentum in the coming months.
The Case-Shiller 20-City Index increased 6.6% in April (Briefing.com consensus +6.8%), and the March increase was revised to 6.7% from 6.8%.
On Wednesday, investors will receive the Durable Goods Orders report for May, the advance readings for May Wholesale Inventories and International Trade in Goods, the Pending Home Sales report for May, and the weekly MBA Mortgage Applications Index.
Nasdaq Composite +9.5% YTD
Russell 2000 +8.7% YTD
S&P 500 +1.9% YTD
Dow Jones Industrial Average -1.8% YTD
Another Trade-Induced Sell Off
25-Jun-18 16:30 ET
Dow -328.09 at 24252.80, Nasdaq -160.81 at 7532.03, S&P -37.81 at 2716.81
https://www.briefing.com/investor/markets/stock-market-update/2018/6/25/another-tradeinduced-sell-off.htm
[BRIEFING.COM] Stocks got hit pretty hard on Monday amid escalated fears that the U.S. and China are headed towards a full-blown trade war. Losses were broad-based, with declining issues outnumbering advancing issues 3 to 1 on the New York Stock Exchange. However, the market did settle notably above session lows thanks to some late comments from the White House.
The S&P 500 lost 1.4%, but did manage to close a tick above its 50-day moving average despite spending most of the session below the key technical level. The Dow, meanwhile, lost 1.3% and suffered some technical damage, closing below its 200-day moving average for the first time in two years. The Nasdaq was particularly weak, losing 2.1%, as tech shares struggled, and the Russell 2000 lost 1.7%.
Trade war fears were escalated after a weekend report from The Wall Street Journal that the Trump administration is looking to bar Chinese companies from investing in U.S. technology firms. Treasury Secretary Steven Mnuchin refuted the report in a tweet on Monday morning, saying the administration is targeting all countries attempting to "steal our technology", not just China.
Then things got a little confusing.
Peter Navarro, President Trump's top trade adviser, made a late-day appearance on CNBC, saying the sell off was a "very large overreaction" and insisting that the White House has no plans to impose investment restrictions. Mr. Navarro's comments boosted the market, cutting the S&P 500's loss from 2.0% at its session low to 1.2% at its afternoon high.
Nine of eleven S&P sectors finished Monday in negative territory, with growth-sensitive groups being the weakest performers. The top-weighted technology sector (-2.3%) finished at the bottom of the sector standings. Chipmakers were particularly weak, evidenced by a 3.1% drop in the Philadelphia Semiconductor Index, and the tech-heavy FAANG names really struggled; Facebook (FB 196.35, -5.39), Apple (AAPL 182.17, -2.75), Amazon (AMZN 1663.15, -52.52), Alphabet (GOOG 1124.81, -30.67), and Netflix (NFLX 384.48, -26.61) lost between 1.5% and 6.5%.
Elsewhere, Harley-Davidson (HOG 41.57, -2.64) tumbled 6.0% after announcing it won't raise prices to cover the cost of the EU's reciprocal tariffs; instead, it'll work to shift production to international facilities. Carnival (CCL 58.54, -4.99) was also a notable laggard, losing 7.9%, after disappointing guidance outweighed upbeat quarterly results.
On a positive note, the countercyclical consumer staples (+0.4%) and utilities (+1.7%) sectors closed Monday in the green. Within the consumer staples space, Campbell Soup (CPB 42.23, +3.63) surged 9.4% and Kraft Heinz (KHC 63.32, +0.11) added 0.2% following a NY Post report that Kraft might be interested in acquiring the soup maker.
U.S. Treasuries rose amid the flight to safety, sending yields lower across the curve. The yield on the benchmark 10-yr Treasury note slipped two basis points to 2.88%. Meanwhile, the CBOE Volatility Index, often referred to as the "investor fear gauge", spiked 28.8%, hitting its highest level since late April.
Reviewing Monday's economic data, which was limited to the New Home Sales report for May:
New Home Sales in May hit an annualized rate of 689,000, which is above the Briefing.com consensus of 666,000. The April reading was revised to 646,000 (from 662,000).
The key takeaway from the report is that there wasn't any growth in new home sales outside the South region. That is the largest region for new home sales, though, and where there is a concentration of lower-priced housing markets, which helps explain the year-over-year drop in median and average selling prices.
On Tuesday, investors will receive the Case-Shiller 20-City Index for April and the Conference Board's Consumer Confidence Index for June.
Nasdaq Composite +9.1% YTD
Russell 2000 +8.0% YTD
S&P 500 +1.6% YTD
Dow Jones Industrial Average -1.9% YTD
InvestmentHouse - Is the Economy Ready to Roll Over? (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
- SP500, DJ30 post modest oversold bounces as growth sells for a second
session.
- Some new areas showing signs of life
- It the economy ready to roll over or are the new areas showing the
expansion will continue?
- Many in the past have doubted the economy's ability to continue gains and
were wrong.
- Important week for growth and indeed market direction in general.
Friday was a bit more of the same of the Thursday new market look. This
time SP500 and DJ30 actually closed positive while the leading growth stocks
and their primary indices (NASDAQ, RUTX) sold for a second session.
It was not a large cap NYSE surge nor was it a growth stock purge. Sure
volume was huge, but that was due to an annual Russell adjustment. Perhaps
it was the start of some new rotation, but the moves to end the week were
not enough in themselves to show a change in investor tastes. The moves
left several important stocks at near support after two downside sessions,
making this coming week an important one for the growth areas, but more
generally the direction the market takes from here.
SP500 5.12, 0.19%
NASDAQ -20.13, -0.26%
DJ30 119.19, 0.49%
NASDAQ -20.13, -0.26%
SP400 0.11%
RUTX -0.20%
SOX -0.72%
NASDAQ 100 -0.28%
VOLUME: NYSE +180%, NASDAQ +45%. Okay, cannot read much into this given
the yearly Russell indexes 'adjustment.'
ADVANCE/DECLINE: NYSE +2:1, NASDAQ +1.2:1. The breadth shows Friday was
more of a large cap event where the big names that led higher sold back for
a second session while some NYSE large caps moved up and some new areas
rebounded such as energy. Yes, there is some shifting in tastes ongoing.
Again, that makes this coming week important directionally, and more
specifically for particular groups, some up, some down, or perhaps more
money comes in and the market finally moves up together.
I think that may be the key. While many Thursday and Friday talked of the
market rolling over, of course they were myopically focused on just the
stocks that moved higher. I think Thursday perhaps threw a curve: while
growth stocks sold back from highs, other areas did not move higher, indeed
continued sliding. That meant market rolling over.
Friday while growth experienced another tough session, some stocks rallied
such as CLF (industrial minerals), oil and gas, materials -- building
blocks, the 'stuff' things are made of. Many are looking at CAT, DE and
assuming anything on the industrial side is still dead money. As noted,
that is not the case and perhaps some are missing what may be changing or at
least spreading out to more of the market.
This does not look like a move that is rolling over, but a branching out
into other areas, areas that support the notion that the US -- even if the
rest of the world does not join in for now (synchronized global
recovery?) -- is going to continue expanding.
Further expansion? You wouldn't know it listening to many experts,
Congress.
So many are assuming the US economy has to fade along with the rest of the
world economies. Some big think tanks at major financial entities feel
recession is coming. Gasoline is too high, bubbles everywhere -- the fear
is a fear of growth, of success. Or just a belief the US cannot grow
without everyone else in the world. We have seen growth occur when no one
thought it could continue (1980's) and motor higher when the rest of the
world faded (1990's). No one believes it can happen, that growth can
continue beyond initial surges or that growth can continue even if the rest
of the world and their mostly failed economic models stumble after short
improvements in economic activity.
This is germane in today's context as well. People love to say things are
different this time. Said it in the 1970's, that the US could not ever grow
as it used to. Then we grew better than we ever did, or at least matched
the 1920's. They said at the time that the deficits were just too big and
would crush us. Well, once the plan was complete and we spent the USSR into
economic and thus military oblivion we enjoyed surpluses that, of course, we
squandered on more social programs and increased taxes until we choked off
the 20 year boom.
Today's context is trade, how if we don't let pathetic trade arrangements
remain in place how we will destroy the world economy similar to the
Smoot-Hawley tariffs of the thirties. Not even relevant. We are trying to
get RID of bad trade deals knowing that we can easily compete with foreign
entities on an equal field versus sending our business, jobs, and IP
overseas. Those who benefit from these arrangements spread the dogma about
the need for 'free trade,' knowing full well that does not exist in the
current agreements, yet they stymie any attempts to change those agreements.
The worry is not that the US is seeking to remove these trade arrangements
and thus protect our ability to compete, but that those benefitting from the
arrangements continue giving to their friendly congressmen so both can
remain in Congress. And in power. Any attempt to correct the problem is
panned, blocked, ridiculed as insanely playing with the fires of a trade
war. Hogwash.
Okay, so we are not playing for an imminent crash. We are looking for
winning sectors and stocks. We will see if growth comes back around --
would make sense if we are still in a growth mode -- though it might need
more of a test before it is ready after this impressive run. We look to see
if the 'hard' areas come back around. Friday saw some money moving into
these areas -- though you have to temper that with the annual 'adjustment'
in the Russell indices. Still, hard energy, oil and gas, drugs showed some
buying from decent patterns. Decent patterns show accumulation, some buying
shows money moving their way. We will see if money continues flowing their
way.
THE MARKET
CHARTS
NASDAQ: After gapping modestly higher Thursday (but not to a new high) and
reversing to close at the 10 day EMA, Friday NASDAQ gapped higher again but
gave it up to close just below the 10 day EMA. That keeps NASDAQ in the
all-time high range it broke into, but there was some selling of big names,
many of which are at near support. The key for NASDAQ is whether the big
names can hold on and resume their moves.
RUTX: Gapped and rallied to a new high Wednesday and that was peak euphoria
for the moment. Thursday a drop to test the 10 day EMA, Friday a doji at
the 10 day EMA. As noted Thursday, the recent leg higher matched the length
and gains of the first move in May where RUTX broke out. A test of the 10
day is normal, as is a 20 day EMA test, another 15 points.
SP500: The pattern remains a solid one as noted Thursday. A 20 day EMA
test the past 1.5 weeks after moving to a higher recovery high on this leg.
If the other areas such as large drug companies, oil companies start to
pitch in, then SP500 has more upside push even if areas such as financials
still stink. For now.
SP400: The midcaps are at the January high, working laterally in a 2 week
lateral move along the rapidly converging 10 and 20 day EMA. The prior high
did not send it lower, but instead the midcaps are consolidating laterally.
This is a growth index. If the US is to continue expansion the midcaps
should consolidate then break higher.
DJ30: Up Friday, but the Dow has issues the other indices do not, namely
its components and too few to help it out. That said, JNJ may be ready to
bounce as may MMM. Those will help, but the Dow also has financials and
machinery, and they are more than paperweights right now.
SOX: Last but very important. SOX peaked the last run in early June about
25 points below the March all-time high. It has since tested, stepping down
to the 50 day EMA last week. Tried a bounce early week, failed, ending up
at the 50 day EMA to close. Not a dog of a pattern, but it is struggling.
You can argue there is a potential ABCD here, but it is not a really pretty
one. It also has issues with some main components such as INTC really
struggling to hang on. This index is a negative for the upside right now.
LEADERSHIP:
FAANG: Some important tests, some others just consolidating. FB holding
its move very well. NFLX is doing the same. AMZN testing the 10 day EMA
with a bit heavier action. GOOG showing a good doji with tail at the 10 day
EMA. AAPL holding the 50 day EMA for the fourth session.
Oil/Energy: Some good breaks higher, some good setups. APC gapped and
rallied past its 5 week consolidation and a 15 month base. Many smaller
issues look quite good, e.g. PES, NE, NGL. Getting some money, but they
have shown this action before. Still, they look good, and retail did the
same thing before it went crazy.
Software: A leadership group under pressure from FFIV to DATA, NOW. VMW,
UIS still solid. They can still recover after a consolidation. NOW may be
interesting already with its doji with tail at the 50 day EMA. ATVI looks
as if it might set up again for us.
China: Still trying to hang on and set up again. YY is not bad at all and
could give us a new entry. ATHM is in one of its usual lateral tests.
HTHT, however, broke near support. BABA, BIDU are hanging on. NTES looks
good to make a break higher from an inverted head and shoulders.
Drugs/Biotech/Health: JNJ is getting a lot of volume in a potential
inverted head and shoulders. IMGN finally caught fire. PGNX looks good in
its pattern. ARRY making a good test. ALXN still moving higher. There is
money coming this way.
Retail: Still solid overall though some are testing. COST still moving up,
RH looks as if it can resume the breakaway gap move. DDS, WSM, ROST, TJX,
ZUMZ all testing a bit.
Some of the brick and mortar we decent post-Supreme Court ruling. ROST,
COST, DDS, ZUMZ. W was sold down to the 20 day EMA near 105 but recovered
almost 10 points to close just lower. Online furniture seller.
MARKET STATS
DJ30
Stats: +119.19 points (+0.49%) to close at 24580.89
Nasdaq
Stats: -20.13 points (-0.26%) to close at 7692.82
Volume: 3.382B (+45.16%)
Up Volume: 1.94B (+1.209B)
Down Volume: 1.93B (+360M)
A/D and Hi/Lo: Advancers led 1.16 to 1
Previous Session: Decliners led 2.59 to 1
New Highs: 126 (-31)
New Lows: 41 (-14)
S&P
Stats: +5.12 points (+0.19%) to close at 2754.88
NYSE Volume: 2.204B (+180.03%)
A/D and Hi/Lo: Advancers led 1.97 to 1
Previous Session: Decliners led 2.13 to 1
New Highs: 89 (+6)
New Lows: 36 (-46)
SENTIMENT
VIX: 13.77; -0.87
VXN: 18.38; -0.51
VXO: 12.85; -0.59
Put/Call Ratio (CBOE): 0.86; -0.17
Bulls and Bears:
Bulls fell back from the strong rally upside off of the even stronger
plunge. Bears are a bit lighter though still overall on the rebound from
lows not seen since early 1987.
Bulls: 52.0 versus 55.5
Bears: 17.6 versus 17.8
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: 52.0 versus 55.5
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
versus 49.5 versus 49.5 versus 48.1 versus 50.5 versus 57.5 versus 60.0
versus 60.2 versus 57.8 versus 50.0 versus 52.5 versus 54.9 versus 51.5
versus 50.00 versus 55.8 versus 50.00 versus 51.9 versus 58.1 versus 58.7
versus 58.5 versus 54.7 versus 51.9 versus 56.3 versus 55.8 versus 49.5
Bears: 17.6 versus 17.8
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: 2.895% versus 2.899%. Bonds rallied back a bit on the week, keeping
the yield curve flatter.
Historical: the last sub-2% rate was in November 2016 (1.867%). 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% versus 2.997% versus
2.97% versus 2.966% versus 3.006% versus 2.952% versus 2.948% versus 2.968%
versus 2.954% versus 2.959% versus 2.975% versus 3.0245% versus 3.00% versus
2.962% versus 2.96% versus 2.914% versus 2.867% versus 2.83% versus 2.829
versus 2.825% versus 2.781%
EUR/USD: 1.16572 versus 1.16072. Euro continued a Thursday bounce, trying
for a double bottom break back upside.
Historical: 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 versus 1.16643 versus 1.15446 versus
1.17148 versus 1.17096 versus 1.17022 versus 1.17826 versus 1.1786 versus
1.17714 versus 1.1802 versus 1.1811 versus 1.18272 versus 1.19358 versus
1.19411 versus 1.1913 versus 1.18533 versus 1.18672 versus 1.19150 versus
1.19619 versus 1.1983 versus 1.1978 versus 1.19896 versus 1.20741 versus
1.21291 versus 1.21788 versus 1.2163 versus 1.22232
USD/JPY: 109.980 versus 109.895. Tight doji over the 200 day SMA as the
dollar looks as if it is setting to break higher once more.
Historical: 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 versus 108.699 versus 108.699 versus 109.385 versus
109.667 versus 109.502 versus 110.833 versus 110.95 versus 110.76 versus
110.935 versus 110.376 versus 110.246 versus 109.693 versus 109.384 versus
109.40 versus 109.746 versus 109.038 versus 109.022 versus 109.08 versus
109.175 versus 109.628 versus 109.91 versus 109.354 versus 109.051 versus
109.28 versus 109.373 versus 108.894 versus 108.728 versus 107.645 versus
107.404 versus 107.409 versus 107.027 versus 107.010
Oil: 65.58, +3.04. Impressive 4.64% move back up through the 50 day MA's
as OPEC cut an increased production bill but not the 1M bbl as anticipated.
Gold: 1270.70, +0.20.
Down Week Ends on High Note
22-Jun-18 16:25 ET
Dow +119.19 at 24580.89, Nasdaq -20.13 at 7692.84, S&P +5.12 at 2754.62
https://www.briefing.com/investor/markets/stock-market-update/2018/6/22/down-week-ends-on-high-note.htm
[BRIEFING.COM] The S&P 500 ended the week on a positive note by advancing 0.2% on Friday. Energy shares led the broad-based rally thanks to a spike in oil prices, which surged to a four-week high as OPEC wrapped up its latest summit in Vienna. However, financials, technology, and consumer discretionary stocks lagged, keeping gains in check. For the week, the S&P 500 lost 0.9%.
Friday's session was range-bound to say the least. The S&P 500 held a gain between 0.2% and 0.5% throughout the entire session, sticking to a 12-point range. Trading volume was extremely high due to the annual re-balancing of the Russell 1000 and Russell 2000 indices. Roughly 2.2 million shares changed hands at the New York Stock Exchange.
The OPEC summit was the biggest event of the day, as it ended on a somewhat unexpected note. Following a contentious two-day meeting, the oil-producing countries agreed to increase total output by roughly 600,000 barrels per day -- far less than the top end of estimates, which were calling for an increase of up to 1.5 million barrels per day.
West Texas Intermediate crude futures rallied 4.5% to $68.59 per barrel in reaction, helping the energy sector (+2.2%) finish unchallenged atop the sector standings; the next best-performing group -- materials -- added 1.4%. In total, eight of the eleven sectors finished in the green, with financials (-0.5%), technology (-0.4%), and consumer discretionary (-0.1%) being the three laggards. Unfortunately for the bulls, those three groups are heavily-weighted, representing around 50% of the broader market combined.
The financials and consumer discretionary sectors were holding up alright until the afternoon when they dropped to fresh session lows, while technology was weak throughout the session. Within the tech space, software company Red Hat (RHT 142.14, -23.59) tumbled 14.2% after disappointing guidance for its fiscal second quarter overshadowed its better-than-expected Q1 results.
In Washington, President Trump announced a new tariff threat via Twitter on Friday, vowing to slap a 20% tariff on automobiles produced in EU countries if the European Union fails to remove duties on imports of U.S. autos. The U.S. stock market dropped to new lows following the tweet, but didn't stay there for long.
U.S. Treasuries finished Friday on a flattish note, although shorter-dated issues showed relative weakness. The yield on the benchmark 10-yr Treasury note finished unchanged at 2.90%, while the yield on the 2-yr Treasury note climbed two basis points to 2.55%. The U.S. Dollar Index declined 0.4%, slipping from an 11-month high.
Investors did not receive any notable economic data on Friday.
Nasdaq Composite +11.4% YTD
Russell 2000 +9.8% YTD
S&P 500 +3.0% YTD
Dow Jones Industrial Average -0.6% YTD
Week In Review: Trade Tensions Weigh
Stocks fell this week as trade tensions helped to keep buyers at bay. The benchmark S&P 500 index ended the week lower by 0.9%. The tech-heavy Nasdaq lost 0.7%, but did notch a new all-time high on Wednesday, and the Dow Jones Industrial Average tumbled 2.0%.
At the start of the week, investors were still weighing the prospect of a trade war between the U.S. and China after President Trump confirmed last Friday that he has approved a 25% tariff on $50 billion worth of Chinese goods. Beijing responded swiftly to that news, vowing to implement equivalent duties on U.S. goods.
The story added a new chapter on Monday evening when President Trump asked his administration to identify an additional $200 billion worth of Chinese goods that he says will be hit with a 10% tariff should China follow through on its promise to retaliate. In addition, if China retaliates against the new $200 billion list, Mr. Trump said he will place tariffs on yet another $200 billion worth of Chinese goods.
The industrial sector, which is viewed as being in the crosshairs of protectionist trade actions, was the worst-performing S&P 500 group this week, losing 3.4%. Similarly, chipmakers, which derive a large chunk of their revenue from shipments to China, were also under pressure, sending the Philadelphia Semiconductor Index lower by 3.6%.
President Trump issued another tariff threat on Friday, this time targeting the European Union. The president said the U.S. will be imposing a 20% tariff on all automobiles imported from EU countries if the EU fails to remove duties on imports of U.S. automobiles. On a related note, as of Friday, the European Union has officially implemented tariffs on $3.2 billion worth of U.S. goods in retaliation to U.S. tariffs on imports of steel and aluminum that went into effect earlier this month.
Elsewhere, the Organization of Petroleum Exporting Countries (OPEC) met in Vienna this week to discuss easing production caps that have been in place for more than 18 months. The meeting was reportedly contentious, but the countries eventually agreed to boost oil output by a less-than-expected 600,000 barrels per day. WTI crude futures rallied to a four-week high on Friday following the news, and the energy sector reclaimed losses registered earlier in the week, finishing with a weekly gain of 1.5%.
In U.S. corporate news, Walgreens Boots Alliance (WBA) will be joining the Dow Jones Industrial Average on June 26, taking the spot of General Electric (GE), which was one of the original Dow components and has been a continuous part of the average for more than a century. The decision follows a disastrous 18-month stretch for GE shares, which have dropped around 60% since the end of 2016.
Separately, media names returned to the spotlight on Wednesday when Walt Disney (DIS) increased its offer for 21st Century Fox's (FOXA) entertainment assets. Disney is now offering $38 per share, up from its previous offer of $28 per share and better than last week's offer from Comcast (CMCSA) of $35 per share.
E-commerce companies, including Amazon (AMZN), eBay (EBAY), Wayfair (W), Overstock.com (OSTK), and Etsy (ETSY), sold off on Thursday after the U.S. Supreme Court ruled that states can require online retailers to collect sales tax, overturning a 1992 precedent.
Also of note, Intel's (INTC) chief executive, Brian Krzanich, resigned after breaking the company's non-fraternization policy, Oracle (ORCL) shares dropped to a 15-month low after the company's quarterly update provided less insight than usual into its growing cloud business, and Starbucks (SBUX) shares hit a three-year low after the company announced it will be scaling back store growth.
U.S. Treasuries ended the week on a modestly higher note, pushing the benchmark 10-yr yield lower by two basis points to 2.90%.
Resuming the Retreat
21-Jun-18 16:20 ET
Dow -196.10 at 24461.70, Nasdaq -68.56 at 7712.97, S&P -17.56 at 2749.50
https://www.briefing.com/investor/markets/stock-market-update/2018/6/21/resuming-the-retreat.htm
[BRIEFING.COM] Stocks dropped for the fourth time in five sessions on Thursday, with energy and industrial shares leading the retreat. The S&P 500 shed 0.6%, extending its weekly loss to 1.1%. The market opened flat, but dropped sharply about 30 minutes into the session. The S&P 500 settled near the bottom of its daily range.
E-commerce names took a hit on Thursday after the U.S. Supreme Court ruled that states can require online retailers to collect sales tax, overturning a 1992 precedent. Shares of eBay (EBAY 38.01, -1.25) and Overstock.com (OSTK 36.15, -2.80) tumbled 3.2% and 7.2%, respectively, while shares of online retail behemoth Amazon (AMZN 1730.22, -19.86) declined 1.1%.
Meanwhile, energy shares in the S&P 500 lost 1.9% as top oil producers kicked off a two-day meeting in Vienna, Austria. The summit is expected to result in an agreement to raise production levels following more than 18 months of a deal designed to reduce output by 1.8 million barrels per day. WTI crude futures were down more than 1.0% in early trading, but ended lower by 0.3% at $65.54/bbl.
In the tech space (-0.8%), chipmakers were in focus following better-than-expected earnings from Micron (MU 59.44, +0.49) and the resignation of Intel's (INTC 52.19, -1.27) chief executive, Brian Krzanich, who is stepping down after violating the company's non-fraternization policy. Micron shares added 0.8%, while Intel shares declined 2.4%.
Elsewhere, shares of Kroger (KR 28.73, +2.55) and Darden Restaurants (DRI 107.06, +13.79) spiked 9.7% and 14.8%, respectively, after the companies beat quarterly earnings estimates. However, shares of German automaker Daimler (DDAIF 67.09, -3.18) lost 4.5% after the company issued a profit warning due to pending Chinese retaliatory tariffs on cars built in the United States.
In the UK, the Bank of England voted in favor of maintaining its key policy rate, but the decision was split with three of the nine policymakers pushing for a rate hike. The degree of disunity surprised some investors and helped increase demand for the pound, which climbed 0.6% against the U.S. dollar to 1.3245.
U.S. Treasuries rallied on Thursday, pushing yields lower across the curve. The benchmark 10-yr yield dropped to 2.90% from 2.93%.
Reviewing Thursday's economic data, which included the weekly Initial Claims report, the Philadelphia Fed Index for June, the FHFA Housing Price Index for April, and the Conference Board's Leading Economic Index for May:
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 revised prior week count of 215,000 (from 218,000). As for continuing claims, they rose to 1.723 million from a revised count of 1.701 million (from 1.697 million).
If one wanted to extrapolate a concern from the initial claims report, it would be the notion that the low level of initial claims will keep the Fed inclined to raise interest rates.
The Philadelphia Fed Survey for June declined to 19.9 (Briefing.com consensus 27.0) from an unrevised 34.4 in May.
The key takeaway from the report is that the downturn was led by a sharp pullback in the New Orders Index, which dropped to 17.9 from 40.6, and that the Unfilled Orders Index dropped to -2.7 (first negative reading since January) from 15.3, suggesting firms' backlog diminished.
The FHFA Housing Price Index rose 0.1% in April, and the March increase was revised to 0.2% from 0.1%.
The Conference Board's Leading Economic Index increased 0.2% in May (Briefing.com consensus +0.4%), and the April increase was left unrevised at 0.4%.
The key takeaway from the report is that the strength among the leading indicators remains very widespread.
Investors will not receive any notable economic data on Friday.
Nasdaq Composite +11.7% YTD
Russell 2000 +10.0% YTD
S&P 500 +2.9% YTD
Dow Jones Industrial Average -1.0% YTD
Wall Street Ends Three-Session Skid
20-Jun-18 16:30 ET
Dow -42.41 at 24657.80, Nasdaq +55.93 at 7781.53, S&P +4.73 at 2767.06
https://www.briefing.com/investor/markets/stock-market-update/2018/6/20/wall-street-ends-threesession-skid.htm
[BRIEFING.COM] Stocks ended a three-session skid on Wednesday as a heap of corporate news served to distract investors from escalated U.S.-China trade tensions. The Nasdaq and the Russell 2000 rallied to new record highs, adding around 0.7% apiece, and the S&P 500 ticked up 0.2%. The Dow underperformed though, shedding 0.2%.
Walgreens Boots Alliance (WBA 68.00, +3.39) will be joining the Dow Jones Industrial Average on June 26, taking the spot of General Electric (GE 12.88, -0.07), which was one of the original Dow components and has been a continuous part of the average for more than a century. The decision follows a disastrous 18-month stretch for GE shares, which have dropped around 60% since the end of 2016.
Media names returned to the spotlight on Wednesday after Walt Disney (DIS 107.15, +1.05) increased its offer for 21st Century Fox's (FOXA 48.08, +3.37) entertainment assets. Disney is now offering $35 per share, up from $28 per share and better than last week's offer from Comcast (CMCSA 33.39, +0.58) of $35 per share. Fox shares surged 7.5%.
Elsewhere, Oracle (ORCL 42.82, -3.45) shares dropped 7.5% to a 15-month low after the company's quarterly update provided less insight than usual into its growing cloud business. Meanwhile, shares of Starbucks (SBUX 52.22, -5.21) tumbled 9.1% to a 20-month low after the coffee giant announced it will be scaling back store growth and closing underperforming urban locations.
Most S&P 500 sectors finished in the green, but gains were pretty modest; other than real estate (+1.1%), no group added more than 0.5%. The consumer discretionary (+0.5%) and energy (+0.4%) sectors were the top-performing groups, but the top-weighted technology sector (+0.3%) also had a relatively solid showing. Within the tech space, shares of Facebook (FB 202.00, +4.51) jumped 2.3% to a new all-time high, helped by reports that its photo-sharing subsidiary Instagram has reached 1 billion monthly users.
At the opposite end of the sector standings, the heavily-weighted financial space ended lower by 0.3% even though the 2s-10s spread widened, rebounding from its lowest level in a decade. The yield on the benchmark 10-yr Treasury note advanced four basis points to 2.93% while the 2-yr yield climbed two basis points to 2.57%. The telecom services sector was the worst-performing group with a loss of 1.0%.
Outside of equities, West Texas Intermediate crude futures rallied on Wednesday, rising 1.3% to $65.71 per barrel, after the Department of Energy reported that U.S. crude stockpiles decreased for the second week in a row, declining by 5.9 million barrels. The U.S. Dollar Index ticked up 0.1% to 94.73.
Reviewing Wednesday's economic data, which included the Existing Home Sales report for May, the Current Account Balance for the first quarter, and the weekly MBA Mortgage Applications Index:
Existing home sales decreased 0.4% in May to an annualized rate of 5.43 million units (Briefing.com consensus 5.55 million). The April reading was revised to 5.45 million (from 5.46 million).
The key takeaway from the report remains the same: notable supply constraints continue to act as a drag on overall sales. The limited inventory -- and the high prices on available inventory -- is crimping affordability, particularly for first-time buyers; moreover, all prospective buyers are feeling affordability pressures from rising mortgage rates and home prices rising faster than income.
The current account deficit for the first quarter totaled $124.1 billion (Briefing.com consensus -$129.2 billion). The fourth quarter deficit was revised to $116.1 billion from $128.2 billion.
The weekly MBA Mortgage Applications Index rose 5.1% to follow last week's decline of 1.5%.
On Thursday, investors will receive the weekly Initial Claims report (Briefing.com consensus 220K), the Philadelphia Fed Index for June (Briefing.com consensus 27.0), the FHFA Housing Price Index for April, and the Conference Board's Leading Economic Index for May (Briefing.com consensus +0.4%).
Nasdaq Composite +12.7% YTD
Russell 2000 +11.2% YTD
S&P 500 +3.5% YTD
Dow Jones Industrial Average -0.3% YTD
Trade Tensions Weigh for Third Straight Session
19-Jun-18 16:25 ET
Dow -287.26 at 24700.21, Nasdaq -21.44 at 7725.60, S&P -11.30 at 2762.33
https://www.briefing.com/investor/markets/stock-market-update/2018/6/19/trade-tensions-weigh-for-third-straight-session.htm
[BRIEFING.COM] U.S. stocks retreated for a third consecutive session on Tuesday as U.S.-China trade tensions continued to weigh on sentiment. However, also for the third straight session, an intraday rebound made the close look notably better than the open. The S&P 500, for instance, was down 1.1% early on Tuesday, but settled lower by just 0.4%. Meanwhile, the Nasdaq and the Dow ended lower by 0.3% and 1.2%, respectively, while the Russell 2000 outperformed (+0.1%), ticking up to a new all-time high.
President Trump threatened to escalate trade tensions with China even further on Monday evening, asking his administration to identify an additional $200 billion worth of Chinese goods to be penalized with tariffs. The president says this new list of goods will be subject to tariffs of 10% if Beijing follows through on its promise to retaliate against planned U.S. tariffs of 25% on $50 billion worth of Chinese imports. In addition, if Beijing retaliates against the new $200 billion list, Mr. Trump said he will place tariffs on yet another $200 billion worth of Chinese goods.
The industrial sector, which is viewed as being in the crosshairs of protectionist trade actions, was the worst-performing S&P 500 group on Tuesday with a loss of 2.1%. Meanwhile, chipmakers, which derive a large chunk of their revenue from shipments to China, also underperformed, sending the Philadelphia Semiconductor Index lower by 1.2%. The top-weighted technology sector, which houses semiconductor names, settled with a loss of 0.7%, and the materials sector was also a notable laggard, dropping 1.8%.
In general, cyclical sectors underperformed their less-risky, countercyclical peers. For instance, the three aforementioned groups -- industrials, technology, and materials -- are all cyclical spaces, and the health care (+0.2%), consumer staples (+0.5%), utilities (+1.1%), and telecom services (+1.4%) groups, which finished in the green, are all countercyclical.
Within the health care space, Sarepta Therapeutics (SRPT 143.93, +38.69) spiked 36.8% after announcing positive trial results for its Duchenne muscular dystrophy (DMD) drug. The iShares Nasdaq Biotechnology ETF (IBB 112.04, +1.61) rallied 1.5%, hitting a three-month high.
Elsewhere, Tesla (TSLA 352.55, -18.28) dropped 4.9% after CEO Elon Musk revealed in a company email that a disgruntled employee conducted "extensive and damaging sabotage."
Outside of equities, U.S. Treasuries moved higher in a curve-flattening trade that left the 2-10 spread at its lowest level in more than a decade. The yield on the benchmark 10-yr Treasury note slipped three basis points to 2.89%, and the yield on the 2-yr Treasury note finished flat at 2.55%. Meanwhile, the U.S. Dollar Index rallied 0.3% to 94.67, and West Texas Intermediate crude futures dropped 1.2% to $64.90 per barrel.
Reviewing Tuesday's economic data, which was limited to Housing Starts and Building Permits for May:
Housing starts rose to a seasonally adjusted annualized rate of 1.350 million units in May (Briefing.com consensus 1.323 million), up from a revised 1.286 million units in April (from 1.287 million).
Building permits declined to a seasonally adjusted 1.301 million in May (Briefing.com consensus 1.343 million) from a revised 1.364 million in April (from 1.352 million).
The key takeaway from the report is that permits -- a leading indicator -- declined for both single-family units (-2.2%) and multi-unit dwellings (-8.8%), suggesting there might not be follow-on strength for badly needed single-family homes in June.
Looking ahead, investors will receive on Wednesday the Existing Home Sales report for May (Briefing.com consensus 5.55 million), the Current Account Balance for the first quarter (Briefing.com consensus -$129.2 billion), and the weekly MBA Mortgage Applications Index.
Nasdaq Composite +11.9% YTD
Russell 2000 +10.3% YTD
S&P 500 +3.3% YTD
Dow Jones Industrial Average -0.1% YTD
Minor Damage
18-Jun-18 16:20 ET
Dow -103.01 at 24987.47, Nasdaq +0.65 at 7747.04, S&P -5.79 at 2773.63
https://www.briefing.com/investor/markets/stock-market-update/2018/6/18/minor-damage.htm
[BRIEFING.COM] U.S.-China trade tensions weighed at the start of Monday's session, but sentiment eventually improved, allowing stocks to escape with just minor damage.
The benchmark S&P 500 index finished with a loss of 0.2%, but was down 0.8% at the opening bell. As for the other major averages, the Dow Jones Industrial Average lost 0.4%, the tech-heavy Nasdaq Composite finished flat, and the small-cap Russell 2000 advanced 0.5%, closing at a new all-time high.
Washington and Beijing remain at odds over trade after President Trump confirmed on Friday that he has approved a 25% tariff on $50 billion worth of Chinese goods -- to which Beijing swiftly responded by vowing to implement equivalent duties on U.S. goods. There weren't any new developments over the weekend.
Most S&P 500 sectors finished Monday in negative territory, with health care (-1.0%), consumer staples (-1.5%), and telecom services (-2.0%) leading the retreat. However, all other declining sectors finished with modest losses of no more than 0.4%.
Within the health care space, Biogen (BIIB 289.12, -15.91) was particularly weak, losing 5.2%, after rival PTC Therapeutics (PTCT 47.88, +10.33) announced positive trial results for its experimental spinal muscular atrophy drug. PTCT shares spiked 27.5%, hitting a fresh three-year high.
The energy sector (+1.1%) was the top-performing group by a wide margin following reports that Friday's OPEC/non-OPEC meeting could end with producers agreeing on a less-than-expected increase in output. West Texas Intermediate crude futures rebounded from a two-month low on Monday, rallying 1.2% to $65.85/bbl.
The top-weighted technology sector (+0.3%) also finished in the green, even though chipmakers underperformed. Semiconductor giant Intel (INTC 53.22, -1.89), for instance, dropped 3.4% after its shares were downgraded to 'Under Perform' from 'Market Perform' at Northland Capital. Tech giants Microsoft (MSFT 100.86, +0.73), Facebook (FB 198.31, +2.46), and Alphabet (GOOG 1173.46, +21.20) rallied, adding between 0.7% and 1.8%.
Elsewhere, media names were in focus once again after CNBC's David Faber reported that Walt Disney (DIS 107.06, -1.79) is planning to add cash to its bid for the bulk of 21st Century Fox's (FOXA 44.56, -0.10) assets. Disney's upped offer is a response to last week's $65 billion all-cash bid from Comcast (CMCSA 32.58, -1.30).
Also of note, GameStop (GME 15.20, +1.24) jumped 8.9% after Reuters reported that the company is holding talks with private equity firms over a potential transaction, and Rent-A-Center (RCII 14.68, +2.65) spiked 22.0% after agreeing to be acquired by Vintage Capital for $15.00 per share in cash.
On the data front, Monday's lone economic report, the NAHB Housing Market Index for June, came in at 68, slightly lower than the Briefing.com consensus of 70.
InvestmentHouse - US, China Trade Tariffs and the Market Struggles (WeekendNewsletter)
http://www.investmenthouse.com/frblog.php
- US, China trade tariffs. Market struggles, but holds up very well.
- Economic data pretty good, some not so great, but all of it a shadow of
what it once was and could be again.
- Has the redefinition of a strong economy fooled the Fed?
- Index action Friday suggests most of the move was just position shuffling
at expiration.
- Still good patterns after the 'week from hell' for the markets. That
bodes well for the upside to continue.
Trade had to get back into the picture at some point, knew it would. The
week's rally was under the White House threat of Friday tariffs on China.
Friday that threat became reality. The White House announced $50B in
tariffs on Chinese goods via a 25% tariff rate. China vowed a response and
in the first hour of trade delivered it: soy beans, whiskey, beef and some
other US products. While it was hoped this stage of the trade reformation
talks could be avoided, they are now here.
Stocks struggled as the possibility became reality. Futures opened sharply
lower. When the session bell rang stocks opened lower but then dove lower
after the first half hour as China announced its tariffs.
That sharp 10 minute drop was met with equally sharp buying, snapping the
indices right back up. Didn't turn positive, but immediately jumped back
into the range. Stocks range-traded into mid-afternoon. Then at 2:00ET
buys hit and jumped stocks to session highs, trading basically flat from the
Thursday close. The move waffled some into the close but managed to hold a
decent part of the bounce.
SP500 -2.83, -0.10%
NASDAQ -14.66, -0.19%
DJ30 -84.83, -0.34%
SP400 -0.17%
RUTX -0.05%
SOX -0.08$
NASDAQ 100 -0.33%
VOLUME: NYSE +154%, NASDAQ +40%. Impressive expiration volume.
ADVANCE/DECLINE: NYSE -1.1:1, NASDAQ +1.1:1. Impressively boring breadth.
All indices managed a very solid move off the session lows that frankly were
never that low. Keep in mind it was expiration Friday and that means
holdings will be shuffled to position for next expiration. The tariff news
was fortuitous in a way as it assisted some in the shuffle. Then the market
showed a rebound to near flat: the dip was bought. Fairly clear expiration
shuffling and positioning with the assist from the tariff news.
Most stocks managed a rebound though not all. Our positions mostly
recovered, but those that did not we exited. Many stocks showed a dip then
a rebound on strong volume. Some of these were the industrial stocks that
have lagged and you would think would have been hammered lower and nailed
the floor on the trade issues managed very nice price recoveries with
volume. HON, UTX, DE, EMR are just a few.
The leaders from other areas showed less drama. Software was up in many
cases. AMZN, FB, NFX, GOOG, NVDA, BABA all held up just fine. SQ, QRVO,
ATHM, LSCC, BRKS, BIDU, TXN and many other stocks rallied, some quite
nicely.
It was not carnage for the leading groups of stocks. It was not carnage for
the indices either. It was a day off for the growth indices. It was
another day of testing, and perhaps a shakeout, for the lagging indices.
Despite the 'horrors' of a trade war as China called it, the market rode out
the news and expiration, holding their relative positions.
Of course, that leaves the large cap NYSE indices still looking for a break
higher, but as noted above, the action has the look of a shakeout that could
provide that spring upside for a new breakout.
NEWS/ECONOMY
A mountain of data and news on the week. FOMC decision to add another rate
hike in 2018. ECB decision to possible end QE by 2019 but has no intention
of hiking rates. Retail sales rather solid. Atlanta Fed hopping up its
current quarter GDP estimate to 4.8%.
Friday it was tariffs. It was New York PMI at 25.0 over 20.1 in May. It
was Michigan Sentiment at 99.3, up from 98.0 in May. All solid enough.
Note, however, that Industrial Production and Capacity Utilization for May
fell and missed expectations.
Industrial Production: -0.1 vs 0.2 expected vs 0.9 prior (from 0.7)
Capacity Utilization: 77.9 versus 78.1 expected versus 78.1 April
Good and not so good, hot and cold.
Then there is the yield curve. The Fed is hiking the short end while longer
term bonds rally, pushing yields lower. That is flattening the curve, an
indication that economics are slowing or that the Fed is overreacting to the
economic pickup.
This is interesting. As you may recall, from the early stages of the
'recovery' under the Obama administration I said that the recovery would not
be good by historical standards, but, because it had been so long since we
had really good economic growth and because everyone was so starved for
improvement, that mediocre numbers would be described as 'great,' 'strong,'
and the like. That is exactly what happened, and a lot of people allowed
the story line to be skewed that way, allowed themselves to believe that
1.5% annual growth with 3 or 4 quarters spaced out over 8 years hitting the
high 3% level was a 'great' recovery.
Is the Fed a victim of the propaganda it helped underwrite? While growth is
vastly improved versus the Obama years, it is still well, well off 'strong'
or 'great.' Those words describe what was the recovery under Reagan: 4%,
5%, 7%, 11% quarterly GDP growth, massive capital investment, millions upon
millions of high quality (not food industry) jobs in tech, industrial,
mining, construction, and other sectors.
Those were strong numbers. What we are seeing now are decent. If this
quarter turns out to be 4.8%, THAT is strong. We will see, but those of us
who lived through the Carter years and the Reagan years know that even this
improvement in the economic condition is far from what our system is capable
if we get rid of all the socialist remnants from Bush and Obama.
I always find it revolting to hear purported experts say that capitalism
does not work in this world because of the income inequities generated the
past 10+ years. That is nonsensical. I heard the same thing in the Carter
years, about how America had a good run, but the world had changes and its
system just could not produce the same gains as in the past.
No the problem is under Bush and Obama we have careened well off the
capitalism course. Free enterprise works IF you have free enterprise. We
have handcuffed our system. Reagan showed what happens when you free up our
entrepreneurs, free up capital, remove restraints on investment and risk
taking. Trump is trying, but the Congress his party controls will not act
on his agenda to rid us of the ACA and other socialist restraints. If they
were gone, yes we could again post those dramatic gains.
And the meaning is . . .
Okay, so back to the current Fed. Is it drinking the Kool-Aid of the
economy growing too fast and being too strong? With 95.9M working aged
people still out of the workforce? With average GDP growth still in the
2's? Seriously? Yet, that is what we hear, meaning the Fed would like to
stymie growth in the 2% range.
Thus, the yield curve, a measure of true economic strength, is not happy
with the Fed cracking down on economic growth at these economic output
levels. It is telling you that the Fed risks overtightening -- something it
always does, sadly -- and the decent-ish economic growth we see right now
will be put at risk long before the economy ever has a chance to show what
it can really accomplish.
THE MARKET
CHARTS
Not bad action given the 'horror' of a trade war with China. As noted
below, even with this scenario and SP500 and DJ30 weighted with stocks that
will not like trade wars, they both held up remarkably well.
NASDAQ: After a new all-time high Thursday, NASDAQ opened lower, held 7700
on the low, and rebounded to a modest loss. NASDAQ shows good upside
volume, very good leadership, and Friday did nothing to change the strength
of the move higher.
SOX: This remains an enigma in this market, even more so than SP500 and
DJ30. SOX rallied quite well into early June, still shy of the March
all-time high, then tested a week back. It has held the 10 day EMA, but is
unable to break higher. Thursday as tech and growth rallied it bumped
higher, but nothing impressive. Still at the 10 day, and very important for
the market.
RUTX: Not exploding higher on the week but put in new highs yet again.
Thursday a new high, Friday a test intraday down near the 10 day EMA, then a
rush back upside for a most modest loss. Still very strong, still doing
well in a tariff fight environment.
SP400: Brushed a new high, just putting in one, but that was the extend of
the move. Not surprising given SP400 rallied 2 weeks to get to that point.
Wednesday was a little wild, but it calmed down nicely Thursday and Friday,
showing a pair of doji with tail, holding the 10 day EMA on the close.
Touched a new high then tested to consolidate the rally, now in good
position to move to a new high and this time make it stick.
SP500: Similar to SP400, a rally from late May into this week. Spent the
week rounding out the move and fading to test the 10 day EMA, holding above
it on the close. Nice shakeout action. Many big names have tested and held
on. We will see if the reach lower and recovery was indeed a good shakeout.
DJ30: Also rallied, moving past the May highs with a solid break two weeks
back, rounding out the top then fading to the 10 day EMA Thursday. Friday a
gap lower, a test of the 20 day EMA, then a rebound to the 10 day. Shakeout
here as well? Again, it will show if that is the case, but here is the
point: even with the 'worst case' scenario for trade the Dow held its
breakout over resistance.
LEADERSHIP
FAANG: As noted Thursday, all posted nice gains but AAPL. Friday they all
held good patterns, again except AAPL. It broke below the 20 day EMA and we
just did not want to mess with it anymore. AMZN tested modestly with a
doji. FB ditto. NFLX ditto. GOOG was actually up. These look fine.
Chips: QRVO, LSCC, BRKS, AVGO continued upside. Still some strength here.
NVDA doji tested. ON is in great shape. MU may have found its test bottom.
AAOI looks good in its test. There is promise here though many are
struggling.
Software: Some impressive moves in the circumstances. FFIV up again. GLUU
up. DATA solid upside. EA as well. RHT, VMW look excellent to move higher
again.
Industrials: EMR, UTX, HON all tested lower, rebounded nicely. CAT gapped
rather large and did not get back. TEX has to make a 50 day MA stand. MMM
is interesting and looks as if it is about to turn the corner upside. Still
possibilities here.
Metals: Very mixed action. NUE, STLD down. SCHN exploded higher. CLF
reached lower, recovered a lot of ground to show a doji holding the 10 day
EMA.
China: BABA faded Friday after a Thursday break higher. Holding the 10 day
EMA and still solid in its uptrend and breakout. ATHM pushed higher, HTHT
looks solid to break higher. IQ, after a huge move, threw a doji Friday.
SOHU showing a nice move to end the week. NTES looks interesting to turn
the corner back up, perhaps SINA as well.
Drugs/Biotech: Still some looking good. EXAS added to a week of good
gains. Others not so good. ARWR fell to the 10 day EMA rather abruptly.
IMMU is back at the 20 da after a bounce didn't keep running. BLUE jumped
Wednesday and Thursday but reversed those moves sharply Friday.
Internet: AKAM enjoyed a good week and was up 1.37% Friday; not bad. LLNW
still setting up for a move higher.
MARKET STATS
DJ30
Stats: -84.83 points (-0.34%) to close at 25090.48
Nasdaq
Stats: -14.66 points (-0.19%) to close at 7746.38
Volume: 3.04B (+39.45%)
Up Volume: 1.35B (-20M)
Down Volume: 1.64B (+865.56M)
A/D and Hi/Lo: Advancers led 1.02 to 1
Previous Session: Advancers led 1.35 to 1
New Highs: 167 (-27)
New Lows: 44 (+9)
S&P
Stats: -2.83 points (-0.10%) to close at 2779.66
NYSE Volume: 2.36B (+153.80%)
A/D and Hi/Lo: Decliners led 1.1 to 1
Previous Session: Advancers led 1.33 to 1
New Highs: 86 (-16)
New Lows: 71 (+20)
SENTIMENT
VIX: 11.98; -0.14
VXN: 15.42; -0.52
VXO: 11.01; +0.50
Put/Call Ratio (CBOE): 0.93; 0.00
Bulls and Bears:
Bulls up 5.5 points over the past three weeks, bears -1.4 over the same
period. After dropping rather sharply during the stock rebound, bulls
finally feel the upside a bit. Likewise, bears rallied into the selling,
now tailing off after a few weeks of upside. That is the way it works.
Bulls: 55.5 versus 52.9
Bears: 17.8 versus 17.7
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: 55.5 versus 52.9 versus 50.0
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 versus 49.5
versus 49.5 versus 48.1 versus 50.5 versus 57.5 versus 60.0 versus 60.2
versus 57.8 versus 50.0 versus 52.5 versus 54.9 versus 51.5 versus 50.00
versus 55.8 versus 50.00 versus 51.9 versus 58.1 versus 58.7 versus 58.5
versus 54.7 versus 51.9 versus 56.3 versus 55.8 versus 49.5
Bears: 17.8 versus 17.7 versus 19.2
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: 2.922% versus 2.933%. Bonds stemmed the selling on the week, worked
laterally long the 50 day MA's. Then they started to rally post-FOMC. Fed
raises rates and bonds rally, dropping yields? Again, not much faith shown
in the bond market that the Fed has a clue.
Historical: the last sub-2% rate was in November 2016 (1.867%). 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% versus 2.997%
versus 2.97% versus 2.966% versus 3.006% versus 2.952% versus 2.948% versus
2.968% versus 2.954% versus 2.959% versus 2.975% versus 3.0245% versus 3.00%
versus 2.962% versus 2.96% versus 2.914% versus 2.867% versus 2.83% versus
2.829 versus 2.825% versus 2.781%
EUR/USD: 1.1607 versus 1.15678. After a gut punch plunge Thursday from the
50 day MA to almost the May low, the euro recovered just a bit. Nothing
major on the upside for the euro.
Historical: 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 versus 1.16643 versus 1.15446 versus 1.17148 versus
1.17096 versus 1.17022 versus 1.17826 versus 1.1786 versus 1.17714 versus
1.1802 versus 1.1811 versus 1.18272 versus 1.19358 versus 1.19411 versus
1.1913 versus 1.18533 versus 1.18672 versus 1.19150 versus 1.19619 versus
1.1983 versus 1.1978 versus 1.19896 versus 1.20741 versus 1.21291 versus
1.21788 versus 1.2163 versus 1.22232 versus 1.22094 versus 1.22876 versus
1.23464 versus 1.23748 versus 1.23712 versus 1.238532 versus 1.23313 versus
1.23299 versus 1.23720 versus 1.2359 versus 1.2311 versus 1.22812 versus
1.2247 versus 1.2285
USD/JPY: 110.668 versus 110.578. Dollar enjoyed gains all week but
Wednesday, the FOMC announcement day. Looked dead in late May. Quite the
comeback.
Historical: 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 versus 108.699 versus 108.699 versus 109.385 versus
109.667 versus 109.502 versus 110.833 versus 110.95 versus 110.76 versus
110.935 versus 110.376 versus 110.246 versus 109.693 versus 109.384 versus
109.40 versus 109.746 versus 109.038 versus 109.022 versus 109.08 versus
109.175 versus 109.628 versus 109.91 versus 109.354 versus 109.051 versus
109.28 versus 109.373 versus 108.894 versus 108.728 versus 107.645 versus
107.404 versus 107.409 versus 107.027 versus 107.010
Oil: 65.06, -1.83. It had to happen. After a 2 week climb back up to the
50 day EMA after breaking it in late May, oil rolled back over. Surging
dollar pushing it lower as well.
Gold: 1278.50, -29.80. Bombing lower as well, indeed breaking below the
May lows. That corrects the Thursday upside action that I called bizarre.
MONDAY
The 'week from hell' for the financial markets is in the books and NASDAQ,
RUTX and SP400 managed to put in new highs on the week before a bit of a
late week fade. SP500 and DJ30, the indices you would expect to get
hammered, while not coming close to new highs, held up very well, setting
themselves up for a new move higher despite news that most would have
predicted would scuttle any idea of an upside move. What doesn't kill you
makes you stronger, right?
SP500, DJ30 start the week in position to make good upside moves if the
conditions merge. Many tech stocks remain positive in their moves, not
extended after starting good upside breaks. Still like many of the patterns
out there. We are in several, and will look to be in more if they can make
good on the patterns in place. Thus far tech and growth have done so and we
will look at those hard. Don't forget, however, the industrials. As noted
before, if they could survive the back and forth dueling tariffs and hold
their patterns, it behooves you to keep a watch on them and when they break
higher, pick up the positions.
Have a great weekend!