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Trade War Fears Re-Enter the Mix
15-Jun-18 16:30 ET
Dow -84.83 at 25090.48, Nasdaq -14.66 at 7746.39, S&P -3.07 at 2779.42
https://www.briefing.com/investor/markets/stock-market-update/2018/6/15/trade-war-fears-reenter-the-mix.htm
[BRIEFING.COM] Trade war fears weighed at the start of Friday's session, but stocks rebounded intraday, leaving the major averages just modestly lower. The S&P 500 was down as much as 0.7%, but ended with a loss of just 0.1%. The Nasdaq slipped 0.2%, retreating from Thursday's record high, while the Dow lost 0.3%.
President Trump confirmed before the open that he's approved a 25% tariff on $50 billion worth of Chinese goods and warned of additional tariffs should China retaliate. Unfazed by the threat, Beijing announced that it will impose a 25% tariff on $34 billion worth of U.S. goods starting on July 6, which is when the U.S. plans to impose its tariffs. Beijing also noted that a tariff on another $16 billion worth of U.S. goods could be imposed at a later date and said any previously negotiated agreements, including China's offer to buy nearly $70 billion of U.S. goods, will be invalid.
The S&P 500 sectors ended Friday pretty evenly split between green and red. Five groups advanced, led by the countercyclical consumer staples (+1.3%), utilities (+0.7%), and telecom services (+1.2%) spaces, while six groups declined. The energy space (-2.1%) finished at the back of the pack by a wide margin as crude prices tumbled.
West Texas Intermediate crude futures dropped 2.7% to $65.06 per barrel, their worst close since hitting a two-month low on June 6. Crude traders have their eyes on next week's OPEC/non-OPEC meeting where oil producers are expected to raise their production targets in order to combat falling output from Venezuela and Iran.
In addition to energy, the top-weighted technology sector (-0.5%) also underperformed, with mega caps Apple (AAPL 188.84, -1.96) and Microsoft (MSFT 100.13, -1.29) dropping 1.0% and 1.3%, respectively. Adobe Systems (ADBE 251.82, -6.28) also struggled, losing 2.4%, despite beating quarterly earnings estimates.
Elsewhere, AT&T (T 33.15, +0.63) completed its acquisition of Time Warner after the Department of Justice decided against applying for a delay of Tuesday's ruling, and shares of General Motors (GM 43.91, +0.34) spiked intraday following a Bloomberg report that the company is having early discussions with banks about strategic options for its self-driving car unit Cruise Automation.
U.S. Treasuries were fairly volatile on Friday, with the yield on the 10-yr Treasury note drifting between 2.89% and 2.94%. The benchmark yield eventually settled two basis points below its Thursday close at 2.92%, while the yield on the 2-yr Treasury note lost three basis points, dropping to 2.55%.
Overseas, the Bank of Japan kept its key interest rate unchanged, as expected, but downgraded its view on inflation.
Reviewing Friday's economic data, which included the Industrial Production and Capacity Utilization report for May, the preliminary reading of the University of Michigan Consumer Sentiment Index for June, and the Empire Manufacturing report for June:
Industrial Production slipped 0.1% in May (Briefing.com consensus +0.2%), while the April increase was revised to 0.9% (from +0.7%). Meanwhile, Capacity Utilization ticked down to 77.9% (Briefing.com consensus 78.1%) from a revised reading of 78.1% in April (from 78.0%).
The key takeaway from the report is that the decline in overall production was driven by weakness in manufacturing production.
The preliminary reading of the University of Michigan Consumer Sentiment Index for June rose to 99.3 (Briefing.com consensus 99.0) from 98.0 in May.
The key takeaway from the report is that the Expectations Index declined to its lowest level since the start of the year due to less favorable prospects for the overall economy, which were tied in part to higher inflation expectations.
The Empire Manufacturing Survey for June climbed to 25.0 (Briefing.com consensus 20.0) from the prior month's unrevised reading of 20.1.
Looking ahead, investors will receive just one economic report, the NAHB Housing Market Index for June, on Monday.
Nasdaq Composite +12.2% YTD
Russell 2000 +9.7% YTD
S&P 500 +4.0% YTD
Dow Jones Industrial Average +1.5% YTD
Week In Review: Little Changed Following Headline-Heavy Week
There was a steady stream of noteworthy news this week, but none of the headlines moved the S&P 500 in a significant way. The benchmark index ended the week almost exactly flat, adding less than one point. The tech-heavy Nasdaq outperformed, adding 1.3%, while the Dow lagged, losing 0.9%.
This week's story really began over the weekend when the annual Group of Seven meeting, which was held in Quebec, ended on an uncharacteristically contentious note. President Trump was prepared to sign the customary joint statement, but changed his mind following what the White House deemed as "inappropriate" comments from Canadian Prime Minister Justin Trudeau.
The world then turned its attention to Singapore, where President Trump met with North Korean leader Kim Jong Un on Tuesday in a historic summit that marked the first ever meeting between a sitting U.S. president and a North Korean leader. The meeting ended with a joint statement in which North Korea reaffirmed its commitment to completely denuclearize and the U.S. promised "security guarantees" -- including the suspension of military exercises on the Korean Peninsula. The two nations will engage in follow-up negations to work out the specific details.
Monetary policy took center stage midweek when the U.S. Federal Reserve released its latest policy directive. The Fed decided to raise interest rates for the second time this year, increasing the fed funds target range by a quarter point to 1.75% to 2.00%, and upped its interest-rate forecast to include a total of four rate increases this year -- up from three in March. The market had expected the rate hike, but the updated forecast took some by surprise.
Overseas, the European Central Bank released its latest policy directive on Thursday. As expected, the ECB left its key policy rate unchanged and announced a plan to end its asset purchase program. The ECB in September will cut its monthly purchases in half, from EUR30 billion to EUR15 billion, and then end purchases altogether three months later -- although it will continue to reinvest the principal from maturing securities. As for interest rates, the ECB said they will remain at their present levels "at least through the summer of 2019." That statement was credited with sending the euro down more than 1.0% against the U.S. dollar.
The Bank of Japan also conducted a policy meeting this week, but made no changes to its key interest rate. However, the BoJ did downgrade its view on inflation, further highlighting the difference between the BoJ, which is struggling to end its crisis-era stimulus, and the Fed, which continues to progress on a path to normalization.
Back in the States, media names were in focus after a federal judge on Tuesday ruled in favor of AT&T (T) in its drawn-out legal battle with the Justice Department. The ruling allowed AT&T to move forward with its acquisition of Time Warner (TWX), which it closed on Thursday, and set the stage for more merger activity in the future. Comcast (CMCSA), for instance, outdid Disney's (DIS) all-stock bid for the bulk of 21st Century Fox's (FOXA) assets following the ruling, offering $65 billion in cash.
In politics, trade war fears were reignited on Friday after President Trump confirmed that he's approved a 25% tariff on $50 billion worth of Chinese goods. China responded swiftly, announcing that it'll impose a 25% tariff on $34 billion worth of U.S. goods on July 6, the same day the U.S. tariffs are scheduled to take effect.
Modest Victory for S&P; Nasdaq Hits New Record
14-Jun-18 16:30 ET
Dow -25.89 at 25175.31, Nasdaq +65.34 at 7761.05, S&P +6.86 at 2782.49
https://www.briefing.com/investor/markets/stock-market-update/2018/6/14/modest-victory-for-s-and-p-nasdaq-hits-new-record.htm
[BRIEFING.COM] The S&P 500 drifted within a pretty tight range on Thursday, eventually settling with a modest gain of 0.3%. Investors were still wrestling with the Fed's upped rate-hike forecast and received another central bank policy decision, this time from the ECB. The Dow (-0.1%) struggled to keep pace, but the tech-heavy Nasdaq (+0.9%) outperformed, hitting a new all-time high.
As expected, the European Central Bank left its key policy rate unchanged on Thursday morning and announced a plan to end its asset purchase program. The ECB in September will cut its monthly purchases in half, from EUR30 billion to EUR15 billion, and then end purchases altogether three months later -- although it will continue to reinvest the principal from maturing securities. As for interest rates, the ECB said they will remain at their present levels "at least through the summer of 2019."
The euro dove sharply following the ECB's policy release and was down about 1.7% against the U.S. dollar at the closing bell in New York. The yield on Germany's 10-yr bund also slid, going from 0.50% to 0.42%, but U.S. Treasury yields were mostly lower even before the ECB decision. The yield on the benchmark 10-yr Treasury note slid three basis points to 2.95%, but the 2-yr yield bucked the trend, rising two basis points to 2.58%. That left the 2-10 spread at its lowest level in more than a decade.
Lenders, which make money on the difference between what they charge for loans and what they pay on deposits, dropped with the 2-10 spread, sending the S&P 500's financial sector to the bottom of the sector standings. The financial group lost 0.9% and was one of only three groups -- industrials (-0.4%) and energy (-0.2%) being the others -- to close in the red.
On the flip side, eight sectors advanced on Thursday. The lightly-weighted utilities group (+1.2%) was the top performer, continuing to rebound after a poor start to the month, and the consumer discretionary sector (+1.0%) was also a notable outperformer. Within the consumer discretionary space, media names were in focus once again after Comcast (CMCSA 33.82, +1.50, +4.6%) outdid Disney's (DIS 108.75, +2.44, +2.3%) all-stock bid for the bulk of 21st Century Fox's (FOXA 44.58, +0.92, +2.1%) assets, offering $65 billion in cash.
Meanwhile, in the tech sector (+0.6%), Twitter (TWTR 46.76, +2.69) added another 6.1% and is now up 16.6% since being added to the S&P 500 on June 7. Social media peer Facebook (FB 196.81, +4.40) also did well, adding 2.3%, but Oracle (ORCL 45.90, -2.37) struggled, losing 4.9% after being downgraded to 'Neutral' from 'Overweight' at JP Morgan.
In Washington, the White House is reportedly planning to roll out on Friday a shorter list of tariffs on imports from China, according to CNBC. The updated list is expected to include between 800 and 900 products, down from around 1,300 products originally. The market had a muted reaction to the news.
Reviewing Thursday's economic data, which included Retail Sales for May, weekly Initial Claims, Export and Import Prices for May, and April Business Inventories:
May retail sales rose 0.8% (Briefing.com consensus +0.4%), while the April increase was revised to 0.4% from 0.3%. Excluding autos, retail sales increased 0.9% in May (Briefing.com consensus +0.5%), and the April increase was revised to 0.4% from 0.3%.
The key takeaway from the report is that consumer spending on goods was strong in May, which will feed expectations for a healthy pickup in second quarter GDP growth.
The latest weekly initial jobless claims count totaled 218,000, while the Briefing.com consensus expected a reading of 223,000. Today's tally was below the unrevised prior week count of 222,000. As for continuing claims, they declined to 1.697 million from a revised count of 1.746 million (from 1.741 million).
The key takeaway from the report is the same as last week: the low level of initial and continuing jobless claims is consistent with a tight labor market.
Import prices excluding oil rose 0.6% in May after rising a revised 0.6% in April (from +0.2%), and export prices excluding agriculture increased 0.5% after rising an unrevised 0.7% in April.
The key takeaway from the report is that import prices continued an upward trend that began in August 2017 and recorded their largest 12-month advance (+4.3%) since February 2017.
Business Inventories rose 0.3% in April (Briefing.com consensus +0.3%). The March reading was revised to -0.1% from 0.0%.
The inventories-to-sales ratio held steady at 1.35 month-over-month and was down from 1.38 in the same period a year ago.
Looking ahead, investors will receive on Friday morning the Industrial Production and Capacity Utilization report for May, the Empire Manufacturing report for June, and the preliminary reading of the University of Michigan Consumer Sentiment Index for June.
Also, the Bank of Japan will release its latest policy directive overnight. No changes are expected.
Nasdaq Composite +12.4% YTD
Russell 2000 +9.7% YTD
S&P 500 +4.1% YTD
Dow Jones Industrial Average +1.9% YTD
Stocks Tick Higher Ahead of Trump-Kim Summit
11-Jun-18 16:30 ET
Dow +5.78 at 25322.31, Nasdaq +14.41 at 7659.93, S&P +2.97 at 2782.00
https://www.briefing.com/investor/markets/stock-market-update/2018/6/11/stocks-tick-higher-ahead-of-trumpkim-summit.htm
[BRIEFING.COM] U.S. equities eked out a slim victory on Monday as investors shrugged off a contentious Group of Seven meeting and looked ahead to a historic summit between President Donald Trump and North Korean leader Kim Jong Un. The S&P 500 was up 0.3% with just 10 minutes to go, but a late bout of selling left the index with a gain of 0.1%.
Mr. Trump's meeting with Mr. Kim is scheduled to begin in Singapore at around 9:00 PM ET and will mark the first time that a sitting U.S. president has met with a North Korean leader. The two sides will attempt to come to some sort of agreement on denuclearization that'll likely require security assurances from the U.S. However, the chance of success remains unclear as officials engaged in last-minute talks ahead of the meeting are reportedly struggling to bridge the gaps on some of the most basic issues, according to The New York Times.
Separately, the annual Group of Seven summit over the weekend ended on a contentious note after President Trump decided to forego signing a joint statement in response to comments from Canadian Prime Minister Justin Trudeau, who vowed to retaliate against Mr. Trump's recently imposed tariffs on steel and aluminum imports.
Most S&P 500 sectors finished Monday with modest gains. However, the telecom services and consumer staples groups outperformed, adding 0.7% and 0.8%, respectively. The health care sector (+0.1%), meanwhile, finished roughly in line with the broader market even though Boston Scientific (BSX 34.32, +2.37) soared 7.4% on news that rival Stryker (SYK 169.78, -9.17) has made a takeover approach.
Retailers had another positive outing, pushing the SPDR S&P Retail ETF (XRT 50.07, +0.52) higher by 1.1%. With Monday's advance, the XRT is now up 8.0% for the month of June, nearly triple the S&P 500's month-to-date gain of 2.8%. The consumer discretionary sector, which houses the bulk of retailers, finished with a gain of 0.3%.
On the downside, the utilities and financials spaces were the weakest performers, shedding 0.3% apiece.
Elsewhere, U.S. Treasuries ended Monday on a lower note, pushing yields higher across the curve. The yield on the benchmark 10-yr Treasury note advanced two basis points to 2.96%. Meanwhile, West Texas Intermediate crude futures climbed 0.5% to $66.11 per barrel, hitting their best level in more than a week.
Investors didn't receive any notable economic data on Monday. However, they will receive several reports on Tuesday, including the Consumer Price Index for May (Briefing.com consensus +0.3%), the Treasury Budget for May, and the NFIB Small Business Optimism Index for May.
Nasdaq Composite +11.0% YTD
Russell 2000 +9.1% YTD
S&P 500 +4.1% YTD
Dow Jones Industrial Average +2.4% YTD
InvestmentHouse - G-7 Meeting Contentious as Expected (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
- G-7 meeting contentious as expected, Canada accused of backstabbing was
unexpected, but Trump lays it on the table for all to see, offering true
free trade between the EU and the US. Bets if ANY nation will agree to
truly free trade?
- New highs on many indices, others close, and those lagging are looking
better.
- Will the market outlook regarding the future remain the same and yield
breaks higher from these good patterns? There is a better chance of that
than countries agreeing to true free trade.
The big story over the weekend was the G-7 (fka G-8, aka G6+1). Not that
there were no agreements and not that Trump and his advisors called Canada's
Trudeau dishonest and a backstabber. Those were indeed humorous moments,
and the latter not expected.
No, the real story was what Trump proposed after Europe complained about the
US' call for tariffs on the EU. After hearing all the euros complain about
the US placing tariffs on EU products because the EU placed tariffs on US
products and misused NAFTA, Trump called their bluff -- Trump offered NO
tariffs at all between the EU and the US. The old saying be careful what
you say you want because you might get it was never more in play. Only
Merkel had the guts to say something, and it was at least not negative: she
would consider that proposal.
Take that Paul Ryan, Mitch McConnell and all the other fake free trade
stooges. They are whining against Trump's tariff proposals because, they
say, we have to have 'free' trade with our allies. But there IS NO free
trade. The EU imposes all kinds of tariffs on all kinds of US goods. Every
day. Saying the US should not impose tariffs because it would disrupt free
trade is thus on its face absurd. Why were THEY not saying 'yes we want
free trade, so Europe, drop your tariffs on our goods and we won't impose
tariffs on yours. Quid pro quo. A bargained for exchange that helps all
participants.
Now the question is out there: do the euros REALLY want free trade? Do the
congressional republicans really want free trade or are they protecting
their donors? It is out there. We could have free trade. Are there the
guts to really take it?
Classic Trump bargaining. Everyone screams he is a madman. Robert DeNiro
unleashed a tirade this week that was not only obscene but makes you wonder
if senility has fully set in. Trump is actually bargaining, actually
negotiating as he did every day in business. The goal is clear, just as he
said while campaigning: free trade is fair trade, and our trade deals are
neither. He has shown he is the one wanting free trade. He made the
proposal. Again, does anyone have the guts to grab it? Does anyone REALLY
want true free trade?
THE MARKET
SP500 8.66, 0.31%
NASDAQ 10.44, 0.14%
DJ30 75.12, 0.30%
SP400 0.50%
RUTX 0.28%
SOX -0.85%
NASDAQ 100 flat
VOLUME: NYSE -12%, NASDAQ -16%. Friday volume fade on a session that was
both ways. Not bad, no heavy selling, just some low volume movement after
good breaks higher.
ADVANCE/DECLINE: NYSE 1.4:1, NASDAQ 1.1:1. Modest as you would expect on a
flattish day.
Friday saw the midcaps lead, clearing to a new all-time high intraday. They
faded a bit, closing with a new all-time closing high. Another index hits
the A-T level, SP400 putting in a nice 6-session run.
SP500 put in a very acceptable week, finally clearing the May peaks. That
is all. It still has a lot of work, but started to do some work. Many
industrial stocks have some very interesting patterns. Ah, the pretty
picture syndrome NASDAQ experienced for a while. Then NASDAQ stocks broke
higher as did chips. All of them, of course, following RUTX and its string
of new highs.
RUTX is indeed impressive, rallying to another new high on Monday, Tuesday,
and Wednesday. Thursday it hit a new all-time high but faded. Friday was a
modest upside session. Still very strong if a bit extended -- again.
NASDAQ rallied to a new high on the week, dropped rather hard Thursday, then
Friday added some back. Solid pattern, waiting for the 10 day EMA to catch
up to it. When it does it is likely to surge again.
SOX rallied up to the March all-time high then faded Thursday and Friday to
the 10 day EMA. The chips came back to life and helped the market rally,
helped those other indices hit the new highs. Now we will see if the chips
can add their own new all-time high.
DJ30 posted a good week, continuing the prior Friday move up off the 50 day
SMA. DJ30 cleared the May highs and is now similarly situated as SP500 with
the March and February highs just overhead, still a long way off from that
January all-time high. Large caps have lagged, but their patterns are good.
As asked before, will the pretty patterns turn into good breakouts upside?
LEADERSHIP
Industrials: Still looking good, still need to show the good patterns can
convert. IP has a very nice look. UTX as well. HON started upside last
week. CAT still solid and DE continues to look ready to make the move.
Metals: This group has some nice patterns as well. SCHN, STLD, X. Perhaps
anticipating things not going so well at G-7. We will see how they react
Monday.
Software: Some struggled to end the week. NOW dumped Thursday, hung in
Friday. DATA also fell to near support. UIS enjoyed a great week. ATVI
remains solid. RHT, TTWO look good to go as well. MSFT testing the 10 day
MA, not bad at all.
Chips: NVDA looks very good with a 4-session test of the 10 day EMA. MXIM
testing the same level as well. TXN as well. NPTN looks quite good. Some
others as well, e.g. AAOI, MU -- these could provide new entries this week.
FAANG: FB in a nice 20 day EMA test on the week, weathering the continued
stream of bad news. GOOG looks ready to break higher again off the 10 day
EMA. AMZN may come back all the way to the 10 day and provide an entry.
NFLX is testing the 10 day as well and could provide something this week.
China: ATHM with a nice doji with tail tapping the 20 day EMA and
rebounding. HTHT tested the 10 day EMA as well, bounced Friday. BABA
tested to the 20 day, bounced Friday. Familiar story: test to near support,
bounce. IQ surged to a new all-time high with a 6+% gain; okay not all
tested the 10 day EMA.
Oil: Some broke higher starting Thursday. CRZO gapped and rallied that
session. COP continued climbing after the drop to the 50 day EMA the prior
week. XOM cracked to a higher recovery high.
Drugs/Biotech: Mixed bag, still many good stocks. ARWR testing the 10 and
20 day EMA on the week after a good rally. IMGN looked very good but then
reversed ugly Thursday and Friday. VVUS surged Friday; dang -- we watched
it, then watched it break higher. BLUE at the 50 day EMA and a 'must hold'
level. Other healthcare is not bad, e.g. EXAS, FATE looking quite good.
MARKET STATS
DJ30
Stats: +75.12 points (+0.30%) to close at 25316.53
Nasdaq
Stats: +10.44 points (+0.14%) to close at 7645.51
Volume: 1.94B (-16.38%)
Up Volume: 1.16B (+110M)
Down Volume: 722.78M (-517.22M)
A/D and Hi/Lo: Advancers led 1.1 to 1
Previous Session: Decliners led 1.27 to 1
New Highs: 154 (-123)
New Lows: 18 (-14)
S&P
Stats: +8.66 points (+0.31%) to close at 2779.03
NYSE Volume: 774.1M (-12.35%)
A/D and Hi/Lo: Advancers led 1.43 to 1
Previous Session: Advancers led 1.2 to 1
New Highs: 117 (-49)
New Lows: 23 (-34)
SENTIMENT
VIX: 12.18; +0.05
VXN: 16.51; +0.06
VXO: 11.33; -0.40
Put/Call Ratio (CBOE): 0.95; +0.03
Bulls and Bears:
Bulls edged higher as part of a 4 week recovery from the plummet from the 65
range. Hardly a new surge. Bears are holding a rebound from the prior five
months, but frankly, it is not that much of a bounce.
Bulls: 50.0 versus 49.1
Bears: 19.2 versus 19.2
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: 50.0 versus 49.1
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: 19.2 versus 19.2
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: 2.948% versus 2.928%. Bonds continued selling on the week but
Thursday surged back up through the 50 day MA. Held that level with a 50
day MA Friday with a doji. Yields faded some, but the recovery of bonds over
the 50 day MA is an interesting development.
Historical: the last sub-2% rate was in November 2016 (1.867%). 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: 1.17737 versus 1.17987. Euro recovered last week, then tested
back to the 20 day MA. Will the G-* conclusion send the euro up again?
Historical: 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: 109.466 versus 109.705. Dollar tested the 50 day MA to end the
week after recovering over that important level 9 sessions prior.
Historical: 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: 65.74, -0.21. Oil sold off to end May, start June. Thursday a
bounce, Friday flat. Not that strong and this bounce likely hits the 10 day
EMA then rolls back over.
Gold: 1302.70, -0.30.
MONDAY
Thursday was a bit rocky for the growth indices such as NASDAQ and SOX, but
they recovered decently Friday and remain in good patterns. The setups in
the indices are still quite nice though RUTX may need some more time to test
and consolidate before it rallies again.
That leaves the other indices that have lagged as likely candidates to
rally. SP500, SP400 look good. Industrials are showing better patterns
whether machinery or metals. Money looked to be going their way last week,
but not definitive just yet. We are looking at IP, still looking at DE, and
watching to see if CAT and HON can deliver upside.
There are also many other groups looking good, some that have rallied well
and just tested near support. GOOG, NVDA are examples. They too provide
that push to not only NASDAQ but SP500 as well.
In short, there are many good patterns in the market, and that suggests the
indices will continue to climb -- if they can keep the same outlook toward
the futures after G-7 and the US/North Korea meeting on 6/14, we could see a
lot of new breaks higher.
Our plays to start the week are a mix of healthcare, chips, big names,
China, industrial. Will see what groups receive the money.
Have a great weekend!
Stocks Tick Higher, Extend Weekly Gains
08-Jun-18 16:30 ET
Dow +75.12 at 25316.53, Nasdaq +10.44 at 7645.51, S&P +8.66 at 2779.03
https://www.briefing.com/investor/markets/stock-market-update/2018/6/8/stocks-tick-higher-extend-weekly-gains.htm
[BRIEFING.COM] The major averages ticked up between 0.1% and 0.3% on Friday, extending their weekly gains to 1.2%-2.8%. Stocks opened modestly lower as technology shares weighed, but the consumer staples and health care sectors helped turn things around later in the session. The day was pretty quiet in terms of headlines, although the Group of Seven (G7) did kick of its annual summit in Quebec.
President Trump is expected to be on the outside looking in at this year's G7 summit after his decision to impose tariffs on steel and aluminum imports was met with resistance from U.S. allies. The president further stirred the pot on Friday by saying the G7 -- which used to be the G8 before Russia got thrown out in 2014 for its annexation of Crimea -- should let Russia back into the group. Investors weren't spooked by the tension though, nor were they fazed by reports that Chinese government hackers stole massive amounts of highly sensitive data from a U.S. Navy contractor.
Nearly all S&P 500 sectors advanced on Friday, but gains were modest for the most part. The consumer staples sector was an exception though, adding 1.3%. Monster Beverage (MNST 55.48, +2.65) was the top-performing consumer staples component, rallying 5.0%, following its annual shareholder meeting. The health care sector also showed relative strength, climbing 0.7% in a broad-based rally.
The energy (-0.2%) and utilities (unch) sectors were the only groups to finish Friday in the red, but the top-weighted information technology group also lagged, closing just a tick above its unchanged mark. Within the tech space, Apple (AAPL 191.70, -1.76) lost 0.9% following reports that it has asked its supply chain to prepare around 20% fewer components for iPhones debuting in the second half of 2018, and Broadcom (AVGO 257.97, -6.71) dropped 2.5% despite reporting better-than-expected quarterly results on Thursday evening.
Elsewhere, U.S. Treasuries finished Friday on a flattish note, with the yield on the benchmark 10-yr note ticking up one basis point to 2.94%. Meanwhile, West Texas Intermediate crude futures slid 0.3% to $65.76 per barrel, and the U.S. Dollar Index climbed 0.1% to 93.56 to end a four-session losing streak.
Reviewing Friday's economic data, which was limited to Wholesale Inventories for April:
April Wholesale Inventories ticked up 0.1% (Briefing.com consensus +0.2%). The March reading was revised to +0.2% from +0.3%.
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.
Investors will not receive any economic data on Monday.
Nasdaq Composite +10.8% YTD
Russell 2000 +8.9% YTD
S&P 500 +3.9% YTD
Dow Jones Industrial Average +2.4% YTD
Week In Review: Third Straight Weekly Advance
The U.S. equity market advanced for the third week in a row, with the benchmark S&P 500 index adding 1.6%. The Dow Jones Industrial Average was particularly strong, adding 2.8%, while the Nasdaq Composite and the Russell 2000 touched new record highs, finishing the week with respective gains of 1.2% and 1.5%.
There were several notable corporate headlines this week, starting on Monday when the executive chairman and former CEO of Starbucks (SBUX), Howard Schultz, announced that he will be stepping down. In talking about his future plans, Mr. Schultz failed to rule out a run for the White House, prompting speculation that he'll challenge President Trump in 2020.
Elsewhere in the consumer discretionary space, Tesla (TSLA) shares spiked on Wednesday after CEO Elon Musk said it's "quite likely" that Tesla will hit its target for producing 5,000 Model 3 electric vehicles per week by the end of June. Retailers soared this week, sending the SPDR S&P Retail ETF (XRT) higher by 6.3%, following comments from Evercore ISI Research, which suggested that fears about Amazon's (AMZN) ever-growing footprint may be overblown. Some short-covering activity also likely helped push retail shares higher.
Meanwhile, in the tech space, Facebook (FB) came under scrutiny once again following news that the social media company has data-sharing partnerships with at least four Chinese electronics companies, including one flagged as a national security threat by American intelligence officials. Separately, Apple (AAPL) shares dropped on Friday following reports that the company has asked its supply chain to prepare around 20% fewer components for iPhones debuting in the second half of 2018.
In Washington, Commerce Secretary Wilbur Ross said the U.S. has struck a deal to end crippling sanctions against Chinese telecom giant ZTE that includes a $1 billion penalty and the implementation of a U.S.-chosen compliance team to monitor the company going forward. ZTE will also be required to change its board of directors and its executive team. On a related note, China is reportedly ready to approve Qualcomm's (QCOM) proposed acquisition of NXP Semi (NXPI).
Leaders from the Group of Seven (G7) kicked off their annual summit on Friday in the small Canadian resort town of La Malbaie. This year's meeting is expected to be more contentious than usual due to President Trump's decision to impose tariffs on imports of steel and aluminium. French President Emmanuel Macron has threatened to exclude the U.S. from the annual joint statement, symbolizing the strained relationship between the U.S. and its allies.
In Europe, the ECB's Chief Economist, Peter Praet, said the European Central Bank will discuss how to wind down its asset purchase program at next week's policy meeting after officials agreed that inflation is moving towards the central bank's target of 2.0%. The euro responded by rallying against the U.S. dollar, adding nearly 1.0% for the week.
The Fed will also be meeting next week, and it's all but certain that officials will hike interest rates for the second time this year. The question is whether the updated interest-rate projections, which will be released alongside the rate-hike decision on Wednesday, will call for one or two more hikes this year.
Tech Shares Slide, Bring S&P Win Streak to an End
07-Jun-18 16:20 ET
Dow +95.02 at 25241.41, Nasdaq -54.17 at 7635.07, S&P -1.98 at 2770.37
https://www.briefing.com/investor/markets/stock-market-update/2018/6/7/tech-shares-slide-bring-s-and-p-win-streak-to-an-end.htm
[BRIEFING.COM] The major averages finished Thursday on a mostly lower note, with the S&P 500 shedding 0.1% to end a four-session winning streak. The Nasdaq and the Russell 2000 retreated from all-time highs, finishing lower by 0.7% and 0.5%, respectively, while the Dow outperformed, adding 0.4%.
Most S&P 500 sectors finished the day in positive territory, with energy (+1.6%) and telecom services (+1.2%) leading the charge. Energy stocks rose with the price of crude oil following reports that Venezuela is nearly a month behind in crude deliveries due to its ongoing economic crisis. WTI crude futures advanced 1.9% to $65.95 per barrel after hitting a two-month low on Wednesday. In addition to energy, the consumer staples (+0.6%) and utilities (+0.4%) sectors also outperformed.
However, the information technology sector -- which is the biggest S&P 500 group, representing a quarter of the broader market by itself -- dropped 1.1%, overpowering mostly modest gains from the ten other groups. Within the space, giants like Microsoft (MSFT 100.88, -1.61), Facebook (FB 188.18, -3.16), and Alphabet (GOOG 1123.86, -13.02) lost between 1.2% and 1.7%, and chipmakers pushed the Philadelphia Semiconductor Index lower by 1.0%.
In Washington, Commerce Secretary Wilbur Ross said the U.S. has struck a deal to end crippling sanctions against Chinese telecom giant ZTE that includes a $1 billion penalty and the implementation of a U.S.-chosen compliance team to monitor the company going forward. ZTE will also be required to change its board of directors and its executive team in the next 30 days. Separately, President Donald Trump and Japan's Prime Minister Shinzo Abe held a joint press conference on Thursday, touching on next week's U.S.-North Korea summit.
On the corporate front, Qualcomm (QCOM 60.64, +0.80) and NXP Semi (NXPI 120.07, +5.55) rallied 1.3% and 4.9%, respectively, following reports that China is ready to approve Qualcomm's proposed acquisition of NXP. Meanwhile, J.M. Smucker (SJM 100.80, -5.72) lost 5.4% and Five Below (FIVE 99.05, +17.77) spiked 21.9% after both companies released their quarterly results, and Allergan (AGN 163.27, +7.89) jumped 5.1% following reports that billionaire investor Carl Icahn has built a small position in the drugmaker.
U.S. Treasuries rallied on Thursday, shooting to new highs in the afternoon when emerging market currencies dropped to new lows against the U.S. dollar. There wasn't a news catalyst to credit for the move, but it's worth noting that Indonesia, Turkey, and India have all raised rates recently in an effort to stem capital flight. The iShares MSCI Brazil Capped ETF (EWZ 31.71, -1.77) got clobbered on Thursday, dropping 5.1%, and the iShares MSCI Emerging Markets ETF (EEM 46.42, -0.72) lost 1.5%. The yield on the benchmark 10-yr U.S. Treasury note dropped five basis points to 2.93%.
Reviewing Thursday's economic data, which was limited to weekly Initial Claims and the Consumer Credit report for April:
The latest weekly initial jobless claims count totaled 222,000, while the Briefing.com consensus expected a reading of 225,000. Today's tally was below the revised prior week count of 223,000 (from 221,000). As for continuing claims, they rose to 1.741 million from a revised count of 1.720 million (from 1.726 million).
The key takeaway from this report is that the low level of initial claims is consistent with a tight labor market.
The Consumer Credit report for April showed an increase of $9.2 billion (Briefing.com consensus $13.9 billion). March credit growth was revised to $12.3 billion from $11.6 billion.
The key takeaway from the report is that the increase in consumer credit was the lowest since September 2017, which suggests rising interest rates may have driven consumers to pay down debt and/or tempered their demand for credit.
On Friday, investors will receive just one economic report, Wholesale Inventories for April (Briefing.com consensus +0.2%).
Nasdaq Composite +10.6% YTD
Russell 2000 +8.6% YTD
S&P 500 +3.6% YTD
Dow Jones Industrial Average +2.1% YTD
Tech Shares Slide, Bring S&P Win Streak to an End
07-Jun-18 16:20 ET
Dow +95.02 at 25241.41, Nasdaq -54.17 at 7635.07, S&P -1.98 at 2770.37
https://www.briefing.com/investor/markets/stock-market-update/2018/6/7/tech-shares-slide-bring-s-and-p-win-streak-to-an-end.htm
[BRIEFING.COM] The major averages finished Thursday on a mostly lower note, with the S&P 500 shedding 0.1% to end a four-session winning streak. The Nasdaq and the Russell 2000 retreated from all-time highs, finishing lower by 0.7% and 0.5%, respectively, while the Dow outperformed, adding 0.4%.
Most S&P 500 sectors finished the day in positive territory, with energy (+1.6%) and telecom services (+1.2%) leading the charge. Energy stocks rose with the price of crude oil following reports that Venezuela is nearly a month behind in crude deliveries due to its ongoing economic crisis. WTI crude futures advanced 1.9% to $65.95 per barrel after hitting a two-month low on Wednesday. In addition to energy, the consumer staples (+0.6%) and utilities (+0.4%) sectors also outperformed.
However, the information technology sector -- which is the biggest S&P 500 group, representing a quarter of the broader market by itself -- dropped 1.1%, overpowering mostly modest gains from the ten other groups. Within the space, giants like Microsoft (MSFT 100.88, -1.61), Facebook (FB 188.18, -3.16), and Alphabet (GOOG 1123.86, -13.02) lost between 1.2% and 1.7%, and chipmakers pushed the Philadelphia Semiconductor Index lower by 1.0%.
In Washington, Commerce Secretary Wilbur Ross said the U.S. has struck a deal to end crippling sanctions against Chinese telecom giant ZTE that includes a $1 billion penalty and the implementation of a U.S.-chosen compliance team to monitor the company going forward. ZTE will also be required to change its board of directors and its executive team in the next 30 days. Separately, President Donald Trump and Japan's Prime Minister Shinzo Abe held a joint press conference on Thursday, touching on next week's U.S.-North Korea summit.
On the corporate front, Qualcomm (QCOM 60.64, +0.80) and NXP Semi (NXPI 120.07, +5.55) rallied 1.3% and 4.9%, respectively, following reports that China is ready to approve Qualcomm's proposed acquisition of NXP. Meanwhile, J.M. Smucker (SJM 100.80, -5.72) lost 5.4% and Five Below (FIVE 99.05, +17.77) spiked 21.9% after both companies released their quarterly results, and Allergan (AGN 163.27, +7.89) jumped 5.1% following reports that billionaire investor Carl Icahn has built a small position in the drugmaker.
U.S. Treasuries rallied on Thursday, shooting to new highs in the afternoon when emerging market currencies dropped to new lows against the U.S. dollar. There wasn't a news catalyst to credit for the move, but it's worth noting that Indonesia, Turkey, and India have all raised rates recently in an effort to stem capital flight. The iShares MSCI Brazil Capped ETF (EWZ 31.71, -1.77) got clobbered on Thursday, dropping 5.1%, and the iShares MSCI Emerging Markets ETF (EEM 46.42, -0.72) lost 1.5%. The yield on the benchmark 10-yr U.S. Treasury note dropped five basis points to 2.93%.
Reviewing Thursday's economic data, which was limited to weekly Initial Claims and the Consumer Credit report for April:
The latest weekly initial jobless claims count totaled 222,000, while the Briefing.com consensus expected a reading of 225,000. Today's tally was below the revised prior week count of 223,000 (from 221,000). As for continuing claims, they rose to 1.741 million from a revised count of 1.720 million (from 1.726 million).
The key takeaway from this report is that the low level of initial claims is consistent with a tight labor market.
The Consumer Credit report for April showed an increase of $9.2 billion (Briefing.com consensus $13.9 billion). March credit growth was revised to $12.3 billion from $11.6 billion.
The key takeaway from the report is that the increase in consumer credit was the lowest since September 2017, which suggests rising interest rates may have driven consumers to pay down debt and/or tempered their demand for credit.
On Friday, investors will receive just one economic report, Wholesale Inventories for April (Briefing.com consensus +0.2%).
Nasdaq Composite +10.6% YTD
Russell 2000 +8.6% YTD
S&P 500 +3.6% YTD
Dow Jones Industrial Average +2.1% YTD
Financials, Materials Lead Another Positive Outing
06-Jun-18 16:15 ET
Dow +346.41 at 25146.39, Nasdaq +51.38 at 7689.24, S&P +23.55 at 2772.35
https://www.briefing.com/investor/markets/stock-market-update/2018/6/6/financials-materials-lead-another-positive-outing.htm
[BRIEFING.COM] Stocks rallied for a fourth straight session on Wednesday, with financials and materials shares leading the charge. The Nasdaq and the Russell 2000 hit new record highs for the third day in a row, adding 0.7% apiece, and the Dow led the major indices with a solid gain of 1.4%. The benchmark S&P 500 index added 0.9%, closing at its best level in three months.
10 of 11 S&P 500 sectors advanced on Wednesday. The financial space (+1.8%) was strong throughout the session, underpinned by a sharp rise in Treasury yields, which hit their highest levels in nearly two weeks. The yield on the benchmark 10-yr Treasury note climbed six basis points to 2.98%. The materials (+1.9%), consumer discretionary (+1.0%), health care (+1.2%), and telecom services (+1.5%) sectors were also notably strong.
On the flip side, rising yields weighed on the interest-rate-sensitive utilities sector, which finished at the bottom of the sector standings with a loss of 2.1%. The top-weighted technology group finished in the green with a gain of 0.5%, but had trouble keeping up with the broader market. Within the space, Facebook (FB 191.34, -1.60) was particularly weak, dropping 0.8%, after reports that the company gave data access to at least four Chinese electronics companies, including one flagged by American intelligence officials as a national security threat.
In other corporate news, Tesla (TSLA 319.50, +28.37) spiked 9.7% after its CEO, Elon Musk, said at the company's annual shareholder meeting on Tuesday evening that it's "quite likely" that Tesla will hit its target for producing 5,000 Model 3 electric vehicles per week by the end of June. Signet Jewelers (SIG 52.27, +8.12) also had a strong outing, soaring 18.4%, after reporting better-than-expected earnings and revenues for the first quarter and reaffirming its earnings guidance for the fiscal year.
The energy sector (+0.6%) was volatile on Wednesday after the Department of Energy reported an unexpected build in crude oil inventories. The DOE said that U.S. crude stockpiles increased by 2.1 million barrels last week, while estimates had expected a draw of around 3.6 million barrels. West Texas Intermediate crude futures were down around 0.2% ahead of the release, but finished the session lower by 1.1% at $64.76 per barrel, which ties a two-month low.
In Europe, ECB officials said that inflation is moving towards the 2.0% target, suggesting that next week's policy meeting could provide investors with some guidance about the wind-down of the central bank's asset purchase program. The euro climbed to a two-week high against the U.S. dollar following the comments, jumping 0.5% to 1.1772.
Reviewing Wednesday's economic data, which included the April Trade Balance, the revised readings for first quarter Productivity and Unit Labor Costs, and the weekly MBA Mortgage Applications Index:
The April trade balance showed a deficit of $46.2 billion (Briefing.com consensus -$48.8 billion). The March deficit was revised to $47.2 billion from $49.0 billion.
The key takeaway from the report is that the real goods deficit in April was 6.0% less than the first quarter average, which suggests net exports should be factored as a positive input for upbeat Q2 GDP growth forecasts.
First quarter unit labor costs were revised upward to 2.9% (Briefing.com consensus +2.8%) from +2.7% in the preliminary reading, while first quarter productivity was revised to +0.4% (Briefing.com consensus +0.6%) from +0.7% in the preliminary reading.
The key takeaway from the report is that productivity continues to run at relatively weak levels, which will stand in the way of GDP growth maintaining an accelerated growth rate above 3.0%.
The weekly MBA Mortgage Applications Index increased 4.1% to follow last week's decrease of 2.9%.
On Thursday, investors will receive weekly Initial Claims (Briefing.com consensus 225K) and April Consumer Credit (Briefing.com consensus $13.9 billion).
Nasdaq Composite +11.4% YTD
Russell 2000 +9.2% YTD
S&P 500 +3.7% YTD
Dow Jones Industrial Average +1.7% YTD
Stocks Advance for Third Straight Session
05-Jun-18 16:15 ET
Dow -13.71 at 24799.98, Nasdaq +31.40 at 7637.86, S&P +1.93 at 2748.80
https://www.briefing.com/investor/markets/stock-market-update/2018/6/5/stocks-advance-for-third-straight-session.htm
[BRIEFING.COM] Stocks ended Tuesday on slightly higher note, with the S&P 500 adding 0.1%. The Nasdaq (+0.4%) and the Russell 2000 (+0.7%) outperformed, finishing at new all-time highs for the second day in a row, but the Dow lagged, closing lower by 0.1%. The major averages kept within pretty narrow ranges on Tuesday due to a lack of market-moving news.
The lightly-weighted materials sector (+0.8%) was the top-performing S&P 500 group, followed by consumer discretionary (+0.6%), information technology (+0.4%), and telecom services (+0.5%). On the flip side, financials (-0.4%) finished with energy (-0.3%), consumer staples (-0.5%), utilities (-0.7%), and real estate (-0.5%) at the bottom of the sector standings. Financials declined in tandem with Treasury yields, which finished lower across the curve. The yield on the benchmark 10-yr Treasury note dropped two basis points to 2.92%.
In corporate news, shares of Starbucks (SBUX 55.68, -1.39) dropped 2.4% after Howard Schultz announced on Monday evening that he's stepping down from his role as executive chairman. Twitter (TWTR 39.80, +1.92) shares, meanwhile, spiked 5.1% after news that the company will be added to the S&P 500 on June 7, and shares of Mylan (MYL 39.98, +1.48) jumped 3.8% after the company received FDA approval for a drug similar to Amgen's (AMGN 181.73, -3.71) Neulasta, which is used to decrease the chance of inflection for chemotherapy patients.
Several retailers made outsized moves on Tuesday, sending the SPDR S&P Retail ETF (XRT 48.49, +0.85) up 1.8% to its best level since late January. The retail rally was helped by Monday comments from Evercore ISI Research, which suggested that fears about Amazon's (AMZN 1696.35, +31.08) ever-growing footprint are overblown. However, Amazon shares also had a solid performance on Tuesday, climbing 1.9% to finish at a new record high.
Overseas, Italian Prime Minister Giuseppe Conte delivered his inaugural address, calling for a universal basic income, a fairer tax system, and the EU to review sanctions against Russia. Italy's major stock index, the MIB, underperformed other European indices, losing 1.2%, and the yield on the Italian 10-yr bond rose 20 basis points to 2.75%.
Reviewing Tuesday's economic data, which was limited to the ISM Services Index for May and the Job Openings and Labor Turnover Survey for April:
The ISM Services Index for May ticked up to 58.6 (Briefing.com consensus 58.0) from an unrevised reading of 56.8 in April.
The key takeaway from the report is that it matched an uptick in the ISM Manufacturing Index for May. The uptick in both will help substantiate the belief that second quarter GDP growth is poised to pick up noticeably from the first quarter.
The April Job Openings and Labor Turnover Survey showed that job openings increased to 6.698 million from a revised 6.633 million (from 6.550 million) in March.
Looking ahead, investors will receive on Wednesday the April Trade Balance (Briefing.com consensus -$48.8 billion), the revised readings for first quarter Productivity (Briefing.com consensus 0.6%) and Unit Labor Costs (Briefing.com consensus 2.8%), and the weekly MBA Mortgage Applications Index.
Nasdaq Composite +10.6% YTD
Russell 2000 +8.4% YTD
S&P 500 +2.8% YTD
Dow Jones Industrial Average +0.3% YTD
Stocks Advance for Third Straight Session
05-Jun-18 16:15 ET
Dow -13.71 at 24799.98, Nasdaq +31.40 at 7637.86, S&P +1.93 at 2748.80
https://www.briefing.com/investor/markets/stock-market-update/2018/6/5/stocks-advance-for-third-straight-session.htm
[BRIEFING.COM] Stocks ended Tuesday on slightly higher note, with the S&P 500 adding 0.1%. The Nasdaq (+0.4%) and the Russell 2000 (+0.7%) outperformed, finishing at new all-time highs for the second day in a row, but the Dow lagged, closing lower by 0.1%. The major averages kept within pretty narrow ranges on Tuesday due to a lack of market-moving news.
The lightly-weighted materials sector (+0.8%) was the top-performing S&P 500 group, followed by consumer discretionary (+0.6%), information technology (+0.4%), and telecom services (+0.5%). On the flip side, financials (-0.4%) finished with energy (-0.3%), consumer staples (-0.5%), utilities (-0.7%), and real estate (-0.5%) at the bottom of the sector standings. Financials declined in tandem with Treasury yields, which finished lower across the curve. The yield on the benchmark 10-yr Treasury note dropped two basis points to 2.92%.
In corporate news, shares of Starbucks (SBUX 55.68, -1.39) dropped 2.4% after Howard Schultz announced on Monday evening that he's stepping down from his role as executive chairman. Twitter (TWTR 39.80, +1.92) shares, meanwhile, spiked 5.1% after news that the company will be added to the S&P 500 on June 7, and shares of Mylan (MYL 39.98, +1.48) jumped 3.8% after the company received FDA approval for a drug similar to Amgen's (AMGN 181.73, -3.71) Neulasta, which is used to decrease the chance of inflection for chemotherapy patients.
Several retailers made outsized moves on Tuesday, sending the SPDR S&P Retail ETF (XRT 48.49, +0.85) up 1.8% to its best level since late January. The retail rally was helped by Monday comments from Evercore ISI Research, which suggested that fears about Amazon's (AMZN 1696.35, +31.08) ever-growing footprint are overblown. However, Amazon shares also had a solid performance on Tuesday, climbing 1.9% to finish at a new record high.
Overseas, Italian Prime Minister Giuseppe Conte delivered his inaugural address, calling for a universal basic income, a fairer tax system, and the EU to review sanctions against Russia. Italy's major stock index, the MIB, underperformed other European indices, losing 1.2%, and the yield on the Italian 10-yr bond rose 20 basis points to 2.75%.
Reviewing Tuesday's economic data, which was limited to the ISM Services Index for May and the Job Openings and Labor Turnover Survey for April:
The ISM Services Index for May ticked up to 58.6 (Briefing.com consensus 58.0) from an unrevised reading of 56.8 in April.
The key takeaway from the report is that it matched an uptick in the ISM Manufacturing Index for May. The uptick in both will help substantiate the belief that second quarter GDP growth is poised to pick up noticeably from the first quarter.
The April Job Openings and Labor Turnover Survey showed that job openings increased to 6.698 million from a revised 6.633 million (from 6.550 million) in March.
Looking ahead, investors will receive on Wednesday the April Trade Balance (Briefing.com consensus -$48.8 billion), the revised readings for first quarter Productivity (Briefing.com consensus 0.6%) and Unit Labor Costs (Briefing.com consensus 2.8%), and the weekly MBA Mortgage Applications Index.
Nasdaq Composite +10.6% YTD
Russell 2000 +8.4% YTD
S&P 500 +2.8% YTD
Dow Jones Industrial Average +0.3% YTD
Positive Start to the Week
04-Jun-18 16:15 ET
Dow +178.48 at 24813.69, Nasdaq +52.13 at 7606.46, S&P +12.25 at 2746.87
https://www.briefing.com/investor/markets/stock-market-update/2018/6/4/positive-start-to-the-week.htm
[BRIEFING.COM] The equity market kicked off the week with a quiet victory on Monday, adding to last week's advance. The tech-heavy Nasdaq climbed 0.7% to 7606.46, closing at a new record high for the first time since March 12. Meanwhile, the S&P 500 and the Dow advanced 0.5% and 0.7%, respectively. The Russell 2000 lagged, adding just 0.3%, but still finished at a new all-time high.
Gains were broad-based on Monday, with seven of eleven S&P 500 sectors settling in positive territory. Consumer discretionary (+1.1%) was the top-performing sector, followed closely by information technology (+0.9%), consumer staples (+0.8%), and real estate (+1.0%).
Within the tech space, Apple (AAPL 191.83, +1.59) climbed 0.8%, closing at a new all-time high, as investors focused on the company's WorldWide Developers Conference (WWDC), and Microsoft (MSFT 101.67, +0.88) advanced 0.9%, also settling at a new record, after announcing that it will acquire GitHub for $7.5 billion in stock.
Meanwhile, retailers helped underpin the consumer discretionary and consumer staples sectors and pushed the SPDR S&P Retail ETF (XRT 47.64, +1.02) up 2.2% to a fresh four-month high. Walmart (WMT 85.42, +2.43), Home Depot (HD 191.36, +4.01), and Target (TGT 76.35, +3.55) were notable outperformers, adding between 2.1% and 4.9%.
On the downside, energy (-0.9%) finished at the bottom of the sector standings as crude prices dropped yet again. WTI crude futures declined by 1.6% to $64.76 per barrel, finishing 10.4% below the three-and-a-half year high they hit on May 21. The utilities (-0.9%), industrials (-0.1%), and telecom (-0.1%) groups also settled in the red.
In the health care space (+0.4%), Nektar Therapeutics (NKTR 52.57, -37.78) plunged 41.8% following disappointing clinical trial results for its drug NKTR-214, which is being used in combination with Bristol-Myers Squibb's (BMY 51.45, -1.68) cancer drug Opdivo. Conversely, Dow component Merck (MRK 62.02, +1.46) jumped 2.4% after another round of positive trial results for its star cancer drug Keytruda.
Outside of equities, U.S. Treasuries began the week on a lower note, sending yields higher across the curve. The yield on the benchmark 10-yr Treasury note, for instance, climbed four basis points to 2.94%. Meanwhile, the U.S. Dollar Index declined 0.2% to 94.02, marking its third loss in four sessions.
Reviewing Monday's economic data, which was limited to the Factory Orders report for April:
The Factory Orders report for April showed a decrease of 0.8% (Briefing.com consensus -0.5%). The March reading was revised to +1.7% from +1.6%.
The key takeaway from the report is that shipments of nondefense capital goods excluding aircraft were slightly higher than what was seen in the Advance Durable Goods Orders Report for April, so this will provide an added dose of support for Q2 GDP growth forecasts.
Looking ahead, investors will receive the ISM Services Index for May and the Job Openings and Labor Turnover Survey for April on Tuesday.
Nasdaq Composite +10.2% YTD
Russell 2000 +7.7% YTD
S&P 500 +2.7% YTD
Dow Jones Industrial Average +0.4% YTD
InvestmentHouse - End of the Part-Time Economy? (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
- NASDAQ, SOX answer the call, RUTX remains solid, SP500 tries to follow.
- May jobs top expectations, wages rise.
- End of the part-time economy? Nearly 1M full-time jobs added.
- A good start to June with some new money, but it was . . . a Friday.
Thursday I noted that how the indices respond to the Thursday trade and end
of month drop would be the tell. I also said NASDAQ, and SOX if it could as
well, needed to break higher, citing MSFT, INTC, AAPL as key stocks.
Well, Friday they obliged. Futures were higher from the open of trade,
holding a fairly tight range into the actual jobs report. The President
tweeted a couple of hours ahead of the release that he was looking forward
to the numbers, and that was interpreted as an indication they would be
good. Some attributed the morning rise in futures to that tweet. Looking
at the timeline, however, that is hard to conclude given futures were
already up before the tweet and didn't move much at all from there. Oh
well. The President should not, however, be tweeting about upcoming reports
just as his predecessor should not have given out the numbers ahead of the
official release. What happens next time if there is no tweet? Assume they
are not so great?
The jobs report was good enough and indeed initially caused futures to drop
as the 'Fear of the Fed' reemerged. A surprise beat, decent wage growth,
and high-quality jobs as the Household Survey showed 904,000 full-time jobs
added. Now that is REAL jobs growth, not the Affordable Care Act stunted
part-time waiter and burger flipper jobs through 2016.
In any event, if there was some Fed fear, stocks moved past it rather
quickly, opening higher, rallying to 1:00ET, then working laterally, holding
the gains into the close.
SP500 29.35, 1.08%
NASDAQ 112.21, 1.51%
DJ30 219.37, 0.90%
SP400 0.61%
RUTX 0.88%
SOX 2.34%
VOLUME: NYSE -38%; NASDAQ -13%. NYSE trade faded back to average after a
sharp end of month spike Thursday. Decent trade is about all you can say.
NASDAQ still showed solid overall trade levels (2.2B vs 2.4B), still solidly
above average after a month-end housekeeping session Thursday.
ADVANCE/DECLINE: NYSE 2.4:1, NASDAQ 2.4:1. Not the 4:1 from Wednesday, but
solid enough.
Yes, NASDAQ was a big leader with its big names working well. MSFT, INTC,
NFLX, BABA broke to higher highs. GOOG, NVDA, AAPL put in solid moves. It
is not unusual for techs to take some leadership in the summer and that is
why I put the emphasis on NASDAQ making a move. Good start.
Those leaders and many more gave NASDAQ a clean break from its May range,
clearing the January penultimate high. NASDAQ is now 34 points from the
March all-time closing high. Volume was not as big as the month-end trade,
but it was still solidly above average, the capper to a four-session run of
much improved volume.
SOX added the bonus move as it too broke higher and cleared the January
high. SP500 rallied back to near the top of its range in a decent move.
RUTX shook off the Thursday downside and moved right back up to the
Wednesday all-time high.
Thus, at least for Friday and the start of the new month the indices that
needed to contribute did just that. Okay, next week DJ30, SP500 and SP400
need to contribute . . . hey, it worked Friday.
We banked some gain on BABA, IQ and WHD as the former two hit our initial
targets. WHD struggled so we took the rest of the gain off the table. We
bought some HTHT, TXN, and VEEV. There were others we could have picked up,
e.g. AAPL, RHT, TTWO, but the volume was iffy, they did not move too far,
and we likely still get good entries to start next week. On top of that, a
quick review of stocks shows some nice patterns ready to move higher to
support the upside move. As noted all week, that is what the market needs,
i.e. enough leaders to push the indices.
JOBS REPORT
Jobs, May: 223K vs 190K exp vs 159K prior (from 164K)
Unemployment: 3.8% vs 3.9% prior. Lowest since 4/08
Wages 0.3% vs 0.1% prior; +2.7% year/year
Workweek: 34.5 as expected and unchanged
Participation: 62.7% vs 62.8% prior as 170K left the workforce.
Those not in the labor force are at a new record of 95.9M. The ACA still has
effects. It was never repealed, just tinkered with. It still has its impact
and it shows.
Black unemployment: 5.9% versus 6.6% prior. Lowest since 1972.
Retail: 31K
Healthcare 29K
Construction 25K
Professional/Business 23K
Manufacturing 18K
Temp -7800
Full-time versus Part-time.
Recall during the Obama years the monthly lament about the low wage,
part-time jobs dominating the jobs reports. With the ACA in place and other
non-growth policies, it did not behoove companies to expend money on
full-time employees. Many industries and sectors did not hire at all
because the economy was so slow in terms of growth (recall the years and
years of top line revenue misses as sales declined during the 'recovery').
These were mostly the industries where you would typically find full-time
jobs. Instead, companies paid dividends, bought back stock shares, and cut
costs anywhere and everywhere. That is how they 'beat' the bottom line
earnings expectations even with sales declining quarter after quarter.
Indeed, even if they wanted to hire full-time workers, the ACA made that
unprofitable because of the added taxes and costs. The lucky received
exemptions. Still, it did not pay to hire full-time workers given the
economy.
Thus the proliferation of part-time jobs. Every month we would lose more
full-time jobs but see more and more part-time jobs. The sectors hiring
were retail, hospitality and leisure, government (huge federal expansion
under Obama), retail, food and beverage.
Now look at today. Individual mandate removed (though the ACA is still
there, still causing price increases in insurance premiums and otherwise
plaguing small businesses), anti-growth regulations unwritten, several taxes
undone, both replaced with pro-growth policies and tax reductions and
incentives.
The result: we started to see a return to high quality jobs in construction,
manufacturing, finance, etc. We saw retail hires shrink. We saw low hour,
low wage part-time jobs dry up.
So much so that in May a record was set for full-time jobs at 904,000.
Almost 1 million new full-time jobs. Quality jobs.
President Obama likes to take credit, likes to say he 'set the table' for
this rebound. In a way, yes he did. His policies were so anti-growth and
anti-business I said, during the heat of the election campaign, that WHOEVER
won could preside over a booming economy just by being smart and rolling
back the economy-crippling regulations and taxes. Clinton, Trump, Christie,
Cruz, etc., etc. Heck, even Bernie Sanders could have done so if he got rid
of the regulations and taxes (which he would not do, instead he would have
piled on more).
Thus, Obama DID set the table but it was not in the way he implies, i.e.
that his policies set up a growth environment. No, it was because his
policies HELD BACK what would have been a stronger, natural US economy
recovery that Trump's economy looks so good. I mean, Trump has not repealed
the ACA, just the mandate. He has removed a lot of regs, but there are
still many hobbling and hindering business. If he was able to do what he
wanted or said, the economy would REALLY be rumbling higher.
And that brings me to another point. I said this all during the prior
administration: we were being 'dummied down' in our understanding of what a
really strong economy is. We were told the US could not grow as fast as in
the past, etc. -- the same old tripe we were told in the Carter years.
'Nice try US, it worked for a while but the gravy train is over.' Then a
free enterprise President with a clear understanding of what drives that
system was elected. Huge boom.
So today I hear Cramer on CNBC say this was the best economy of his lifetime
(he is older than I am). Nonsense. The 1980's were stronger and broader.
Stronger GDP growth, more jobs created, all sectors booming, NEW tech
sectors emerging and booming. There is NO comparison. Today is 'okay'
growth, the kind of growth generated after the first few years of the Reagan
policies generated 4%, 6%, 7%, 10% and higher GDP rates. Strongest in his
lifetime? Absurd. But, Cramer has a history of these kind of statements,
i.e. full of BS and hyperbole.
THE MARKET
CHARTS
NASDAQ: Top billing given the breakout form the 2+ week lateral range and
the fact I noted Thursday it needed to do so. Volume lower but still
solidly above average as it takes out the January high and is running at the
March all-time high. Did what it needed, decent trade, good action from the
big names as well as the not so big names.
SOX: Clean break higher here as well, moving past the recent attempts at
higher highs. Now also cleanly past the mid-January peak. Some resistance
at 1420 from the bottom of the all-time high weeklong range and gap point
(less than 9 points away). Of course the prior high is wrapped up in that
resistance so it is basically an all-inclusive level to get through.
RUTX: New high Wednesday with a big surge off the weeklong test of the 10
day EMA. Faded Thursday, but Friday rallied right back to the all-time high
from Wednesday. Solid break higher, small caps still look good even if this
was not a session where they were in the lead (as has been the case the past
month).
SP500: Gapped off the 50 day EMA from the Thursday close, moved to a new
closing high in its lateral range. Not really a breakout as it has not
cleared the chaff at the top of the range. A good move aided by of course
the big NASDAQ names that started upside. Now it has to . . . actually make
the move and make it stick.
SP400: The midcaps looked so good Wednesday with their strong surge to a
new recovery high, clearing the range. Thursday gave that move back and
Friday, while higher, was an uninspired gap to a doji well below the
Wednesday and Thursday highs. Quite the letdown.
DJ30: Speaking of letdowns, DJ30 looked great two Mondays back, gapping
upside and out of its range. It gave that back, then really stunk the place
up with the Tuesday gap to the 50 day SMA. It bounced back and forth each
session since, going nowhere. Its claim to fame is that it did not break
below the 50 day MA. With the other indices breaking higher, that is faint
praise.
LEADERSHIP
FAANG: Have to start here as several are NASDAQ stocks. AAPL broke upside
from a 3 week lateral range over the 10 day EMA. Not any volume, but
promising for next week. FB continued a break higher from Thursday closing
with an all-time high closing price. NFLX Broke nicely higher off a 4-day
lateral move. GOOG gapped sharply higher and cleared the early May peak.
Two good days of upside price and volume. AMZN edged higher again on still
very low trade. All higher so NASDAQ was higher.
Chips: INTC put in a multiyear high with a solid upside break with volume.
MU recovered some from the Thursday downgrade drop. AMD posted a sharp move
and is now at the top of a 17 month trading range. AVGO is moving over its
200 day SMA. QRVO has set a good pattern. Others look stronger, e.g. XLNX,
ASML, SIMO. Indeed, SMTC broke sharply higher Thursday. The group is
coming around though it is not 'there' yet.
Software: VMW gapped sharply higher on earnings, clearing the May high;
that could produce an entry after a lateral test. MSFT broke to a new high.
VEEV broke higher Friday on very nice trade. NOW continues its comeback,
closing at an all-time closing high. FFIV is trying to break higher again.
TTWO started higher but could use more trade. GLUU is trying the same.
Very solid stocks working better.
Drugs/Biotechs: A mixed group but very good patterns and moves. ARWR
posted another good week. IMMU bouncing off the 10 day EMA. VCEL breaking
higher off a test. VVUS in a nice test. The group continues to produce
winners.
China: New life. BABA broke upside Friday. YY broke higher earlier in the
week. IQ broke sharply higher starting Wednesday. ATHM, HTHT enjoyed
strong weeks and Friday SOHU started upside with a nice move.
Industrial: Struggled but through they struggle they held on and have
worked some good consolidations, e.g. HON, BA. CAT can go into that
category as well.
Oil: Tough prior week, some healing this week though no clear renewal of
the upside. COP recovered decently off a 50 day MA test. APC likewise.
MRO recovered off a 20 day EMA test. CVX is trying to bounce from the 50
day MA. Others are struggling, e.g. PTEN, SPN, NBR -- small drillers and
operators.
MARKET STATS
DJ30
Stats: +219.37 points (+0.90%) to close at 24635.21
Nasdaq
Stats: +112.22 points (+1.51%) to close at 7554.33
Volume: 2.2B (-12.7%)
Up Volume: 1.59B (+797.72M)
Down Volume: 568.39M (-1.122B)
A/D and Hi/Lo: Advancers led 2.41 to 1
Previous Session: Decliners led 1.57 to 1
New Highs: 206 (+48)
New Lows: 43 (-7)
S&P
Stats: +29.35 points (+1.08%) to close at 2734.62
NYSE Volume: 856.023M (-37.52%)
A/D and Hi/Lo: Advancers led 2.37 to 1
Previous Session: Decliners led 1.72 to 1
New Highs: 116 (+14)
New Lows: 40 (-26)
SENTIMENT
VIX: 13.46; -1.97
VXN: 15.11; -1.67
VXO: 12.52; -1.46
Put/Call Ratio (CBOE): 0.86; -0.27
Bulls and Bears:
Bulls edged higher as part of a 4 week recovery from the plummet from the 65
range. Hardly a new surge. Bears are holding a rebound from the prior five
months, but frankly, it is not that much of a bounce.
Bulls: 50.0 versus 49.1
Bears: 19.2 versus 19.2
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: 50.0 versus 49.1
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: 19.2 versus 19.2
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: 2.902% versus 2.86%. After a early week on the trade scares, bonds
slipped back to end the week, pushing yields higher. Now testing the 50 day
MA and the lower gap point from Tuesday.
Historical: the last sub-2% rate was in November 2016 (1.867%). 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: 1.166 versus 1.16993. Bounced up to the 10 day EMA, bumping there
Thursday and Friday, showing doji. Likely fails here.
Historical: 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: 109.53 versus 108.767. Up off the lows at the 50 day MA tested
early week. Interesting collision with the 200 day SMA ahead.
Historical: 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 versus 107.362 versus
107.267 versus 106.882 versus 106.873 versus 107.09 versus 107.16 versus
106.939 versus 107.11 versus 106.816 versus 106.797 versus 105.901 versus
106.286 versus 106.81 versus 105.397 versus 105.473 versus 104.789 versus
104.829 versus 105.892 versus 106.478 versus 105.945 versus 105.946
Oil: 65.81, -1.23. After trying to retake the 50 day MA Wednesday and
Thursday, oil failed as anticipated, falling to a lower closing low on this
selling. 60.00 looks probable still.
Gold: 1299.30, -5.40. Rallied up to the 200 day SMA through Thursday,
tried to break over but failed, then Friday gapped lower. Looks as if
gold's bounce is failing as well.
MONDAY
Good moves from key indices and stocks to end the week. That is all well
and good. Needed to do it. But, you know what is next: can they not only
hold the moves but can they push the gains? The patterns look right, the
leadership is expanding some, moves are starting. With this market,
however, there is no resting on laurels.
Fortunately there are good patterns we see ready to step up and help
continue the drive higher. Naturally we will be looking at those for plays
to further participate in the upside. With NASDAQ and SOX breaking higher
and SP500 not looking atrocious, we want to have money in them if the moves
are made.
Summer is getting going, often stocks stumble through summer even if tech
shows some leadership. That is working against the upside, but the patterns
are fanning out a bit, and a rally loves having a lot of stocks in good
patterns to drive it higher. We have some great plays in very good stocks
and are looking at even more; if the market wants to set up leaders and send
them running higher, I am not going to question it.
I have seen too many smart people outsmart themselves and miss out on good
runs that are presented simply because they are at the wrong time of the
year or otherwise make no sense. As you know, the market does not always
make sense. It does, however, set up the same kind of patterns and moves
over and over and over. They don't always make the moves (just pretty
pictures until they do, right?), but when they ARE making the moves, it is
time to move with them. We will see if this coming week the new breaks can
hold and continue higher, pulling more indices and stocks with them.
Have a great weekend!
Starting June with a Bang
01-Jun-18 16:25 ET
Dow +219.37 at 24635.21, Nasdaq +112.22 at 7554.33, S&P +29.35 at 2734.62
https://www.briefing.com/investor/markets/stock-market-update/2018/6/1/starting-june-with-a-bang.htm
[BRIEFING.COM] The month of May might have ended with a whimper, but the month of June started with a bang. Driven by an easing of the political tension in Europe and another employment report out of the U.S. that produced strong job growth, modest wage growth, and the lowest unemployment rate since April 2000, the major indices put together a winning session that was punctuated by leadership from economically-sensitive sectors.
The gains for the major indices ranged from 0.9% for the Russell 2000 to 1.5% for the Nasdaq Composite. Sellers were an outnumbered bunch on Friday, evidenced by an advance-decline line at the NYSE and Nasdaq that favored advancing issues by a more than 2-to-1 margin.
Leading the advance, which had a risk-on demeanor before the opening bell, was the information technology sector (+1.9%). It kept good company, however.
Following in its footsteps were the materials (+1.5%), industrials (+1.2%), and financial (+1.1%) sectors. The countercyclical health care sector (+1.2%) offered an added measure of support that made it challenging to knock the indices back to any considerable degree during Friday's trading.
The bulk of today's gains were logged within the first hour of trading. They were solidified as the day went on by better than expected construction spending and ISM manufacturing data, as well as the news from the White House that the June 12 summit with North Korea in Singapore is back on in what it is apt to be a multi-step negotiating process for denuclearization of the Korean Peninsula.
Interestingly, the protectionist trade concerns that drove the market lower on Thursday were placed on the back burner on Friday.
Traders instead embraced the report out of Europe that Italy's president gave a mandate to the anti-establishment 5-Star Movement and right-wing League Party to form a government, thereby avoiding the need for a snap election that some thought could end up being a referendum on Italy's membership in the European Union.
That news triggered a risk-on tone in European markets that carried over to the U.S. The reassuring employment report simply accentuated the positive bias that persisted throughout the trading day.
Reflecting the upbeat tone, 27 out of 30 Dow components registered a gain on Friday while only two of the 11 S&P sectors -- utilities (-1.5%) and consumer staples (-0.03%) -- ended with a loss.
The energy sector (+0.5%) for its part kept its head above water even though oil prices ($65.83, -$1.14, -1.7%) fell sharply in a technically-driven sell-off.
Treasuries were also weak on Friday as some of the safe-haven premium tied to European politics was unwound along with the notion that the Federal Reserve won't raise the fed funds rate at least three times this year. The 2-yr note yield increased seven basis points to 2.48% while the 10-yr note yield jumped eight basis points to 2.90%.
Reviewing Friday's economic data:
May nonfarm payrolls increased by 223,000 (Briefing.com consensus 190,000). May private sector payrolls increased by 218,000 (Briefing.com consensus 177,000).
May unemployment rate was 3.8% (Briefing.com consensus 3.9%) versus 3.9% in April
May average hourly earnings were up 0.3% (Briefing.com consensus +0.3%), after increasing 0.1% in April. Over the last 12 months, average hourly earnings have risen 2.7%, versus 2.6% for the 12 months ending in April
The key takeaway from the May employment report is that it still had a Goldilocks hue to it, as it was accented with strong job growth and only moderate wage inflation.
The ISM Manufacturing Index increased to 58.7 (Briefing.com consensus 58.0) from 57.3 in April. The dividing line between expansion and contraction is 50.0; May marked the 21st consecutive month the index has been above 50.0.
The key takeaway from the report is the summary that respondents are experiencing price pressures and that those price pressures are causing price-increase discussions as they prepare for the second half of the year.
Total construction spending increased 1.8% in April (Briefing.com consensus +1.0%) following an unrevised 1.7% decline in March.
The key takeaway from the report is that it showed a welcome pickup in construction spending growth, which will be a source of support for Q2 GDP forecasts.
Nasdaq Composite +9.4% YTD
Russell 2000 +7.4% YTD
S&P 500 +2.3% YTD
Dow Jones Industrial Average -0.3% YTD
Week In Review:
The stock market finished the week on a mostly higher note as investors digested an easing of the political crisis in Italy, fresh tariff-related developments, and the Employment Situation report for May. The S&P 500 (+0.5%), the Nasdaq Composite (+1.6%), and the Russell 2000 (+1.3%) advanced, while the Dow Jones Industrial Average (-0.5%) finished a step lower.
U.S. markets opened the week on Tuesday following a three-day Memorial Day weekend. Sellers dominated that Tuesday session after Italian President Sergio Mattarella blocked the formation of a euro-skeptic government, vetoing the economic minister nominee of an anti-establishment coalition that was aiming to come to power. Italian bond yields surged in reaction as some feared the veto would prompt a snap election that could turn into a de facto referendum on Italy's membership in the European Union. The Italian political crisis calmed down on Thursday evening, when President Mattarella approved the formation of a ruling coalition between Italy's anti-establishment Five Star Movement and right-wing League party, effectively silencing the prospect of a snap election later this year.
Elsewhere in Europe, Spain endured some political drama of its own this week as Prime Minister Mariano Rajoy was ousted on Friday in a no-confidence vote following a corruption scandal involving 29 individuals with ties to his People's Party. Pedro Sanchez, the leader of the Socialist Party, will succeed Mr. Rajoy as prime minister. Separately, German financial giant Deutsche Bank hit a 16-month low on Thursday after The Wall Street Journal reported that it's on the Federal Reserve's list of troubled banks.
Back in the U.S., the stock market rebounded from its Tuesday slide on Wednesday with energy shares leading the charge following reports that OPEC and Russia will keep production cuts in place until at least the end of the year. West Texas Intermediate crude futures rallied on Wednesday in reaction, but still finished the week lower by 3.0%.
Stocks stumbled for a second time on Thursday when the Trump administration announced that it will let steel and aluminum tariff exemptions expire for the EU, Canada, and Mexico. The White House's decision, which elicited retaliatory responses from the EU, Canada, and Mexico as expected, will result in duties of 25% on steel imports and duties of 10% on imports of aluminum, effective June 1.
Wall Street bounced back on Friday, bolstered by an easing of the political tension in Europe, news that the June 12 summit with North Korea is back on, and the release of the Employment Situation report for May, which featured a better-than-expected increase in nonfarm payrolls (+223K actual vs +190K Briefing.com consensus) and a lower-than-expected unemployment rate (3.8% actual vs 3.9% Briefing.com consensus). The average hourly earnings figure came in as expected, showing a month-over-month increase of 0.3%.
The key takeaway from the employment report is that it still had a Goldilocks hue to it, having been accented with strong job growth and only moderate wage inflation. Furthermore, the strong job growth and low unemployment rate created some good feelings about the potential for a pickup in consumer spending that should aid the second quarter growth outlook.
Six of eleven S&P sectors declined this week, with financials (-1.3%), telecom services (-0.9%), and industrials (-0.7%) being the weakest performers. Conversely, energy (+2.5%), technology (+2.0%), and real estate (+1.7%) were the top-performing groups.
Retailers dominated the earnings front once again, with Costco (COST), Dollar General (DG), Dollar Tree (DLTR), lululemon (LULU), Ulta Beauty (ULTA), Dick's Sporting Goods (DKS), and others reporting their quarterly results, which came in mixed. The SPDR S&P Retail ETF (XRT) settled roughly flat for the week.
U.S. Treasuries were volatile this week, eventually finishing with modest gains. The benchmark 10-yr yield, which moves inversely to the price of the 10-yr Treasury note, finished the week lower by three basis points at 2.90%. Meanwhile, the U.S. Dollar Index eked out a fractional gain, settling the week at 94.22.
Stocks Return to Negative Territory for the Week
31-May-18 16:15 ET
Dow -251.94 at 24415.84, Nasdaq -20.34 at 7442.11, S&P -18.74 at 2705.27
https://www.briefing.com/investor/markets/stock-market-update/2018/5/31/stocks-return-to-negative-territory-for-the-week.htm
[BRIEFING.COM] The U.S. equity market returned to negative territory for the week on Thursday, giving back a good chunk of Wednesday's rebound effort, as investors digested the latest tariff-related headlines and looked ahead to Friday's release of the Employment Situation report for May. The major averages finished near the bottom of their daily ranges, with the S&P 500 and the Dow Jones Industrial Average dropping 0.7% and 1.0%, respectively. The tech-heavy Nasdaq Composite showed relative strength, shedding just 0.3%, as tech names outperformed.
President Trump's administration announced on Thursday that it will let steel and aluminum tariff exemptions expire for the EU, Canada, and Mexico, effectively slapping a duty of 25% on steel imports and a duty of 10% on imports of aluminum coming from the three U.S. trading partners. The tariffs, which elicited retaliatory threats, will go into effect June 1st.
Meanwhile, Secretary of State Mike Pompeo said the U.S. and North Korea are making progress towards a June 12 summit, and The New York Times reported that a delegation of North Korean officials will be hand-delivering a letter to President Trump from North Korean leader Kim Jong Un. In Europe, Italy's Five-Star Movement and League parties have reportedly reached a deal to form a coalition government, and German financial giant Deutsche Bank tumbled to a 16-month low after The Wall Street Journal reported that it's on the Federal Reserve's list of troubled banks.
On Wall Street, nine of eleven S&P 500 sectors settled Thursday in negative territory, with the utilities sector (+0.1%) and the top-weighted technology sector (unch) being the two exceptions. The tech group, which represents around a quarter of the broader market by itself, was helped by positive performances from giants Facebook (FB 191.78, +4.11) and Alphabet (GOOG 1084.99, +17.19), which advanced 2.2% and 1.6%, respectively. Chipmaker Micron (MU 57.59, -4.98) didn't do so hot though, tumbling 8.0%, after being downgraded to 'Equal-Weight' from 'Overweight' at Morgan Stanley.
The industrials, consumer staples, and telecom services sectors finished at the back of the pack with losses between 1.3% and 1.6%, but most groups didn't lose more than 1.0%. The consumer discretionary sector (-0.5%) finished in line with the S&P 500, but there were several big movers within the group. For instance, Dollar Tree (DLTR 82.59, -13.76) and Dollar General (DG 87.48, -9.04) dropped 14.3% and 9.4%, respectively, after missing Q1 earnings estimates, and General Motors (GM 42.70, +4.87) rallied 12.9% after announcing that Softbank will be investing $2.25 billion in GM's self-driving unit.
Outside of the equity market, U.S. Treasuries finished Thursday slightly higher, sending yields lower across the curve. The yield on the benchmark 10-yr Treasury note slipped two basis points to 2.82%. Meanwhile, the U.S. Dollar Index declined 0.1% to 93.97, and WTI crude futures dropped for the seventh time in eight sessions, tumbling 1.7% to $67.04 per barrel.
Reviewing Thursday's batch of economic data, which included Personal Income, Personal Spending, and the PCE Price Index for April, the weekly Initial Claims report, the Chicago PMI for May, and Pending Home Sales for April:
Personal income climbed 0.3% in April (Briefing.com consensus +0.3%) following a revised increase of 0.2% in March (from 0.3%). Meanwhile, personal spending rose 0.6% in April (Briefing.com consensus +0.3%) following a revised increase of 0.5% in March (from 0.4%). The PCE Price Index rose 0.2% in April (Briefing.com consensus +0.2%), and the core PCE Price Index, which excludes food and energy, increased 0.2% (Briefing.com consensus +0.1%). Year-over-year, the core PCE Price Index is up 1.8%, unchanged from the last reading (which was revised down from +1.9%).
The key takeaway from the report is that real PCE was up 0.4%, leaving it well above the first quarter average growth rate of less than 0.1% and solidifying expectations for stronger GDP growth in the second quarter. Separately, the firming trend in the price indexes should contribute to an internal belief at the Federal Reserve that there is scope for three rate hikes in 2018.
The latest weekly initial jobless claims count totaled 221,000, while the Briefing.com consensus expected a reading of 227,000. Today's tally was below the unrevised prior week count of 234,000. As for continuing claims, they declined to 1.726 million from a revised count of 1.742 million (from 1.741 million).
The latest initial claims report is encouraging, yet it will be glossed over by market participants, who will turn a more attentive eye to Friday's release of the Employment Situation Report for May.
The Chicago PMI for May hit 62.7 (Briefing.com consensus 57.9), up from 57.6 in April.
The key takeaway from the report is that all five barometer components increased in May, reflecting renewed growth momentum in manufacturing activity in the Chicago Fed region.
Pending Home Sales decreased 1.3% in April (Briefing.com consensus +0.7%). Today's reading follows a revised 0.6% increase in March (from +0.4%).
On Friday, investors will receive the Employment Situation report for May at 8:30 AM ET. The Briefing.com consensus expects that the report will show the addition of 190,000 nonfarm payrolls, a 0.3% increase in average hourly earnings, and an unemployment rate of 3.9% (unchanged from April). In addition, the ISM Index for May (Briefing.com consensus 58.0) and the Construction Spending report for April (Briefing.com consensus +1.0%) will cross the wires at 10:00 AM ET, and May auto and truck sales will be released throughout the day.
Nasdaq Composite +7.8% YTD
Russell 2000 +6.5% YTD
S&P 500 +1.2% YTD
Dow Jones Industrial Average -1.2% YTD
Energy Shares Lead Broad-Based Rebound
30-May-18 16:20 ET
Dow +306.33 at 24667.78, Nasdaq +65.86 at 7462.45, S&P +34.15 at 2724.01
https://www.briefing.com/investor/markets/stock-market-update/2018/5/30/energy-shares-lead-broadbased-rebound.htm
[BRIEFING.COM] Wall Street regained Tuesday losses on Wednesday, and a little extra, as investors walked back their bearish reaction to Italy's ongoing political crisis. The S&P 500 and the Dow advanced 1.3% apiece, while the Nasdaq finished with a gain of 0.9%. Smaller companies outperformed, pushing the small-cap Russell 2000 higher by 1.5%.
Wednesday's rebound effort began in Europe, where Italian shares ended a five-session losing streak. Italy's MIB advanced 2.1%, trimming its weekly loss to 2.7%, even though the country's political situation remained much the same with the anti-establishment 5 Star Movement and the right-wing League parties continuing to try to form a governing coalition. Italian debt also rebounded after an auction of 5-yr and 10-yr government bonds was met with strong demand. The yield on the Italian 10-yr bond, which spiked 41 basis points on Tuesday, dropped 20 basis points on Wednesday to 2.90%.
The U.S. bond market, meanwhile, gave back some of the gains registered in Tuesday's flight-to-safety trade, sending yields higher across the curve. The yield on the benchmark 10-yr U.S. Treasury note finished Wednesday higher by seven basis points at 2.84%, while the yield on the 2-yr U.S. Treasury note climbed 10 basis points to 2.42%. Meanwhile, the U.S. dollar dropped 1.0% against the euro to 1.1655 after hitting a nearly 10-month high against the single currency on Tuesday.
On Wall Street, energy shares led a broad-based advance, underpinned by an increase in the price of crude oil. West Texas Intermediate crude futures soared 2.2% to $68.25 per barrel on Wednesday, notching their first daily gain since May 21, following reports that OPEC and Russia will keep production cuts in place until at least the end of the year. The S&P 500's energy sector finished with a solid gain of 3.1%, easily claiming the top spot on Wednesday's leaderboard. The next-best performing group was financials with a gain of 1.9%.
All S&P 500 sectors finished Wednesday in the green, with seven of eleven adding at least 1.0%. The top-weighted technology group lagged though, adding a relatively weak 0.7%, as the market's biggest component by market cap, Apple (AAPL 187.50, -0.40), finished with a loss of 0.2%. Customer-relations software company Salesforce (CRM 129.30, +2.42) rallied though, adding 1.9%, after beating both earnings and revenue estimates for the first quarter. HP (HPQ 22.16, +0.86) also had a good showing, adding 4.0%, after reporting upbeat quarterly revenues.
Elsewhere on the earnings front, retailers were well-represented once again, with Dick's Sporting Goods (DKS 38.35, +7.87), Michael Kors (KORS 60.41, -7.81), and DSW (DSW 24.61, -1.46) reporting their quarterly results. Dick's spiked 25.8%, hitting its best level since July 2017, after reporting better-than-expected earnings and revenues, but Michael Kors and DSW declined 11.5% and 5.6%, respectively, despite also beating on both the top and bottom lines. Retailers did relatively well overall, pushing the SPDR S&P Retail ETF (XRT 47.26, +0.63) higher by 1.4%.
Reviewing Wednesday's big batch of economic data, which included the Fed's Beige Book for April, the ADP Employment Change report for May, the second estimate of first quarter GDP, Advance International Trade in Goods for April, Advance Wholesale Inventories for April, and the weekly MBA Mortgage Applications Index:
The Federal Reserve released its April Beige Book, which described the economy as expanding moderately. The report acknowledged the presence of higher manufacturing activity, but consumer spending was classified as ‘soft.' The Beige Book also noted the presence of higher costs of basic materials.
The ADP National Employment Report showed an increase of 178,000 in May (Briefing.com consensus 183,000). The April reading was revised to 163,000 from 204,000.
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 second estimate of first quarter GDP pointed to an expansion of 2.2%, while the Briefing.com consensus expected a reading of 2.3%. The first estimate came in at 2.3%.
The key takeaway from the report is that it was a rerun of a bad episode of consumer spending in the first quarter. Therefore, it won't have any market impact since the "new" news today on Q1 GDP is old news.
The Advance report for International Trade in Goods for April showed a deficit of $68.2 billion (Briefing.com consensus -$70.7 billion), while the March deficit was revised to $68.6 billion (from $68.0 billion).
The Advance report for Wholesale Inventories for April was unchanged (0.0%), while the March reading was revised to +0.2% (from +0.5%).
The weekly MBA Mortgage Applications Index decreased 2.9% following last week's decline of 2.6%.
On Thursday, investors will receive Personal Income (Briefing.com consensus +0.3%), Personal Spending (Briefing.com consensus +0.3%), and the PCE Price Index for April (Briefing.com consensus +0.2%), the weekly Initial Claims report (Briefing.com consensus 227K), the Chicago PMI for May (Briefing.com consensus 57.9), and Pending Home Sales for April (Briefing.com consensus +0.7%).
Nasdaq Composite +8.1% YTD
Russell 2000 +7.3% YTD
S&P 500 +1.9% YTD
Dow Jones Industrial Average -0.2% YTD
Italian Political Strife Prompts Flight to Safety
29-May-18 16:25 ET
Dow -391.64 at 24361.45, Nasdaq -37.26 at 7396.59, S&P -31.47 at 2689.86
https://www.briefing.com/investor/markets/stock-market-update/2018/5/29/italian-political-strife-prompts-flight-to-safety.htm
[BRIEFING.COM] Uncertainty surrounding the future of the Italian government sent equity markets lower around the globe on Tuesday as U.S. investors returned to the trading desk for the first time this week following an extended Memorial Day weekend. The S&P 500 lost 1.2% on Tuesday, settling at a three-week low, while the Dow and the Nasdaq ended lower by 1.6% and 0.5%, respectively. The small-cap Russell 2000 showed relative strength, settling lower by just 0.2%.
On Sunday, Italian President Sergio Mattarella moved to block the formation of a euroskeptic government, vetoing the economic minister nominee of an anti-establishment coalition that's aiming to come to power. The president's veto puts Italy on track for a snap election, which some insiders fear could become a de facto referendum on Italy's membership in the European Union. Italy's major stock index, the MIB, dropped 2.7% on Tuesday, extending its two-week decline to 12.1%. Italian debt also dropped, sending the yield on the Italian 10-yr bond 41 basis points higher to 3.09%, a fresh four-year high. (Editor's note: an earlier version of this comment incorrectly said the Italian 10-yr yield climbed seven basis points)
Separately, Spain's major stock index, the IBEX, tumbled 2.5% on Tuesday after the country's parliament agreed to a vote of confidence in Prime Minister Mariano Rajoy's leadership following a corruption scandal involving 29 individuals with ties to Mr. Rajoy's People's Party. The vote is scheduled for Friday.
In a flight to safety, European investors bid up German bunds, sending the 10-yr bund yield eight basis points lower to 0.25%, which is its lowest level in nearly a year. American debt was also in demand, pushing yields lower across the curve. The yield on the benchmark 10-yr U.S. Treasury note, for instance, dropped 16 basis points to 2.77%, which is a fresh seven-week low. The 10-yr yield is now about 35 basis points below the seven-year high it hit less than two weeks ago on May 17.
Financial shares sold off sharply in reaction to the sudden decline in yields. The S&P 500's financial sector ended lower by 3.4%, closing at the bottom of the sector standings by a comfortable margin; the next-worst performing group was materials with a loss of 1.8%. On the flip side, the rate-sensitive utilities (unch) and real estate (+0.3%) sectors were the top performers.
European political worries weighed heavily on the euro, which dropped 0.8% against the U.S. dollar to 1.1539, hitting its lowest level in nearly a year. The dollar's relative strength didn't bode well for most dollar-denominated commodities, including crude oil. West Texas Intermediate crude futures dropped 1.7% on Tuesday to $66.78 per barrel, slipping further from the three-and-a-half year high they hit last week. In addition to a strengthening dollar, concerns that Saudi Arabia and Russia are planning to ramp up production have weighed on crude prices as of late.
Some late buying brought the major U.S. stock indices up from their lowest marks of the day in the final minutes of the session. At its session low, the S&P 500 was down 1.6% at 2677, which is just five points above its 50-day moving average. Meanwhile, the Dow was down as much as 2.0%, and the Nasdaq was down as much as 1.1%.
Reviewing Tuesday's economic data, which was limited to the Conference Board's Consumer Confidence Index for May and the S&P Case-Shiller Home Price Index for March:
The consumer confidence reading for May increased to 128.0 (Briefing.com consensus 127.5) from the prior month's revised reading of 125.6 (from 128.7).
The key takeaway from the report is that consumers' assessment of current conditions is at a 17-year high, which matches up neatly with the understanding that the unemployment rate is at a 17-year low.
The Case-Shiller 20-city Index increased 6.8% in March (Briefing.com consensus +6.4%), while the February increase was left unrevised at 6.8%.
On Wednesday, investors will receive a number of economic reports, including the weekly MBA Mortgage Applications Index, the ADP Employment Change report for May (Briefing.com consensus 183K), the second estimate of first quarter GDP (Briefing.com consensus 2.3%), both the Advance International Trade in Goods (Briefing.com consensus -$70.7 billion) and Advance Wholesale Inventories reports for April, and the Fed's Beige Book for April.
Nasdaq Composite +7.1% YTD
Russell 2000 +5.7% YTD
S&P 500 +0.6% YTD
Dow Jones Industrial Average -1.5% YTD
Stocks Slip Ahead of Memorial Day Weekend
25-May-18 16:30 ET
Dow -58.67 at 24753.09, Nasdaq +9.42 at 7433.85, S&P -6.43 at 2721.33
https://www.briefing.com/investor/markets/stock-market-update/2018/5/25/stocks-slip-ahead-of-memorial-day-weekend.htm
[BRIEFING.COM] The stock market ended Friday on a mostly lower note, but managed to keep in positive territory for the week. The S&P 500 declined 0.2% on Friday, closing the week higher by 0.3%. The Dow also dropped 0.2% on Friday, trimming its weekly gain to 0.2%, while the Nasdaq ticked up 0.1%, extending its weekly advance to an impressive 1.1%.
North Korea-U.S. relations were in focus once again on Friday after a North Korean official responded with a conciliatory tone to President Trump's Thursday decision to cancel his scheduled summit with North Korean leader Kim Jong Un, saying that North Korea is still willing to meet with the United States. President Trump later revealed that communication has reopened with North Korea, adding that the summit could still happen -- possibly even on the originally scheduled date of June 12.
Separately, the Trump administration has reportedly reached a deal with Beijing to save struggling Chinese telecom company ZTE that involves ZTE paying a fine, hiring compliance officers, and changing its management. There were also reports that, in connection with the ZTE deal, the U.S. is pushing for approval of the proposed Qualcomm (QCOM 59.96, +0.88)/NXP Semi (NXPI 116.79, +5.28) merger. The merger has been approved by eight of the nine required global regulators, with Chinese approval still pending.
Energy shares dropped sharply on Friday, pushing the S&P 500's energy sector lower by 2.6%. The energy sell off coincided with a tumble in crude oil futures, which further retreated from Monday's three-and-a-half year high following reports that Saudi Arabia and Russia are thinking about reducing supply constraints to make up for any production fallout in Iran and Venezuela. West Texas Intermediate crude futures lost 4.0% on Friday, settling at $67.91 per barrel, marking a fresh three-week low.
Outside of energy, most S&P 500 groups finished within 0.4% of their flat lines. Within the consumer discretionary space (+0.2%), retailers were all over the place following another batch of earnings reports. Ross Stores (ROST 77.34, -5.62) and Gap (GPS 28.15, -4.80) dropped 6.8% and 14.6%, respectively, after missing earnings estimates for the first quarter, while Foot Locker (FL 55.74, +9.35) surged 20.2% after beating both top and bottom line estimates.
In the bond market, U.S. Treasuries extended their weekly gains, sending yields lower across the curve, thanks to some inflows from European investors, who sought some security from continued political uncertainty within the region following reports that the main opposition party in Spain is seeking to remove Prime Minister Mariano Rajoy. The yield on the benchmark 10-yr Treasury note finished Friday five basis points lower at 2.93%, closing the week with a loss of 13 basis points.
Elsewhere, the U.S. Dollar Index advanced 0.4% on Friday to 94.13, marking its best close since mid-November.
Reviewing Friday's economic data, which was limited to April Durable Orders and the final reading of the University of Michigan Consumer Sentiment Index for May:
April durable goods orders fell 1.7%, which is more than the 1.6% decrease expected by the Briefing.com consensus. The prior month's reading was revised to +2.7% (from +2.6%). Excluding transportation, durable orders increased 0.9% (Briefing.com consensus +0.6%) to follow the prior month's revised increase of 0.4% (from 0.0%).
The key takeaway from the report is that it will factor as a positive input for Q2 GDP forecasts since shipments of nondefense capital goods, excluding aircraft, rose 0.8%. It also conveyed a modest pickup in business spending, evidenced by the 1.0% increase in new orders for nondefense capital goods, excluding aircraft.
The final reading of the University of Michigan Consumer Sentiment Index for May slipped to 98.0 (Briefing.com consensus 98.8) from 98.8 in the preliminary reading.
The key takeaway from the report is that consumers expect smaller income gains than they did a month ago, or a year ago, despite thinking the unemployment rate will stabilize at its 18-year low of 3.9%.
U.S. markets will be closed on Monday in observance of Memorial Day.
Nasdaq Composite +7.7% YTD
Russell 2000 +6.0% YTD
S&P 500 +1.8% YTD
Dow Jones Industrial Average +0.1% YTD
Week In Review: Unfazed
Equities finished the week a tick higher, unfazed by what seemed like a continuous flow of geopolitical headlines. Most of the news centered on U.S.-China trade relations and the U.S.-North Korea summit -- which, as of Thursday, is "officially" canceled, but more on that later. The Dow settled the week up 0.2%, the S&P 500 added 0.3%, and the Nasdaq outperformed, jumping 1.1%.
The week began on a positive note following weekend comments from Treasury Secretary Steven Mnuchin, who said that a U.S.-China trade war has been put "on hold" while the two nations continue to try and work out their differences, and following news that last week's trade talks ended with China agreeing to buy more goods from the U.S. in an effort to reduce its trade surplus. China followed up that pledge by announcing early on Tuesday that it will be cutting import tariffs on U.S. automobiles (to 15% from 25%) and on some U.S. auto parts (to 6% from 8-25%).
However, the upbeat vibes faded later on Tuesday when President Trump revealed that the White House has yet to reach a deal with Beijing to save struggling Chinese telecom company ZTE. The news didn't sit well with investors, who had been expecting the president to use ZTE, which has been severely hurt by U.S. sanctions, as a bargaining chip in trade negotiations with Beijing. Reports on Friday indicated that President Trump and China have finally reached a tentative deal on ZTE, but by then the focus had largely shifted to the ongoing situation in North Korea.
President Trump canceled his June 12 summit with North Korean leader Kim Jong Un on Thursday, stating in an open letter to Mr. Kim that he felt the meeting was "inappropriate" based on the "tremendous anger and open hostility" displayed in a recent statement from a North Korean official directed at Vice President Mike Pence. However, the president has left open the possibility of meeting with Mr. Kim, saying on Friday that dialog with North Korea has reopened and that the summit could still happen.
In other political developments, President Trump officially signed the Dodd-Frank reform bill on Thursday, which rolled back regulations on small and medium-sized lenders put in place following the 2008 financial crisis. The president also added that the rollback may be extended to larger banks in the future. Separately, The Wall Street Journal reported that the Trump administration is considering import tariffs on automobiles that could be as high as 25%.
Investors received on Wednesday afternoon the FOMC minutes from the May meeting, which came in more dovish than expected, helping to fuel a late-session rally. The minutes pointed to a rate hike at the June meeting, as expected, and suggested that the Fed may not be as aggressive with its rate-hike path as many had previously thought. The latter takeaway stems from the acknowledgement in the minutes that officials would be content to let inflation briefly run above their 2.0% target.
Overseas, the prospect of a populist government coming to power in Italy weighed on Italian debt, pushing the yield on Italy's 10-yr BTP higher by 25 basis points to 2.47%. A flight to safety pushed both German and U.S. debt higher -- thereby reducing bond yields. The 10-yr German bund yield dropped 18 basis points to 0.40 this week, and the 10-yr U.S. Treasury note yield dropped 13 basis points to 2.93%. Investors also expressed concern over the ongoing situation in Spain following Friday reports that the country's opposition party is looking to oust Prime Minister Rajoy.
Meanwhile, reports that Saudi Arabia and Russia will soon relax their crude oil supply constraints to compensate for any production fallout in Venezuela and Iran sent crude prices sharply lower this week. West Texas Intermediate crude futures hit a fresh three-and-a-half year high on Monday, but finished Friday 6.4% below that level at $67.91 per barrel. A rise in the U.S. dollar also didn't help matters, making commodities, which are priced in U.S. dollars, more expensive for holders of foreign currencies. The U.S. Dollar Index jumped 0.6% this week to 94.13, its highest level since mid-November.
Back on Wall Street, retailers dominated the earnings front once again, with Lowe's (LOW), TJX (TJX), Target (TGT), Ross Stores (ROST), Best Buy (BBY), AutoZone (AZO), Tiffany & Co (TIF), Gap (GPS), Kohl's (KSS), Advance Auto (AAP), and Foot Locker (FL) reporting their quarterly results. The results come in mostly better-than-expected, but a few companies missed bottom-line estimates, including Lowe's, Target, and Gap. The SPDR S&P Retail ETF (XRT) settled the week higher by 0.3%.
The S&P 500 sectors finished the week on a mostly higher note, with seven of the eleven settling in the green. The rate sensitive utilities space (+3.1%) led the charge, underpinned by the decline in Treasury yields, while the energy sector (-4.5%) was by far the weakest group, suffering from the drop in crude prices. The other sectors finished with weekly gains/losses of 2.0% or less.
Stocks Slip After Trump Cancels North Korea Summit
24-May-18 16:25 ET
Dow -75.05 at 24811.76, Nasdaq -1.53 at 7424.43, S&P -5.53 at 2727.76
https://www.briefing.com/investor/markets/stock-market-update/
[BRIEFING.COM] The stock market was on track for a sizable loss on Thursday following President Trump's decision to cancel his June 12 summit with North Korean leader Kim Jong Un, but nearly reclaimed all of that loss in an intraday rebound. The S&P 500 was down as much as 1.0% before ending the session lower by 0.2%. Meanwhile, the Dow finished lower by 0.3%, and the Nasdaq closed just a tick beneath its flat line.
In a letter to Mr. Kim, President Trump said he felt it was "inappropriate" to go through with their planned meeting based on the "tremendous anger and open hostility" displayed in a recent statement directed at Vice President Mike Pence. The cancellation is obviously a blow to U.S.-North Korea relations, which appeared to be warming before North Korea started reverting to old habits in recent weeks, but it also might be a blow to U.S.-China relations as Mr. Trump has insinuated that Chinese President Xi might have had something to do with North Korea's change in attitude.
Also out of Washington, President Trump officially signed the Dodd-Frank reform bill on Thursday, which rolled back regulations on small and medium-sized lenders put in place following the 2008 financial crisis. The president also added that the rollback may be extended to larger banks in the future. Separately, The Wall Street Journal reported that the Trump administration is considering import tariffs on automobiles that could be as high as 25%. American automakers Ford Motor (F 11.62, +0.18) and General Motors (GM 38.39, +0.54) rallied more than 1.0% the news, while foreign automakers slid.
The S&P 500 sectors finished Thursday mostly lower, with seven of eleven closing in the red. The energy sector (-1.7%) was the weakest space, suffering amid another decline in the price of crude oil, which has now dropped for three sessions in a row amid fears that OPEC may boost production due to supply concerns out of Iran and Venezuela. WTI crude futures ended 1.6% lower at $70.71 per barrel. The heavily-weighted financial sector (-0.7%) was also relatively weak as Treasury yields declined for the second day in a row. The benchmark 10-yr yield ended two basis points lower at 2.98%.
On a positive note, the consumer discretionary (+0.2%), industrials (+0.6%), telecom services (+0.6%), and utilities (+0.8%) sectors finished in the green. General Electric (GE 14.60, +0.42) led the industrial sector higher, adding 3.0%, after CNBC's David Faber reported that the company does not plan to cut its dividend (refuting reports from earlier in the week). Meanwhile, in the consumer discretionary space,electronics retailer Best Buy (BBY 70.90, -5.05) slid 6.7% despite reporting above-consensus earnings and revenues for the first quarter.
Reviewing Thursday's economic data, which included weekly Initial Claims, Existing Home Sales for April, and the FHFA Housing Price Index for March:
The latest weekly initial jobless claims count totaled 234,000, while the Briefing.com consensus expected a reading of 220,000. Today's tally was above the revised prior week count of 223,000 (from 222,000). As for continuing claims, they rose to 1.741 million from a revised count of 1.712 million (from 1.707 million).
While initial claims were higher than expected, the key takeaway from the report is that it won't do anything to upset the favorable perspective on the initial claims trend.
Existing home sales decreased 2.5% in April to an annualized rate of 5.46 million units (Briefing.com consensus 5.57 million). The March reading was left unrevised at 5.60 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 going to feel added affordability pressures from rising mortgage rates.
The FHFA Housing Price Index rose 0.1% in March (Briefing.com consensus +0.6%), and the February increase was left unrevised at 0.6%.
Looking ahead to Friday, investors will receive April Durable Orders and the final reading of the University of Michigan Consumer Sentiment Index for May.
Nasdaq Composite +7.6% YTD
Russell 2000 +6.0% YTD
S&P 500 +2.0% YTD
Dow Jones Industrial Average +0.4% YTD
Stocks Rebound Intraday Following FOMC Minutes
23-May-18 16:30 ET
Dow +52.40 at 24886.81, Nasdaq +47.50 at 7425.96, S&P +8.85 at 2733.29
https://www.briefing.com/investor/markets/stock-market-update/2018/5/23/stocks-rebound-intraday-following-fomc-minutes.htm
[BRIEFING.COM] The stock market earned a hard-fought victory on Wednesday, boosted by the afternoon release of the FOMC minutes from the May meeting, which came in more dovish than expected, helping the market overcome a lower start to the session. The Dow Jones Industrial Average climbed 0.2%, the S&P 500 advanced 0.3%, and the tech-heavy Nasdaq Composite jumped 0.6%. Small caps also ended the day higher, with the Russell 2000 adding 0.2%.
Lingering concerns about U.S.-China trade relations and doubts that the U.S.-North Korea summit will take place as scheduled weighed on the equity market at the start of Wednesday's session. The major stock indices opened with losses of around 0.4% apiece and stayed at, or near, that level all the way into the afternoon.
However, things turned around following the release of the FOMC minutes from the May meeting, which pointed to a rate hike in June, as expected, and suggested that the Fed may not be as aggressive with its rate hikes as many had previously thought. The latter takeaway stems from the acknowledgement in the minutes that officials would be content to let inflation briefly run above their 2.0% target.
Stocks shot higher following the minutes release, while the 'Fed-sensitive' 2-yr Treasury yield dropped sharply. The 2-yr yield was hovering around 2.58% ahead of the minutes, but eventually finished three basis points below its Tuesday close at 2.53%. Meanwhile, the benchmark 10-yr yield lost six basis points on Wednesday, dropping to 3.00%, amid fears of a populist government in Italy, whose agenda will surely drive up budget deficits. The Italian populist fears also weighed on the euro, helping to push the U.S. Dollar Index up 0.4% to 93.88, a fresh five-month high.
Back to yields, the narrowing gap between the 2-yr yield and the 10-yr yield weighed on financials, which rely on the difference between what they pay for deposits and what they receive for loans. The financial sector was the worst-performing S&P group on Wednesday, losing 0.6%. Telecom services also struggled, dropping 0.4%, but no other sector lost more than 0.2%, and most finished in the green.
Information technology finished alongside utilities at the top of the sector standings, adding 0.9%, with Netflix (NFLX 344.72, +13.10) leading the charge. Netflix shares rallied 4.0%, closing at a new record high. Meanwhile, tech giants Apple (AAPL 188.36, +1.20), Microsoft (MSFT 98.66, +1.16), Facebook (FB 186.90, +3.10), and Alphabet (GOOG 1079.69, +9.96) added between 0.6% and 1.7%. Chipmakers outperformed slightly, pushing the PHLX Semiconductor Index higher by 0.5%.
The consumer discretionary space was also a notable outperformer, adding 0.8%. Home improvement retailer Lowe's (LOW 94.69, +8.94) led the sector higher after news that Bill Ackman's Pershing Square has taken a $1 billion stake in the company -- which outweighed Lowe's below-consensus first quarter results. Lowe's shares rallied 10.4%, closing at a three-month high.
Meanwhile, shares of Tiffany & Co (TIF 126.05, +23.81) spiked 23.3%, hitting a new all-time high, after the luxury jewelry retailer beat quarterly earnings and revenue estimates, raised its guidance, and authorized a new share repurchase program. Shares of Target (TGT 71.17, -4.30), however, dropped 5.7% after the company missed on the bottom line.
Reviewing Wednesday's economic data, which included April New Home Sales and the weekly MBA Mortgage Applications Index:
New Home Sales in April hit an annualized rate of 662,000, below the Briefing.com consensus of 677,000. The March reading was revised to 672,000 (from 694,000).
The key takeaway from the report is that lower-priced homes ($399,999 or less) accounted for a smaller percentage of new homes sold in April than the prior month, reflecting perhaps the lack of supply at more attractive price points for prospective buyers.
The weekly MBA Mortgage Applications Index decreased 2.6% following last week's decline of 2.7%.
Looking ahead, investors will receive weekly Initial Claims, the FHFA Housing Price Index for March, and Existing Home Sales for April on Thursday.
Nasdaq Composite +7.6% YTD
Russell 2000 +6.0% YTD
S&P 500 +2.2% YTD
Dow Jones Industrial Average +0.7% YTD
Wall Street Rallies After U.S.-China Trade War Put On Hold
21-May-18 16:30 ET
Dow +298.20 at 25013.29, Nasdaq +39.70 at 7394.04, S&P +20.04 at 2733.01
https://www.briefing.com/investor/markets/stock-market-update/2018/5/21/wall-street-rallies-after-uschina-trade-war-put-on-hold.htm
[BRIEFING.COM] Weekend comments from Treasury Secretary Steven Mnuchin, who said that a trade war between the U.S. and China has been put on hold, helped the U.S. stock market rebound from last week's losses on Monday. The major averages did settle below their session highs -- the Nasdaq (+0.5%) notably so -- but the Dow (+1.2%) and the S&P 500 (+0.7%) still finished with comfortable gains. The small-cap Russell 2000 (+0.7%) advanced to a new record high for the fourth session in a row.
Mr. Mnuchin's announcement followed last week's trade negotiations between Washington and Beijing, which reportedly ended with China agreeing to buy more goods from the U.S. to reduce its trade surplus with America. While there wasn't a specific dollar amount attached to the additional Chinese purchases, the shelving of tariff threats between the world's two largest economies alone was enough to encourage buyers to re-enter the mix. Gains were broad-based on Monday, with all 11 S&P sectors closing in the green.
The industrial sector (+1.5%) finished at the top of the sector standings. The group benefited from a 3.6% increase in shares of Boeing (BA 363.92, +12.69), which have served as a proxy for trade concerns. Meanwhile, General Electric (GE 15.26, +0.29) shares also had a positive outing, adding 1.9%, after the 126-year-old giant unveiled an $11.1 billion deal to merge its transportation business with locomotive manufacturer Wabtec (WAB 98.55, +3.36). GE shares did give back some gains though following reports that further dividend cuts (or even dividend elimination) are possible.
Technology (+0.8%) got off to a good start, vying with industrials for first place in the sector standings, but eventually fell back. Shares of several chipmakers, including NVIDIA (NVDA 244.24, -1.70) and Texas Instruments (TXN 110.41, -0.13), weighed on the group, but shares of Micron (MU 55.48, +2.09) rallied 3.9% after the company raised its fiscal Q3 guidance.
Elsewhere, the lightly-weighted telecom services (+1.5%) and real estate (+1.0%) sectors were also notable advancers, trimming their losses for the year, as was the energy group (+1.0%), which took advantage of another rise in the price of crude oil. WTI crude futures advanced 1.4% to $72.26 per barrel, marking their highest close since November 2014.
On the downside, the health care group (+0.1%) finished at the bottom of the sector standings as biotechnology shares weighed, evidenced by a 1.3% decline in the iShares Nasdaq Biotechnology ETF (IBB 106.38, -1.42). Shares of biotech giant Celgene (CELG 74.69, -3.68) were particularly weak, closing lower by 4.7%; that marks an eight-month loss of around 50% for Celgene.
In the bond market, Treasuries ended Monday on a flat to lower note, cutting the 2s10s spread by three basis points. The yield on the benchmark 10-yr Treasury note finished unchanged at 3.07%, while the yield on the 2-yr Treasury note advanced three basis points to 2.57%. Yields move inversely to prices. The U.S. Dollar Index, meanwhile, slipped 0.1% to 93.47, retreating from Friday's a five-month high.
Investors did not receive any notable economic data on Monday.
Nasdaq Composite +7.1% YTD
Russell 2000 +6.6% YTD
S&P 500 +2.2% YTD
Dow Jones Industrial Average +1.2% YTD
InvestmentHouse - Economic Data Showing Improvement (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
- Chips undermine any attempt for a group move higher.
- Economic data showing improvement, the kind that economists always miss.
- Still watching to see if the large cap and midcap indices can make good on
their good patterns.
- China says it never agreed to reduce the trade deficit $200B, but this
weekend agrees to "substantially reduce" the gap. Okay, given the trade
gap's size, $200B looks 'substantial.' Perhaps this 'deal' helps stocks
Monday.
Overall a week of lateral movement as the indices consolidated the initial,
and thus far only, surge off support. Sure, Tuesday was a hard day for the
large cap indices, but they hung on and worked laterally along the 10 day
EMA.
Of course, there are always exceptions to the general rule. There was
nothing lateral about the RUTX small caps as they tested early then surged
Wednesday and Thursday, taking a breather for a modest gain Friday. A lot
of power from the small caps as they punched out three consecutive new
all-time highs.
The other exception: SOX. It too suffered the Tuesday drop but held and
bounced nicely Wednesday. It looked good to go but then AMAT's weak
guidance undermined the move as it dragged other stocks lower and SOX with
it, gapping downside to a 1.44% Friday loss. Chips are an important group
to the market, and there is a question mark after Friday whether they can
shake off the AMAT impact and perhaps form a right shoulder to a potential
inverted head and shoulders pattern. That will take time, but it will also
show itself if SOX is able to limit the downside in the coming week.
SP500 -7.16, -0.26%
NASDAQ -28.13, -0.38%
DJ30 1.11, 0.00%
SP400 -0.25%
RUTX 0.08%
SOX -1.44%
NASDAQ 100 -0.51%
VOLUME: NYSE +18%, NASDAQ +2%. Upside volume, moving up above average again
for the first time in 7 sessions, as the NYSE indices were not hit hard.
That is not a bad thing given the lateral consolidation. NASDAQ trade still
below average as it tests the 10 day EMA, not bad action at all.
ADVANCE/DECLINE: NYSE +1.1:1, NASDAQ edges just positive. All thanks to the
small caps.
Again it was said trade was a concern with China saying it would never
unilaterally offer to reduce the budget deficit by $200B, Larry Kudlow then
saying China was lying, all the while China dropped its inquiry into claims
the US is dumping sorghum. Lots of words, lots of positioning, but it is
the actions that are ultimately the key. Of course, it does not help that
the US is now bickering with Europe over trade as well. China, Europe,
NAFTA. A trifecta.
Outside of ongoing trade speculation the economic data was not bad. Philly
Fed on Thursday shot past expectations and continuing claims has dropped
like a rock the past year. Retail sales dropped from March levels but the
revisions were to the upside and that means that likely the April readings
will be upwardly revised as well. When you start seeing the upward
revisions, that typically means any slow down is over, that the economists
are still seeing things through their 3-steps behind glasses.
'Ah ha!' the economists all say. THAT is why the RUTX surged to a new
all-time high while the large cap indices, laden with their worries over a
trade conflict, have failed to move. Oh, how silly of me; economists don't
know squat about markets. Heck, 90% of them don't know squat about
economics!
THE MARKET
CHARTS
RUTX: Continued the breakout to higher highs. Strong initial move, 3 days
of pause/test, two new upside sessions to new highs Wednesday and Thursday.
Friday was up but a day off with a modest gain, showing a doji. Broke out,
put in a good move on top of the breakout.
SOX: I said it was hardly the picture of health, and Friday it showed some
issues after AMAT's earnings beat but lowered guidance. Sounded like CAT in
a way. Other chip equipment stocks fell with AMAT, dragging SOX to the 10
day EMA on the close. That puts SOX at the trendline as well. There is the
possibility of forming an inverted head and shoulders with a dip to the 50
day SMA (another 15 points). Possible. SOX is still trending higher, but
it will have to overcome the AMAT pall and forming a right shoulder could do
it.
SP400: An upside week but barely. SP400 had to test to the 10 day EMA
before breaking higher the second half of the week. Tested the prior break
over the April high, moved back up to hold the breakout. Friday was off a
bit. Breakout, tested, now we will see if SP400 can follow RUTX higher
toward the old highs. A long way to go with an interim peak in between to
get to that prior all-time high.
SP500: Holding at the 10 day EMA after dropping to that level on the
Tuesday flop that ended leg one of this latest upside attempt. Friday saw
BA, CAT, DE and others break higher, but they could not budge the needle on
the entire 500 large caps. Still a very good break higher out of the
triangle followed by the current nice tight lateral test. MACD looks good
as noted before. All that is missing is the next upside break.
DJ30: Very tight lateral move over the 10 day EMA Tuesday through Friday
after the drop from Monday that put in a new high on the rally off support.
Breakout from the triangle, a move over the April high, now testing that
move. Nice pattern, but nice patterns are just nice patterns until the next
break is put in. BA broke higher, CAT as well, both components. If AAPL
can throw in as well, that perhaps will help spring the move.
NASDAQ: Broke over the April high the prior week, held it Monday, but then
dropped Tuesday to the 10 day EMA and that prior peak. Worked laterally,
tried to make the break Wednesday, but didn't stick and NASDAQ closed the
week at the 10 day. As with the other large cap indices, it is in position
to move higher, just needs to show the move.
LEADERSHIP
Oil: Oils stocks enjoyed the lead, as a group, for the week. HAL, SLB,
PTEN, NBR, SPN and others had great weeks if not great Fridays. WHD had a
great week regardless of the day. We were able to bank some nice gain on
the week with several of our positions.
Drugs/biotechs: After a quiet 2+ weeks of consolidation, some good breaks
higher toward the end of the week. IMMU, ECYT gapped and gave us nice gains
to bank. ARWR is still solid in its upside move. Still waiting for BIIB to
make a break higher form a well-formed pattern. VCEL climbing the 10 day.
BLUE, as volatile as ever, is in the process of what looks to be a big move
starting.
China stocks: Volatile as well but mostly upside. BABA is in a 2 week
lateral move. BZUN exploded higher Thursday to a new high, kept it going
Friday. HTHT enjoyed a huge week, frontend loaded. ATHM took a breather
after a good break higher. YY started higher. SOHU could not advance its
Monday break higher. BITA is interesting. BIDU was clocked Friday, gapping
sharply lower to the 50 day EMA after a strong upside move.
Software: After a week of testing, many are starting to bounce back, e.g.
NOW, DATA. ULTI tested for a week and if it can get some volume we are
interested on a new move. UIS still looks good, still has not moved. CRM
testing the 20 day EMA. RHT testing the 50 day MA, started to bounce
Friday, not bad volume. Still a very solid sector.
Big Names: AAPL still in the 10 day EMA test of its break higher from its
range. FB testing its break higher with a 10 day EMA lateral move. GOOG
gapped to the 50 day MA on word of a story coming out about it losing the AI
battle with AMZN. NVDA fell to the 20 day EMA Tuesday and is attempting a
rebound. INTC fell to the 20 day EMA Friday, struggling as did most chips.
Still a nice uptrend. MSFT in a nice 20 day EMA test.
MARKET STATS
DJ30
Stats: +1.11 points (0.00%) to close at 24715.09
Nasdaq
Stats: -28.13 points (-0.38%) to close at 7354.34
Volume: 1.95B (+1.56%)
Up Volume: 909.89M (+37.87M)
Down Volume: 1B (+23.7M)
A/D and Hi/Lo: Decliners led 1.01 to 1
Previous Session: Advancers led 1.54 to 1
New Highs: 148 (-24)
New Lows: 42 (-9)
S&P
Stats: -7.16 points (-0.26%) to close at 2712.97
NYSE Volume: 872M (+17.54%)
A/D and Hi/Lo: Advancers led 1.06 to 1
Previous Session: Advancers led 1.18 to 1
New Highs: 112 (-37)
New Lows: 72 (+19)
SENTIMENT
VIX: 13.42; -0.01
VXN: 16.87; -0.32
VXO: 13.31; +0.33
Put/Call Ratio (CBOE): 1.03; +0.20
Bulls and Bears:
After dropping similar to a stone from 65+ to the 40's, bulls rebounded 3.5
points, somewhat upper mid-level. Big move to a higher high, big drop, now
can stocks find enough contrary view to make a break higher?
Bulls: 46.6 versus 43.1
Bears: 19.4 versus 20.6
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: 46.6 versus 43.1
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: 19.4 versus 20.6
20.6 versus 20.8 versus 19.6 versus 19.8 versus 18.6 versus 17.5 versus 16.8
versus 15.7 versus 15.5 versus 14.4 versus 14.6 versus 14.4 versus 15.5
versus 12.6 versus 12.8 versus 12.7 versus 13.5 versus 15.2 versus 15.1
versus 15.2 versus 15.1 versus 15.1 versus 15.4 versus 15.4 versus 14.4
versus 14.4 versus 15.1 versus 15.2 versus 15.1 versus 17.0 versus 17.1
versus 19.0 versus 20.2
OTHER MARKETS
Bonds: 3.06% versus 3.123%. Bonds bounced some Friday after breaking below
the April and February levels, but the main point is yields held over 3.0%
Historical: the last sub-2% rate was in November 2016 (1.867%). 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%
versus 2.801% versus 2.805% versus 2.775% versus 2.812% versus 2.806% versus
2.781% versus 2.739% versus 2.714% versus 2.781% versus 2.775% versus 2.854%
versus 2.813% versus 2.814% versus 2.881% versus 2.90% versus 2.852%
EUR/USD: 1.17714 versus 1.1802. After rebounding to the 10 day EMA into
Monday, the euro crashed lower Tuesday and continued to a lower selloff low
Friday.
Historical: 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: 110.76 versus 110.935. Dollar broke out over the 200 day SMA
Thursday, paused Friday. This was the next key level.
Historical: 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 versus
107.362 versus 107.267 versus 106.882 versus 106.873 versus 107.09 versus
107.16 versus 106.939 versus 107.11 versus 106.816 versus 106.797 versus
105.901 versus 106.286 versus 106.81 versus 105.397 versus 105.473 versus
104.789 versus 104.829 versus 105.892 versus 106.478 versus 105.945 versus
105.946
Oil: 71.37, -0.12. Oil was off Friday and sluggish on the week, but it
continued its climb up the 10 day EMA.
Gold: 1291.30, +1.90. Plunged below the 200 day SMA Tuesday, holding the
same level through Friday.
MONDAY
The indices were unable to make a break higher Friday even though some
stocks jumped upside, e.g. BA. Chips were a drag, pure and simple. Other
groups were up, but not enough to offset the negatives and boost a new break
higher. Thus, the stock indices enter next week with SP500, DJ30, NASDAQ,
SP400 in good patterns but still looking for the next break higher, RUTX
likely ready to test its upside surge, and SOX trying to find out where it
wants to try and make a stand.
Now if trade is truly an issue, and it is to a certain extent, there may be
some positives to start the week. China and the US met and it is reported
that China agrees to boost US export purchases to "substantially reduce" the
trade gap. Is $200B a 'substantial reduction?' Was Larry Kudlow right in
calling China a liar and did China make claims it knew were untrue (I guess
that means it lied . . .)?
Well, given you know China likes to be able to save face, it would appear
that its readiness to agree to "substantially reduce" the trade gap but not
say it agreed to $200B in reductions is just that: face-saving semantics.
Perhaps this 'deal' will boost stocks. Perhaps there is still a lot of
weekend ahead. There is also the chip stocks. Can the market rally without
them? Yes, but it is not as easy. Good patterns remain in many areas and
we will see if they can continue breaking higher. They need to in order to
offset those groups struggling, e.g. fast food (SONC, JACK, YUM) and some
not-so-fast food (RRGB, TXRH).
In the end it comes down to leaders and whether they can make good on good
patterns. Many are and we banked some nice gain the past week. More will
have to make the moves to push SP500, DJ30, NASDAQ, SP400 higher out of
their bases. It is May, it is already hot outside, and the market has to
deal with the time of year issue (sell in May and go away . . .). For now,
if the stocks make the moves, we will play the stocks.
Have a great weekend!
Wall Street Slips On Friday, Locks In Weekly Losses
18-May-18 16:25 ET
Dow +1.11 at 24715.09, Nasdaq -28.13 at 7354.34, S&P -7.16 at 2712.97
https://www.briefing.com/investor/markets/stock-market-update/2018/5/18/wall-street-slips-on-friday-locks-in-weekly-losses.htm
[BRIEFING.COM] Stocks were range-bound on Friday, drifting near their flat lines from open to close. The S&P 500 and the Nasdaq ended with losses of 0.3% and 0.4%, respectively, while the Dow eked out a very slim victory, adding less than 0.1%. Small caps showed relative strength once again, pushing the Russell 2000 up 0.1% and to its third consecutive record close.
Friday's outing left the S&P 500, the Nasdaq, and the Dow with weekly losses of around 0.5% apiece. The Russell 2000 finished the week up 1.2%.
There were several notable post-earnings movers on Friday, mostly to the downside. Shares of Nordstrom (JWN 45.36, -5.55) slid 10.9% after the high-end retailer missed quarterly estimates for same-store sales, and Applied Materials (AMAT 49.51, -4.45) shares dropped 8.3% after the company, which supplies tools used by chipmakers, cut its revenue guidance. Shares of Campbell Soup (CPB 34.37, -4.85) also took a beating, tumbling 12.4%, after the company slashed its earnings guidance, announced the immediate retirement of its CEO, and said it'll be launching a months-long strategic review.
However, on the upside, Deere (DE 155.25, +8.44) shares rallied 5.8% after the company's upbeat revenue guidance overshadowed an earnings miss. The industrial sector, which houses Deere, finished at the top of Friday's sector standings with a gain of 0.6%. The health care and materials groups also showed relative strength, adding 0.3% and 0.1%, respectively.
Within the health care space, Amgen (AMGN 176.30, +1.65) shares rallied 0.9% after the company won FDA approval for the first drug designed to prevent migraines.
The financials and energy sectors were the worst-performing groups, losing 0.9% and 0.8%, respectively. Financials slid in tandem with Treasury yields, which retreated from multi-year highs. The benchmark 10-yr yield slid four basis points to 3.07%. Similarly, energy struggled as crude futures ticked down from a three-and-a-half year high. WTI crude futures slipped 0.3% to $71.25/bbl.
In U.S.-China trade news, Beijing denied Thursday reports that it has offered to slash its trade surplus with the U.S. by up to $200 billion. On a related note, shares of Dutch semiconductor company NXP (NXPI 111.02, +4.31) jumped 4.0% after a Chinese official said approval of the company's proposed merger with U.S. chipmaker Qualcomm (QCOM 57.51, +0.56) is looking "more optimistic." The deal has been approved by eight of the nine required global regulators, with Chinese approval still pending.
Across the pond, two anti-establishment parties in Italy, the 5 Star Movement and the League, have agreed on a governing platform and are expected to nominate a prime minister in time for Monday's meeting with Italian President Sergio Mattarella. Italy's MIB lost 1.5% on Friday while other major European indices finished just a tick lower.
Investors did not receive any notable economic data on Friday.
Nasdaq Composite +6.5% YTD
Russell 2000 +5.9% YTD
S&P 500 +1.5% YTD
Dow Jones Industrial Average UNCH YTD
Week In Review: Stocks Stumble As Yields Rise
The stock market stumbled this week, giving back about a quarter of last week's advance, with the S&P 500, the Nasdaq, and the Dow losing between 0.5% and 0.7%. However, shares of smaller, domestically-focused companies outperformed, sending the Russell 2000 higher by 1.2%. The Russell 2000 closed at a new record high in each of the last three sessions of the week.
Beijing sent a delegation to Washington this week for a second round of trade talks after the first round failed to move the needle earlier this month. There was some optimism ahead of this week's negotiations after President Trump announced over the weekend that he's working to get Chinese phone company ZTE, which is suffering due to U.S. sanctions, "back into business." However, the optimism faded after the president acknowledged on Thursday that he's doubtful a deal can be reached.
In other international developments, Italy's major stock index tumbled 2.9% this week and its 10-yr yield shot higher by 35 basis points as two anti-establishment parties, the 5 Star Movement and the League, neared forming a governing coalition that will almost certainly clash with the European Union. Separately, U.S. officials said the U.S., Canada, and Mexico are still nowhere near a deal on NAFTA.
On Wall Street, Treasury yields were in focus after they spiked to multi-year highs on Tuesday. The yield on the benchmark 10-yr Treasury note hit 3.11%, its highest level since July 2011, before slipping to 3.07% on Friday. Still, that represents a gain of 10 basis points for the week. The rise in "risk free" returns lured some buyers away from the equity market, putting Wall Street's May rally on hold.
Tuesday's spike in Treasury yields coincided with the release of the Retail Sales report for April, even though the report came in as expected, showing a month-over-month increase of 0.3%.
On a related note, retailers dominated the earnings front this week, with Walmart (WMT), Home Depot (HD), Macy's (M), Nordstrom (JWN), and J.C. Penney (JCP) reporting their quarterly results. All five companies beat earnings estimates, but Walmart, Home Depot, Nordstrom, and J.C. Penney fell short on same-store sales, sending their shares lower. Shares of Macy's, conversely, soared after the company beat same-store sales estimates and raised its guidance for the fiscal year.
Apart from earnings, shares of CBS (CBS) dropped sharply on Thursday after a judge ruled against the company in its attempt to dilute its controlling shareholder, Shari Redstone, who is attempting to force a CBS-Viacom (VIAB) merger. The Redstone family controls both CBS and Viacom through its holding company, National Amusements.
As for the sector standings, decliners outnumbered advancers seven to four this week. The rate-sensitive utilities (-3.2%) and real estate (-3.2%) sectors were the worst-performing groups, largely due to the rise in Treasury yields. The heavily-weighted technology (-1.5%) and financials (-1.1%) spaces also struggled. On the upside, the energy (+1.5%) and materials (+1.6%) sectors were the top performers.
Following this week's decline, the S&P 500 and the Nasdaq are up 1.5% and 6.5% for the year, respectively, and the Dow is now flat.
Quiet Session Ends With Slim Losses
17-May-18 16:20 ET
Dow -54.95 at 24713.98, Nasdaq -15.82 at 7382.48, S&P -2.33 at 2720.13
https://www.briefing.com/investor/markets/stock-market-update/2018/5/17/quiet-session-ends-with-slim-losses.htm
[BRIEFING.COM] Stocks wandered between positive and negative territory on Thursday, eventually settling the session a tick lower. The S&P 500 shed 0.1%, and the Nasdaq Composite and the Dow Jones Industrial Average lost 0.2% apiece. Conversely, the small-cap Russell 2000 advanced 0.6%, closing at a new record high for the second day in a row.
Investors kept an eye on the Treasury market, where yields continued to hover at multi-year highs. The benchmark 10-yr yield, for instance, ticked up to 3.11% from 3.10% to finish at its highest level since July 2011. A rise in Treasury yields, which offer a "risk free" return, has lured some buyers away from the equity market this week, putting Wall Street's May rally on hold.
U.S.-China trade relations were also in focus on Thursday after President Trump said he's doubtful that the two nations will reach a trade agreement. The two countries are on the brink of imposing tens of billions of dollars worth of tariffs against one another, but are currently engaged in talks with hopes of avoiding that scenario.
In corporate news, CBS (CBS 51.61, -2.22) shares dropped 4.1% after a judge ruled against the company in its attempt to break free from its controlling shareholder, Shari Redstone, who is attempting to force a CBS-Viacom (VIAB 28.16, -0.11) merger. The Redstone family controls both CBS and Viacom through its holding company, National Amusements.
Meanwhile, on the earnings front, shares of Walmart (WMT 84.49, -1.64) lost 1.9% after the world's largest retailer reported above-consensus earnings and revenues for the first quarter, but missed estimates for same-store sales. Similarly, shares of Cisco Systems (CSCO 43.46, -1.70) dropped 3.8% despite the company reporting better-than-expected quarterly results.
Energy shares were strong on Thursday, pushing the S&P 500's energy sector higher by 1.3%, even though crude prices spent the bulk of the day giving back an overnight gain of more than 1.0%. West Texas Intermediate crude futures eventually settled higher by 0.1% at $71.48 per barrel. Still, that marks the commodity's best close in three-and-a-half years.
Most of the other S&P groups finished in negative territory, with the rate-sensitive utilities space (-0.9%) closing at the back of the pack. The top-weighted technology sector also lagged, losing 0.5%, due in part to Cisco's sizable slide, but also due to broad weakness. Tech giants like Apple (AAPL 186.99, -1.19) and Microsoft (MSFT 96.18, -0.97) lost 0.6% and 1.0%, respectively.
Reviewing Thursday's economic data, which included weekly Initial Claims, the Philadelphia Fed Index for May, and the Conference Board's Leading Economic Index for April:
The latest weekly initial jobless claims count totaled 222,000, while the Briefing.com consensus expected a reading of 216,000. Today's tally was above the unrevised prior week count of 211,000. As for continuing claims, they declined to 1.707 million from a revised count of 1.794 million (from 1.790 million).
The key takeaway from the initial claims report is that it covers the period in which the survey for the May employment report was conducted. The continued low level of initial claims, then, should continue to feed expectations for another solid increase in nonfarm payrolls.
The Philadelphia Fed Survey for May rose to 34.4 (Briefing.com consensus 20.0) from an unrevised 23.2 in April.
The key takeaway from the report is that the Prices Received Index -- a reflection of manufacturers' own prices -- increased seven points to 36.4, which is the highest reading since February 1989.
The Conference Board's Leading Economic Index increased 0.4% in April (Briefing.com consensus +0.4%), and the March increase was revised to 0.4% from 0.3%.
The key takeaway from the report is that the strength among the leading indicators remains very widespread.
Investors will not receive any economic data on Friday.
Nasdaq Composite +6.9% YTD
Russell 2000 +5.8% YTD
S&P 500 +1.7% YTD
Dow Jones Industrial Average UNCH YTD
Small Caps Lead Broad-Based Rebound
16-May-18 16:30 ET
Dow +62.52 at 24768.93, Nasdaq +46.67 at 7398.30, S&P +11.01 at 2722.46
https://www.briefing.com/investor/markets/stock-market-update/2018/5/16/small-caps-lead-broadbased-rebound.htm
[BRIEFING.COM] Stocks rebounded on Wednesday, reclaiming about half of their Tuesday losses, with shares of smaller, domestically focused companies showing particular strength. The small-cap Russell 2000 jumped 1.0%, finishing at a new all-time high, while the tech-heavy Nasdaq added 0.6% and the S&P 500 and the Dow advanced 0.4% and 0.3%, respectively.
The major averages opened with slim gains and extended them in a sharp move around midday, but slipped a bit in front of the closing bell.
Treasury yields remained at multi-year highs, with the benchmark 10-yr yield ticking up another two basis points to 3.10% -- its highest close since July 2011. However, unlike on Tuesday, the rise in yields didn't have a broadly bearish impact on equities. The rate-sensitive utilities (-0.9%) and real estate (-0.4%) groups finished in the red, but the nine other S&P sectors advanced.
Materials was the top-performing group with a gain of 1.2%, but consumer discretionary and consumer staples also outperformed, adding 0.8% apiece, as retailers rallied around Macy's (M 33.17, +3.24) first quarter results; the department store soared 10.8%, hitting a 15-month high, after beating earnings and revenue estimates and raising its guidance for the fiscal year.
Chipmakers were also strong, with Micron (MU 56.50, +2.49) showing particular strength after being initiated with an 'Outperform' rating at RBC Capital Markets. Micron shares rallied 4.6%, helping to push the PHLX Semiconductor Index higher by 1.4%. The top-weighted technology sector, which houses chipmakers, advanced 0.4%.
Overseas, Italy's MIB dropped 2.3% on Wednesday following the leaking of a draft proposal from the two anti-establishment parties seeking to form a coalition government. The draft reportedly advocates for procedures that would allow countries to quit the euro and for debt forgiveness from the European Central Bank. Italy's 10-yr yield surged 19 basis points to 2.13%.
The U.S. dollar climbed 0.3% against the euro to 1.1801, helping to push the U.S. Dollar Index (93.30, +0.16) up 0.2% to a five-month high.
Reviewing Wednesday's economic data, which included April Housing Starts and Building Permits, April Capacity Utilization and Industrial Production, and the weekly MBA Mortgage Applications Index:
Housing starts decreased to a seasonally adjusted annualized rate of 1.287 million units in April (Briefing.com consensus 1.325 million), down from a revised 1.336 million units in March (from 1.319 million). Building permits slipped to a seasonally adjusted 1.352 million in April (Briefing.com consensus 1.350 million) from a revised 1.377 million in March (from 1.354 million).
The key takeaway from the report is that single-family activity remained fairly muted. Bad weather will get some blame for the torpid activity overall, yet nothing in this report suggests prospective homeowners can expect supply-driven price relief in the near future.
Industrial Production increased 0.7% in April (Briefing.com consensus +0.6%), while the March reading was revised to +0.7% (from +0.5%). Meanwhile, Capacity Utilization ticked up to 78.0% (Briefing.com consensus 78.4%) from a revised reading of 77.6% in March (from 78.0%).
The key takeaway from the report is that the April increase was fueled by increased output across all three major industry groups.
The weekly MBA Mortgage Applications Index decreased 2.7% following last week's downtick of 0.4%.
On Thursday, investors will receive several economic reports, including weekly Initial Claims, the Philadelphia Fed Index for May, and the Conference Board's Leading Economic Index for April. In addition, Walmart (WMT 86.13, +1.61) -- the world's largest retailer -- will report earnings ahead of the opening bell.
Nasdaq Composite +7.2% YTD
Russell 2000 +5.3% YTD
S&P 500 +1.8% YTD
Dow Jones Industrial Average +0.2% YTD
Win Streak Ends As Treasury Yields Spike
15-May-18 16:30 ET
Dow -193.00 at 24706.41, Nasdaq -59.69 at 7351.63, S&P -18.68 at 2711.45
https://www.briefing.com/investor/markets/stock-market-update/2018/5/15/win-streak-ends-as-treasury-yields-spike.htm
[BRIEFING.COM] The Dow's eight-session winning streak came to an abrupt end on Tuesday as Treasury yields spiked, returning to multi-year highs. The Dow and the Nasdaq finished with losses of 0.8% apiece, while the S&P 500 ended lower by 0.7%. The small-cap Russell 2000 held up relatively well though, settling near its unchanged mark.
Treasury yields, which move inversely to Treasury prices, shot higher in pre-market action on Tuesday following the release of the Retail Sales report for April, which came in as expected, showing a month-over-month increase of 0.3%. In addition, the March increase was upwardly revised to 0.8% from 0.6%, and core retail sales -- which exclude auto, gas station, building materials, and food and drinking services sales -- jumped 0.4%.
The yield on the benchmark 10-yr Treasury note blew past the more than four-year high it hit three weeks ago, ending nine basis points above its Monday close at 3.08% -- its highest close since July 2011. Meanwhile, the yield on the 2-yr Treasury note climbed four basis points to 2.58% -- its highest close since July 2008.
Higher "risk free" interest rates enticed investors to dial back their equity holdings, especially within the rate-sensitive real estate space -- which finished at the bottom of the sector standings with a loss of 1.7% -- and within the homebuilding subsector -- evidenced by a 3.8% decline in the iShares U.S. Home Construction ETF (ITB 37.27, -1.47). The financial sector benefited from the rise in rates, settling near the top of sector leaderboard, but still ended with a loss of 0.2%.
Meanwhile, the heavily-weighted health care sector lost 1.3%, led lower by medical device company Agilent (A 62.50, -6.71), which tumbled 9.7% to a nine-month low after slashing its guidance for the July quarter and for the fiscal year. The top-weighted technology sector also underperformed, losing 1.0%, and energy was the only group to close in the green, finishing just a tick higher.
Dow component Home Depot (HD 187.98, -3.10) declined 1.6% after missing same-store sales estimates for the first quarter -- the first time it's missed on that metric in seven quarters. The home improvement retailer did beat earnings estimates though and did reaffirm its guidance for the fiscal year.
The U.S. and China kicked off a second round of trade talks in Washington on Tuesday. Round one, which took place in Beijing earlier this month, failed to move the needle, but there is some optimism about this round after U.S. President Donald Trump said he's working on getting Chinese phone company ZTE, which is suffering from U.S. sanctions, "back into business."
Reviewing Tuesday's economic data, which included Retail Sales for April, the Empire State Manufacturing Index for May, the NAHB Housing Market Index for May, and Business Inventories for March:
April retail sales rose 0.3% (Briefing.com consensus +0.3%), while the March increase was revised to 0.8% from 0.6%. Excluding autos, retail sales increased 0.3% in April (Briefing.com consensus +0.5%), and last month's increase was revised to 0.4% from 0.2%.
The key takeaway from the report is that consumer spending on goods was decent in April. Core retail sales, which exclude auto, gas station, building materials, and food and drinking services sales, jumped 0.4%.
The Empire Manufacturing Survey for May climbed to 20.1 (Briefing.com consensus 15.0) from the prior month's unrevised reading of 15.8.
The NAHB Housing Market Index for May ticked up to 70 (Briefing.com consensus 69) from a revised reading of 68 in April (from 69).
Business Inventories were flat in March (Briefing.com consensus +0.1%). The February reading was left unrevised at +0.6%.
The key takeaway from the report is that sales growth outpaced inventories growth, which is what businesses need to see to claim some pricing power.
On Wednesday, investors will receive several economic reports, including Housing Starts and Building Permits for April, Capacity Utilization and Industrial Production for April, and the weekly MBA Mortgage Applications Index.
Nasdaq Composite +6.5% YTD
Russell 2000 +4.2% YTD
S&P 500 +1.4% YTD
Dow Jones Industrial Average -0.1% YTD
Stocks Surrender Morning Gains, but Avoid Negative Finish
14-May-18 16:20 ET
Dow +68.24 at 24899.41, Nasdaq +8.43 at 7411.32, S&P +2.41 at 2730.13
https://www.briefing.com/investor/markets/stock-market-update/2018/5/14/stocks-surrender-morning-gains-but-avoid-negative-finish.htm
[BRIEFING.COM] The stock market began the week on a slightly higher note, but intraday action saw the major averages back off their opening highs. The S&P 500 added 0.1% after being up 0.5% in the early going. The Dow Jones Industrial Average outperformed, rising 0.3%.
Equities got off to an upbeat start thanks to an early rally among chipmakers. Qualcomm (QCOM 56.74, +1.51) was at the forefront of the early strength, responding to reports that Chinese regulators will reevaluate the company's offer to acquire NXP Semiconductors (NXPI 110.74, +11.73). The news came after President Trump voiced his desire to find a way to allow U.S. companies to do business with China's ZTE Corporation once again.
The outperformance in high-beta semiconductor names provided an early boost to the technology sector (unch), but large tech components had a mixed showing in the afternoon, pressuring the sector back to its flat line. The PHLX Semiconductor Index (+1.3%) remained strong until the close with Cavium (CAVM 78.18, +5.21) spiking 7.1% to lead the group higher.
Like technology, energy (+0.7%) and health care (+0.7%) outperformed from the start, but unlike technology, the two sectors remained strong until the close. Biotechnology contributed to the outperformance in health care, sending the iShares Nasdaq Biotechnology ETF (IBB 107.68, +1.10) higher by 1.0%. Meanwhile, the energy sector held the lead throughout the session even though crude oil retreated from its high. The energy component settled higher by 0.4% at $71.01/bbl after approaching the $71.25 area in morning trade.
The market's midday pullback developed as sectors like financials (-0.1%), industrials (-0.2%), and consumer staples (unch) refused to follow in the footsteps of influential groups that outperformed from the start. Industrials were pressured by relative weakness in transport stocks. The Dow Jones Transportation Average fell 0.4% after briefly climbing above its closing high from April.
Treasuries recorded losses across the curve with the 10-yr yield rising two basis points to 3.00%.
Market participants did not receive any economic data today, but tomorrow's session will feature several releases. April Retail Sales (Briefing.com consensus 0.3%), Retail Sales ex-auto (Briefing.com consensus 0.5%), and the May Empire Manufacturing survey (Briefing.com consensus 15.0) will be released at 8:30 ET while March Business Inventories (Briefing.com consensus 0.1%) and May NAHB Housing Market Index (Briefing.com consensus 69) will follow at 10:00 ET. The Net Long-Term TIC Flows report for March will be released at 16:00 ET.
Nasdaq Composite +7.4% YTD
Russell 2000 +4.3% YTD
S&P 500 +2.1% YTD
Dow Jones Industrial Average +0.7% YTD
InvestmentHouse - Stock Indices Set for a Short Test (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
- Rally takes a pause Friday after a solid week showing decent internals,
good enough leadership.
- Stock indices clear initial resistance, set for a short test.
- Earnings remain good enough but not exploding stocks higher.
On Friday, after 5 or 6 days of upside, the market rested. Nice moves off
support by all the indices with RUTX already bumping at the all-time highs.
Makes sense that they took a breather after the nice break higher, with some
decent volume as well, ahead of the weekend.
SP500 4.65, 0.17%
NASDAQ -2.09, -0.03%
DJ30 91.64, 0.37%
SP400 0.06%
RUTX 0.19%
SOX -0.75%
NASDAQ 100 0.16%
VOLUME: NYSE -8%, NASDAQ -4%
ADVANCE/DECLINE: NYSE +1.2:1, NASDAQ +1.2:1
The week continued the rally and put a stronger stamp on the bounce that
started two Thursdays back with the doji reversal off support on all the
indices. Good volume on a key break higher as the indices broke through
near resistance. SP500, DJ30, SP400 cleared the upper trendline in their
triangles/downward wedges. NASDAQ, RUTX cleared the April highs with RUTX
rallying to the prior all-time highs. Not huge volume all the way up, but
strong volume on the breaks through resistance. That works.
Leadership is solid enough. Not many huge moves on the session as many that
led the break higher took a day off. Others, however, jumped. Retail posted
excellent gains. HD broke free from the handle. TSCO did the same with a
2.68% gain. FOSL surged on the week with a big breakout. BBY jumped
Friday. Nice. China stocks had a great week, e.g. ATHM, BIDU, while others
posted decent Friday moves, e.g. BIDU, HTHT. Software was strong again if
not on Friday.
So, a bounce higher on the indices off support, good volume on the break
through resistance, more than enough volume. Not the strongest move ever,
but compared to what the market showed before, a rather impressive week.
Friday was a rest day. Likely there is more testing early next week, and
that is good. A couple more days off would be normal, and then the market
shows if it can make good on that break of resistance. Thus far the move
looks solid, and we will be looking to move in to more positions, some that
gapped away from us this week, after they test the initial move.
THE MARKET
CHARTS
RUTX: The small cap leadership continued through the week, and Thursday and
Friday RUTX bumped against the March and January highs. After 6 sessions
upside and a 66 point move to that resistance, a pause would be normal.
Looking for a flag test to form and then RUTX can take on the prior highs.
SP500: Broke over the April high as well as the upper trendline to the
triangle on the week, pausing for a rest Friday. Good initial move off the
200 day SMA and the bottom of the triangle, breaking through the upper
trendline. Now a pause after 6 days off the support and that should set
SP500 for a renewed move higher.
NASDAQ: A strong move on the week as well, coming off the lower trendline
from 2016, clearing the mid-April high. Actually showed above average
volume on the Wednesday break past the April peak. Friday was a day off on
lower trade. As with the other indices, a test for a couple more days puts
in a 1-2-3 test and it is ready for a new upside leg in this move.
DJ30: Broke through the 50 day MA's and the upper trendline to the downward
wedge Wednesday, and continued upside through Friday. Volume was no great
shakes, but DJ30 moved through the mid-April peak, taking out the next
important resistance. Not a hugely powerful move, but breaking some
resistance, following the other indices.
SP400: Doji Friday after breaking higher the prior Friday and rallying
through Thursday. Cleared the 50 day MA's, the upper trendline to the
triangle, and the April peak long the way. Not as powerful as RUTX, but
knocking down the resistance as it finds it.
SOX: Took Friday off after breaking through the 50 day MA Thursday in a
6-session rally. That pushed SOX to the mid-April high and back in the old
channel from late 2017 into 2018. Recovered, but not much of a pattern.
LEADERSHIP
Chips: Hard to call this a leadership group right now as there are not that
many pushing to higher highs, but it is an important group and so worth a
look. MU moved up to the 50 day SMA late week, but still no volume. LRCX
is not bad given an inverted head and shoulders/ABCD pattern. AVGO is in a
trading range. QRVO is pausing after a 2-week move straight up. VSH is
testing a nice break higher. Some good moves, but again, not a huge area of
leaders.
China: Solid moves last week with some taking a pause Friday, e.g. BABA,
BZUN, WUBA. ATHM surged then rested Friday. BIDU, HTHT added some more
upside through Friday. Solid group.
FAANG: A week that saw some FAANG stocks renew. GOOG was one with a solid
surge on the week though flattish Friday. FB surged nicely on the week.
AAPL was off Friday but a steady rise on the week. AMZN is over the 10 day
EMA but very sluggish. NFLX is the same way, easing to test the 10 day EMA.
Oil stocks: Mostly an upside week as stocks started moving higher out of
patterns or continued moves, but it was back and forth each session and the
gains were still overall modest. SLB gapped out of its handle, but could go
no farther. HAL still in the lateral move. ESV enjoyed a strong week.
PTEN up slowly along the 10 day EMA. NBR stuck in a lateral move. Offshore
drillers were off Friday, but broke higher on the week, e.g. RIG, DO.
Retail: Well, Thursday I called the group unremarkable, then Friday there
were some good breaks. HD, TSCO jumped for us. BBY started breaking
higher. Nice. RH testing late week. COST, ROST not bad but still stuck in
a lateral range.
Healthcare: The Trump healthcare proposals gave these stocks a rush Friday.
We will see if they can sustain the momentum. ESRX, UNH, DVA, BIIB look
interesting.
MARKET STATS
DJ30
Stats: -2.09 points (-0.03%) to close at 7402.88
Volume: 2.08B (-3.55%)
Up Volume: 925.67M (-604.33M)
Down Volume: 1.12B (+445.26M)
A/D and Hi/Lo: Advancers led 1.19 to 1
Previous Session: Advancers led 1.58 to 1
New Highs: 151 (-25)
New Lows: 49 (+7)
S&P
Stats: +4.65 points (+0.17%) to close at 2727.72
NYSE Volume: 709.964M (-7.65%)
A/D and Hi/Lo: Advancers led 1.24 to 1
Previous Session: Advancers led 2.54 to 1
New Highs: 118 (-21)
New Lows: 27 (-4)
SENTIMENT
VIX: 12.65; -0.58
VXN: 16.19; -0.19
VXO: 12.57; -0.64
Put/Call Ratio (CBOE): 0.98; +0.17
Bulls and Bears:
Of COURSE bulls fell the past two weeks as the market started to rebound.
That is how this works, i.e. an inverse relationship.
Bulls: 43.1 versus 43.6 versus 48.0
Bears: 20.6 versus 20.8 versus 19.6 versus 19.6
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: 43.1 versus 43.6
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: 20.6 versus 20.8
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: 2.97% versus 2.966%. Closed over 3% Wednesday, but faded. Bouncing
back and forth the past two weeks just below the 50 day MA, and looks,
frankly, as if TLT wants to break higher. Does not make sense in terms of a
strengthening economy when rates should rise and bond prices should fall.
Nonetheless the bond market has the look it might try to break higher, and
that is a market against a new breakout in the stock market if indeed bonds
do break higher.
Historical: the last sub-2% rate was in November 2016 (1.867%). 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% versus 2.801% versus 2.805% versus 2.775% versus 2.812% versus 2.806%
versus 2.781% versus 2.739% versus 2.714% versus 2.781% versus 2.775% versus
2.854% versus 2.813% versus 2.814% versus 2.881% versus 2.90% versus 2.852%
EUR/USD: 1.19411 versus 1.1913. After 3 weeks of a steep decline, the euro
recovered some ground Wednesday to Friday, though could only manage a bounce
to the 10 day EMA.
Historical: 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: 109.384 versus 109.40. After a rally into May, the dollar is
working laterally below the 200 day SMA. It looks to be consolidating the
move higher to set up for a run at the 200 day.
Historical: 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 versus
107.362 versus 107.267 versus 106.882 versus 106.873 versus 107.09 versus
107.16 versus 106.939 versus 107.11 versus 106.816 versus 106.797 versus
105.901 versus 106.286 versus 106.81 versus 105.397 versus 105.473 versus
104.789 versus 104.829 versus 105.892 versus 106.478 versus 105.945 versus
105.946
Oil: 70.70, -0.66. Faded Friday after a week of continued upside along the
10 day EMA.
Gold: 1320.70, -1.60. Gold held the 200 day SMA the past 2 weeks, bounced
sharply Thursday. Friday a modest loss but gold is holding support and
setting up a bounce upside.
MONDAY
The stock indices made good on the reversals off support, moving through
near resistance last week with RUTX indeed already bumping at the prior
all-time highs. The pause Friday was logical as previously noted, and a
couple of days rest would work to rejuvenate the move and help it continue.
There was some better volume and some better breadth while leadership is
relatively solid. Thus we anticipate more upside and look to pick up more
solid plays as they present themselves.
As is usually the case with good moves, you cannot enter all the positions
you wanted. They either creep higher on low trade or they gap and rally
away from you. Or they don't move at all. The cool thing about continuing
moves is you get a second chance at those when they test the initial break.
Thus, after a bit more rest to start the week, when stocks resume the move
we want to let the current positions ride and then when new stocks break
higher, as long as the internals remain improved, pick up new positions.
Have a great weekend!
Wall Street Locks In Big Weekly Gains
11-May-18 16:30 ET
Dow +91.64 at 24831.17, Nasdaq -2.09 at 7402.89, S&P +4.65 at 2727.72
https://www.briefing.com/investor/markets/stock-market-update/2018/5/11/wall-street-locks-in-big-weekly-gains.htm
[BRIEFING.COM] Equities ticked higher on Friday, locking in big gains for the week, as a positive performance from the health care sector narrowly outweighed a modest pullback from the information technology group. The S&P 500 and the Dow added 0.2% and 0.4%, respectively, while the tech-heavy Nasdaq underperformed, closing a tick below its flat line. All three indices finished with weekly gains of more than 2.0%.
The market drifted flat to slightly higher for the bulk of Friday's session, but volatility picked up briefly in the afternoon when President Trump unveiled a blueprint for lowering drug prices. The president plans to increase competition within the drug space and to change rules that have allowed some drugmakers to game the system. The blueprint lacked many details, however, prompting a sigh of relief from investors, who were worried about the possibility of imminent regulation. Health-related names rallied into the close, leaving the S&P 500's health care sector with a gain of 1.5%.
Telecom services was the only group to outperform health care on Friday, largely thanks to Verizon (VZ 48.62, +1.42), which rallied after JPMorgan upgraded shares to 'Overweight' from 'Neutral'; the telecom services group finished with a gain of 2.1%, while Verizon shares ended higher by 3.0%.
The only other sectors to finish in the green were industrials, consumer discretionary, and utilities, but their gains were modest at 0.2% apiece. On the downside, six sectors finished in the red, but no group lost more than 0.5%. The technology group was among the worst performers, closing lower by 0.3%, which posed a problem for the broader market given the group's huge influence; technology is the top-weighted S&P 500 sector, representing around a quarter of the broader market alone.
Shares of chipmaker NVIDIA (NVDA 254.53, -5.60) declined 2.2%, retreating from an all-time high, amid a "sell the news" response to the company's first quarter results, which came in better-than-expected. Separately, Apple (AAPL 188.59, -0.72) shares broke their nine-session winning streak, slipping 0.4%, and shares of Symantec (SYMC 19.52, -9.66) plunged 33.1% after the company announced that it has relayed concerns from an ex-employee to the SEC.
Outside of equities, U.S. Treasuries finished Friday on a flattish note, with the benchmark 10-yr yield holding steady at 2.97%. Meanwhile, WTI crude futures declined 0.9% to $70.70 per barrel, slipping from a three-and-a-half year high, and the U.S. Dollar Index dropped for the third day in a row, slipping 0.2% to 92.41.
Reviewing Friday's economic data, which was limited to April Import/Export Prices and the preliminary reading of the University of Michigan Consumer Sentiment Index for May:
Import prices excluding oil rose 0.2% in April after rising a revised 0.1% in March (from +0.2%). Export prices excluding agriculture increased 0.7% after holding flat last month (revised from -0.1%).
The key takeaway from the report is that overall import price pressures moderated on a year-over-year basis while nonfuel import prices remain at palatable levels on a year-over-year basis.
The preliminary reading of the University of Michigan Consumer Sentiment Index for May held steady at 98.8 (Briefing.com consensus 98.0).
The key takeaway from the report is that there was some slippage in income expectations and a small uptick in the one-year inflation expectation to 2.8% from 2.7%.
Investors will not receive any economic data on Monday.
Nasdaq Composite: +7.2% YTD
Russell 2000: +4.6% YTD
S&P 500: +2.0% YTD
Dow Jones Industrial Average: +0.5% YTD
Week In Review: Buyers Re-emerge Following Q1 Earnings Season
Buyers returned to the market this week following a three-week absence during the thick of the first quarter earnings season. The S&P 500, the Dow, and the Nasdaq finished with sizable weekly gains, adding between 2.3% and 2.7% apiece -- enough to put the S&P 500 and the Dow back into positive territory for the year (+2.0%, +0.5% YTD). The Nasdaq is now up 7.2% year-to-date.
The stock market got off to a slow start this week as investors digested President Trump's decision to pull the U.S. out of the Iran nuclear agreement and restore the "highest level of economic sanctions" against Iran. The president was scolded by European allies, which wanted the U.S. to remain in the agreement, while Iran's response was more violent with lawmakers burning the American flag in parliament.
Tensions in Middle East were further escalated later in the week when Israel struck nearly all of Iran's military infrastructure in Syria in response to an Iranian missile attack on Israeli-held territory.
Outside of a brief pause, stocks had a mostly muted reaction to the headlines, but crude oil futures took off, with WTI crude establishing a new three-and-a-half year high ($71.26/bbl), as the restoration of U.S. sanctions on Iran -- which is OPEC's third-largest oil exporter -- and the looming threat of conflict within the oil-rich region prompted investors to bet on a disruption to crude supply on the global market.
The S&P's energy sector benefited from the rise in oil prices, adding 3.8% this week, but the industrials, technology, and financials sectors finished with similar weekly gains, adding between 3.4% and 3.6%. In total, nine sectors finished the week in the green, while two -- consumer staples (-0.5%) and utilities (-2.3%) -- finished in the red.
Stocks started taking off on Wednesday and carried that momentum into Thursday's session; the S&P 500 added 1.9% in those two days alone, catapulting above its 50-day moving average to a nearly two-month high. Technology shares rallied over that two-day stretch, reminiscing last year's tech-charged surge, with Apple (AAPL) extending its streak of record closes to five in a row on Thursday (the streak was then broken with a small loss on Friday).
Investors received some important inflation data on Thursday -- namely, the Consumer Price Index for April -- which helped further fuel the bullish bias, coming in slightly below estimates (+0.2% actual vs +0.3% Briefing.com consensus), and thereby tempering concerns that the Fed might have to be more aggressive in its path to normalization.
Overseas, the Bank of England voted 7-2 in favor of keeping its official bank rate and its asset purchase program unchanged on Thursday, but BoE Governor Mike Carney added that interest rates will likely go up by the end of the year. Separately, President Trump announced that his summit with North Korean Leader Kim Jong Un will be held on June 12 in Singapore, a positive stride in the quest for global peace.
The stock market ended the week with a flat performance on Friday. Volatility picked up temporarily in the afternoon when President Trump released a blueprint for lowering drug prices, but order was restored after it became clear that the blueprint still lacked many specific details.
Wall Street Rallies for Second Consecutive Session
10-May-18 16:30 ET
Dow +196.99 at 24739.53, Nasdaq +65.07 at 7404.98, S&P +25.28 at 2723.07
https://www.briefing.com/investor/markets/stock-market-update/2018/5/10/wall-street-rallies-for-second-consecutive-session.htm
[BRIEFING.COM] Stocks had another strong outing on Thursday, their second in a row, lifting the S&P 500 to a nearly two-month high. The benchmark index finished the session higher by 0.9% and is now about 45 points above its 50-day moving average. The Dow and the Nasdaq also closed with comfortable gains, adding 0.8% and 0.9%, respectively, while the Russell 2000 advanced 0.5%.
The market was firing on all cylinders, with all 11 S&P sectors finishing in the green. Telecom services (+1.9%), utilities (+1.3%), health care (+1.3%), and information technology (+1.3%) led the charge, while consumer discretionary (+0.4%) lagged a bit as retailers and Amazon (AMZN 1609.08, +1.08) underperformed. The other groups settled with gains between 0.6% and 1.0%.
Within the tech space, Apple (AAPL 190.04, +2.68) -- the S&P 500's largest component by market cap -- jumped 1.4% on Thursday, securing its ninth consecutive advance and a new record high. Other tech giants -- including FAANG stocks Facebook (FB 185.53, +2.87) and Alphabet (GOOG 1097.57, +14.81) -- also showed notable strength, reminiscing last year's tech-charged rally.
Inflation data -- namely, the Consumer Price Index for April -- helped fuel buying on Thursday, coming in slightly below estimates, and thereby tempering concerns that the Fed might have to be more aggressive in its path to normalization. The weekly Initial Claims report added to that upbeat narrative, pointing to a still-humming job market.
Overseas, the Bank of England voted 7-2 in favor of keeping its official bank rate and its asset purchase program unchanged, but BoE Governor Mike Carney added that interest rates will likely go up by the end of the year. In the Middle East, Israel struck nearly all of Iran's military infrastructure in Syria overnight in response to an Iranian missile attack on Israeli-held territory.
Also of note, President Trump said his summit with North Korean Leader Kim Jong Un will be held on June 12 in Singapore.
Treasury yields moved mostly lower on Thursday as bonds advanced for the first time this week. The yield on the benchmark 10-yr Treasury note dropped below the psychologically important 3.00% mark, losing three points to finish at 2.97%. The 2-yr yield ticked higher though, closing up one basis point at 2.54%.
The S&P 500, the Dow, and the Nasdaq hold week-to-date gains between 2.0% and 2.7% going into Friday's session, on course for their best week since early March.
Reviewing Thursday's economic data, which included the April Consumer Price Index, weekly Initial Claims, and the April Treasury Budget:
Total CPI increased 0.2% (Briefing.com consensus +0.3%) in April, while core CPI, which excludes food and energy, rose 0.1% (Briefing.com consensus +0.2%). On a year-over-year basis, total CPI is up 2.5% (vs +2.4% in March) and core CPI is up 2.1% (vs +2.1% in March).
The key takeaway from the report is that the CPI and core CPI headlines were weaker than expected, which helped temper concerns about the potential for the Fed to be more aggressive than expected.
The latest weekly initial jobless claims count totaled 211,000, while the Briefing.com consensus expected a reading of 220,000. Today's tally was unchanged from the prior week's unrevised count of 211,000. As for continuing claims, they declined to 1.790 million from a revised count of 1.760 million (from 1.756 million).
Since there was no change in initial claims from the prior week, it's fair to say that there was no change in the key takeaway from the report, which is that the low level of claims continues to underscore a condition of tightening supply in the labor market.
The Treasury Budget for April showed a surplus of $214.3 billion versus a surplus of $182.4 billion for the same period a year ago.
The Treasury Budget data is not seasonally adjusted, so the April surplus cannot be compared to the $208.7 billion deficit for March.
On Friday, investors will receive April Import/Export Prices and the preliminary reading for the University of Michigan Consumer Sentiment Index for May (Briefing.com consensus 98.0).
Nasdaq Composite: +7.3% YTD
Russell 2000: +4.4% YTD
S&P 500: +1.9% YTD
Dow Jones Industrial Average: +0.1% YTD
Energy Leads Broad-Based Rally
09-May-18 16:25 ET
Dow +182.33 at 24542.54, Nasdaq +73.00 at 7339.91, S&P +25.87 at 2697.79
https://www.briefing.com/investor/markets/stock-market-update/2018/5/9/energy-leads-broadbased-rally.htm
[BRIEFING.COM] Equities made a strong move higher on Wednesday, with the S&P 500 and the Nasdaq climbing 1.0% apiece, and the Dow advancing 0.8%.
The day began on a mildly higher note as investors continued to digest President Trump's Tuesday decision to withdraw the U.S. from the Iran nuclear deal. However, buying picked up notably around midday as the S&P 500 started to pull away from its 50-day moving average -- which, up until that point, had been an area of resistance.
The energy sector led the charge on Wednesday, closing atop the sector standings -- by a wide margin -- with a gain of 2.0%. A rebound in the crude oil futures market, which returned to a three-and-a-half year high after tumbling on Tuesday in a "sell the news" trade, fueled the energy rally; WTI crude futures settled higher by 2.9% at $71.10 per barrel. President Trump's decision to restore the "highest level of economic sanctions" against Iran, OPEC's third-largest oil exporter, will likely decrease crude supply on the global market -- which, in turn, should force prices higher.
In total, nine of eleven S&P sectors closed in the green. In addition to energy, the financials (+1.5%), technology (+1.4%), materials (+1.4%), and industrials (+1.1%) sectors added more than 1.0% apiece. On the downside, the lightly-weighted utilities and telecom services sectors finished at the back of the pack with losses of 0.8% and 1.1%, respectively.
The consumer staples sector closed a tick higher, but a ways behind the broader market. Walmart (WMT 83.06, -2.68) weighed on the group, losing 3.1%, after the company agreed to buy a 77% stake in Indian e-commerce giant Flipkart for $16 billion -- which qualifies as Walmart's largest acquisition deal ever.
On the earnings front, Walt Disney (DIS 99.97, -1.82) beat both earnings and revenue estimates for its fiscal second quarter, but continued concerns about the ESPN business and the fate of the company's deal to acquire the entertainment assets of 21st Century Fox (FOXA 37.70, -0.29) overpowered the good earnings news; DIS shares finished lower by 1.8%.
U.S. Treasuries ended Wednesday on a broadly lower note, pushing yields higher across the curve. The yield on the benchmark 10-yr Treasury note returned to the psychologically important 3.00% mark, finishing four basis points above its Tuesday close, while the 2-yr yield ticked up one basis point to 2.53% -- a fresh cycle high.
Reviewing Wednesday's economic data, which included the April Producer Price Index, March Wholesale Inventories, and the weekly MBA Mortgage Applications Index:
The Producer Price Index for final demand increased 0.1% (Briefing.com consensus +0.2%), while the final demand index, less food and energy, rose 0.2%, as expected.
The key takeaway from the report is that there was a moderation in the producer price inflation trend in April, yet it wasn't significant enough to alter the Federal Reserve's perspective pertaining to the presumed path for inflation and monetary policy.
Wholesale inventories increased 0.3% in March (Briefing.com consensus +0.5%) on top of a downwardly revised 0.9% increase (from +1.0%) in February.
The market is known for showing a limited reaction to the release, since the full business inventories report is released a few days later.
The weekly MBA Mortgage Applications Index declined by 0.4%.
On Thursday, investors will receive the April Consumer Price Index (Briefing.com consensus +0.3%), weekly Initial Claims (Briefing.com consensus 220K), and the April Treasury Budget.
Nasdaq Composite: +6.3% YTD
Russell 2000: +3.9% YTD
S&P 500: +0.9% YTD
Dow Jones Industrial Average: -0.7% YTD
Flat Finish Following Trump Decision on Iran Nuclear Deal
08-May-18 16:30 ET
Dow +2.89 at 24360.21, Nasdaq +1.69 at 7266.91, S&P -0.71 at 2671.92
https://www.briefing.com/investor/markets/stock-market-update/2018/5/8/flat-finish-following-trump-decision-on-iran-nuclear-deal.htm
[BRIEFING.COM] The stock market ended Tuesday little changed as investors chewed on President Trump's decision to pull the U.S. out of the Iran nuclear agreement all the way through the closing bell. The Dow and the Nasdaq finished a tick higher, while the S&P 500 finished a tick lower. Small caps rallied though, pushing the Russell 2000 higher by 0.5%.
Stocks held steady ahead of the president's afternoon announcement, as investors weren't entirely sure as to what he would decide to do, but volatility picked up in the aftermath. Mr. Trump has frequently criticized the Iran nuclear deal, which lifted economic sanctions against Iran in exchange for limits on the country's nuclear program, and ultimately decided to reimpose the "highest level of economic sanctions" against Iran, effective immediately, because he felt the country was not honoring the agreement.
European allies -- including France, Germany, and the U.K. -- had encouraged Mr. Trump to stay in the agreement, which they signed alongside the U.S., Russia, and China back in 2015, and expressed regret following the president's decision, adding that they remain committed to the deal.
Crude oil futures and energy names were the focus on Wall Street, as U.S. sanctions on Iran -- which is OPEC's third-largest oil producer -- will undoubtedly reduce supply on the global crude oil market. WTI crude futures had a counter-intuitive reaction -- likely the result of a "buy the rumor, sell the news" trade -- and retreated from a more than three-year high, dropping 2.3% to $69.08 per barrel. The S&P's energy sector, meanwhile, was up and down following the decision, but eventually settled atop of the sector standings with a gain of 0.8%.
The financials and industrials sectors finished right behind energy, adding 0.7%, and information technology was the only other group to settle in the green, ticking up 0.3%. Within the financial space, Citigroup (C 71.00, +2.50) was the top-performer, rallying 3.7%, following news that activist investor ValueAct has built a $1.2 billion stake in the company. A rise in Treasury yields also helped the heavily-weighted financial space; the yield on the benchmark 10-yr Treasury note rose two basis points to 2.97%.
On the downside, seven groups finished in the red, with utilities (-2.5%) and telecom services (-1.3%) closing at the bottom of the sector standings; however, no other group lost more than 0.8%. The consumer discretionary space declined 0.5%, with Comcast (CMCSA 30.59, -1.80) showing particular weakness, losing 5.6%, following reports that it's planning a cash bid for the entertainment assets of 21st Century Fox (FOXA 37.99, -0.05) in an attempt to upend Disney's (DIS 101.79, -0.69) pursuit of those assets.
As for economic data, investors received just one report on Tuesday -- the March Job Openings and Labor Turnover Survey -- which showed that job openings increased to 6.550 million from a revised 6.078 million (from 6.052 million) in February. Wednesday's session will feature the release of the Producer Price Index for April (Briefing.com consensus +0.2%), Wholesale Inventories for March (Briefing.com consensus +0.5%), and the weekly MBA Mortgage Applications Index.
Energy Reversal Nearly Upends Positive Day
07-May-18 16:30 ET
Dow +94.81 at 24357.32, Nasdaq +55.60 at 7265.22, S&P +9.21 at 2672.63
https://www.briefing.com/investor/markets/stock-market-update/2018/5/7/energy-reversal-nearly-upends-positive-day.htm
[BRIEFING.COM] Stocks were range-bound for much of Monday's session, cruising towards what looked like an easy victory, but news that President Trump will announce his decision regarding the Iran nuclear deal on Tuesday prompted a wave of selling in the late afternoon. The market bounced back a bit following the initial reaction, but still finished off its highs of the day. The S&P 500 and the Dow settled with gains of 0.4% apiece, while the tech-heavy Nasdaq and the small-cap Russell 2000 ended with respective gains 0.8% and 0.9%.
The energy sector led the broader market higher out of the gate, moving in tandem with crude oil prices, which hit their highest level in three-and-a-half years; the energy sector was up 2.4% at its highest mark of the day, while WTI crude futures were up 1.6% at $70.81/bbl. However, those gains were completely unraveled after President Trump tweeted that he'll be announcing his decision to either stay or pull out of the Iran nuclear deal at 2:00 PM ET on Tuesday. The president is expected to pull out of the deal -- thereby restoring sanctions on Iran, a top oil exporter -- but that's not for certain.
Energy eventually finished with a gain of 0.2%, closing near the center of the sector standings. The top-weighted technology sector (+0.8%) trailed energy in second place through much of the session and took over the top spot on the leaderboard after energy fell. Within the tech space, Apple (AAPL 185.16, +1.33, +0.7%) climbed for the sixth session in a row, settling at a new all-time high, and NVIDIA (NVDA 248.68, +9.62, +4.0%) soared after Bank of America/Merrill Lynch maintained its 'Buy' rating ahead of Thursday's earnings report.
The financials (+0.7%) and industrials (+0.7%) groups closed right behind technology at the top of the sector standings, while the other advancing sectors finished with gains between less than 0.1% and 0.4%. On the downside, the health care (-0.1%), consumer staples (-0.6%), utilities (-0.5%), and telecom services (-0.6%) sectors -- all of which are countercyclical groups -- settled in negative territory.
Elsewhere, U.S. Treasuries began the week on a modestly lower, but mostly quiet, note amid a lack of notable economic data; the yield on the benchmark 10-yr Treasury note advanced one basis point to 2.95%.
Monday's lone economic report -- the Consumer Credit report for March -- showed an increase of $11.7 billion (Briefing.com consensus $16.1 billion). The key takeaway from the report is that there was a decline in outstanding revolving credit for the second straight month, which reflects a propensity by consumers to pay down debt in a rising interest rate environment. That inclination helps explain why consumer spending growth was lackluster in the first quarter.
Nasdaq Composite: +5.2% YTD
Russell 2000: +2.8% YTD
S&P 500: UNCH YTD
Dow Jones Industrial Average: -1.5% YTD
InvestmentHouse - Another Rally With No Teeth? (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
- Stock indices build on the Thursday reversal, posting very nice percentage
gains on virtually no volume. Another rally with no teeth?
- Some nice leaders post good moves. Others we are still waiting on.
- Jobs report stronger but misses, and some say that is good because of the
Fed. Really? Still on that?
- Buffett bought AAPL in Q1, lets it 'slip' on a CNBC interview, lemmings
rush to follow the 'teacher.' Yes, he taught them a lesson, but they are
not getting it.
- Indices did what they needed to do at support. Now can some volume
actually show up to make these patterns work instead of fizzle?
Those Thursday doji at key support levels for the index bases led to a nice
price advance Friday as the indices try to make good on holding support and
holding their bases. Solid percentage gains for the indices as they
launched higher off support, though volume came in very, very light for the
session. Oh great, here we go again: upside accompanied by no volume.
SP500 33.69, 1.28%
NASDAQ 121.47, 1.71%
DJ30 332.36, 1.39%
SP400 1.33%
RUTX 1.23%
SOX 2.31%
NASDAQ 100 1.89%
VOLUME: NYSE -10%; NASDAQ -13%. Ah yes, once again volume declines,
precipitously and below average as stocks rallied. Again volume is missing
on the upside.
ADVANCE/DECLINE: NYSE +3:1, NASDAQ +2.7:1. Very solid breadth as the
entire market rallied. Buying across the board, but not many buyers.
Remember, the indices are in a basing process with SP500, DJ30, SP400 in
triangles, NASDAQ in a 3+ month trading range but still holding a 2+ year
trendline, while SOX and RUTX are in ranges as well. All tested lows or
trendlines in their bases and Friday all started to bounce. You WANT to see
better volume on the upside to give even the bounces some credibility as
well as show continuing accumulation, something that has to occur in a base
or else when it comes time to breakout all it does is jump up, fizzle, and
then fall.
Thus, the lack of volume keeps this in a bounce classification, and frankly
you have to see what happens Monday to see if there is something there other
than a Friday short squeeze. Yes, there are plenty of indications it is not
just a short squeeze, e.g. holding support, good patterns, decent earnings
(okay, good earnings), and it could make good on the volume later. Why?
Because if this is a real move there is not just one entry. If they are
still working we can move in with more positions Monday, and again when they
test the initial move off the support at the bottom of the patterns and
ranges.
A bit of a test that holds is a good entry point for more positions as many
stocks gapped higher Friday. If the move was on solid volume in a stock in
a good pattern, you can still enter if the upside continues. Weaker volume,
not so interested.
NEWS/ECONOMY
What had stocks so ginned up they rallied on no volume? Buffett let 'slip'
Berkshire had acquired 75M AAPL shares in Q1. Of course everyone rushed in;
if Warren bought they should buy. So, Buffett once again, after he took his
position, let out that he had done so, knowing all of the lemmings would
rush to follow and drive up the value of his shares. Worked like a charm.
They will never learn that Buffett, the 'investor, teacher, icon' as CNBC's
special calls him, is simply playing by his book just as Trump plays by his
book. The willing dupes were there yet again, and the entire market was up
in part because of Buffett's 'belief in America.'
Seeing through the Mueller investigation? It probably did not hurt that the
judge overseeing the Mueller case against Mr. Manafort is considering
dismissing the charges altogether, questioning Mueller's areas of
investigation. "I don't see how this indictment has anything to do with
anything the special prosecutor is authorized to investigate," noted the
judge. Could it be the courts are going to stand up to the unending
nonsense on this matter when so many other clearly prosecutable actions have
taken place before any of the areas under investigation were claimed to have
occurred? The market perhaps took some heart in the possibility of the
courts curtailing this. Perhaps.
Jobs Report not so good and thus was quite good.
With the Fed on hiking trail there is still the idea that economic weakness
is goodness. Futures bounced on thoughts, uttered by the CNBC morning
blabbermouth (man I miss Mark Haynes), that Fed Chair Powell should consider
perhaps 3 rate hikes in 2018 were unnecessary. There you have it: no need
for as many rate hikes.
Thus, a jobs report that was not that strong was a reason to at least not
sell stocks. When the bell rang, after falling to the open stocks jumped
upside. Jobs miss, Fed should reduce hikes, Buffett buying AAPL (back in
Q1 -- think he is buying now that he let everyone else know?). On Friday
that was reason to buy.
The April jobs report, however, was a miss though the jobs mix continues
MUCH improved over the Obama years that were dominated by government,
restaurant and bar hiring, and retail hiring.
Jobs: 164K vs 190K exp vs 132K prior (from 103K)
Unemployment 3.9 vs 4.0 ex vs 4.1 March. Lowest since 12/2000
Wages: 0.15% vs 0.2% expected. 2.6% year/year. Not that great.
U6: 7.8% (lowest since 12/2001)
Participation: 62.8%. Not rising this month, unable to move past that 63%
level.
Labor force: -236K and thus the 3.9% unemployment rate
Workweek: still at 34.5
Where the Jobs are:
Prof/Business: 54K
Manufacturing: 24K
Construction: 17K
Healthcare: 24K
Mining: 8K
Information: 7K
Government: -10K
Wholesale trade: -10K
Again, a decent job mix once more, but not an overall strong report. But
again, perhaps the Fed will go easy on the hikes? Hmm. Seemed to work for
Friday as one of the catalysts upside off the support.
THE MARKET
New break higher off of support in the patterns or at the trendlines as the
case may be. No volume, good breadth, good initial move. Now we see if
they can hold the moves.
CHARTS
SOX: Biggest move so starting here. Also, they were the most oversold
after the 8 week selloff from the March high. Two weeks at the 200 day SMA
then a big bounce Friday. Tried this a week before and didn't even last a
session as the gap higher was sold. Not bad in terms of the bounce. The
overall pattern is still lacking as SOX formed a head and shoulders and
broke lower. As is often the case in these patterns, it has not broken
down. Lots of rebounding chips the past 1 to 3 sessions, but a lot are just
rebounds that turned higher from the teeth of selling. Thus, we see if
chips can show the right stuff.
NASDAQ: Bouncing off the trendline from early 2016 after the Thursday doji
at the level on good volume. Made it to the 50 day SMA, closing just over
that level. Volume backed off to below average. Perhaps the reversal was
enough. In any event, held the trendline as it did two weeks back, bouncing
again. This time NASDAQ needs to put some distance on the trendline, unlike
the last attempt in the first two weeks of April.
SP500: Triangle was getting to the point so to speak, where it would show
its break higher or break lower. Nice doji reversal Thursday, nice solid
upside break and rally Friday to the 50 day EMA. That puts it about halfway
to the upper trendline in the 3+ month triangle. Volume needs to come in
because on both Thursday and Friday it was nowhere as the move started. On
the breakout at 2700ish (closed at 2663) that is when it really needs to
show the volume.
DJ30: Same action as SP500, i.e. doji Thursday at the 200 day SMA followed
by a break higher Friday. DJ30 is still below the 50 day MA's at 24,500 and
the upper trendline in its triangle at 24,450. No volume here either, but
again, on the breakout that is where you want to see it.
RUTX: Surged back up through the 50 day MA's, helping that NYSE 3:1
breadth. Only index that did not come close to the 200 day SMA on the April
selling. Small caps showing relative strength is not a bad indication for
the economy and the market. Even as the economy moves through a slow patch.
If the small caps rally, that says well for the slow patch ending and the
economy to pick back up.
SP400: After the Thursday doji tapping right at the 200 day SMA on the low,
the midcaps rallied through the 50 day MA's as well. Already nearing the
upper trendline of the 3+ month triangle, and as with the other indices we
are watching to see the volume to see if it comes back in on the break
higher.
LEADERSHIP
Retail: Some nice patterns. After pulling back some, HD, COST are starting
to rebound. TSCO tested and looks good. RH jumped to a higher recovery
high on good volume. BBY has a very interesting pattern. TJX is testing the
50 day MA's. Definitely some good-looking possibilities.
Software: Moving up again. FFIV was off a bit Friday but had a great week.
GLUU exploded higher for a third session. RHT broke to a higher high Friday
after testing the 10 day EMA on the week. CRM showed good volume finally as
it works up the 10 day EMA. MSFT trying to come up off the 50 day MA but
not much volume. DATA tested after the big upside breakaway gap Thursday on
its earnings. Still a good group.
Oil: Remains looking solid in the patterns. MRO did make the break
Thursday, adding to it Friday. HAL in a nice doji test of the 10 day EMA in
a handle. SLB looks great in its handle. DO looks as if it might come back
around to a buy. PTEN had a decent week to the upside. SPN in a nice
handle.
China: BABA shot higher on tremendous volume on very good earnings. BIDU is
in a weeklong lateral gap test. HTHT jumped up off a 50 day MA test. Not
bad. WUBA looks good off its 10 day EMA test.
Semiconductors: Some started rallying earlier this week and continued
through Friday, e.g. SLAB, QRVO. Others are setting up interesting
patterns, e.g. AAOI, AMD. LRCX and MU are interesting as well. Others are
still struggling, e.g. MXWL, XLNX. Important group, good to see some
improving.
Drugs/Healthcare: SRPT exploded higher Friday out of a 2 month triangle.
IMMU in a nice test. VRX has tested and looks good to move higher. EXAS
looks good. Mixed but good sector.
Misc: FLIR surging off a test post breakout. PCTY gapping to a new high on
volume.
MARKET STATS
DJ30
Stats: +332.36 points (+1.39%) to close at 24262.51
Nasdaq
Stats: +121.47 points (+1.71%) to close at 7209.62
Volume: 2.02B (-12.87%)
Up Volume: 1.6B (+595.867M)
Down Volume: 393.13M (-866.107M)
A/D and Hi/Lo: Advancers led 2.71 to 1
Previous Session: Decliners led 1.79 to 1
New Highs: 93 (+32)
New Lows: 50 (-32)
S&P
Stats: +33.69 points (+1.28%) to close at 2663.42
NYSE Volume: 765.7M (-10.31%)
A/D and Hi/Lo: Advancers led 3 to 1
Previous Session: Decliners led 1.4 to 1
New Highs: 76 (+21)
New Lows: 65 (-56)
SENTIMENT
VIX: 14.77; -1.13
VXN: 18.41; -1.24
VXO: 15.26; -1.24
Put/Call Ratio (CBOE): 0.96; -0.06
Bulls and Bears:
Bulls bounced back 4.5 points after a precipitous decline. They are falling
hard, bouncing with quick sharp bounces, then falling again. Very similar to
the stock market action. Bears were lower but they are holding the bounce
higher into the 19's.
Bulls: 48.0 versus 43.6
Bears: 19.6 versus 19.8
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: 48.0 versus 43.6
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: 19.6 versus 19.8
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: 2.952% versus 2.948%. Bonds moved up to test the 50 day MA on the
week and closed just below that level Friday. Double bottom? About to find
out in how they react at the 50 day MA's.
Historical: the last sub-2% rate was in November 2016 (1.867%). 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% versus 2.801% versus 2.805%
versus 2.775% versus 2.812% versus 2.806% versus 2.781% versus 2.739% versus
2.714% versus 2.781% versus 2.775% versus 2.854% versus 2.813% versus 2.814%
versus 2.881% versus 2.90% versus 2.852%
EUR/USD: 1.19619 versus 1.1983. Euro dropped hard on the week through the
200 day SMA, trying to set up a bounce to test that break lower.
Historical: 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 versus 1.22698 versus 1.23073 versus
1.23234 versus 1.2406 versus 1.24494 versus 1.2351 versus 1.23301 versus
1.23467 versus 1.22478 versus 1.2342 versus 1.2287 versus 1.2304 versus
1.23782 versus 1.2392 versus 1.23412 versus 1.2305 versus 1.2305 versus
1.24017 versus 1.2411 versus 1.2344 versus 1.23187 versus 1.22822 versus
1.21894
USD/JPY: 109.08 versus 109.175. Dollar rallied on the week, tested
Thursday and Friday to the 20 day EMA, showing a doji. Looks as if it is
testing to size up the 200 day SMA just overhead at 110.38.
Historical: 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 versus
107.362 versus 107.267 versus 106.882 versus 106.873 versus 107.09 versus
107.16 versus 106.939 versus 107.11 versus 106.816 versus 106.797 versus
105.901 versus 106.286 versus 106.81 versus 105.397 versus 105.473 versus
104.789 versus 104.829 versus 105.892 versus 106.478 versus 105.945 versus
105.946
Oil: 69.72, +1.29. Oil broke to a higher rally high Friday.
Gold: 1314.70, +2.00. Fell to the 200 day SMA on the week, managed an ever
so slight bounce to end the week.
S&P Nearly Recoups Weekly Decline In Friday Rally
04-May-18 16:25 ET
Dow +332.36 at 24262.51, Nasdaq +121.47 at 7209.62, S&P +33.69 at 2663.42
https://www.briefing.com/investor/markets/stock-market-update/2018/5/4/s-and-p-nearly-recoups-weekly-decline-in-friday-rally.htm
[BRIEFING.COM] U.S. equities rallied on Friday following the publication of the monthly jobs report, with technology names leading the charge -- including Apple (AAPL 183.83, +6.94), which rallied 3.9% after Warren Buffet revealed his company, Berkshire Hathaway (BRK.B 195.64, +4.03), bought an additional 75 million shares of Apple in the first quarter. The Russell 2000 jumped 1.2%, the S&P 500 advanced 1.3%, the Dow climbed 1.4%, and the Nasdaq rose 1.7%.
Equity indices opened the session modestly lower, but things turned around quickly after the S&P 500 found support at its 200-day moving average. Stocks climbed steadily into the late afternoon, finishing near their best marks of the day. Friday's gains brought the S&P 500 and the Dow within 0.2% of their flat lines for the week and left the Nasdaq with a weekly gain of 1.3%.
The Employment Situation report for April was released on Friday morning, but didn't contain many surprises, reinforcing the notion that the Fed is on course for at least two more rate hikes this year. The report showed a lower-than-expected increase in nonfarm payrolls (164K actual vs 190K Briefing.com consensus), an in-line reading for average hourly earnings (+0.2% actual/Briefing.com consensus), and a lower-than-expected unemployment rate (3.9% actual vs 4.0% Briefing.com consensus).
Gains were broad-based on Friday, with all 11 S&P sectors settling in the green. The top-weighted technology sector (+2.0%) closed at the top of the day's leaderboard, but seven groups in total finished with gains of at least 1.0%. The energy and utilities sectors finished at the back of the pack, but still added 0.4%-0.5% apiece.
Several well-known consumer names rallied after reporting better-than-expected quarterly earnings and revenues, including Pandora (P 6.89, +1.14), GoPro (GPRO 5.45, +0.49), and Shake Shack (SHAK 55.95, +8.54), which spiked between 9.9% and 19.8%, and CBS (CBS 53.17, +4.43), which climbed 9.1%. However, V.F. Corp (VFC 76.27, -2.19) -- which owns brands like The North Face, Lee, Wrangler, JanSport, and Dickies -- declined 2.8% despite also beating top and bottom line estimates.
U.S. Treasuries saw some intraday movement on Friday, but ended mostly flat, with the yield on the benchmark 10-yr Treasury note closing unchanged at 2.94%. Meanwhile, WTI crude futures jumped 1.9% to $69.72/bbl, their highest close since November 2014, and the U.S. Dollar Index climbed 0.2% to 92.45 -- a new 2018 high.
In geopolitics, two days of trade negotiations between the U.S. and China ended without a deal, as expected, but the two sides did agree to keep talking.
Nasdaq Composite: +4.4% YTD
Russell 2000: +2.0% YTD
S&P 500: -0.4% YTD
Dow Jones Industrial Average: -1.9% YTD
Week In Review: Mixed Week Ends On A Positive Note
Equity indices finished the week mixed, with the S&P 500 and the Dow losing 0.2% apiece and the tech-heavy Nasdaq adding 1.3%. Investors digested the latest policy directive from the Fed, the Employment Situation report for April, and another big batch of corporate earnings -- including Apple's (AAPL) quarterly report.
The stock market kicked off the week on a lower note Monday, with telecoms leading the retreat after Sprint (S) and T-Mobile US (TMUS) agreed to an all-stock merger over the weekend. The deal, which capped four years of on-again, off-again talks, is aimed at creating a larger carrier to better compete with wireless giants AT&T (T) and Verizon (VZ).
Wall Street bounced back a bit on Tuesday, led by technology shares, which rallied ahead of Apple's quarterly earnings release. Apple's results crossed the wires on Tuesday evening, showing a better-than-expected bottom line. In addition, the tech giant raised its profit guidance for the current quarter, increased its share repurchase program by $100 billion, and raised its dividend by 16%.
Apple shares rallied more than 4.0% on Wednesday in reaction to the upbeat results/guidance, but the broader market struggled -- a somewhat concerning signal considering Apple was among the top performers during last year's rally and considering it's the largest component in the S&P 500 by market cap.
The Fed's latest policy directive was released on Wednesday afternoon, but contained few surprises. Fed officials unanimously decided to leave the federal funds target range unchanged at 1.50% to 1.75%, as expected. In addition, officials laid the groundwork for a rate hike at the June meeting and left the door open for another one to two hikes before the end of the year.
Equity indices shot lower at the start of Thursday's session, with the S&P 500 busting through its 200-day moving average, but eventually rebounded to finish little changed. Tesla (TSLA) received a lot of attention in the media on Thursday after its CEO, Elon Musk, unconventionally dismissed analysts' questions in the company's earnings call, calling them "boring."
The Employment Situation report for April crossed the wires on Friday morning, showing a lower-than-expected increase in nonfarm payrolls (164K actual vs 190K Briefing.com consensus), an in-line reading for average hourly earnings (+0.2% actual/Briefing.com consensus), and a lower-than-expected unemployment rate (3.9% actual vs 4.0% Briefing.com consensus).
The key takeaway from the report is that there weren't a lot of big surprises in it, which effectively means the Fed is apt to stay on course for at least two more rate hikes this year.
Apple reemerged in the headlines on Friday after Warren Buffet revealed his company, Berkshire Hathaway (BRK.B), bought an additional 75 million shares of Apple in the first quarter. Apple jumped 3.9% in reaction, leading a broad-based rally that made a significant dent in the S&P 500's weekly decline. The tech group was the top-performing sector on Friday, extending its weekly gain to 3.2%.
The technology sector closed at the top of the sector standings by a decent margin, while health care (-3.0%), telecom services (-4.6%), and consumer staples (-2.0%) finished at the back of the pack. In total, seven S&P 500 sectors settled the week in negative territory, while four groups settled in the green.
Flat Finish to Volatile Session Ahead of Jobs Report
03-May-18 16:30 ET
Dow +5.17 at 23930.15, Nasdaq -12.75 at 7088.15, S&P -5.94 at 2629.73
https://www.briefing.com/investor/markets/stock-market-update/2018/5/3/flat-finish-to-volatile-session-ahead-of-jobs-report.htm
[BRIEFING.COM] Stocks got off to a bad start on Thursday, but rebounded sharply in the afternoon to end the session little changed. The S&P 500 and the Nasdaq Composite settled a tick lower, losing 0.2% apiece, the Dow Jones Industrial Average finished flat, and the Russell 2000 underperformed, losing 0.5%.
It looked like things might get ugly shortly after the opening bell, as the S&P 500 quickly dropped below its 200-day moving average, losing as much as 1.6%. The financial sector led that initial slide, with AIG (AIG 51.94, -2.90) showing particular weakness after missing earnings estimates for the first quarter; AIG shares ended the session lower by 5.3%.
Stocks drifted near their lows of the day for a couple of hours before the technology and materials sectors led a sharp move higher. The tech group was helped by chipmakers, especially NVIDIA (NVDA 232.99, +6.68), which climbed 3.0% after being upgraded to 'Overweight' from 'Equal Weight' at Barclays. Meanwhile, the materials group did relatively well even though its top component by market cap -- DowDuPont (DWDP 63.47, -0.02) -- struggled to advance after releasing its first quarter earnings -- which came in better-than-expected. DWDP shares ended flat.
The S&P 500 did touch positive territory at the top of that intraday rally, but slipped into the close -- possibly due to the uncertainty surrounding Friday's release of the Employment Situation Report for April. The report always has market-moving potential, but it may carry some extra weight this time around considering Treasury yields aren't far off from multi-year highs. The benchmark 10-yr yield, for instance, finished at 2.95% on Thursday -- which is about eight basis points below the more than four-year high it hit last week.
Tesla (TSLA 284.45, -16.70) received a lot of attention in the media on Thursday after its CEO, Elon Musk, unconventionally dismissed analysts' questions in the company's earnings call, calling them "boring"; shares of Tesla ended lower by 5.6%. On the upside, shares of Kellogg (K 58.15, +1.50) and Kraft Heinz (KHC 54.95, +0.75) rallied 2.7% and 1.4%, respectively, after both companies reported better-than-expected earnings for the first quarter.
In the end, three S&P sectors finished Thursday in the green -- industrials (+0.2%), materials (+0.3%), and technology (+0.3%) -- while eight finished in the red. The heavily-weighted financials and health care groups were the weakest performers, losing 0.9% apiece, but no other laggard lost more than 0.4%.
Investors received a big batch of economic data on Thursday that included the preliminary readings for first quarter Productivity and Unit Labor Costs, the March Trade Balance report, weekly Initial Claims, March Factory Orders, and the ISM Services Index for April:
The preliminary unit labor costs rose 2.7% during the first quarter, while the Briefing.com consensus expected an increase of 3.0%. The preliminary productivity reading showed an increase of 0.7%, while the Briefing.com consensus expected an increase of 0.8%.
The key takeaway from the report is that productivity is improving, yet it is still running at relatively weak levels. On a year-over-year basis, productivity was up 1.3% versus the 0.7% annual average for 2007 to 2017. The long-term average from 1947 to 2017 is 2.1%.
The latest weekly initial jobless claims count totaled 211,000, while the Briefing.com consensus expected a reading of 220,000. Today's tally was above the unrevised prior week count of 209,000. As for continuing claims, they declined to 1.756 million from a revised count of 1.833 million (from 1.837 million).
The key takeaway from the report is that it continues to underscore a condition of tightening supply in the labor market.
The March trade balance showed a deficit of $49.0 billion (Briefing.com consensus -$49.8 billion). The February deficit was revised to $57.7 billion from $57.6 billion.
The key takeaway from the report is that it will continue to feed the Trump Administration's trade fire as goods deficits were recorded with China, the EU, Mexico, Japan, Germany, OPEC, and Canada.
The ISM Services Index for April slipped to 56.8 (Briefing.com consensus 58.3) from an unrevised reading of 58.8. in March.
The key takeaway from the report is that it will feed into the slowdown narrative that has been building with the flattening yield curve, even though there is still broad-based strength in the components that drive the overall index reading. Separately, all 18 non-manufacturing industries reported growth in April.
The Factory Orders report for March showed an increase of 1.6% (Briefing.com consensus +1.2%). The February reading was revised to +1.6% from +1.2%.
The key takeaway from the report is that it showed a dip in business spending in March, evidenced by the 0.4% decrease in orders for nondefense capital goods excluding aircraft.
Friday's lone economic report -- the Employment Situation report for April -- will be released at 8:30 AM ET.
Nasdaq Composite: +2.7% YTD
Russell 2000: +0.7% YTD
S&P 500: -1.6% YTD
Dow Jones Industrial Average: -3.2% YTD
Upbeat Apple Earnings Can't Uphold Broader Market
02-May-18 16:30 ET
Dow -174.07 at 23924.98, Nasdaq -29.81 at 7100.90, S&P -19.13 at 2635.67
https://www.briefing.com/investor/markets/stock-market-update/2018/5/2/upbeat-apple-earnings-cant-uphold-broader-market-.htm
[BRIEFING.COM] The major averages finished the midweek session on a lower note despite an upbeat quarterly earnings report from Apple (AAPL 176.57, +7.47) and a status quo directive from the Federal Open Market Committee. The S&P 500 and the Dow lost 0.7% apiece, while the tech-heavy Nasdaq declined 0.4%. Small caps advanced though, sending the Russell 2000 higher by 0.3%.
As expected, the Fed unanimously decided to leave the federal funds target range unchanged at 1.50% to 1.75% on Wednesday while laying the groundwork for a rate hike at the June meeting -- which would be the second rate increase of 2018. Following the policy directive -- which noted that inflation on a 12-month basis is expected to run "near" the Fed's 2.0% target over the medium term -- the market is still anticipating at least three rate hikes in total this year, with the chances of a fourth hike sitting near 50% (according to the fed funds futures market).
The S&P 500 briefly touched positive territory following the Fed's decision, reclaiming the modest loss it held throughout the morning, but soon moved sharply lower, notching new session lows along the way. The benchmark index never recovered from the late-afternoon drop and eventually finished near its worst mark of the day.
Wednesday's ending, while bitter, wasn't really all that surprising as equity futures struggled to take off overnight despite an upbeat earnings report from Apple -- the S&P 500's largest and most influential component -- which was released on Tuesday evening. Apple beat earnings estimates for its fiscal second quarter, raised its profit guidance for Q3, increased its share repurchase program by $100 billion, and raised its dividend by 16%. The tech giant's shares rallied 4.4% following the report, as one might expect, but the S&P's technology sector finished a tick lower.
Social media giant Facebook (FB 176.07, +2.21) did have a positive session though, adding 1.3%, after its rival Snap (SNAP 11.03, -3.10) missed revenue estimates and reported lower-than-expected daily active users (DAUs) for the first quarter; SNAP shares tumbled 21.9%, hitting a new all-time low.
In total, 10 of the 11 S&P groups finished Wednesday in the red, with financials (-1.2%), health care (-1.4%), consumer staples (-1.9%), and telecom services (-1.8%) leading the retreat. Gilead Sciences (GILD 66.88, -5.68) led the health care sector lower, dropping 7.8%, after reporting worse-than-expected earnings and revenues for Q1. Meanwhile, in the consumer staples group, CVS Health (CVS 65.94, -2.06) declined 3.0% despite beating Q1 earnings estimates and issuing upbeat guidance. Energy (+0.4%) was the only advancing sector.
U.S. Treasuries finished Wednesday on a modestly higher note, with yields slipping across the curve; the benchmark 10-yr yield declined one basis point to 2.96%. Meanwhile, the U.S. Dollar Index jumped 0.4% to 92.59, a fresh 2018 high, and WTI crude futures rallied 0.9% to $67.91 per barrel.
On the data front, the ADP National Employment report for April was released on Wednesday, showing an increase of 204,000 (Briefing.com consensus 225,000); the March reading was revised to 228,000 from 241,000. 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.
Looking ahead to Thursday, investors will receive a big batch of economic data that includes the preliminary readings for first quarter Productivity (Briefing.com consensus +0.8%) and Unit Labor Costs (Briefing.com consensus +3.0%), the March Trade Balance report (Briefing.com consensus -$49.8 billion), weekly Initial Claims (Briefing.com consensus 220K), March Factory Orders (Briefing.com consensus +1.2%), and the ISM Services Index for April (Briefing.com consensus 58.3).
Nasdaq Composite: +2.9% YTD
Russell 2000: +1.3% YTD
S&P 500: -1.4% YTD
Dow Jones Industrial Average: -3.2% YTD
Tech Sector Carries Market Ahead of Apple Earnings
01-May-18 16:30 ET
Dow -64.10 at 24099.05, Nasdaq +64.44 at 7130.71, S&P +6.75 at 2654.80
https://www.briefing.com/investor/markets/stock-market-update/2018/5/1/tech-sector-carries-market-ahead-of-apple-earnings.htm
[BRIEFING.COM] Strength in technology shares carried the broader market to a modest victory on Tuesday, leaving the major averages at their best marks of the day. The S&P 500 added 0.3%, the tech-heavy Nasdaq rallied 0.9%, and the small-cap Russell 2000 jumped 0.6%. The Dow underperformed, however, losing 0.3%.
The major averages extended opening losses through the first half of Tuesday's session, with the S&P 500 losing as much as 0.9%. However, things turned around in the afternoon as the technology sector (+1.5%) rallied ahead of Apple's (AAPL 169.10, +3.84) latest earnings report -- which was due after the closing bell. Apple shares ended the session higher by 2.3%, and shares of other tech giants like Microsoft (MSFT 95.00, +1.48) and Alphabet (GOOG 1037.31, +19.98) added more than 1.5% apiece. Chipmakers also outperformed, pushing the PHLX Semiconductor Index higher by 1.7%.
Four other sectors finished Tuesday in positive territory, including financials (+0.1%), consumer discretionary (+0.2%), health care (unch), and real estate (+0.7%). The health care group was able to overcome a negative reaction to earnings reports from Pfizer (PFE 35.40, -1.21) and Merck (MRK 57.98, -0.89); Pfizer shares lost 3.3% after the company reported upbeat earnings on worse-than-expected revenues, and Merck shares declined 1.5% even though the company beat earnings estimates on in-line revenues and raised its guidance for fiscal year 2018.
On the downside, six sectors finished Tuesday in the red, with telecom services (-0.8%), consumer staples (-0.9%), industrials (-0.5%), and energy (-0.6%) leading the retreat. Energy shares struggled as crude oil prices pulled back from their highest levels in more than three years; West Texas Intermediate crude futures declined 1.8% to $67.28 per barrel.
In the bond market, U.S. Treasuries ended Tuesday on a lower note, pulling back after three days of gains. The yield on the benchmark 10-yr Treasury note finished four basis points higher at 2.98%, but saw limited intraday movement -- which makes sense considering the Fed will release its latest policy directive on Wednesday at 2:00 PM ET. Meanwhile, the jump in yields increased dollar demand, evidenced by the U.S. Dollar Index, which climbed 0.7% to 92.30 -- its highest level of the calendar year.
In Washington, President Trump delayed the imposition of steel and aluminum tariffs on the European Union, Canada, and Mexico by 30 days, and reached permanent exemptions for Australia, Brazil, and Argentina -- although the details still need to be worked out.
Reviewing Tuesday's economic data, which was limited to the ISM Index for April and Construction Spending for March:
The ISM Index for April declined to 57.3 from an unrevised reading of 59.3 in March, while the Briefing.com consensus expected a reading of 58.5.
The key takeaway from the report is that it is an April number, reflecting some growth deceleration for the manufacturing sector at the start of the second quarter which will continue to feed concerns about the message of a flattening yield curve.
Construction Spending dropped 1.7% in March, while the Briefing.com consensus expected an increase of 0.5%. The prior month's increase was revised to 1.0% from 0.1%.
The key takeaway from the report is that construction spending growth continues to run at a relatively slow pace, which is an inhibitor of stronger overall growth.
On Wednesday, the Fed's latest policy directive will cross the wires at 2:00 PM ET. In addition, investors will receive the weekly MBA Mortgage Applications Index at 7:00 AM ET and the ADP Employment Change report for April (Briefing.com consensus 225K) at 8:15 AM ET.
Nasdaq Composite: +3.3% YTD
Russell 2000: +1.0% YTD
S&P 500: -0.7% YTD
Dow Jones Industrial Average: -2.5% YTD
Disappointing Start to the Week
30-Apr-18 16:25 ET
Dow -148.04 at 24163.15, Nasdaq -53.53 at 7066.27, S&P -21.86 at 2648.05
https://www.briefing.com/investor/markets/stock-market-update/2018/4/30/disappointing-start-to-the-week.htm
[BRIEFING.COM] Stocks got off to a decent start on Monday, but ended the session on a lower note. The major averages finished at their worst marks of the day due to a sharp bout of selling in the final minutes; the S&P 500 and the Nasdaq settled with losses of 0.8% apiece, while the Dow dropped 0.6%.
Losses were broad-based on Monday, with all 11 S&P sectors finishing in negative territory. Telecom services was the worst-performing group, losing 2.7%, following news that Sprint (S 5.61, -0.89) and T-Mobile US (TMUS 60.51, -4.01) have agreed to an all-stock merger; the deal is aimed at creating a larger carrier to better compete with wireless giants AT&T (T 32.70, -0.34) and Verizon (VZ 49.35, -2.22). Sprint and T-Mobile US shares dropped 13.7% and 6.2%, respectively, while Verizon shares lost 4.3% and shares of AT&T slid 1.0%.
As for the other sectors, losses ranged from less than 0.1% to 1.6%. The industrials (-1.4%), materials (-1.3%), and health care (-1.6%) sectors showed relative weakness, while the consumer discretionary (-0.4%), technology (-0.5%), energy (unch), real estate (-0.4%), and utilities (-0.3%) groups showed relative strength.
Within the consumer discretionary space, shares of McDonald's (MCD 167.44, +9.14) rallied 5.8%, hitting a three-month high, after the fast food giant reported better-than-expected earnings and revenues for the first quarter. Meanwhile, in the tech sector, Apple (AAPL 165.26, +2.94) shares jumped 1.8%, rebounding from a nearly three-month low.
The energy group finished just a tick beneath its flat line, helped by an increase in the price of crude oil; West Texas Intermediate crude futures jumped 0.7% to $68.53 per barrel, challenging the more than three-year high they hit last week. Tensions in the oil-rich Middle East heightened on Monday -- helping to underpin the price of crude oil for fear that an actual conflict would slow production -- after Israeli Prime Minister Benjamin Netanyahu accused Iran of lying about not having a nuclear weapons development program.
Elsewhere, the consumer staples sector finished slightly ahead of the broader market, losing 0.6%, as shares of its largest component by market cap -- Walmart (WMT 88.46, +1.17) -- rallied 1.3% after the company announced that it will be selling its UK subsidiary Asda Group to Sainsbury's; however, Walmart will retain a 42% stake in the merged business.
U.S. Treasuries moved mostly higher on Monday, flattening the yield curve along the way; the yield on the benchmark 10-yr Treasury note slid two basis points to 2.94%, while the 2-yr yield finished flat at 2.48%. Meanwhile, the U.S. Dollar Index jumped 0.4% to 91.64, hitting its highest level since early January.
Reviewing Monday's economic data, which included Personal Income, Personal Spending, and PCE Prices for March, the Chicago PMI for April, and March Pending Home Sales:
Personal income climbed 0.3% in March (Briefing.com consensus +0.4%) following a revised increase of 0.3% in February (from 0.4%). Meanwhile, personal spending rose 0.4% in March (Briefing.com consensus +0.4%) following a revised flat reading in February (from 0.2%). The PCE Price Index was flat in March (Briefing.com consensus 0.0%), 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 1.9%, versus 1.6% in the last reading.
The key takeaway from the report is that it shows consumer inflation in the reaches of the Federal Reserve's inflation target, which will give the Federal Reserve some data-based ammunition to keep raising the fed funds rate (but not at the May FOMC meeting).
Chicago PMI for April hit 57.6 (Briefing.com consensus 58.0), up from 57.4 in March.
Pending Home Sales increased 0.4% in March (Briefing.com consensus +1.5%). Today's reading follows a revised 2.8% increase in February (from +3.1%).
On Tuesday, investors will receive the ISM Index for April (Briefing.com consensus 58.5), Construction Spending for March, and April auto and truck sales.
Nasdaq Composite: +2.4% YTD
Russell 2000: +0.4% YTD
S&P 500: -1.0% YTD
Dow Jones Industrial Average: -2.3% YTD
InvestmentHouse - Indices Cannot Sustain an Upside Move (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
- Once again, market cannot make much of a much anticipated, strong earnings
report.
- NASDAQ gaps higher, up over 115 points, gives it all back.
- Decently bullish stock index patterns remain, but thus far any upside
upside is used to sell, undermining the patterns.
- Good patterns in many stocks and sectors are failing to provide breakouts,
or if they do, many are quickly lost.
- Money does appear still working into some areas and thus there are
potential upside entries as money reallocates
- Some sectors still look good but with some distribution, can the patterns
hold?
Friday was not a washout, but it was more evidence that the market is having
a hard time coming up with buyers willing to sustain a move higher.
Earnings season has given buyers every reason to buy stocks as results for
the vast majority of stocks have handily topped expectations, and in many
cases, crushing expectations. Yet, the stock indices, while not rolling
over and in some cases still in very decent patterns, cannot sustain an
upside move.
Friday was the most recent case in point. AMZN utterly crushed
expectations. MSFT and INTC both also laughed at their expectations.
Before that it was FB, GOOG, and NFLX. Bada bing, bada boom. Or for the
more cerebral as the NFL announcers, with unintentional hilarity, use to
describe football players, ipso facto. The indices should be surging. Yet,
the indices, down heading into earnings and in prime position to move upside
on great results, have not.
Stocks gapped higher Friday, particularly on NASDAQ as its futures showed a
115+ point opening gain. DJ30, SP500, not so much. Not nearly so. Yet,
they posted some good early moves as well. The move was all on the open,
however. Stocks gapped then sagged into midmorning. NASDAQ swung 115
points high to low, needing to come back to close with a 1.12 point gain.
AMZN lost well over half its early gain by the time it closed. It may rule
retail but it cannot control the markets. Not yet.
SP500 2.97, 0.11%
NASDAQ 1.12, 0.02%
DJ30 -11.15, -0.05%
SP400 -0.16%
RUTX -0.11%
SOX -0.80%
NASDAQ 100 0.10%
VOLUME: NYSE -12%, NASDAQ -4%. At least volume was lower on the reversal
off opening highs. Not a turkey shoot at the stocks that moved higher.
Volume still remains weak overall and mixed in terms of rising volume on up
sessions versus rising volume on down sessions.
ADVANCE/DECLINE: NYSE 1.4:1, NASDAQ 1.1:1. Not the breadth of champions,
but of course with the rollover in the index, a weak A/D line is not
surprising.
No, it was no rollover in and of itself, but it was another in a series of
failed attempts to move higher. There is a pattern of selling into
strength, of breakouts getting pushed back without much upside other than
the day of the breakout, taking down even good moves.
The indices still have relatively decent upside patterns with NASDAQ, SP500,
DJ30 sporting what are arguably triangles forming over key support levels.
Triangles can be positive, can be negative. The key is the index ranges are
narrowing over the past 1.5 months and forming 'points' to the triangles,
and that typically indicates a more serious directional move is coming. In
other words, they are going to break upside or downside. The inability to
utilize good news that one would think SHOULD have yielded upside has not
done so. Indeed, when the news does result in a break higher, as noted
above, the breaks have been turned back on the indices and of course in many
individual stocks as well.
Some areas still look quite good, e.g. oil, but that is arguably for an
entirely different reason than other stocks would rally on. In any event,
money is moving toward oil and it looks as if it is also still interested in
drugs and healthcare.
Other areas are deceptive. Some good patterns are still out there for sure,
but this market has been taking down good areas. Sectors with good looking
patterns just fail to move and then get taken lower. Others that rallied
well and then slipped into pattern building also look good but then get
taken out. Thus, things are a bit deceptive and you find yourself looking
at retail, software and wondering if they are going to break higher from
their consolidations or break lower as others have.
The pattern of giving up breaks higher is not an indication of market
health. Patterns that set up but then cannot breakout and break apart show
changing expectations by the big money: they were being accumulated but then
the money turned off and indeed left.
That is an indication of a market that is distributing, i.e. is a net seller
of stocks as the big money sells on rallies, bounces, good news moves. That
could lead to potentially bullish triangle patterns in the indices to simply
fail to make breaks higher, and indeed break lower.
Why would they do that if the economy still looks solid as Q1 GDP showed
Friday (2.4% vs 1.8% expected vs 2.9% Q4)? Could be the Fed rate hikes and
rising interest rates. Perhaps a yield curve inversion in bonds? The
timing is not that great for the market: late April and often the overall
market turns sluggish and choppy over summer and into the early fall. 'Sell
in May . . .' right?
Sure there will be groups that perform just as always. Oil seems solid,
healthcare/drugs are so far so good as they come back around, and software
is still solid but somewhat worrisome as many tech related groups get sold
off in favor of the very core items such as the commodities, e.g. oil.
Summary: That prognosis is not all that great for the market, but then
again, it is what it is. Patterns are still quite solid enough and that
could turn indecision or selling into buying at some point. Thus far,
however, the solid earnings have failed to do that. Fed hikes, possible
yield curve inversion. Couple those with the still threatened trade wars
and there is reason backward looking earnings are not driving stocks higher.
It is just a gut feeling, but one based upon watching breakouts get thrown
back and good news fail to elicit sustained new moves, at the least the
market continues to work laterally in a trading range. At worst this action
that has the look of accumulation but is also showing distribution ends up
undermining the index and leadership patterns to where they drop over the
summer. You cannot emphasize enough the inability to move higher and hold
moves when Q1 earnings were so solid as an indication of the big money being
indifferent or at worst for the bulls, being actively selling.
Thus, we will continue looking upside in those areas that are receiving
money, that are under accumulation, e.g. oil, drugs/healthcare. In
addition, we nose around for stocks we feel are setting up to fall. After a
move higher with some hope on earnings, and some rebounds on results that
bounced a stock but then dissipates, we can get some good downside. FB
comes to mind as does AAPL, AMAT and others.
Perhaps at some point the bounce that holds will come, but not sure what the
catalyst would be outside of new trade deals with China, Canada, Mexico.
That likely does not happen anytime soon and is thus out there hanging on
the horizon. There is also the worry, though not often voiced, of what
happens if the democrats return to the majority in Congress and the
political turmoil (on top of the current political turmoil of course) that
would result.
What I really think is dogging the market are interest rates. Not really
higher 10 year yields but the possibility of an inverted yield curve.
Historically that is an accurate indicator of economic health and of course
the market reacts to that well ahead of the appearance of economic issues.
Thus the struggles in the market at maintaining breaks higher suggests
preparation for downside to come.
THE MARKET
CHARTS
The Thursday bounce move tried to add to the bounce Friday, but a strong
NASDAQ move failed to ignite buying elsewhere, and in the end the indices
faded. Still not bad overall patterns for the large cap indices as they
narrow their ranges, but they are still not yet reacting well to what
appears to be good news. The small and midcap indices are in patterns that
look bullish enough, and they are showing good action in their stocks, they
just have to make good on the patterns. That has been the problem for this
market: making good on the patterns.
NASDAQ: Gapped upside to the 50 day SMA then closed basically flat.
Thursday NASDAQ gapped up off a doji at its trendline from early 2016 and
looked to extend that Friday, but the move was sold. Still banging around
in the lower half of its channel so has room to move, but even with some
good large cap NASDAQ earnings the past two weeks it is still hard-pressed
to put together a sustained break higher. Two weeks upside from early April
was sold off aggressively into last Tuesday. It did not break down, but
even with some very good NASDAQ large cap earnings it has failed to climb
back up in its channel. It is acting heavy, but there are many large cap
NASDAQ stocks that have not broken down and many smaller NASDAQ stocks
working quite well. Thus, the index for now continues the 2016 trend but is
struggling.
SP500: The SP500 high to low move Friday was not nearly as epic as NASDAQ.
SP500 was down pre-market for quite some time before flipping positive.
Small move, low volume, no big deal. It continues narrowing its pattern the
past month, trying to set up a triangle over the 200 day SMA to deliver some
upside. It certainly can do that, but it has also experienced the same
failure to hold moves as NASDAQ, though perhaps on a less grand scale.
DJ30: See SP500. Basically a bullish pattern though intraday of late
unable to hold gains. Using the 200 day SMA as support, DJ30 is trying for
a higher low and a anew break higher.
SOX: Gapped sharply higher Friday, continuing the Thursday upside gap off
the 200 day SMA. Then it reversed and closed lower with a downside
engulfing pattern that can be an issue for the upside. Head and shoulders
pattern overall, very near the neckline in the right shoulder. Trying to
break higher off the 200 day support to break that pattern up, but the
Friday move was not encouraging.
RUTX: The small caps clearly helped lead the way higher from April's start.
After the January peak it has traded in a range that has formed something of
a large 3+ month pennant. Perhaps the small caps put in a higher low at the
50 day MA's a the midpoint of the pennant and rally for a breakout.
Important group of course given the economic implications.
SP400: A pair of tight doji at the 50 day MA's as the midcap index also
puts in a 3+ month pattern also using the 200 day SMA as support. Not bad
at all, and it could be that the midcaps and small caps again lead the
market, getting money that is pulled from the large cap areas.
MARKET STATS
DJ30
Stats: -11.15 points (-0.05%) to close at 24311.19
Nasdaq
Stats: +1.12 points (+0.02%) to close at 7119.80
Volume: 2.04B (-3.77%)
Up Volume: 921.11M (-548.89M)
Down Volume: 1.1B (+474.26M)
A/D and Hi/Lo: Advancers led 1.05 to 1
Previous Session: Advancers led 1.6 to 1
New Highs: 59 (-6)
New Lows: 54 (-8)
S&P
Stats: +2.97 points (+0.11%) to close at 2669.91
NYSE Volume: 724.2M (-12.30%)
A/D and Hi/Lo: Advancers led 1.35 to 1
Previous Session: Advancers led 2.04 to 1
New Highs: 64 (+4)
New Lows: 48 (-28)
Bulls and Bears:
Bulls bounced back 4.5 points after a precipitous decline. They are falling
hard, bouncing with quick sharp bounces, then falling again. Very similar to
the stock market action. Bears were lower but they are holding the bounce
higher into the 19's.
Bulls: 48.0 versus 43.6
Bears: 19.6 versus 19.8
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: 48.0 versus 43.6
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: 19.6 versus 19.8
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: 2.959% versus 2.975%. Bonds rallied back for a second session,
making it to the 10 day EMA and near the 50 day SMA. Possible double bottom
using the February and April lows. Thus far a decent move, more a relief
move.
Historical: the last sub-2% rate was in November 2016 (1.867%). 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% versus 2.801%
versus 2.805% versus 2.775% versus 2.812% versus 2.806% versus 2.781% versus
2.739% versus 2.714% versus 2.781% versus 2.775% versus 2.854% versus 2.813%
versus 2.814% versus 2.881% versus 2.90% versus 2.852%
EUR/USD: 1.21291 versus 1.21788. Big drop down to the 200 day SMA on the
low, followed by a reversal upside for a nice doji with tail. Euro may have
hit a near term bottom after 7 sessions lower that broke it down from its 3+
month lateral range.
Historical: 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 versus 1.22698 versus 1.23073 versus
1.23234 versus 1.2406 versus 1.24494 versus 1.2351 versus 1.23301 versus
1.23467 versus 1.22478 versus 1.2342 versus 1.2287 versus 1.2304 versus
1.23782 versus 1.2392 versus 1.23412 versus 1.2305 versus 1.2305 versus
1.24017 versus 1.2411 versus 1.2344 versus 1.23187 versus 1.22822 versus
1.21894
USD/JPY: 109.051 versus 109.28. Dollar rallied through Wednesday, then
spent Thursday and Friday moving laterally, waiting for the 10 day EMA to
catch up to the nice break higher.
Historical: 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 versus
107.362 versus 107.267 versus 106.882 versus 106.873 versus 107.09 versus
107.16 versus 106.939 versus 107.11 versus 106.816 versus 106.797 versus
105.901 versus 106.286 versus 106.81 versus 105.397 versus 105.473 versus
104.789 versus 104.829 versus 105.892 versus 106.478 versus 105.945 versus
105.946
Oil: 68.10, -0.09. Oil is working laterally at the 10 day EMA,
consolidating the break higher and the new recovery high.
Gold: 1323.40, +5.50. Gold rebounded some of the losses on the week that
saw it break lower through the 50 day MA to start. Closing in on the bottom
of its 4 month range.
Earnings Fail to Nudge the Market Higher
27-Apr-18 16:30 ET
Dow -11.15 at 24311.19, Nasdaq +1.12 at 7119.80, S&P +2.97 at 2669.91
https://www.briefing.com/investor/markets/stock-market-update/2018/4/27/earnings-fail-to-nudge-the-market-higher.htm
[BRIEFING.COM] The major averages ended Friday little changed despite strong earnings reports from Amazon (AMZN 1572.62, +54.66), Microsoft (MSFT 95.82, +1.56), and Intel (INTC 52.73, -0.32) -- three high-profile names that helped pace last year's rally. The S&P 500 finished a tick higher (+0.1%), the Nasdaq settled flat, and the Dow closed a tick lower (-0.1%).
Amazon shares soared at the opening bell, adding nearly 8.0%, after the internet retail giant reported blowout first quarter results -- easily beating both top and bottom line estimates -- and raised its profit guidance for the second quarter. However, the bullish sentiment soon dampened; AMZN shares quickly slashed their gains in half, eventually closing higher by 3.6%.
Microsoft and Intel shares went through a similar experience after both companies reported better-than-expected quarterly results; Microsoft trimmed its opening gain of 4.0% to 1.7% by the closing bell, while Intel gave back all of its opening gain of 5.0% and then some, finishing lower by 0.6%.
The dialed back buying of these once invincible-looking stocks helped strengthen the narrative that earnings are at, or near, a peak for this growth cycle.
In other earnings news, energy heavyweight Chevron (CVX 126.62, +2.40) beat earnings estimates for the first quarter, but its peer Exxon Mobil (XOM 77.79, -3.07) missed the mark; Chevron shares ended higher by 1.9%, while Exxon shares settled lower by 3.8%. Meanwhile, shares of Starbucks (SBUX 58.36, -1.02) lost 1.7% after the coffee giant's earnings came in as expected.
Seven S&P 500 sectors finished Friday in positive territory, while four groups finished in the red. Energy (-1.2%) was by far the weakest group, suffering from Exxon's disappointing earnings, while telecom services (+1.8%) led to the upside following a Reuters report that a merger deal between Sprint (S 6.50, +0.50) and T-Mobile (TMUS 64.52, +0.42) could be struck in the next three days.
U.S. Treasuries rallied for the second day in a row on Friday, sending the benchmark 10-yr yield three basis points lower to 2.96%.
In geopolitics, the leaders of North and South Korea held historic talks on Friday, agreeing to sign a pact that seeks permanent and solid peace and stating an aim to work towards a complete denuclearization of the Korean Peninsula. Separately, German Chancellor Angela Merkel met with U.S. President Donald Trump at the White House to discuss the Iran nuclear deal, trade, and other issues.
The Bank of Japan kept interest rates unchanged, as expected, but removed from its policy statement a reference to reaching its 2.0% inflation target in fiscal year 2019/2020.
Reviewing Friday's economic data, which most notably included the preliminary reading of first quarter GDP; investors also received the first quarter Employment Cost Index and the final reading of the University of Michigan Consumer Sentiment Index for April:
First quarter GDP increased at an annualized rate of 2.3%. That was above the Briefing.com consensus estimate of 2.1%, yet it was a deceleration from the fourth quarter growth rate of 2.9%.
The key takeaway from the report is that consumer spending was weak in the first quarter, increasing just 1.1% after increasing 4.0% in the fourth quarter. Real final sales, which exclude the change in inventories and are often viewed as the better gauge of growth, were up only 1.9% versus the prior ten quarter average of 2.2%.
The first quarter Employment Cost Index rose 0.8%, while the Briefing.com consensus expected an increase of 0.7%.
The key takeaway from the report is that wages and salaries, and benefits, are trending higher. That will support the burgeoning inflation narrative and it will keep the Federal Reserve inclined to stay on its rate-hike path.
The final reading of the University of Michigan Consumer Sentiment Index for April rose to 98.8 (Briefing.com consensus 98.0) from 97.8 in the preliminary reading.
The key takeaway from the report is that the monthly drop was due to worries about trade policies and expectations for rising interest rates.
On Monday, investors will receive Personal Income (Briefing.com consensus +0.4%), Personal Spending (Briefing.com consensus +0.4%), and PCE Prices (Briefing.com consensus 0.0%) for March, the Chicago PMI for April (Briefing.com consensus 58.0), and March Pending Home Sales (Briefing.com consensus +1.5%).
Nasdaq Composite: +3.1% YTD
Russell 2000: +1.4% YTD
S&P 500: -0.1% YTD
Dow Jones Industrial Average: -1.7% YTD
Week In Review: Little Changed Following Busy Week
The S&P 500 was up and down this week, but ended little changed, closing a tick below its flat line. The Nasdaq Composite and the Dow Jones Industrial Average, meanwhile, finished the week with losses of 0.4% and 0.6%, respectively, and the small-cap Russell 2000 lost 0.5%. Earnings were the focal point, but rising Treasury yields, policy decisions from the European Central Bank and the Bank of Japan, and a historic meeting between the leaders of North and South Korea also received some attention.
This week was the busiest week of the first quarter earnings season, with more than a third of S&P 500 companies reporting their results -- which largely came in better than expected. However, the market's reaction didn't always correlate with the upbeat headlines.
For instance, in the industrial sector, 3M (MMM), Caterpillar (CAT), Lockheed Martin (LMT), and United Tech (UTX) all dropped on Tuesday after reporting their first quarter results, which, headline-wise, came in above-consensus. Caterpillar initially shot higher, but reversed sharply, taking the broader market with it, after saying in its post-earnings conference call that margins in the first quarter will be the "high water mark" for the year. The industrial sector finished the week at the bottom of the sector standings, losing 3.2%.
Conversely, the consumer discretionary sector finished with a solid gain of 1.1%, boosted by a blowout quarter from Amazon (AMZN) -- which easily topped both earnings and revenue estimates for the first quarter. Chipotle Mexican Grill (CMG) also rallied on its better-than-expected results, surging nearly 25% on Thursday to close at its highest level in nearly a year.
A number of technology heavyweights reported their first quarter earnings this week, including Alphabet (GOOG), Facebook (FB), Microsoft (MSFT), and Intel (INTC). Facebook soared after handily beating consensus estimates, Microsoft climbed after also beating on the top and bottom lines, Intel slid despite an upbeat report, and Alphabet tumbled after its weaker-than-expected operating margins overshadowed its much better-than-expected earnings and revenues. The top-weighted technology sector finished the week lower by 0.6%.
Outside of earnings, investors kept a close eye on Treasury yields, which touched new multi-year highs on Wednesday before slipping in the final two sessions. The benchmark 10-yr yield crossed the psychologically important 3.0% mark for the first time in over four years, going as high as 3.03%, before settling the week at 2.96%.
The preliminary reading of first quarter GDP crossed the wires on Friday, showing an annualized increase of 2.3% -- which was better than the Briefing.com consensus of +2.1%, but a deceleration from the fourth quarter growth rate of 2.9%. The key takeaway from the report is that consumer spending was weak in the first quarter, increasing just 1.1% after increasing 4.0% in the fourth quarter. Real final sales, which exclude the change in inventories and are often viewed as the better gauge of growth, were up only 1.9% versus the prior ten quarter average of 2.2%.
Across the pond, the European Central Bank released its latest policy directive on Thursday morning, which, as expected, left interest rates unchanged and confirmed that net asset purchases will remain at the current monthly pace of EUR30 billion until the end of September 2018, or beyond, if necessary.
In Asia, the Bank of Japan also left interest rates unchanged, as expected, but removed from its policy statement a reference to reaching its 2.0% inflation target in fiscal year 2019/2020. However, the biggest story of the week in Asia came from the Korean Peninsula, where the leaders of North and South Korea came together for a historic summit. The two leaders signed a pact that seeks permanent and solid peace and stated an aim to work towards a complete denuclearization of the Korean Peninsula.