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Tech Shares Lead Broad-Based Rebound
26-Apr-18 16:20 ET
Dow +238.51 at 24322.34, Nasdaq +114.94 at 7118.68, S&P +27.54 at 2666.94
https://www.briefing.com/investor/markets/stock-market-update/2018/4/26/tech-shares-lead-broadbased-rebound.htm
[BRIEFING.COM] Stocks rallied on Thursday, recouping just about all of their weekly losses, as investors cheered the latest batch of first quarter earnings. The S&P 500 and the Dow Jones Industrial Average advanced 1.0% apiece, while the tech-heavy Nasdaq Composite did even better, jumping 1.6%, as technology shares set the pace.
The most influential S&P 500 sector -- information technology -- advanced 2.3% on Thursday, finishing atop the day's sector standings by a comfortable margin. Tech giant Facebook (FB 174.16, +14.47) soared 9.1% after reporting a blowout first quarter, easily topping earnings and revenue estimates and also reporting double-digit growth in daily active users (DAUs). Visa (V 127.08, +5.87) and Advanced Micro (AMD 11.04, +1.33) contributed to the tech rally as well, adding 4.8% and 13.7%, respectively, after reporting above-consensus earnings and revenues for the first quarter and issuing upbeat guidance.
Chipotle Mexican Grill (CMG 422.50, +82.98) was perhaps the most notable post-earnings mover, surging 24.4% to its highest level in nearly a year. The burrito chain reported an impressive first quarter, handily beating earnings estimates on above-consensus growth in same-store sales. The S&P 500 sector that houses Chipotle -- consumer discretionary -- finished in second place in the sector standings with a gain of 1.6%, while most other advancing groups added between 0.6% and 1.5%.
The heavily-weighted financial sector was an exception, finishing just a tick above its flat line. The group underperformed as Treasury yields slipped from multi-year highs; the yield on the benchmark 10-yr Treasury note slipped below the psychologically important 3.0% mark, ending three basis points below its Wednesday close at 2.99%. The 2-yr yield, meanwhile, finished unchanged at 2.49%.
Telecom services was easily the worst-performing sector, tumbling 3.2%, after AT&T (T 33.10, -2.10) reported lower-than-expected earnings and revenues for the first quarter -- T shares dropped 6.0%. The industrial sector was the only other space to close in the red, losing 0.4% and extending its weekly decline to 3.0%; for comparison, the S&P 500 is down just 0.1% week to date. Within the industrial group, transports showed particular weakness, with American Airlines (AAL 42.37, -2.88) dropping 6.4% after lowering its guidance due to higher fuel prices.
Overseas, 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. The euro declined 0.5% against the U.S. dollar to 1.2105 -- its lowest level since early January -- following the release and a dovish-sounding press conference from ECB President Mario Draghi.
Reviewing Thursday's economic data, which included Durable Goods Orders for March, weekly Initial Claims, Advance International Trade in Goods for March, and Advance Wholesale Inventories for March:
March durable goods orders climbed 2.6%, which is more than the 1.9% increase expected by the Briefing.com consensus. The prior month's reading was revised to +3.5% (from +3.1%). Excluding transportation, durable orders were flat (Briefing.com consensus +0.6%) to follow the prior month's revised increase of 0.9% (from +1.2%).
The key takeaway from the report was that business spending was soft, evidenced by a 0.1% decline in orders of nondefense capital goods excluding aircraft. Shipments of those goods, which factor into GDP forecasts, were down 0.7% after increasing 1.0% in February.
The latest weekly initial jobless claims count totaled 209,000, while the Briefing.com consensus expected a reading of 225,000. Today's tally was below the revised prior week count of 233,000 (from 232,000). As for continuing claims, they declined to 1.837 million from a revised count of 1.866 million (from 1.863 million).
The key takeaway from the initial claims report is that it will feed concerns about a tightening in labor supply and a potential pickup in wage-based inflation pressure as a result of it.
The Advance report for International Trade in Goods for March showed a deficit of $68.0 billion.
The Advance report for Wholesale Inventories for March showed an increase of 0.5%.
On Friday, investors will receive the advance estimate of first quarter GDP (Briefing.com consensus +2.1%) at 8:30 AM ET. The first quarter Employment Cost Index (Briefing.com consensus +0.7%) will also be released at 8:30 AM ET, while the Chicago PMI for April (Briefing.com consensus 56.3) and the final reading of the University of Michigan Consumer Sentiment Index for April (Briefing.com consensus 98.0) will cross the wires at 9:45 AM ET and 10:00 AM ET, respectively.
Nasdaq Composite: +3.1% YTD
Russell 2000: +1.5% YTD
S&P 500: -0.3% YTD
Dow Jones Industrial Average: -1.6% YTD
Wall Street Keeps Weekly Losses In Check
25-Apr-18 16:30 ET
Dow +59.70 at 24083.83, Nasdaq -3.61 at 7003.74, S&P +4.84 at 2639.40
https://www.briefing.com/investor/markets/stock-market-update/2018/4/25/wall-street-keeps-weekly-losses-in-check.htm
[BRIEFING.COM] Stocks battled back following a rough start to Wednesday's session, keeping weekly losses in check. The Dow Jones Industrial Average finished higher by 0.3%, ending a five-session skid, and the S&P 500 advanced 0.2%, but the Nasdaq Composite lost 0.1%, extend its losing streak to five sessions.
Initially, it looked as if Wednesday's session might be a continuation of Tuesday's sell off, as stock dropped sharply from their flat lines in the opening minutes. The market quickly found its footing, however, and started trending higher, eventually hitting positive territory in the afternoon. At lowest mark of the day, the S&P 500 was down 0.8% and, at its best, was up 0.4%.
A continued rise in Treasury yields didn't make things easy for the equity market. The benchmark 10-yr yield finally crossed the 3.0% mark after flirting with it over the last few sessions, finishing four basis points above its Tuesday close at 3.02% -- its highest close in more than four years. Meanwhile, the 2-yr yield climbed three basis points to 2.49% -- its highest close in nearly a decade.
Shares of Dow component Boeing (BA 342.86, +13.80) rallied 4.2% on Wednesday after the aerospace giant made a splash on the earnings front, easily beating top and bottom line estimates for the first quarter. Similarly, shares of chipmaker Texas Instruments (TXN 103.00, +4.58), health insurer Anthem (ANTM 238.84, +13.84), and railroad giant Norfolk Southern (NSC 145.96, +10.99) added between 4.7% and 8.1% on better-than-expected Q1 results.
However, on the downside, Twitter (TWTR 29.75, -0.72) shares dropped 2.4% even though the company beat earnings and revenue estimates for the first quarter, and shares of Capitol One (COF 92.76, -4.66) tumbled 4.8% after the company's worse-than-expected Q1 revenues overshadowed its better-than-expected bottom line.
Most of the 11 S&P 500 sectors finished Wednesday in positive territory, but gains were pretty limited; the energy and telecom services sectors added 0.8% apiece, but no other group advanced more than 0.5%. Three sectors finished in negative territory, including the top-weighted financials and information technology groups, which lost 0.1% apiece.
Wednesday's economic data was limited to the weekly MBA Mortgage Applications Index, which showed a downtick of 0.2%. Tomorrow investors will receive Durable Goods Orders for March (Briefing.com consensus +1.9%), weekly Initial Claims (Briefing.com consensus 225K), Advance International Trade in Goods for March, and Advance Wholesale Inventories for March.
Nasdaq Composite: +1.5% YTD
Russell 2000: +1.0% YTD
S&P 500: -1.3% YTD
Dow Jones Industrial Average: -2.6% YTD
Tuesday Tumble
24-Apr-18 16:30 ET
Dow -424.56 at 24024.13, Nasdaq -121.25 at 7007.35, S&P -35.73 at 2634.56
https://www.briefing.com/investor/markets/stock-market-update/2018/4/24/tuesday-tumble.htm
[BRIEFING.COM] Equities tumbled on Tuesday, with the Dow Jones Industrial Average notching its fifth straight loss, as the benchmark 10-yr Treasury yield continued its climb towards 3.0% and as investors digested the latest batch of first quarter earnings. The Dow ended lower by 1.7%, while the S&P 500 and the Nasdaq declined 1.3% and 1.7%, respectively.
The industrials (-2.8%), materials (-2.7%), and technology (-2.0%) sectors led Tuesday's broad-based retreat. Within the industrial space, 3M (MMM 201.13, -14.78), Caterpillar (CAT 144.44, -9.55), and Lockheed Martin (LMT 336.49, -22.11) lost between 6.2% and 6.8% after reporting their first quarter results -- which, headline-wise, came in better than expected. Caterpillar initially shot higher following the release of its report, but reversed after saying in its post-earnings conference call that margins in the first quarter will be the high water mark for the year.
Industrial giant United Technologies (UTX 122.10, -1.36) also moved lower despite an earnings beat, losing 1.1%.
That trend held within the technology sector, where giant Alphabet (GOOG 1019.98, -47.47) dropped 4.5% despite a blowout quarter; the purported bearish catalyst was the company's weaker-than-expected operating margin. Fellow FAANG stocks Facebook (FB 159.69, -6.15) and Netflix (NFLX 307.02, -11.67) also took a hit, losing around 3.7% apiece, and chipmakers struggled, evidenced by the 2.1% decline in the Philadelphia Semiconductor Index -- which closed right at its 200-day moving average.
The materials space, meanwhile, was led lower by mining company Freeport-McMoRan (FCX 16.08, -2.73), which dropped 14.5% after missing both earnings and revenue estimates for the first quarter. The other declining sectors finished with losses between 0.6% and 1.6%, and three groups -- utilities (+0.7%), telecom services (+1.2%), and real estate (+0.2%) actually finished in the green.
Other earnings-related movers included Verizon (VZ 49.67, +1.01), Coca-Cola (KO 43.07, -0.91), Eli Lilly (LLY 80.09, -0.11), Biogen (BIIB 262.15, +2.85), Travelers (TRV 132.88, -4.35), and Harley-Davidson (HOG 42.01, +1.00) -- most of which reported better-than-expected results. However, only Verizon, Biogen, and Harley-Davidson moved higher, adding between 1.1% and 2.4%. Eli Lilly slipped 0.1%, while Coca-Cola and Travelers lost 2.1% and 3.2%, respectively.
The major averages actually opened Tuesday's session in positive territory, hovering about 0.3% above their respective flat lines, but just couldn't foster any added buying momentum -- which, in and of itself, proved to be a bearish catalyst. A late rally helped trim losses a bit before the close; at its session low, the S&P 500 was down 2.0%.
In the bond market, the yield on the benchmark 10-yr Treasury note continued its climb towards the psychologically important 3.0% mark, actually touching it in intraday trade before finishing at 2.98% -- one basis point higher than Monday's close. The 2-yr yield, meanwhile, took a step back after closing Monday at a seven-year high, slipping one basis point to 2.46%.
Reviewing Tuesday's economic data, which included New Home Sales for March, the Conference Board's Consumer Confidence Index for April, the FHFA Housing Price Index for February, and the S&P Case-Shiller Home Price Index for February:
New Home Sales in March hit an annualized rate of 694,000, which is above the Briefing.com consensus of 631,000. The February reading was revised to 667,000 (from 618,000).
The key takeaway from the report is that new home sales activity was the strongest in the South and West regions, which are the nation's biggest markets, suggesting there is good underlying demand.
The consumer confidence reading for April increased to 128.7 (Briefing.com consensus 126.1) from the prior month's revised reading of 127.0 (from 127.7).
The key takeaway from the report is that the percent of consumers expecting their income to decline over the coming months reached its lowest level (6%) since December 2000. That view could be a good portent for a pickup in consumer spending since income expectations are typically driven by feelings of job security.
The FHFA Housing Price Index rose 0.6% in February (Briefing.com consensus +0.5%), while the January increase was revised to 0.9% from 0.8%.
The Case-Shiller 20-city Index increased 6.8% in February (Briefing.com consensus +6.4%), while the January increase was left unrevised at 6.4%.
Wednesday's data will be limited to the weekly MBA Mortgage Applications Index, which will be released at 7:00 AM ET.
Nasdaq Composite: +1.5% YTD
Russell 2000: +1.2% YTD
S&P 500: -1.5% YTD
Dow Jones Industrial Average: -2.8% YTD
Investors Hit Pause As Yields Rise, Ahead of Busy Earnings Week
23-Apr-18 16:30 ET
Dow -14.25 at 24448.69, Nasdaq -17.52 at 7128.60, S&P +0.15 at 2670.29
https://www.briefing.com/investor/markets/stock-market-update/2018/4/23/investors-hit-pause-as-yields-rise-ahead-of-busy-earnings-week.htm
[BRIEFING.COM] The stock market wobbled on Monday as investors braced for a busy week of corporate earnings and kept a close eye on Treasury yields, which rose to multi-year highs. The Nasdaq Composite (-0.3%) and the Dow Jones Industrial Average (-0.1%) each finished a step lower, notching their third and fourth straight losses, respectively, while the S&P 500 (unch) eked out a slim win, closing just a tick above its flat line. Volume was light once again on Monday, with just 730 million shares changing hands at the New York Stock Exchange (50-day moving average is 897 million).
Treasury yields were higher from the jump on Monday, with the yield on the benchmark 10-yr note nearly touching the psychologically important 3.0% mark in overnight trade -- getting as close as 2.998%. The 10-yr yield eventually settled two basis points above its Friday close at 2.97% -- which is its highest close in more than four years -- while the yield on the 2-yr note finished three basis points above its Friday close at 2.47% -- which is its highest close in more than seven years.
Stocks held up well considering the increased, "risk-free" return on U.S. Treasuries and considering the rise in the U.S. dollar -- which, by itself, doesn't bode well for foreign demand of U.S. goods. The U.S. Dollar Index rose 0.7% to 90.68 -- its highest close since mid-January. The greenback added 0.4% against the euro (1.2209) and 1.0% against the yen (108.72).
The S&P 500 sector standings were pretty evenly mixed between green and red, with six groups advancing and five declining. However, outside a 1.1% jump in the lightly-weighted telecom services sector, sector movement was modest, with no group adding/losing more than 0.6%. The energy sector (+0.6%) showed relative strength as WTI crude futures climbed 0.5% to $68.76 per barrel, while the top-weighted technology sector (-0.4%) was the weakest performer as chipmakers weighed; the PHLX Semiconductor Index dropped 1.3%.
In corporate news, Dow components Caterpillar (CAT 153.99, +0.74, +0.5%), Merck (MRK 60.25, +1.42, +2.4%), Exxon Mobil (XOM 79.57, +0.57, +0.7%), and Verizon (VZ 48.66, +0.76, +1.6%) all rose after receiving ratings upgrades, Kimberly-Clark (KMB 98.52, -1.51, -1.5%) slid after revealing that its first quarter margins were significantly impacted by commodity inflation, and Hasbro (HAS 86.12, +3.31, +4.0%) ended higher despite initially dropping as much as 4.6% after reporting worse-than-expected profits and sales for the first quarter.
Monday's economic data was limited to the Existing Home Sales report for March, which came in better-than-expected; existing home sales increased 1.1% month-over-month to an annualized rate of 5.60 million units (Briefing.com consensus 5.57 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.
Looking ahead to Tuesday's data, investors will receive the FHFA Housing Price Index for February (Briefing.com consensus +0.5%), the S&P Case-Shiller Home Price Index for February (Briefing.com consensus +6.4%), New Home Sales for March (Briefing.com consensus 631K), and the Conference Board's Consumer Confidence Index for April (Briefing.com consensus 126.1).
Nasdaq Composite: +3.3% YTD
Russell 2000: +1.7% YTD
S&P 500: -0.1% YTD
Dow Jones Industrial Average: -1.1% YTD
InvestmentHouse - Expiration Sees Second Day of Selling (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
- Expiration sees a second day of selling off the Wednesday recovery peak.
- Volume mixed, not that high (surprise) as stocks sell.
- A lot of positive news in the world, but you would not know it.
- Will the bond yield curve invert? Does it matter?
- Still so many good patterns to drive the market upside. Can they do it
sans chips?
- Looking for more upside positions as earnings ramps up, stocks continue to
set up.
Not a banner expiration for the stock market, and with the worry about a 3%
10 year bond, a 2 year/10 year 40ish basis point yield curve, and weekend
event/news risk, I suppose not that surprising. There was little
volatility -- the action was all to the downside from a soft open. A couple
of bounce attempts were too thinly traded to succeed and by the close the
indices were all lower with the large cap indices back below the 50 day
MA's, now back at the 20 day EMA.
SP500 -22.99, -0.85%
NASDAQ -91.93, -1.27%
DJ30 201.95, -0.82%
SP400 -0.69%
RUTX -0.62%
SOX -1.17%
NASDAQ 10 -1.58%
VOLUME: NYSE +21% (900M); NASDAQ -5%. Some big volume in some NYSE listed
names, e.g. SKX helped push NYSE volume above average for the first session
in 7 sessions. Of course, on the downside. It was, however, expiration so
all volume is suspect.
ADVANCE/DECLINE: NYSE -2.2:1, NASDAQ -1.7:1. Still not disproportionate
and not as bad as the selling percentages would indicate.
After hitting a higher recovery high on this bounce Wednesday, stocks
struggled into the weekend. Chips didn't help, AAPL didn't help, but oil
was good, software as well. Many stocks held up very well even after 2 days
of selling. I know, I have said many leaders are holding up well even in
the weakness. I am still saying it after Friday. RHT, WDAY, FFIV, STX,
VMW, NFLX, HLF, NTNX -- many look good still, trying to offset LRCX and the
chips' drop on the TSMC guidance and all of those worries about iPhone sales
and thus potentially less demand for smartphone chips. Friday was not the
day to pull that off but most still look quite good as of the close with a
lot of important earnings to come.
Ah yes, the earnings season. It is the dominant factor though there is a
lot of talk about a recession with the bond yield curve narrowing. The 2
year and 10 year treasuries have just 40+ basis points between them and the
gap is narrowing. An inversion (2 year yield greater than 10 year yield)
historically signals a coming recession. The Fed has so intervened in the
bond market, however, some argue that the relationship does not hold the
same meaning as in the past. The level of interference/manipulation is
indeed high, but it was during the Greenspan years as well, and still bond
signals were accurate. Recall Greenspan's 'conundrum' comment to Congress
as to why yields remained low despite the Fed hiking the short end. He
opined it was due to heavy foreign buying keeping yields lower. That did
not prevent the subsequent collapse, however; the bond market signals, even
with intervention, still worked well.
Thus, bonds are likely a drag, but the market is set to receive some key
earnings this week that can definitely work a market rebound bid,
particularly with many well-positioned stocks even after Thursday and
Friday. Holding during that pullback shows owners staying with those
stocks, and good earnings brings in more bids.
Remember, we are playing a move to near the prior highs, not a new breakout,
at least not yet. While a possible recession is a huge factor, it is not so
huge near term. The curve has not inverted, stocks are not selling off
wholesale yet. Some good earnings and a rally back to the prior highs is
not far-fetched and is rather normal action.
Not saying that it has to happen. More news can hit that undercuts the
move, good patterns or no. I mean, there is a HISTORIC agreement with North
Korea, one that would be on the front page of every newspaper, the lead
story on every website, but for the mainstream media does not want to give
it much play. They rather lead with the bogus DNC lawsuit against Russia,
Wikileaks, and Trump for harming Clinton's election campaign. The only
thing that harmed the Clinton campaign was Clinton and her advisors who
ignored a big part of the country. That is what many of my left leaning
contacts believe and they are very much pro-democrat. I of course am not
democrat, not republican, but a true conservative; there is no room for me
in EITHER party. Ironically, I find that far left people who truly believe
in the Constitution and its protections can find common ground with me often
more times than republicans or mainstream democrats. Oh well.
The point: there are serious moves in the world to the positive. Not just
NKorea, but Saudi Arabia moving to modernize and aligning with the US and
Israel. These are huge shifts in the dynamics of the world for the good,
yet our headlines trumpet lawsuits that even left leaning pundits and
analysts say are BS, discuss Russia as if it is something other than a
post-communist society that never embraced capitalism and thus remains with
a puny economy that dictates the Cold War antics we see today in order to
project super power status and thus an attempt to remain relevant. Texas
alone could outmuscle Russia economically, and that has to gall Putin, the
little dictator who thinks he could.
Okay, so if the market can see the good through the BS smokescreen, it has
still room to rally and the patterns to carry it. They are still there as
they were before the chips fell. Chips are very big for the market, and if
we were playing for a market breakout this selloff be a major concern
cutting against that kind of move. That is not the case, and therefore with
the good patterns and the vast majority of our positions holding or moving
very well, we still play for that same objective heading into next week.
THE MARKET
CHARTS
A deeper test by the large cap indices broke the 50 day MA.
SP500: After rebound highs were hit Wednesday, SP500 faded into Friday,
ending at the 20 day EMA on the close. Volume rose above average, but with
expiration that must be discounted. SP500 is in a 2-day pullback to the 20
day MA and the early April recovery high and the late February low. Good
place to hold and indeed this is where SP500 needs to continue the rebound.
DJ30: Very similar to SP500, fading to the 20 day EMA and the late February
low on the Friday close as volume moved above average. Still very well
positioned to continue higher.
NASDAQ: Same story, recovery high and doji Wednesday followed by the
Thursday/Friday fade. Closed at the 20 day EMA just below the 50 day EMA.
Volume was lower and still below average on expiration; wow, no dumping for
sure. Not bad action considering the semiconductors had such a lousy end of
the week.
SOX: Speaking of SOX, it was not good. Thursday a gap below the 50 day
MA's and the lower channel trendline. An ugly week for true. That said,
after the nice February to March run, SOX sold as did the rest of the
indices. In early April it bottomed at the 78% Fibonacci retracement of
that rally. Then a bounce, and now last week's drop to match the prior low.
Get where I am heading? Potential double bottom at the 78% Fibonacci
retracement the same as SP500, DJ30. Those two bounced, moved higher, and
are testing that initial move. We will see if SOX can do the same.
SP400: Same action, higher recovery high Wednesday, testing back through
Friday. Nice action with a very good-looking pullback to the 10 day EMA,
filling the gap higher Tuesday. With the gap filled, SP400 will be ready to
move higher. Midcaps along with RUTX led the last move higher, and it looks
as if SP400 is in position to make the new move higher.
RUTX: Solid move up into Wednesday, then threw a tombstone doji. That led
to the Thursday/Friday selling to tap at the 10 day EMA on the Friday low.
Strong, market-leading move, not a pretty significant but normal test toward
the 10 day EMA, just a few points lower than the Friday close. Looking for
RUTX to fade some more early week, perhaps undercut the 10 day, show a doji
with tail, then rebound. That fits with a continuation of the upside move.
LEADERSHIP
FAANG: AAPL dropped to the 200 day SMA Friday on big volume. AMZN dropped
Friday after gapping upside Wednesday and Thursday. A bit of a fade, lower
volume on the drop. FB is working laterally, may try something but may need
more work. NFLX is testing the earnings gap and run higher. Will be a new
entry as it moves back upside. GOOG is working laterally mid-range and is
setting up a new move. Earnings are early week, and entering ahead of time
may not be a great move (LRCX versus NFLX) but it is setting up nicely.
Oil: A very good week though most were down a bit Friday. DO, HAL, APC
posted great moves, needed a rest. Others are setting up after moves, e.g.
CVX. MRO looks very good. Nice group that, after months, is actually
coming through on its patterns.
Semiconductors: SOX at the 78% Fibonacci retracement, so perhaps some of
these can now bounce after a rough week. LRCX is at the 61% Fibonacci
retracement, its second visit; much like SOX, SP500, DJ30. MU trying to
hold near the 50 day MA's, and is right at the November high. Would prefer
to see a hold here given our current position. SLAB was hammered, XLNX,
SWKS -- AAPL did not help these stocks at all.
Software: Faded Friday, but a good week. CRM was off a bit on low trade
Friday. VMW is testing its gaps higher and despite the move can go higher,
and a test is an entry opportunity. FFIV is also making a good test. GLUU
enjoyed a great week. MSFT is testing back after bumping the March peak.
Drugs/Biotech: Continues to be a solid group though diverse. IMMU is in a
nice 1-2-3 test. CERS looked very good though Friday it dropped back to the
10 day MA. AMED continues upside with a nice move. UNH is in a flag test
of the Tuesday upside gap.
Retail: Good moves midweek but fading to end the week. BBY gapped upside
Wednesday, but then faded to close the gap by Friday. HD surged but it too
faded into Friday, testing the move. Still looks very good. TSCO tried to
make the move Friday, but gave it back. Still looks good. COST is in an
excellent breakout test, forming a handle. M starting higher in a nice
pattern. RH still looks good.
MISC: SQ started breaking higher last week, struggled Friday, still looks
good. Testing a good break higher. Works. FCX broke higher, tested a bit
Friday.
Metals: FCX enjoyed a good week. Steel is interesting, possibly setting
up, e.g. AKS, STLD, SCHN.
MARKET STATS
DJ30
Stats: -201.95 points (-0.82%) to close at 24462.94
Nasdaq
Stats: -91.93 points (-1.27%) to close at 7146.13
Volume: 1.88B (-4.57%)
Up Volume: 525.97M (+1.6M)
Down Volume: 1.34B (-80M)
A/D and Hi/Lo: Decliners led 1.68 to 1
Previous Session: Decliners led 1.71 to 1
New Highs: 54 (-19)
New Lows: 63 (+14)
S&P
Stats: -22.99 points (-0.85%) to close at 2670.14
NYSE Volume: 900M (+20.47%)
A/D and Hi/Lo: Decliners led 2 to 1
Previous Session: Decliners led 2.22 to 1
New Highs: 50 (-28)
New Lows: 103 (+8)
SENTIMENT INDICATORS
VIX: 16.88; +0.92
VXN: 21.63; +1.47
VXO: 16.72; +1.46
Put/Call Ratio (CBOE): 0.98; +0.01
Bulls and Bears:
Bulls rose ever so slightly while bears continued to rise. Finally seeing
more movement upside in bears. That is the more significant of the two
because bears have been so low for so long.
Bulls: 43.6 versus 42.2
Bears: 19.8 versus 18.6
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 43.6 versus 42.2
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: 19.8 versus 18.6
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: 2.96% versus 2.914%. Bonds broke lower Thursday, gapping below the
50 day MA. Friday they continued lower. A breakdown and 3+% 10 year yields
look viable.
Historical: the last sub-2% rate was in November 2016 (1.867%). 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% versus 2.826%
versus 2.819% versus 2.844% versus 2.866% versus 2.896% versus 2.872% versus
2.879% versus 2.863% versus 2.879% versus 2.868% versus 2.799% versus 2.875%
versus 2.893% versus 2.864% versus 2.866% versus 2.934% versus 2.952% versus
2.893% versus 2.873% versus 2.904% versus 2.913%
EUR/USD: 1.22876 versus 1.23464. The euro broke lower below the 50 day
MA's. Not out of the lateral range, but heading toward the lows in the four
month range.
Historical: 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 versus 1.21893 versus 1.23257 versus 1.2296 versus 1.2324 versus
1.22820 versus 1.23431 versus 1.2411 versus 1.25083 versus 1.2450 versus
1.23528 versus 1.22887 versus 1.22524 versus 1.2273 versus 1.2377 versus
1.24573 versus 1.2502 versus 1.2404 versus 1.2402 versus 1.23832 versus
1.24308 versus 1.24159 versus 1.24340 versus 1.23083 versus 1.22567
USD/JPY: 107.645 versus 107.404. Dollar trying to break higher out of the
three week lateral range.
Historical: 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 versus 106.344 versus 105.846 versus 106.42 versus 106.335 versus
106.77 versus 106.41 versus 106.105 versus 105.752 versus 106.359 versus
105.734 versus 106.03 versus 106.695 versus 107.381 versus 106.96 versus
106.886 versus 106.85 versus 107.581 versus 107.435 versus 106.294 versus
106.153 versus 106.782 versus 107.77 versus 108.669 versus 108.669
Oil: 68.40, +0.07. Great week, breaking higher Wednesday after a quick
test of the range breakout. Nice setup to continue the move higher. Toward
80 to 100 as Saudi says? Who knows? The pattern is simply bullish.
Gold: 1338.30, -10.50. Flopped Friday after a tight lateral move all week.
Still in the range, but not breakout out Friday.
MONDAY
Earnings ramp up with GOOG (4/23 after), AMZN (4/26 after). Others are set
as well, and the bulls are looking for these stocks to reignite the upside
move. As noted earlier, there are still very good patterns to drive higher.
Good stocks as well, e.g. NFLX, FFIV, etc.
Therefore we are looking at more positions as the market heads higher with
some of these good patterns. Some oil, some big names, some retail. They
are good, the move is still a bounce, they can still make us money. Still
looking for just a move up to near the prior highs before the move
completely fizzles. It can move higher given all the good patterns, but
with the semiconductors dropping out, that prospect dimmed. If LRCX and
others in the group, including SOX itself, rally off their Fibonacci double
bottoms, that can happen. That would be great, but it has to prove it.
Have a great weekend!
Apple Leads Broad Retreat
20-Apr-18 16:30 ET
Dow -201.95 at 24462.94, Nasdaq -91.93 at 7146.12, S&P -22.99 at 2670.14
https://www.briefing.com/investor/markets/stock-market-update/2018/4/20/apple-leads-broad-retreat.htm
[BRIEFING.COM] Stocks retreated for the second day in a row on Friday, with shares of tech giant Apple (AAPL 165.72, -7.08, -4.1%) falling sharply. The S&P 500 lost 0.9%, the Dow Jones Industrial Average dropped 0.8%, and the tech-heavy Nasdaq Composite declined 1.3%, but all three major averages managed to maintain modest gains for the week.
Friday's selling was broad-based, with 10 of 11 S&P 500 sectors finishing in the red. The technology (-1.5%) and consumer staples (-1.7%) groups were the worst-performing sectors, while the financial space (+0.1%) finished at the top of the sector standings with a slim gain. Stocks were modestly lower at the opening bell, but selling accelerated after the S&P 500 breached its 50-day moving average (2687). The major averages finished a step above their session lows thanks to a late rally.
Apple led the tech sector lower on Friday, with its shares dropping 4.1%, following cautious commentary from analysts, who warned that iPhone sales could slow in the coming months. These concerns flowed from the weak guidance that Taiwan Semi (TSM 38.95, -0.58, -1.5%) gave on Thursday, which was attributed, in part, to softer smartphone demand. Apple shares did find some support at their 200-day moving average though, closing right on top of the key technical level.
Meanwhile, in the financial sector, shares of Wells Fargo (WFC 52.56, +1.02) had a positive showing, rallying 2.0%, after the big bank agreed to pay $1 billion to settle loan abuse allegations. Wells Fargo's positive performance helped underpin the financial group, but a steepening of the yield curve was likely the more influential factor; the 2s10s spread ticked up two basis points to 51 basis points -- up from 42 basis points on Tuesday. The benchmark 10-yr yield ended four basis points higher at 2.95% -- its highest level in more than four years.
On the earnings front, shares of General Electric (GE 14.54, +0.55) jumped 3.9% after the Dow component reported better-than-expected earnings and revenues for the first quarter and reaffirmed its guidance for fiscal year 2018. Shares of fellow industrial giant Honeywell (HON 150.57, +2.44) also climbed following upbeat Q1 results, adding 1.7%.
In politics, the Democratic National Committee filed a lawsuit on Friday against the Russian government, the Trump campaign, and the WikiLeaks organization, alleging that they conspired to tilt the 2016 presidential election in Mr. Donald Trump's favor. The news had a negligible impact on trading.
Investors didn't receive any economic data on Friday.
Nasdaq Composite: +3.5% YTD
Russell 2000: +1.9% YTD
S&P 500: -0.1% YTD
Dow Jones Industrial Average: -1.0% YTD
Week In Review: Holding On
The U.S. stock market notched its second consecutive weekly advance this week, but big losses on Thursday and Friday left a bad taste in investors' mouths going into the weekend. The S&P 500 added 0.5% this week, while the Dow Jones Industrial Average and the Nasdaq Composite climbed 0.4% and 0.6%, respectively.
Wall Street kicked off the week on a positive note, breathing a sigh of relief after a U.S.-led strike on Syria over the weekend -- which was in response to a suspected chemical attack from the Syrian government on the rebel-held town of Douma -- turned out to be less dramatic than many had feared. Russian President Vladimir Putin -- who supports Syrian President Bashar al-Assad -- condemned the attack, saying additional strikes could invite chaos in global affairs, but made no mention of a military response to this particular incident -- leading investors to believe that the dust has settled for now.
The bullish bias carried over into Tuesday's session, as investors turned their attention to the earnings front. Netflix (NFLX) soared nearly 10% on Tuesday, hitting a new all-time high, after crushing subscriber growth estimates for the first quarter and issuing upbeat guidance for Q2. Goldman Sachs (GS) had a blow-out first quarter, easily beating both earnings and revenue estimates, but its shares struggled to advance on Tuesday, putting the investment bank on a long list of financial names that have failed to rally on upbeat results.
Stocks moved higher once again on Wednesday, but only modestly so, as IBM (IBM) weighed on investor sentiment. Shares of the tech giant tumbled 7.5% in the midweek session after the company's above-consensus first quarter profits and revenues were overshadowed by its disappointing gross margin rate, the quality of its revenue (more from hardware and less from cloud), and its relatively conservative profit guidance for fiscal year 2018. Meanwhile, energy shares outperformed as crude oil futures returned to their highest level in more than three years.
On Thursday, the market registered its first loss of the week, with consumer staples shares pacing the retreat. Shares of tobacco giant Philip Morris (PM) plunged 15.6% after the company reported a decline in cigarette shipment volume for the first quarter and slower-than-expected growth for its IQOS product -- which heats tobacco instead of burning it. Meanwhile, Apple supplier Taiwan Semi (TSM) led a broad tech retreat after its first quarter earnings and revenues came in below estimates; the chipmaker also lowered its guidance for Q2.
Wall Street ended the week with another disappointing performance on Friday. The technology sector showed relative weakness once again, with its top component by market cap -- Apple (AAPL) -- sliding 4.1% after several analysts raised concerns about the prospect of iPhone sales being weaker than expected. Financials provided some relief though. Financial giant Wells Fargo (WFC) was particularly strong, adding 2.0%, after agreeing to pay $1 billion to settle loan abuse allegations.
In the end, seven S&P sectors finished with weekly gains, while four finished with weekly losses. The energy group (+2.6%) was the top-performing group, as WTI crude futures advanced 1.5% over five sessions, closing Friday at $68.38 per barrel. Conversely, the consumer staples sector (-4.4%) was the worst performer by a large margin, extending its 2018 loss to 11.8%; for comparison, the S&P 500 has slipped 0.1% year to date. In general, growth-sensitive sectors outperformed defensive ones, although the top-weighted technology group (-0.2%) bucked this trend.
The yield curve ultimately steepened this week, but not before the 2s10s spread hit a 10-year low. Fed officials generally don't appear to be worried about a still low 2s10s spread -- which closed at 51 basis points on Friday -- leading the market to still believe that there will be at least three rate hikes this year in total.
Wall Street Ends Range-Bound Session On Mixed Note
18-Apr-18 16:20 ET
Dow -38.56 at 24748.07, Nasdaq +14.14 at 7295.23, S&P +2.25 at 2708.64
https://www.briefing.com/investor/markets/stock-market-update/2018/4/18/wall-street-ends-rangebound-session-on-mixed-note.htm
[BRIEFING.COM] The major averages were range-bound on Wednesday, finishing the session little changed. Investors took in the latest batch of first quarter earnings, which featured reports from IBM (IBM 148.79, -12.12) and Morgan Stanley (MS 53.26, +0.02), and watched crude oil futures return to their highest level in more than three years. The S&P 500 and the Nasdaq Composite finished higher by 0.1% and 0.2%, respectively, closing in the green for a third straight session, while the Dow Jones Industrial Average lagged, finishing lower by 0.2%.
IBM shares dropped 7.5% on Wednesday, as investors looked past the tech giant's above-consensus first quarter profits and revenues, instead focusing on its disappointing gross margin rate, the quality of its revenue (more from hardware and less from cloud), and its relatively conservative profit guidance for fiscal year 2018. The broader technology sector finished a tick lower, shedding 0.2%, closing near the middle of the sector standings.
The financial group, meanwhile, declined 0.4%, continuing to struggle despite blow-out Q1 results from Morgan Stanley -- which included better-than-expected earnings and revenues. Shares of the investment bank were up and down on Wednesday before eventually finishing flat. Morgan Stanley joins a list of financial firms that have struggled after reporting upbeat Q1 results -- including JPMorgan Chase (JPM 109.32, -0.89), Wells Fargo (WFC 50.39, -0.18), Citigroup (C 68.98, -0.76), Bank of America (BAC 29.53, -0.51), and Goldman Sachs (GS 254.00, +0.37).
A slight steepening of the yield curve helped underpin financials to some degree however, bringing the 2s10s spread up from the more than 10-year low it touched on Tuesday. The yield on the benchmark 10-yr Treasury note climbed five basis points to 2.87%, while the yield on the 2-yr Treasury note advanced two basis points to 2.42%.
Meanwhile, West Texas Intermediate crude futures rallied 2.7% to $68.31 per barrel, rebounding from back-to-back down days. WTI crude futures have surged 10.0% since April 6, initially underpinned by the belief that heightened tensions in the oil-rich Middle East could lead to a slowdown in production. Tensions appear to have been dialed back following a one-off U.S.-led strike on Syria over the weekend, but the commodity continues to challenge its best level since November-December 2014. The Department of Energy's weekly inventory report, which showed that U.S. crude stockpiles declined by 1.1 million barrels last week, helped fuel Wednesday's crude rally.
The energy sector has unsurprisingly benefited from the increase in crude prices, adding another 1.6% on Wednesday to extend its April gain to 9.1%; for comparison, the S&P 500 is up 2.6% month to date. Energy finished at the top of Wednesday's sector standings, with industrials (+1.0%) being the next-best performer. Within the industrial space, transports showed particular strength, pushing the Dow Jones Industrial Average higher by 1.7%, after United Continental (UAL 70.58, +3.24, +4.8%) and CSX (CSX 61.01, +4.44, +7.9%) reported above-consensus first quarter results.
On the downside, the consumer staples space was the worst-performing sector, losing 0.9%, with tobacco names leading the retreat after analysts at Goldman downgraded shares of Altria (MO 61.50, -2.48) to 'Neutral' from 'Buy'; Altria shares lost 3.9%. In general, countercyclical sectors underperformed their cyclical peers, but, as mentioned above, the cyclical financials and technology groups -- which are the two most influential sectors -- were notable laggards, keeping the broader market's gain in check.
Trading volume was light once again on Wednesday, with just 770 million shares changing hands at the New York Stock Exchange -- about 17% less than the 50-day moving average.
Reviewing Wednesday's economic data, which was limited to the Fed's Beige Book for March and the weekly MBA Mortgage Applications Index:
The Fed's Beige Book showed that economic activity continued to expand at a modest to moderate pace across the 12 Federal Reserve Districts in March and early April. Outlooks remained positive, but contacts in various sectors including manufacturing, agriculture, and transportation expressed concern about the newly imposed and/or proposed tariffs. Upward wage pressures persisted, but generally did not escalate; most Districts reported wage growth as only modest.
The weekly MBA Mortgage Applications Index increased 4.9% to follow last week's 1.9% decline.
On Thursday, investors will receive the weekly Initial Claims report (Briefing.com consensus 226K), the Philadelphia Fed Index for April (Briefing.com consensus 21.0), and the Conference Board's Leading Economic Index for March (Briefing.com consensus +0.4%).
Nasdaq Composite: +5.7% YTD
Russell 2000: +3.1% YTD
S&P 500: +1.3% YTD
Dow Jones Industrial Average: +0.1% YTD
Averages Post Solid Gains Despite Lagging Financials
17-Apr-18 16:25 ET
Dow +213.59 at 24786.63, Nasdaq +124.81 at 7281.09, S&P +28.55 at 2706.39
https://www.briefing.com/investor/markets/stock-market-update/2018/4/17/averages-post-solid-gains-despite-lagging-financials.htm
[BRIEFING.COM] Stocks climbed for the second straight session on Tuesday, as investors turned their attention from geopolitical tensions to Q1 corporate earnings -- which have been largely upbeat thus far. The tech-heavy Nasdaq Composite was particularly strong, adding 1.7%, while the S&P 500 and the Dow finished with respective gains of 1.1% and 0.9%.
All three major indices closed above their 50-day moving averages -- which none of them had done since March 21 or earlier.
Big earnings names included Netflix (NFLX 336.06, +28.28), Goldman Sachs (GS 253.63, -4.25), Johnson & Johnson (JNJ 130.54, -1.22), and UnitedHealth (UNH 238.55, +8.23), all of which reported better-than-expected first quarter profits. Shares of Netflix soared 9.2% -- hitting a new all-time high -- after the streaming media giant crushed its subscriber growth estimates (+7.4 million actual vs +6.5 million estimates) and raised its guidance for Q2. UnitedHealth shares also advanced, adding 3.6%, while shares of Johnson & Johnson and Goldman Sachs declined 0.9% and 1.7%, respectively.
Goldman Sachs' performance was particular disheartening considering the company soundly beat both profit and revenue estimates for the first quarter. Financial giants JPMorgan Chase (JPM 110.21, 0.00), Wells Fargo (WFC 50.57, -0.23), Citigroup (C 69.74, -0.33), and Bank of America (BAC 30.04, +0.11) performed in a similar manner following their recent earnings beats, leaving some investors scratching their heads and others questioning the conviction behind of this recent equity rebound. The financial sector -- which typically holds a leadership position in broader market moves -- finished Tuesday at the bottom of the sector standings with a loss of 0.1%.
In addition to Goldman, another curve-flattening trade in the U.S. Treasury market weighed on the financial group. The yield on the benchmark 10-yr yield slid two basis points to 2.81%, while the yield on the 2-yr note climbed two basis points to 2.39%, cutting the 2s10s spread to 42 basis points. That's the lowest the 2s10s spread -- which points to the difference between what banks make on loans and what they pay on deposits -- has been since 2007 and represents a loss of 37 basis points since February 9.
However, the financial sector aside, Tuesday was a positive day on Wall Street, with advancing issues outpacing declining issues 2.7 to 1.
Netflix's upbeat earnings report helped push FAANG names higher -- Facebook (FB 168.66, +3.83), Apple (AAPL 178.24, +2.42), Amazon (AMZN 1503.83, +62.33), and Alphabet (GOOG 1074.16, +36.18) added between 1.4% and 4.3% -- which, in turn, helped push the consumer discretionary sector (+1.9%), which houses Amazon, and the technology sector (+2.0%), which houses the others, to the top of the sector standings. Tech giant Microsoft (MSFT 96.07, +1.90) also outperformed, adding 2.0%.
The CBOE Volatility Index (VIX) -- dubbed Wall Street's "fear gauge" -- dropped 10.0% on Tuesday to 14.89, which is its lowest level since early March. It's also worth noting that volume was relatively light on Tuesday, with just 720 million shares changing hands at the New York Stock Exchange; the 50-day moving average is 936 million.
Reviewing Tuesday's economic data, which included March Housing Starts and Building Permits and March Industrial Production and Capacity Utilization:
Housing starts increased to a seasonally adjusted annualized rate of 1.319 million units in March (Briefing.com consensus 1.268 million), up from a revised 1.295 million units in February (from 1.236 million). Building permits rose to a seasonally adjusted 1.354 million in March (Briefing.com consensus 1.315 million) from a revised 1.321 million in February (from 1.298 million).
The key takeaway from the report is that the monthly increases were driven entirely by multi-unit dwellings. Single-family starts were down 3.7% while single-family permits fell 5.5%, which is disappointing given the supply shortage of single-family homes.
Industrial Production increased 0.5% in March (Briefing.com consensus +0.3%), while the February reading was revised to +1.0% (from +0.9%). Meanwhile, Capacity Utilization ticked up to 78.0% (Briefing.com consensus 77.8%) from an unrevised reading of 77.7% in February.
The key takeaway from the report is that all three major industry groups played a part in driving the uptick in industrial production in March.
On Wednesday, investors will receive the weekly MBA Mortgage Applications Index and the Fed's Beige Book for March.
Nasdaq Composite: +5.5% YTD
Russell 2000: +2.9% YTD
S&P 500: +1.2% YTD
Dow Jones Industrial Average: +0.3% YTD
Sigh of Relief
16-Apr-18 16:30 ET
Dow +212.90 at 24573.04, Nasdaq +49.63 at 7156.28, S&P +21.54 at 2677.84
https://www.briefing.com/investor/markets/stock-market-update/2018/4/16/sigh-of-relief.htm
[BRIEFING.COM] Investors breathed a sigh of relief on Monday, pushing stocks solidly higher, after a U.S.-led strike on Syria over the weekend turned out to be less dramatic than many had feared.
The S&P 500 finished higher by 0.8% at 2677.84 after getting rejected at its 50-day moving average (2687). The Dow Jones Industrial Average and the Nasdaq Composite also finished a step below their 50-day moving averages, adding 0.9% and 0.7%, respectively.
U.S., U.K., and French forces carried out a much-anticipated missile attack against the Syrian government late Friday, targeting three sites associated with the production of chemical weapons following a suspected poison gas attack against the rebel-held town of Douma on April 7. Russian President Vladimir Putin -- who supports the Syrian government -- condemned the attack, saying additional strikes could invite chaos in global affairs, but made no mention of a military response to this particular incident -- giving the impression that it's now in the rear-view mirror.
That realization proved to be a positive for the equity market, but didn't bode so well for crude oil, which surged more than 8.0% last week on the bet that heightened tensions in the oil-rich Middle East would lead to a slowdown in production; West Texas Intermediate crude futures slid 1.6% to $66.18 per barrel. However, the energy sector, which typically moves in tandem with the price of crude oil, rallied 1.0%.
All 11 S&P sectors finished Monday in positive territory, with gains ranging from 0.4% to 1.5%. Lightly-weighted groups populated the top and bottom of the sector standings, with telecom services (+1.5%), utilities (+1.4%), and materials (+1.4%) closing at the top, and real estate (+0.4%) closing at the bottom. The heavily-weighted financial space (+0.5%) was the second-worst performer.
In corporate news, drug retailers CVS Health (CVS 66.10, +2.67) and Walgreens Boot Alliance (WBA 66.22, +2.40) rallied 4.2% and 3.8%, respectively, following a CNBC report that internet retail giant Amazon (AMZN 1441.50, +10.71) has shelved plans to sell and distribute pharmaceutical products to hospitals. Separately, Merck (MRK 58.65, +1.48) and Bristol-Myers (BMY 54.08, -4.57) both reported better-than-expected clinical trial results for their respective cancer treatments, but Merck surpassed expectations even more so than Bristol. Merck shares jumped 2.6%, while Bristol shares tumbled 7.8%.
On the earnings front, Bank of America (BAC 29.93, +0.13) struggled early after reporting above-consensus first quarter earnings ahead of Monday's opening bell, but eventually finished up 0.4%. Financial peer Charles Schwab (SCHW 53.08, +2.04) soared 4.0% after also beating bottom-line estimates for Q1. Moving to transports, JB Hunt (JBHT 119.75, +6.98) jumped 6.2% after beating both earnings and revenues estimates for the first quarter, helping to fuel a broad transport rally; the Dow Jones Transportation Average finished Monday higher by 2.3%.
In the bond market, U.S. Treasuries ended Monday slightly lower, which was a minor victory in light of the larger losses posted overnight. The 2-yr yield flirted with 2.40% before closing flat at 2.37%, while the benchmark 10-yr yield flirted with 2.87% before closing with a one basis point gain at 2.83%.
Reviewing Monday's economic data, which included Retail Sales for March, the Empire State Manufacturing Survey for April, Business Inventories for February, and the NAHB Housing Market Index for April:
March retail sales increased 0.6% (Briefing.com consensus +0.4%). The prior month's reading was left unrevised at -0.1%. Excluding autos, retail sales increased 0.2%, as expected. The prior month's increased was left unrevised at 0.2%.
The key takeaway from the report is that March stopped a streak of three consecutive monthly declines in retail sales, although it also demonstrates that consumers continue to show some restraint in discretionary spending.
The Empire Manufacturing Survey for April declined to 15.8 (Briefing.com consensus 20.0) from the prior month's unrevised reading of 22.5.
Business Inventories increased 0.6% in February (Briefing.com consensus +0.6%). The January reading was left unrevised at +0.6%.
The key takeaway from the report is that inventory growth outpaced sales growth, as inventories increased for manufacturers (+0.3%), retailers (+0.4%), and merchant wholesalers (+1.0%).
The NAHB Housing Market Index for April decreased to 69 (Briefing.com consensus 70) from an unrevised reading of 70 in March.
On Tuesday, investors will receive March Housing Starts (Briefing.com consensus 1268K) and Building Permits (Briefing.com consensus 1315K) at 8:30 AM ET and March Industrial Production (Briefing.com consensus +0.3%) and Capacity Utilization (Briefing.com consensus 77.8%) at 9:15 AM ET.
Nasdaq Composite: +3.7% YTD
Russell 2000: +1.8% YTD
S&P 500: +0.2% YTD
Dow Jones Industrial Average: -0.6% YTD
InvestmentHouse - Too Much Turmoil and Geopolitics to Buy Into Weekend (WeekendNewsletter)
http://www.investmenthouse.com/frblog.php
- Too much turmoil and geopolitics for many to buy into the weekend.
- Stocks start higher but fade off the higher highs.
- Indices cannot take out the 50 day MA's yet, but volume and breadth are
light.
- Syria strikes raise risk level, but Trump declares 'mission accomplished.'
- Earnings start with NFLX leading off Monday as indices are in position to
continue the rebound rally.
- Still plenty of leadership in position to move higher.
The week did not end great, but while the stock indices traded lower Friday,
the overall week was positive. Even Friday. No, not a rip higher, but a
second bounce from the February lows, one that produced better internals and
much better moves by some solid leader stocks. The bounce took RUTX past
the 50 day MA's, but the rest of the indices still had to deal with that
level, something we noted as this bounces' first test. Wanted them to move
through and then come back and test from above a la RUTX, but that was not
in the cards. With the move higher on the week and a weekend with still
many potential flashpoint issues, after a higher open the bids dried up and
stocks solid back, really struggling in the afternoon session.
SP500 -7.68, -0.29%
NASDAQ -33.60, -0.47%
DJ30 -122.91, -0.50%
SP400 -0.32%
RUTX -0.50%
SOX -0.77%
VOLUME: NYSE -4%, NASDAQ -13%. Volume, already low, tumbled Friday. NYSE
posted another below average session, NASDAQ faded as well. Volume was
quite light all week with one good upside session Tuesday when the market
kicked in its first good upside move in awhile with some good internals and
leadership.
ADVANCE/DECLINE: NYSE -1.3:1, NASDAQ -1.7:1.
These internals show no selling, just a drying up of the bids ahead of the
weekend. People were not dumping stocks ahead of the weekend, they just
stopped buying given all of the geopolitical issues in the world. Oh, and
it was Friday the 13th as well.
Again, it was not a great week of power. It was, however, the second bounce
off the test of the February lows by SP500 and DJ30. It showed the internal
strength and particularly leadership that the first bounce did not have. As
you are aware, we concluded based upon the internals and the improved action
in leaders that a tradable rally was beginning and thus we started buying
the good moves. It is interesting that Friday Byron Weems said he believed
that the market would test the February low and then move higher from there.
It would appear to us that the February lows have been tested and the market
is already moving upside despite the Friday sluggishness.
Accordingly, we picked up quite a few positions on the week, greatly
expanding our exposure to the market. Some really good names moving really
well. The key now, as noted late week is whether the indices can overcome
the first test, the 50 day MA's, and continue the rally into earnings.
Friday was a 'no,' but that was not the seminal test. This week more
earnings come out and the market is set up quite well to move higher and
continue the rebound.
What about the geopolitics, e.g. the late Friday strike on Syria by the US,
France and UK (Germany sat this one out)? If things spiral out of control
of course all bets are off. Thus far, however, the market is shaking them
off and moving higher, even if on low volume.
Remember, this does not mean we think new highs are going to result. They
can but the market will need a real boost and get a lot more volume to make
that happen. Earnings can provide that as they did in October 2017. Thing
is, the move higher has been steady and straight for a long time. Starting
in January and that four week surge to higher highs, the market moves are
much more volatile. That is something moves tend to show near their end
before a deeper correction is needed.
Also, the patterns developed in the indices suggest a rebound but more has
to be shown to make new highs. Specifically, SP500 and DJ30 set up double
bottoms at the 78% and 61% Fibonacci retracement, respectively, of the
September through January rally. Those are reliable upside bounce plays
with a maximum target at the prior highs. Beyond that, again, needs to have
something more to drive it.
Therefore, on this move we play the pattern move. Then if something more
shows up to drive stocks higher, we enjoy the ride as we are already in, and
we take the opportunities presented in other stocks that will show up. We
know that to be the case because if the move continues beyond a bounce there
will be new leaders and new opportunities to play the upside.
THE MARKET
Friday the lackluster economic data continued as the slow spot I discussed
over a month ago -- and that the Fed just acknowledged this past week --
continues. Michigan Sentiment was not bad but it posted the biggest loss in
18 months.
Then there are the geopolitical issues dominated by trade, and after Friday
evening, perhaps Syria/Russia. One bright spot Friday was Secretary Ross
stating at a conference in Lima, Peru that he anticipates a new deal on
NAFTA by the third week in May.
Thus far, the market, while buffeted day to day by the news, has overcome
the negatives and is rising off the February lows. It is not a massive
surge but it is showing the right credentials in internals (when it counts)
and leadership. Even IBD says the market is now in what it calls a
confirmed uptrend again. As noted, we are playing that move, using rational
expectations.
CHARTS
RUTX: The small caps get the pole position today because they led the move
starting with a Tuesday surge off a higher low. That higher low was a test
of the initial move from the 200 day SMA and selloff that started mid-March.
RUTX broke higher through the 50 day MA's and extended that move into
Thursday. Friday of course it was off, but it is testing from a position of
strength, i.e. from above. That bodes well for RUTX successfully testing
and resuming the move upside.
SP400: Moved through the 50 day MA's Thursday on the high but could not
hold it. Again Friday but could not hold it. Still an improved pattern,
showing a pennant the past 3 months. Looks ready to follow RUTX through
that first resistance.
NASDAQ: Moved up to the 50 day MA's on the week, but was rebuffed Friday.
Holding over the rising 10 day EMA and we anticipate NASDAQ to continue the
move next week given the good leadership. NASDAQ appears to have formed a
new, wider uptrending channel using the 200 day SMA on the lows. Rallied
off that level just over a week back, a quick test, then the move higher
last week.
SOX: Came off the channel lower trendline Monday and posted a great move
into the Friday open. That move SOX through the 50 day MA's, but it could
not hold the move. Still trending in its 5 month channel, coming off the
low the past week as noted.
DJ30: Off the February lows touched just 7 sessions back. February lows,
200 day SMA, 61% Fibonacci retracement -- very good support. Bounced up to
the 50 day EMA Friday, faded modestly, lower trade. Okay, a double bottom
at the February lows, and now something of a downward pointing wedge
forming. Wedges tend to resolve to opposite direction of the point, and in
this case that would be upside.
SP500: Also held the February lows, 200 day SMA, and its 78% Fibonacci
retracement. Bounced through the Friday open, testing the 50 day MA's from
below. Faded that move, but is in very good position to hold and continue
the move higher.
LEADERSHIP
FAANG: NFLX and the four dwarves. NFLX was up all week in a good move.
AAPL up but still lodged in the range. AMZN looks weak below the 50 day MA.
FB managed to bounce on ZBurg playing nice to Congress, but still has to
appear before the EU. GOOG is holding at the 200 day SMA; perhaps some day
it can put in a bounce. For now, money has left all of this group outside
NFLX.
Chips: Still a struggle but working on it. LRCX not bad with a move up on
the week. AVGO gapped upside on a big share buyback program, but still has
to show its pattern can hold up. INTC is back near its high, coming off the
50 day MA. MU is moving up off the 50 day MA. MXWL, AMAT not bad while
MLNX is putting in higher highs. There are leaders.
Drugs/Biotech: AMED, AMAG had good weeks though Friday was off. DVAX was
strong but fell to the 10 day EMA Friday. UNH still trying to set up, ARWR
looks great, INO setting up, MYL not bad. VRX looking good. Good group.
Software: Really improving. RHT a good move last week, FFIV awesome for
us. CRM trying to make a break. GLUU breaking higher in the gaming
software. NOW setting up, COUP looks nice.
Oil: DO working quite well. HAL continues higher. APC as well. A group
of leaders that held up working well. Others are attempting to catch up.
Like NBR.
MARKET STATS
DJ30
Stats: -122.91 points (-0.50%) to close at 24360.14
Nasdaq
Stats: -33.60 points (-0.47%) to close at 7106.65
Volume: 1.76B (-12.87%)
Up Volume: 491.17M (-928.83M)
Down Volume: 1.25B (+675.7M)
A/D and Hi/Lo: Decliners led 1.64 to 1
Previous Session: Advancers led 1.85 to 1
New Highs: 52 (-19)
New Lows: 30 (+8)
S&P
Stats: -7.69 points (-0.29%) to close at 2656.30
NYSE Volume: 717.253M (-3.71%)
A/D and Hi/Lo: Decliners led 1.3 to 1
Previous Session: Advancers led 1.19 to 1
New Highs: 43 (-10)
New Lows: 50 (+8)
SENTIMENT INDICATORS
VIX: 17.41; -1.08
VXN: 22.06; -0.84
VXO: 17.89; -1.40
Put/Call Ratio (CBOE): 0.98; -0.01
Bulls and Bears:
Bulls are falling rapidly after the peak at 66.7. that was a significant
high and bulls have dropped hard into the low 40's. As you would
anticipate, the market sold off but as the bulls sell off the market is
ready for a pre-earnings rally off the lows.
Bulls: 42.2 versus 47.6 versus
Bears: 18.6 versus 18.1
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 42.2 versus 47.6
49.5 versus 55.5 versus 54.9 versus 48.6 versus 48.1 versus 48.5 versus 41.9
versus 54.4 versus 66.00 versus 64.7 versus 66.7 versus 64.4 versus 61.9
versus 64.1 versus 64.2 versus 62.3 versus 61.5 versus 63.5 versus 64.4
versus 63.5 versus 62.3 versus 60.6 versus 60.4 versus 57.5 versus 54.3
versus 50.5 versus 47.1 versus 49.5 versus 49.5 versus 48.1 versus 50.5
versus 57.5 versus 60.0 versus 60.2 versus 57.8 versus 50.0 versus 52.5
versus 54.9 versus 51.5 versus 50.00 versus 55.8 versus 50.00 versus 51.9
versus 58.1 versus 58.7 versus 58.5 versus 54.7 versus 51.9 versus 56.3
versus 55.8 versus 49.5
Bears: 18.6 versus 18.1
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: 2.825% versus 2.825%
Historical: the last sub-2% rate was in November 2016 (1.867%). 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% versus 2.826% versus 2.819% versus 2.844% versus 2.866% versus 2.896%
versus 2.872% versus 2.879% versus 2.863% versus 2.879% versus 2.868% versus
2.799% versus 2.875% versus 2.893% versus 2.864% versus 2.866% versus 2.934%
versus 2.952% versus 2.893% versus 2.873% versus 2.904% versus 2.913% versus
2.833% versus 2.857% versus 2.8577% versus 2.844% versus 2.813% versus
2.805% versus 2.707% versus 2.841% versus 2.792%
EUR/USD: 1.23313 versus 1.23299. Holding steady in its lateral move,
testing the 50 day EMA, still positive pattern overall.
Historical: 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 versus 1.21893 versus 1.23257 versus 1.2296 versus 1.2324 versus
1.22820 versus 1.23431 versus 1.2411 versus 1.25083 versus 1.2450 versus
1.23528 versus 1.22887 versus 1.22524 versus 1.2273 versus 1.2377 versus
1.24573 versus 1.2502 versus 1.2404 versus 1.2402 versus 1.23832 versus
1.24308 versus 1.24159 versus 1.24340 versus 1.23083 versus 1.22567
USD/JPY: 107.362 versus 107.267. Trying to break higher out of a tight
weeklong lateral move.
Historical: 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 versus 106.344 versus 105.846 versus 106.42 versus 106.335 versus
106.77 versus 106.41 versus 106.105 versus 105.752 versus 106.359 versus
105.734 versus 106.03 versus 106.695 versus 107.381 versus 106.96 versus
106.886 versus 106.85 versus 107.581 versus 107.435 versus 106.294 versus
106.153 versus 106.782 versus 107.77 versus 108.669 versus 108.669
Oil: 67.39, +0.32. Nice break higher off the 50 day MA to a higher high,
moving past the last January peak.
Gold: 1347.90, +6.00. Broke higher Wednesday but then fell, only to start
to rebound Friday. A 2.5 month base looks close to breaking out.
MONDAY
The big news Friday was the Syria 'coalition' strikes. Russia claims it
shot down 70-something of around 100 missiles and little damage done. The
Pentagon says it hit all targets. Both could be true the way they phrase
things.
The worry is that causes some further brouhaha, but it helped when Trump's
defense minister said the strikes were a 'one time thing.' Later Trump
stated it was 'mission accomplished.' Now I know that phrase has dubious
meaning what with the Bush II forays into nation building, but in this
situation I am pretty sure it can be taken to mean as a message to Russia
that we are not going to launch further strikes based upon the chemical
poisoning claims.
With the selloff ahead of earnings, the start of the move higher, the lower
volume on the downside sessions, and the ability to thus far shake off
geopolitics, we are still looking for the move upside to continue.
That means a move through the 50 day MA's for the indices as they follow
RUTX and its move into earnings. NFLX gets things going with its results
Monday after the close. LRCX is Tuesday after the close. Some important
names announcing early to try and get the market moving into the first
couple of weeks of the season. These initial earnings will be important for
the move, and we anticipate holding some of the positions on NFLX, LRCX and
of course see if they can carry the rest of the market, and our other
positions higher.
Therefore, though we have several new positions as of last week, there are
plenty of very good-looking stocks still in very good position to make moves
higher.
Have a great weekend!
Stocks Trim Weekly Gains on Friday
13-Apr-18 16:30 ET
Dow -122.91 at 24360.14, Nasdaq -33.60 at 7106.65, S&P -7.69 at 2656.30
https://www.briefing.com/investor/markets/stock-market-update/2018/4/13/stocks-trim-weekly-gains-on-friday.htm
[BRIEFING.COM] Stocks slipped on Friday, ending a positive week on a disappointing note, as some geopolitical angst prompted investors to take some money off the table ahead of the weekend. The S&P 500 declined 0.3%, the Nasdaq Composite lost 0.5%, and the Dow Jones Industrial Average dropped 0.5% -- trimming their gains for the week to 1.8%-2.8%.
The major averages started the session modestly higher following better-than-expected first quarter earnings results from financial giants JPMorgan Chase (JPM 110.30, -3.07, -2.7%), Wells Fargo (WFC 50.89, -1.81, -3.4%), and Citigroup (C 71.01, -1.12, -1.6%). However, after a short stint in the green, the financial sector moved lower, bringing the broader market with it. Volatility picked up in the final stretch, with the major averages dropping to new lows before bouncing back, as investors contemplated the likelihood of a U.S.-led strike on Syria over the weekend.
President Trump has promised that the U.S. will be striking the Syrian government, which is accused of carrying out a chemical attack against the rebel-held town of Douma last Saturday, but the president has intentionally made the timing of the attack unclear. Adding to the uncertainty, an attack would likely put the U.S. at odds with Russia, who supports Syrian President Bashar al-Assad and has vowed to shoot down any missiles fired at Syria.
The energy sector (+1.1%) helped keep losses in check on Friday, extending its weekly gain to 6.0%, as oil prices rallied for the fifth day in a row. West Texas Intermediate crude futures jumped 0.3% to $67.26 per barrel -- their best level in more than three years -- benefiting, once again, from the uncertainty surrounding the oil-rich Middle East. The utilities (+0.7%), consumer staples (+0.5%), and real estate (+0.5%) sectors also advanced, but the seven remaining groups finished in the red.
Unsurprisingly, the financial sector (-1.6%) finished at the bottom of the sector standings following the negative reaction to the big bank earnings. The consumer discretionary space (-0.6%) also underperformed, but no other group lost more than 0.3%. Within the top-weighted technology space (-0.3%), chipmaker Broadcom (AVGO 246.94, +7.51) outperformed, adding 3.1%, following news that the company's board has authorized the repurchase of up to $12 billion of common stock.
In the bond market, U.S. Treasuries finished Friday mixed, flattening the 2s10s spread to 45 basis points -- its lowest level since 2007. The yield on the benchmark 10-yr Treasury note slipped one basis point to 2.82%, while the yield on the 2-yr Treasury note climbed two basis points to 2.37%.
Reviewing Friday's economic data, which was limited to the preliminary reading of the University of Michigan Consumer Sentiment Index for April and the Job Openings and Labor Turnover Survey for February:
The preliminary reading of the University of Michigan Consumer Sentiment Index for April declined to 97.8 (Briefing.com consensus 100.6) from 101.4 in March.
The key takeaway from the report is that the monthly drop was due to worries about trade policies and expectations for rising interest rates.
The February Job Openings and Labor Turnover Survey showed that job openings decreased to 6.052 million from a revised 6.228 million (from 6.312 million) in January.
On Monday, investors will receive Retail Sales for March, the Empire State Manufacturing Survey for April, Business Inventories for February, and the NAHB Housing Market Index for April.
Nasdaq Composite: +2.9% YTD
Russell 2000: +0.9% YTD
S&P 500: -0.7% YTD
Dow Jones Industrial Average: -1.5% YTD
Week In Review: Light Volume Overshadows Gains
Wall Street had a good week in terms of gains, but volume was light, pointing to a lack of conviction among investors -- who spent the week digesting a steady stream of headlines. The tech-heavy Nasdaq Composite led the major indices higher, adding 2.8%, while the S&P 500 and the Dow Jones Industrial Average advanced 2.0% and 1.8%, respectively.
The stock market began the week on a positive note following weekend interviews from several White House officials, including Treasury Secretary Steven Mnuchin, that helped to alleviate fears that the U.S. is barreling towards a tit-for-tat trade war with China. Chinese President Xi Jinping helped further improve investor sentiment with a speech at the Boao Forum on Tuesday, saying that he plans to "significantly" cut tariffs on imported automobiles, reduce duties on other imported goods, and improve the intellectual property rights of foreign firms.
Moving to the Middle East, geopolitical tensions were heightened following a suspected chemical attack from the Syrian government on the rebel-held town of Douma that killed at least 40 people over the weekend. The situation escalated even further on Wednesday morning when Russia, which supports Syrian President Bashar al-Assad, warned that it would shoot down any missiles fired at Syria -- to which U.S. President Donald Trump replied "get ready Russia, because they will be coming."
As of this writing, the U.S. has yet to strike the Syrian government, but it could happen at any moment. The attack was first thought to be imminent, but President Trump muddled that belief on Thursday by tweeting that it could happen "very soon or not so soon at all!"
In addition to the situation in Syria, a missile attack aimed at Saudi Arabia by pro-Iranian rebels in Yemen served to further escalate tensions in the region. Saudi air defense forces intercepted one missile over the capital Riyadh on Wednesday, while two others were intercepted over the southern areas of Jazan and Najran.
With all the concerning headlines out of the oil-rich Middle East, traders pushed oil prices substantially higher this week, betting that the tensions will eventually lead to a slowdown in production. West Texas Intermediate crude futures surged 8.4% to $67.26 per barrel, closing Friday at their highest level in more than three years. The S&P 500's energy sector benefited from the jump in oil prices, finishing at the top of the week's sector standings by a comfortable margin; the group added 6.0%.
In Washington, Facebook (FB) CEO Mark Zuckerberg testified on Capitol Hill this week, answering questions regarding the company's Cambridge Analytica data scandal and Russia's alleged use of Facebook to influence the 2016 U.S. presidential election. Mr. Zuckerberg was grilled for 10 hours by nearly 100 lawmakers, but the market seemed satisfied with his answers. Facebook shares climbed 5.3% over the two days of testimony, eventually finishing the week with a gain of 4.7%.
On Friday, big banks kicked off the first quarter earnings season, with JPMorgan Chase (JPM), Wells Fargo (WFC), and Citigroup (C) all beating profit estimates on in-line revenues. However, shares of the three lenders, and the broader financial sector, sold off in the wake of the reports. The financial sector settled the week with a gain of 1.0%, which placed it in the middle of the sector standings. The lightly-weighted utilities and real estate groups finished at the back of the pack, losing a little more than 1.0% apiece.
Investors received the minutes from the March FOMC meeting this week, but the report contained few surprises. Some key inflationary data was also released this week -- namely the CPI readings for March -- but was met with a largely muted response from the market. In short, the consumer prices report showed a firming (though not scary) inflation trend that will keep the Federal Reserve wedded to its tightening bias and its belief that at least two more rate hikes are warranted this year.
The CME FedWatch Tool still anticipates that the next rate hike will occur at the June FOMC meeting with an implied probability of 95.0% (up from 85.2% last week). The market also still believes there will be a total of three rate hikes in 2018, but the chances for a fourth hike increased to 36.8% (from 26.3% last week).
Middle East Tensions Halt Rebound
11-Apr-18 16:20 ET
Dow -218.55 at 24189.45, Nasdaq -25.27 at 7069.03, S&P -14.68 at 2642.19
https://www.briefing.com/investor/markets/stock-market-update/2018/4/11/middle-east-tensions-halt-rebound.htm
[BRIEFING.COM] A two-session rebound came to an end on Wednesday, as an imminent U.S. strike on Syria gave equity investors cause for pause.
The Dow Jones Industrial Average led the major averages lower, ending with a loss of 0.9%, while the S&P 500 and the Nasdaq Composite finished lower by 0.6% and 0.4%, respectively. The small-cap Russell 2000 outperformed, however, finishing with a gain of 0.2%.
Investors have been waiting for a response from the U.S. following a suspected chemical attack from the Syrian government on the rebel-held town of Douma that killed at least 40 people over the weekend. However, the situation escalated on Wednesday morning when Russia, which supports Syrian President Bashar al-Assad, warned that it would shoot down any missiles fired at Syria -- to which U.S. President Donald Trump replied "get ready Russia, because they will be coming."
Unconfirmed reports that Saudi Arabia intercepted a missile over its capital Riyadh -- presumably launched by Houthi rebels in Yemen who have targeted Saudi territory before -- added to the uncertainty within the region. Oil prices rose once again, hitting a three-year high, in anticipation that increased tensions in the oil-rich Middle East could lead to a slowdown in production; West Texas Intermediate crude futures finished higher by 2.0% at a price of $66.82 per barrel.
The S&P's energy sector rallied amid the increase in crude prices, adding 1.0%, but nearly all other sectors finished in the red. The heavily-weighted financial sector finished near the bottom of the sector standings, losing 1.3%, outdone only by the telecom services group, which lost 1.5%. A curve-flattening trade in the Treasury market weighed on lenders, which depend on the difference between the interest they make on loans and the rate they pay out on deposits; the benchmark 10-yr yield slipped one basis point to 2.79%, while the 2-yr yield ticked up one basis point to 2.32%.
Minutes from the March FOMC meeting were released on Wednesday afternoon, but contained few surprises. The minutes showed that a number of Fed officials anticipate the path of rate increases to be slightly steeper than they previously expected -- which is in line with the so-called "dot plot" released at the end of the March meeting -- and revealed that they had an in-depth discussion around trade tensions, which all members agree present "downside risks" to the economic outlook.
Investors also received some inflation data on Wednesday; namely, the March CPI readings. Total CPI decreased 0.1% (Briefing.com consensus +0.1%), while core CPI, which excludes the volatile categories of food and energy, increased 0.2% (Briefing.com consensus +0.2%). Year-over-year, total CPI was up 2.4% in March (vs +2.2% in February) and core CPI was up 2.1% (vs +1.8% in February). In short, the report showed a firming (though not scary) inflation trend that will keep the Federal Reserve wedded to its tightening bias and its belief that at least two more rate hikes are warranted this year.
Separately, the Treasury Budget for March showed a deficit of $208.7 billion versus a deficit of $176.2 billion for the same period a year ago.
News networks were focused on the second, and final, day of Mark Zuckerberg's testimony on Capitol Hill. Mr. Zuckerberg, who is the chief executive at Facebook (FB 166.32, +1.28), appeared before a joint hearing of the House Energy and Commerce Committees, answering questions regarding the Cambridge Analytica data scandal and Russia's use of Facebook in attempting to influence the 2016 U.S. presidential election. Facebook shares finished higher by 0.8%, adding to Tuesday's 4.5% rally.
Nasdaq Composite: +2.4% YTD
Russell 2000: +0.7% YTD
S&P 500: -1.2% YTD
Dow Jones Industrial Average: -2.1% YTD
Xi Trade Comments Fuel Broad Rally
10-Apr-18 16:30 ET
Dow +428.90 at 24408.00, Nasdaq +143.96 at 7094.30, S&P +43.71 at 2656.87
https://www.briefing.com/investor/markets/stock-market-update/2018/4/10/xi-trade-comments-fuel-broad-rally.htm
[BRIEFING.COM] Stocks were up big from start to finish on Tuesday following conciliatory remarks from Chinese President Xi Jinping, which helped ease fears of a global trade war. The major averages endured some intraday volatility to finish a step below their best marks of the day -- the S&P 500 added 1.7%, the Dow climbed 1.8%, and the Nasdaq advanced 2.1% -- which was an encouraging sign for investors, who were still a little shell shocked following Monday's sharp reversal.
Mr. Xi helped alleviate fears that the U.S. and China are barreling towards a tit-for-tat trade war in an overnight speech at the Boao Forum, saying that he plans to "significantly" cut tariffs on imported automobiles, reduce duties on other imported goods, and improve the intellectual property rights of foreign firms. President Trump, who has promised to hit China with tariffs in an effort to reduce Washington's trade deficit with Beijing, praised Mr. Xi for his comments, saying the two leaders will "make great progress together."
Moving to the Middle East, uncertainty as to how President Trump will respond to a chemical attack in Syria prompted traders to push oil prices higher on Tuesday, which, in turn, fueled a strong outing for energy shares; the S&P 500's energy sector rallied 3.3%, while West Texas Intermediate crude futures jumped 3.2% to $65.49 per barrel -- their best level in two weeks. President Trump's response to the chemical attack -- which killed more than 40 people on Saturday -- is believed to be imminent.
In Washington, Mark Zuckerberg -- Facebook's (FB 165.04, +7.11) founder, chairman, and CEO -- began a two-day testimony on Capitol Hill with an appearance before a joint hearing of the Senate Judiciary and Commerce Committees on Tuesday, answering questions regarding the Cambridge Analytica data scandal and Russia's alleged use of Facebook to influence the 2016 U.S. presidential election. The market appeared to like what Mr. Zuckerberg had to say, as Facebook's share price more than double its daily gain after he began speaking; FB shares finished higher by 4.5%.
Nine of eleven S&P 500 sectors finished Tuesday in positive territory, with the lightly-weighted utilities (-0.7%) and real estate (-0.7%) sectors being the lone laggards. The energy group (+3.3%) was the top performer, while the top-weighted technology sector (+2.5%) and the telecom services space (+2.3%) finished in second and third, respectively. Within the telecom space, Sprint (S 6.02, +0.88) and T-Mobile US (TMUS 63.13, +3.39) spiked 17.1% and 5.7%, respectively, following a Wall Street Journal report that the two companies have restarted merger talks.
In the bond market, U.S. Treasuries ended Tuesday on a mostly lower note, with the long bond showing relative strength for the second consecutive day. The yield on the benchmark 10-yr Treasury note finished one basis point higher at 2.80%, while the yield on the 30-yr bond finished flat at 3.02%. Yields move inversely to prices.
Investors received just two pieces of economic data on Tuesday -- the Producer Price Index for March and Wholesale Inventories for February:
Producer prices rose 0.3% in March (Briefing.com consensus +0.2%) and core producer prices increased 0.3% (Briefing.com consensus +0.2%). Year-over-year, producer prices are up 3.0% (vs +2.8% in February) and core producer prices have risen 2.7% (vs +2.5% in February).
The key takeaway from the report is that producer prices are trending higher, which will feed concerns about a pass through to consumers and keep the Federal Reserve wedded to its belief that inflation rates are poised to pick up, leaving it with a tightening bias.
February Wholesale Inventories increased 1.0% (Briefing.com consensus +1.1%). The January reading was revised to +0.9% from +0.8%.
The market doesn't typically pay much attention to this release since the full business inventories report is usually released a short time later.
On Wednesday, investors will receive the weekly MBA Mortgage Applications Index at 7:00 AM ET, the Consumer Price Index (Briefing.com consensus +0.1%) for March at 8:30 AM ET, and both the minutes from the March FOMC meeting and the March Treasury Budget at 2:00 PM ET.
Nasdaq Composite: +2.8% YTD
Russell 2000: +0.5% YTD
S&P 500: -0.6% YTD
Dow Jones Industrial Average: -1.3% YTD
Easy Come, Easy Go
09-Apr-18 16:30 ET
Dow +46.34 at 23979.10, Nasdaq +35.23 at 6950.34, S&P +8.69 at 2613.16
https://www.briefing.com/investor/markets/stock-market-update/2018/4/9/easy-come-easy-go.htm
[BRIEFING.COM] Stocks rallied through the first half of Monday's session, reclaiming the bulk of Friday's dive, but nearly gave back all of their gains in the afternoon. The S&P 500 finished with a gain of 0.3%, while the Nasdaq Composite and the Dow Jones Industrial Average advanced 0.5% and 0.2%, respectively. The small-cap Russell 2000 added 0.1%.
A de-escalation of trade war fears was the widely-cited catalyst behind a strong start to Monday's session after weekend interviews from several Trump administration officials gave investors the impression that the White House might be trying to dial back its fiery rhetoric against China. Treasury Secretary Steven Mnuchin, for example, reiterated a comment he made on Friday, saying that the U.S. could enter a trade war with China, but then added that he "[doesn't] expect it at all."
The defense of the S&P 500's 200-day moving average (2594) on Friday also helped fuel a bullish tone at the opening bell. Stocks climbed steadily into the afternoon -- with the S&P 500 adding as much as 1.9% -- but sentiment began to turn in the final two hours as investors looked ahead to comments from China's President Xi Jinping, who will be speaking at the Boao Forum on Tuesday.
The possibility that Mr. Xi could take a forceful stance on trade with the U.S. prompted investors to take some money off the table ahead of the close -- especially considering that the market has been responding to headlines in a knee-jerk fashion as of late. In addition, uncertainty regarding President Trump's response to a chemical weapons attack in Syria that killed dozens of people over the weekend also fueled some late selling, as did a New York Times report that the FBI raided the office of Mr. Trump's longtime personal lawyer Michael Cohen.
In the end, the sector standings were pretty evenly mixed with six groups advancing and five finishing in the red. The health care sector (+0.9%) was the top performer, helped by Dow component Merck (MRK 56.16, +2.80), which rallied 6.2% after announcing that its lung cancer treatment Keytruda helped previously untreated patients live longer in a late-stage trial. The top-weighted technology sector also outperformed (+0.8%), but finished a ways off its session high; the tech space was up 2.9% at its best mark of the day.
On the flip side, the lightly-weighted telecom services sector finished at the bottom of the sector standings with a loss of 1.2%. The consumer discretionary (-0.3%) and industrials (-0.3%) sectors were the second-worst performing groups, while no other space lost more than 0.2%.
Investors didn't receive any economic reports on Monday, but will receive several pieces of data on Tuesday; both the Producer Price Index (Briefing.com consensus +0.2%) and the core Producer Price Index (Briefing.com consensus +0.2%) for March will be released at 8:30 AM ET, followed by the release of Wholesale Inventories for February (Briefing.com consensus +1.1%) at 10:00 AM ET.
Nasdaq Composite: +0.7% YTD
Russell 2000: -1.4% YTD
S&P 500: -2.3% YTD
Dow Jones Industrial Average: -3.0% YTD
InvestmentHouse - Earnings are Next on Tap (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
- Another tit in the tit for tat trade blustering and some weak jobs end a
weak 3-day bounce.
- A lack of strong buyers along with a lack of strong sellers leave the
indices in the same place for a second week.
- There are some great leadership stocks, just not enough.
- Earnings are next on tap and expectations are for a great season that will
repair the market. That is the problem, the expectations.
- Stocks are lower heading into earnings season and that provides
opportunity even if an earnings bounce ultimately cannot hold.
The past week did little but establish there are not many buyers in the
market. Not many sellers either, somewhat surprising given all the
negatives you hear from the financial stations each day.
The lack of buyers shows up with the sessions the market did rally. When
the market managed to cobble together gains as it did on the Tuesday to
Thursday, the move showed low volume and narrow breadth. As soon as a
negative story hit, the bids were pulled and stocks slid back, e.g. Friday.
More proposed Trump tariffs scuttled the advance and stocks started lower
and closed lower.
SP500 -58.37, -2.19%
NASDAQ -161.44, -2.28%
DJ30 -572.46, -2.34%
SP400 -1.97%
RUTX -1.92%
SOX -3.06%
NASDAQ 100 -161.63
VOLUME: NYSE +17%, NASDAQ +10%. Ah, once again stronger volume on the
downside than upside, but -- it is also with the indices holding support
again. When a stock or index holds support on volume and coming off the lows
some, that is not terrible action. Okay, a bit of a positive spin there,
but one silver lining is not bad.
ADVANCE/DECLINE: NYSE -3.7:1; NASDAQ -3.6:1. Of course breadth is much
stronger on the downside than up. That is the MO of this market.
When the market sold, however, there was no groundswell of volume indicating
the sellers were pouring in to ravage the market. Monday stocks sold but
volume remained light. Friday they sold again but volume, while higher, was
still below average. The selling was just not that heavy; more as if the
modest bids that led to the low volume rise on the week were pulled and
stocks slid back. The sellers are there, the buyers are there, but both are
in rather small numbers right now.
The result is the indices basically maintained their positions after a week
of volatility. The week should have shown which side would win out as SP500
and DJ30 had tested the February lows while NASDAQ tested is 2016 trendline.
When the bounce came, however, there was no internal strength as noted, and
on the first seriously adverse story, it fell back.
The inability to bounce suggests the upside does not have the chops to
sustain a move. Given the thinner leadership that makes sense, but it does
not mean the move has to fail. The inability to hold a move when bouncing
off a key low is not good action, but the up and down movement over the
February lows the past two weeks actually allows a thin group of leaders to
expand by improving their patterns and thus developing the kind of
leadership and stamina needed to hold a move may eventually emerge.
It is rather clear where the battle lines are drawn. For DJ30 and SP500 it
is the February lows and the 200 day SMA. For NASDAQ it is the 2016
trendline and the 200 day SMA. SOX is working the channel line and the 200
day SMA. SP400, the trendline and the 200 day SMA. Ditto RUTX.
Those are the battle lines, but for now neither side has the army big enough
to overrun the other. A positive for the upside is that after a dramatic
thinning of leaders, they are on the return with some well-known names
coming back to the fore along with some new or perhaps semi-new sectors.
Another positive is that despite all of the negatives impacting the stock
market (tariff threats, slowing economic data (e.g. consumer spending, jobs
report), Fed in a semi-tightening mode) and every opportunity to break
stocks down, the sellers could only hold the indices at support.
Positives for the downside include the failed bounce attempts off key
support, the lack of broad market leadership, and no quick resolution to the
news stories negative to stocks, a main one being the tariff story and its
loose cannon status.
That leaves stocks heading into next week in the same position as this week:
at support, still looking to see if they can bounce. Earnings season gets
underway and after a series of negative stories failed to take stocks lower,
could this finally bring the bids back? The time at support has allowed
some more patterns to develop, and the longer it holds and more patterns set
up, the better the upside potential.
Sure not many feel positive about the market's situation with all the
selling, the headwinds, and the inability to hold a bounce. But if the
sellers cannot take it lower despite all of this, out of the negativity a
good earnings season can cause a very tradable bounce. Certainly stocks are
lower heading into the season, leaving upside room versus being targets
sitting on big moves.
We will see. If upside patterns continue to develop in good stocks, then
they have the opportunity to show us they can make the moves. If earnings
disappoint it could get ugly -- blaming tariff talk could be a line we hear
a lot regarding guidance. That is okay, however. If stocks make the breaks
higher from good patterns on volume, then that is the signal. If they don't
and then break down, we play the break lower at that point because . . . the
pattern will be resolved.
THE MARKET
CHARTS
DJ30: A second week bouncing around the February lows, indeed undercutting
the February low intraday Monday. All the while DJ30 danced at the 61%
Fibonacci retracement of the September to January rally, as well as the 200
day SMA. Two weeks at these levels, perhaps getting a bit too long. Did
try to bounce starting Tuesday and through Thursday, but had no volume or
breadth. Now with the Friday drop DJ30 starts over to try again, but no
doubt it like gives it a shot. Note how it came off the low after tapping
the 61% dead on. Double bottoms at this level have a good history, if all
remains equal, of rallying nicely.
SP500: Very similar to DJ30, also spending a second week near the February
lows, undercutting the closing low Monday through Wednesday on the intraday
lows. It held at the February closing low and the 200 day SMA, and tapped
the 78% Fibonacci retracement on the Monday intraday low before rebounding,
just as it did on that big intraday drop in early February. Thus, basically
the same as DJ30, just at a lower Fibonacci retracement, also a good level
to double bottom and rebound.
NASDAQ: NASDAQ tested down to the early February closing low starting
Monday, and that put in the low for the week though it was tested Tuesday
and Wednesday. On the closes, NASDAQ held very near the trendline from
early 2016. It also held over the still rising 200 day SMA on the lows.
Not a double bottom as explained last week given the higher March high, but
it is in a channel outlined by the highs and lows this year. Perhaps it
will adjust into a new, larger channel than the prior tight one that was of
course aided by the FOMC's spoon feeding the market.
SOX: Very similar to NASDAQ, working in a wider channel but this channel has
held together the past 6 months. Over the rising 200 day SMA, testing the
same as early February. Can put a higher low and continue higher. If it is
going to do it, time to do it.
SP400: Two weeks over the 200 day SMA, holding that level just as in early
February. SP400 looks very sluggish here but it is still trending higher.
RUTX: Sold to the 200 day SMA with the Monday flop, rallied Tuesday to
Thursday, then Friday rolled back over. Okay, RUTX is very similar to
SP400, i.e. sluggish but can put in a higher low at the rising 200 day SMA.
Small caps are economically sensitive and they are struggling, not near
leading the market.
LEADERSHIP
There are stocks improving their looks and some actual breaks higher on the
week, breaks on good volume. One notable aspect is that in many situations
there are a small number of stocks in a sector that are showing good action.
That shows just how undecided the market is when only stocks here and there
are forming up more bullish patterns. The slight increase in leadership
stocks is in part due to that two weeks of holding support and working up
and down, buying time to form up. In order to sustain a move higher, the
market will need more leadership to step up, however, and right now they are
not lining up.
FAANG: Pretty much toothless at this juncture, at least for the upside.
NFLX still has some starch in it, holding at the late January high/50 day
MA, but it has to make the new move. AMZN bounced up to the 50 day MA after
gapping below it late March. Recovered, now looks weak. AAPL is still
slogging through the trading range. FB remains in purgatory. GOOG is
trying to hold the 200 day SMA. Trying. It looks very much as if this
group's leadership mojo is gone.
Chips: Hard to find anything that is really positive. INTC is still
working at the 50 day MA, attempting to shake off a downgrade. MU was
downgraded as well and extended its pullback. KLIC is not bad but far from
'buy me' position. ON fell off a higher high in early March but is now
approaching its lower channel line and could bounce. LRCX is bunching up
over the 200 day SMA and near the 78% Fibonacci retracement. NPTN is
working on a pattern. None of these are in great position right now, and
many chips that were decent are sinking, e.g. XLNX.
Energy: A few are trying to set up. DO, MRO, HAL -- a few.
Tech: NTNX still solid. STX not bad with a 2 week move over the 50 day MA.
AKAM (internet) still good at the 50 day MA. PANW testing a good move.
CREE remains in a nice pattern.
Retail: Off Friday in many cases, but still solid. M testing a 2-day move
as is DDS. TJX tested a 3-day move. BKE, ZUMZ are working well.
Drugs/Healthcare: DVAX nice cup. HIIQ is looking good again.
Construction: FLR is interesting. DHI, PHM in residential construction
have intriguing patterns.
Misc: Z, HLF, TRIP. These still look good but have to show a move that
sticks.
MARKET STATS
DJ30
Stats: -572.46 points (-2.34%) to close at 23932.76
Nasdaq
Stats: -161.44 points (-2.28%) to close at 6915.11
Volume: 2.36B (+10.28%)
Up Volume: 702.08M (-717.92M)
Down Volume: 1.63B (+936.82M)
A/D and Hi/Lo: Decliners led 3.58 to 1
Previous Session: Advancers led 1.69 to 1
New Highs: 40 (-17)
New Lows: 56 (+30)
S&P
Stats: -58.37 points (-2.19%) to close at 2604.47
NYSE Volume: 879.4M (+16.69%)
A/D and Hi/Lo: Decliners led 3.69 to 1
Previous Session: Advancers led 2.72 to 1
New Highs: 31 (-20)
New Lows: 55 (+30)
SENTIMENT INDICATORS
VIX: 21.49; +2.55
VXN: 27.43; +2.40
VXO: 22.93; +2.95
Put/Call Ratio (CBOE): 1.03; +0.18
Bulls and Bears: Bulls dove, bounced, then dove once more. Getting a bit
out of the stratosphere, a good thing to happen, but not that low yet.
Bears are up, but still relatively weak compared to bulls.
Bulls: 49.5 versus 55.5
Bears: 17.5 versus 16.8
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: 49.5 versus 55.5
55.5 versus 54.9 versus 48.6 versus 48.1 versus 48.5 versus 41.9 versus 54.4
versus 66.00 versus 64.7 versus 66.7 versus 64.4 versus 61.9 versus 64.1
versus 64.2 versus 62.3 versus 61.5 versus 63.5 versus 64.4 versus 63.5
versus 62.3 versus 60.6 versus 60.4 versus 57.5 versus 54.3 versus 50.5
versus 47.1 versus 49.5 versus 49.5 versus 48.1 versus 50.5 versus 57.5
versus 60.0 versus 60.2 versus 57.8 versus 50.0 versus 52.5 versus 54.9
versus 51.5 versus 50.00 versus 55.8 versus 50.00 versus 51.9 versus 58.1
versus 58.7 versus 58.5 versus 54.7 versus 51.9 versus 56.3 versus 55.8
versus 49.5
Bears: 17.5 versus 16.8
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: 2.775% versus 2.812%. Of course the trade worries and jobs report
bounced bonds again. After a week pulling back to test the 50 day MA after
breaking over it, a bounce upside Friday in an attempt to continue the new
rally off the February low.
Historical: the last sub-2% rate was in November 2016 (1.867%). 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% versus 2.826% versus 2.819% versus 2.844% versus 2.866% versus
2.896% versus 2.872% versus 2.879% versus 2.863% versus 2.879% versus 2.868%
versus 2.799% versus 2.875% versus 2.893% versus 2.864% versus 2.866% versus
2.934% versus 2.952% versus 2.893% versus 2.873% versus 2.904% versus 2.913%
versus 2.833% versus 2.857% versus 2.8577% versus 2.844% versus 2.813%
versus 2.805% versus 2.707% versus 2.841% versus 2.792%
EUR/USD: 1.22812 versus 1.2247. Euro continues in its 3 month lateral
range around the 50 day MA.
Historical: 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 versus 1.21893 versus 1.23257 versus 1.2296 versus 1.2324 versus
1.22820 versus 1.23431 versus 1.2411 versus 1.25083 versus 1.2450 versus
1.23528 versus 1.22887 versus 1.22524 versus 1.2273 versus 1.2377 versus
1.24573 versus 1.2502 versus 1.2404 versus 1.2402 versus 1.23832 versus
1.24308 versus 1.24159 versus 1.24340 versus 1.23083 versus 1.22567
USD/JPY: 106.939 versus 107.11. Dollar bounced starting late March with
the tariff talk, and last week it broke over the 50 day MA's, testing the
move Friday.
Historical: 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 versus
106.344 versus 105.846 versus 106.42 versus 106.335 versus 106.77 versus
106.41 versus 106.105 versus 105.752 versus 106.359 versus 105.734 versus
106.03 versus 106.695 versus 107.381 versus 106.96 versus 106.886 versus
106.85 versus 107.581 versus 107.435 versus 106.294 versus 106.153 versus
106.782 versus 107.77 versus 108.669 versus 108.669
Oil: 62.06, -1.48. After bumping the January high two weeks back, oil has
faded and now is fighting to hold the 50 day MA.
Gold: 1336.10, +7.60. Gold tested again on the week, now a 2 week test to
the 50 day MA, attempting to put in a higher low and take on resistance at
1360-65.
MONDAY
Jobs are out of the way and were less than impressive. As I noted last
week, two weeks back, a month back, the US economy has hit a slow spot. It
is likely just a slow spot, but you have to keep watch on the small and
midcaps as they are lagging the rest of the market, and if the tax cuts are
going to kick in and help the economy you would anticipate they would bottom
and start to move back up.
Nearer term there are a couple of competing forces.
Earnings are here and I have heard many, many commentators talk about how
earnings are going to right the market's ship because there is expected 16%
to 19% growth. Okay, great, but those are the expectations. Earnings tend
to work best when expectations are not too grand then companies blow by them
as did FAANG in October 2017. Expectations, the same as gravity as Mountain
Rescue climber Hal noted in the movie 'Cliffhanger,' can be a b**ch. It
sets the bar high and it is a lot easier to disappoint.
On the other hand, stocks deflated valued ahead of earnings and that gives a
nice on ramp to higher prices if earnings are solid and the general
conditions are upbeat. Ah, if general conditions are upbeat. If this
market volatility after a long run upside is forecasting economic issues
then earnings, though they might provide a very tradable rebound from the
recent dip, would not rescue the market. The market looks ahead and
earnings are the past.
The second competing force is leadership. The market can bounce on earnings
given the pullback heading into the season. If the move is going to sustain
then it must have leadership. There is still not enough leadership. The
two weeks bouncing up and down at support has improved some patterns, but
frankly we don't see enough good patterns in sectors that provide leadership
for true moves higher. You need growth to help lead, whether that is growth
in tech, small caps/midcaps, or even the large caps selling to the rest of
the world (e.g. CAT). There are definitely growth stocks in leadership
positions with good patterns. There are just not a ton of them and we are
not seeing a lot developing in the wings. That is a major debilitating
factor for any move higher on earnings.
Thus, this setup ahead of earnings is one that can easily lead to an
earnings bounce. After that, however, unless more and more stocks set up a
bit better and make good upside breaks, any rebound is likely limited in its
height and duration. Certain things have to happen for a market to sustain
a break higher, and leadership is a critical element. Perhaps there are
some groups out there we have discounted too much that will suddenly pull it
all together and lead. That would be awesome and of course we would spot
them quickly. We will watch for those, but if they are forming up right now
they are doing so with very good camouflage.
Therefore, we are going to look at upside for that earnings move higher,
using in many cases stocks we already have on the report. Why? Because they
are the better patterns and this market is short on upside patterns. Energy
needs to show up, software would help, security software is trying to set up
and some are moving, homebuilders are interesting -- but work needs to be
done. Upside plays into earnings season? Yes. Downside plays on deck if
the 2 weeks of bouncing at support fails? Yes as well.
Have a great weekend!
Trade Concerns Drive Friday Fallout
06-Apr-18 16:20 ET
Dow -572.46 at 23932.76, Nasdaq -161.44 at 6915.11, S&P -58.37 at 2604.47
https://www.briefing.com/investor/markets/stock-market-update/2018/4/6/trade-concerns-drive-friday-fallout.htm
[BRIEFING.COM] The stock market closed the week on a decidedly lower note, falling victim to fears about potential trade wars, the Federal Reserve's tightening bias, and the specter of earnings growth not living up to this year's high expectations. The Dow, Nasdaq, S&P 500, and Russell 2000 declined between 1.9% and 2.3% in Friday's trade.
Things got off to a bad start following the news that President Trump ordered the Office of the U.S. Trade Representative to consider whether it would be appropriate to impose an additional $100 billion of tariffs on Chinese imports on top of the proposed $50 billion of tariffs announced on Wednesday.
China quickly responded, saying it would do what is necessary to protect its interests at any cost if the U.S. ultimately pressed ahead with such a tariff plan.
What rattled the stock market, though, was the feistier-sounding nature of administration officials today discussing the new proposal, as well as their seeming lack of concern about the difficulties the stock market has been having on account of the heated trade rhetoric between the U.S. and China.
President Trump noted that the stock market might have to have a little pain as he works to protect the trade interests of the U.S.; meanwhile, Treasury Secretary Mnuchin said in a CNBC interview that he is not focused on short-term market swings and that there is potential of a trade war with China even though that is not the objective.
The major indices rolled over after Mr. Mnuchin's comments and then cascaded even lower after Fed Chair Powell said he thinks inflation will pick up this Spring and that he sees further gradual rate hikes.
In essence, the stock market didn't get the verbal support it has been accustomed to receiving from leading officials in periods of uncertainty. Ironically, that fed a heightened sense of uncertainty about the outlook for the economy and earnings that kept many buyers on the sidelines and Friday's sellers focusing their efforts on the economically-sensitive sectors.
Every sector ended with a loss. The industrials sector (-2.7%) suffered the largest decline, but it had ample company.
The information technology (-2.5%), financial (-2.4%), materials (-2.4%), and health care (-2.4%) sectors all underperformed while losses in the consumer discretionary (-2.1%) and energy (-1.8%) sectors also weighed heavily.
The Dow Jones Industrial Average fell as many as 767 points on Friday before paring its losses in late action. That recovery effort coincided with a bounce in the S&P 500 after it breached its 200-day moving average (2594). Once again, though, the violation of that key technical level brought out the buyers who succeeded in pushing the S&P 500 back above the 200-day moving average by the closing bell.
The trade issues dominated the market narrative on Friday, but there was more to the story. The March employment report provided its own twist for the market.
It showed a surprisingly weak 103,000 gain in nonfarm payrolls and a sturdy 0.3% increase in average hourly earnings. All in all, it was a mixed report, yet it didn't alter the market's thinking about monetary policy other than making it think there was a diminished probability of a fourth rate hike in December.
The CME FedWatch Tool now pegs the probability of a fourth rate hike in December at 24.4% versus 32.7% on Thursday.
Reviewing Friday's economic data, which was limited to the Employment Situation Report for March and the Consumer Credit Report for February:
March nonfarm payrolls increased by 103,000 (Briefing.com consensus 175,000). March private sector payrolls increased by 102,000 (Briefing.com consensus 180,000). March unemployment rate was 4.1% (Briefing.com consensus 4.0%) versus 4.1% in February. March average hourly earnings were up 0.3% (Briefing.com consensus 0.2%), after increasing 0.1% in February. Over the last 12 months, average hourly earnings have risen 2.7%, versus 2.6% for the 12 months ending in February.
The key takeaway from the report is that it was neither too hot nor too cold to provide a clear basis for the Federal Reserve to re-think its outlook for monetary policy. At the same time, it will temper the market's concerns about the prospect of a fourth rate hike this year in December.
Total outstanding consumer credit increased by $10.6 billion in February (Briefing.com consensus $15.0 billion) after increasing an upwardly revised $15.6 billion (from $13.9 billion) in January.
The growth in February was driven almost entirely by nonrevolving credit, which was up $10.5 billion from January to $2836.6 billion.
There is no economic data of note on Monday.
Nasdaq Composite: +0.2% YTD
Russell 2000: -1.4% YTD
S&P 500: -2.6% YTD
Dow Jones Industrial Average: -3.2% YTD
Rebound Rally Continues
05-Apr-18 16:25 ET
Dow +240.92 at 24505.22, Nasdaq +34.44 at 7076.55, S&P +18.15 at 2662.84
https://www.briefing.com/investor/markets/stock-market-update/2018/4/5/rebound-rally-continues-.htm
[BRIEFING.COM] Equities advanced for a third consecutive session on Thursday, with energy and materials shares leading a broad-based rally.
The benchmark S&P 500 jumped 0.7% to 2662.84, trimming its yearly loss to 0.4%, while the Nasdaq Composite climbed 0.5% to 7076.55, and the Dow Jones Industrial Average rallied 1.0% to 24505.22. The S&P 500 and the Dow never touched negative territory -- the Nasdaq did briefly -- and all three major averages finished in the upper half of their trading ranges. Action was somewhat volatile -- although not as volatile as other sessions this week -- but the CBOE Volatility Index slipped 1.43 points, or 7.1%, to 18.63 -- a two-week low.
10 of 11 S&P sectors finished in positive territory, with growth-sensitive groups like consumer discretionary (+1.4%), industrials (+1.0%), energy (+1.8%), and materials (+1.9%) leading the charge. The top-weighted technology sector couldn't keep pace, however, which was somewhat discouraging, but the group still finished with a gain of 0.4%.
Within the tech space, Facebook (FB 159.34, +4.24) outperformed, adding 2.7%, after CEO Mark Zuckerberg said he doesn't think the #deletefacebook movement has had a material impact. Chipmakers lagged, however, pushing the PHLX Semiconductor Index lower by 1.0%. NVIDIA (NVDA 221.38, -4.86) lost 2.2% following some cautious commentary out of Citron Research, and Micron (MU 49.84, -3.55) tumbled 6.7% after a director disclosed that she sold 25,000 shares on April 2. UBS initiated a 'Sell' rating following the disclosure.
Meanwhile, the heavily-weighted health care sector finished at the bottom of the sector standings, shedding 0.1%, as biotechnology names underperformed -- evidenced by the 1.6% decline in the iShares Nasdaq Biotechnology ETF (IBB 104.17, -1.72). Biogen (BIIB 264.98, -7.42) was particularly weak, losing 2.7%, after being downgraded to 'Equal Weight' from 'Overweight' at Barclays.
Despite the pockets of weakness, the broader market was strong through most of Thursday's session. A Bloomberg TV interview with Atlanta Fed President Raphael Bostic contributed to the positive bias, as Mr. Bostic, who is a voting member on this year's FOMC, said he's comfortable with inflation going above the Fed's 2.0% target -- which suggests that he may favor a less aggressive approach to hiking interest rates. However, with the March Employment Situation Report due Friday, investors fought the urge to tamper with their rate-hike expectations.
U.S. Treasuries largely kept overnight losses intact on Thursday, extending them just slightly during intraday trade. The yield on the benchmark 10-yr Treasury note advanced four basis points to 2.83%, closing at its highest level in more than a week, while the 2-yr yield ticked up two basis points to 2.30%.
Reviewing Thursday's economic data, which was limited to the Trade Balance for February and weekly Initial Claims:
The February trade balance showed a deficit of $57.6 billion (Briefing.com consensus -$56.7 billion). The January deficit was revised to $56.7 billion from $56.6 billion.
The key takeaway from the report is twofold: (1) it underscores that trade will be a drag on Q1 GDP growth and (2) it will continue to fan the rhetorical flames regrading trade imbalances.
The latest weekly initial jobless claims count totaled 242,000, while the Briefing.com consensus expected a reading of 225,000. Today's tally was above the revised prior week count of 218,000 (from 215,000). As for continuing claims, they declined to 1.808 million from a revised count of 1.872 million (from 1.871 million).
The key takeaway from the report is that the headline disappointment will be washed away as some normal volatility in a data series that has been persistently encouraging. To that end, this is the 161st straight week initial claims have held below 300,000.
On Friday, investors will receive the Employment Situation Report for March, which the Briefing.com consensus expects will show the addition of 175,000 nonfarm payrolls, an increase of 0.2% in average hourly earnings, and an unemployment rate of 4.0%. The report, which has the potential to move the financial markets, will be released at 8:30 AM ET. The much less influential Consumer Credit Report for February (Briefing.com consensus $15.0 billion) will be released in the afternoon at 3:00 PM ET.
Nasdaq Composite: +2.5% YTD
S&P 500: -0.4% YTD
Dow Jones Industrial Average: -0.9% YTD
Russell 2000: +0.5% YTD
Fighting Through Trade War Fears
04-Apr-18 16:30 ET
Dow +230.94 at 24264.30, Nasdaq +100.83 at 7042.11, S&P +30.24 at 2644.69
https://www.briefing.com/investor/markets/stock-market-update/2018/4/4/fighting-through-trade-war-fears.htm
[BRIEFING.COM] Stocks fought through trade war fears on Wednesday to advance for the second session in a row. The S&P 500, which opened Wednesday with a loss of around 1.5%, finished higher by 1.2% at 2644.69. The Nasdaq and the Dow also opened solidly lower, but ended with gains of 1.5% and 1.0%, respectively, advancing to 7042.11 and 24264.30.
Newly unveiled tariff plans between the world's two largest economies left investors feeling a bit uneasy on Wednesday morning; the Trump administration announced a plan to impose tariffs of 25% on Chinese imports across 1,300 product categories worth $50 billion in total, and China retaliated by announcing a similar plan, calling for duties of 25% on American imports across 106 product categories -- including soybeans, planes, cars, and chemicals -- also worth approximately $50 billion in total. However, the realization that the tariffs have yet to be put in force provided some comfort to investors.
The specific turnaround point for the market came mid-morning when NEC Director Larry Kudlow told reporters that there is a chance that the China tariffs do not go into effect, emphasizing that President Trump wants to solve the China trade issue with the least amount of pain possible. Stocks began trimming losses immediately after the opening bell, eventually triggering some short-covering activity that further accelerated the upward move. The major averages finished near their best marks of the day.
10 of 11 S&P sectors closed Wednesday's session in positive territory, with seven adding more than 1.0%. The consumer discretionary sector (+1.8%) was the best-performing group, with just about all of its components finishing in the green. Amazon (AMZN 1410.57, +18.52) rallied 1.3%, while homebuilders showed particular strength after Lennar (LEN 62.82, +5.73) reported better-than-expected earnings for its fiscal first quarter; LEN shares jumped 10.0%, and the iShares U.S. Home Construction ETF (ITB 40.52, +1.80) added 4.7%.
The top-weighted technology (+1.4%) and financials (+1.1%) sectors performed in-line with, or slightly better than, the broader market, but the industrial space (+0.4%) underperformed, as names with a large exposure to China, including Dow component Boeing (BA 327.44, -3.38), struggled; BA shares lost 1.0%. The utilities space (+0.2%) also lagged, and the energy sector was the only group to finish in negative territory, shedding 0.1%.
U.S. Treasuries finished Wednesday on a mostly lower note, pushing yields a tick higher; the benchmark 10-yr yield climbed one basis point to 2.79%. Elsewhere, West Texas Intermediate crude futures declined 0.2% to $63.37/bbl, gold futures advanced 0.3% to $1340.60/oz, and the U.S. Dollar Index ticked down 0.1% to 89.80.
Reviewing Wednesday's economic data, which included the ADP Employment Report for March, the ISM Services Index for March, and Factory Orders for February:
The ADP National Employment Report showed an increase of 241,000 in March (Briefing.com consensus 203,000). The January reading was revised to 246,000 from 235,000.
This report should solidify expectations for another strong nonfarm payrolls number when the government releases the Employment Situation Report on Friday.
The ISM Services Index for March dipped to 58.8 (Briefing.com consensus 59.0) from an unrevised reading of 59.5 in February.
The key takeaway from the report is that the services sector is still growing nicely, albeit at a slightly slower pace than February.
The Factory Orders report for February showed an increase of 1.2% (Briefing.com consensus +1.8%). The January reading was revised to -1.3% from -1.4%.
The key takeaway from the report is that it revealed a rebound in business spending, evidenced by the 1.4% increase in orders for nondefense capital goods excluding aircraft.
On Thursday, investors will receive the Trade Balance for February (Briefing.com consensus -$56.7 billion) and weekly Initial Claims (Briefing.com consensus 255K).
Nasdaq Composite: +2.0% YTD
S&P 500: -1.1% YTD
Dow Jones Industrial Average: -1.8% YTD
Russell 2000: -0.3% YTD
Wall Street Rebounds On Tuesday
03-Apr-18 16:30 ET
Dow +389.17 at 24033.36, Nasdaq +71.16 at 6941.28, S&P +32.57 at 2614.45
https://www.briefing.com/investor/markets/stock-market-update/2018/4/3/wall-street-rebounds-on-tuesday.htm
[BRIEFING.COM] U.S. equities rebounded on Tuesday, reclaiming a little more than half of their Monday losses in a broad-based rally. The S&P 500 advanced 1.3% to 2614.45, the Dow Jones Industrial Average climbed 1.7% to 24033.36, and the Nasdaq Composite jumped 1.0% to 6941.28.
The major averages bounced around with modest gains for much of the session, but shot to new highs in the late afternoon following a headline that the White House doesn't have any specific plans for action against Amazon (AMZN 1392.05, +20.06). The news wasn't really new -- Press Secretary Sarah Huckabee Sanders made a similar statement last week -- but, nonetheless, it served to temper fears following critical comments from President Trump, who alleges the company is taking advantage of the U.S. Post Office and gets unfair tax treatment.
Amazon jumped following the headline, and the broader market came along with it -- thanks in part to some short-covering activity. AMZN shares, which were down as much as 1.2% on Tuesday, finished higher by 1.5%, while the S&P 500 finished near its session high and about 25 points above its 200-day simple moving average (2590). The benchmark index settled below the key technical level for the first time since June 2016 on Monday.
All 11 S&P sectors finished Tuesday in positive territory, with energy (+2.1%) being the top performer as WTI crude futures rebounded from a two-week low, climbing 0.7% to $63.45 per barrel. The financials (+1.4%), consumer discretionary (+1.2%), industrials (+1.4%), materials (+1.5%), health care (+1.5%), and consumer staples (+1.4%) sectors also finished with solid gains, while the lightly-weighted utilities (+0.4%) and real estate (+0.3%) sectors lagged.
The most influential group -- information technology -- finished higher by 1.0%, but struggled up until the late-afternoon rally, losing as much as 0.7% earlier in the session. The group's turnaround helped boost investor sentiment, which has suffered in recent weeks amid a lack of sector leadership; the technology group has underperformed as of late after pacing last year's rally and a once positive start to 2018. Likewise, the financial sector's upbeat performance was also a notable tailwind for investor sentiment.
Investors did not receive any economic data on Tuesday, but automakers did report sales figures for the month of March. General Motors (GM 36.94, +1.18), Ford Motor (F 11.15, +0.29), and Fiat Chrysler (FCAU 21.79, +1.84) advanced 3.3%, 2.7%, and 9.2%, respectively, after all three reported year-over-year increases in sales; Fiat Chrysler's sales increased 14.0%, while GM's and Ford's sales increased 16.0% and 3.4%, respectively. Electric automaker Tesla (TSLA 267.53, +15.05) also climbed, adding 6.0%, after reporting Model 3 production just below its target and reaffirming its production outlook.
In the bond market, U.S. Treasuries tumbled on Tuesday, pushing yields higher across the curve; the yield on the benchmark 10-yr Treasury note climbed five basis points to 2.78%, rebounding from an eight-week low, while the 2-yr yield also advanced five basis points, closing at 2.29%.
Looking ahead, investors will receive several reports on Wednesday, including the weekly MBA Mortgage Applications Index at 7:00 AM ET, the ADP Employment Change report for March (Briefing.com consensus 203K) at 8:15 AM ET, and both February Factory Orders (Briefing.com consensus +1.8%) and the ISM Services Index for March (Briefing.com consensus 59.0) at 10:00 AM ET.
Nasdaq Composite: +0.6% YTD
S&P 500: -2.2% YTD
Dow Jones Industrial Average: -2.8% YTD
Russell 2000: -1.5% YTD
April Starts With A Big Drop
02-Apr-18 16:30 ET
Dow -458.92 at 23644.19, Nasdaq -193.33 at 6870.12, S&P -58.99 at 2581.88
https://www.briefing.com/investor/markets/stock-market-update/2018/4/2/april-starts-with-a-big-drop.htm
[BRIEFING.COM] U.S. equities registered big losses on Monday, with declining issues outpacing advancing issues four to one at the New York Stock Exchange.
The S&P 500 dropped 58.99 points, or 2.2%, to 2581.88, falling to its lowest level since mid-November and closing below its 200-day simple moving average (2589.85) for the first time since June 2016. The Dow Jones Industrial Average tumbled 458.92 points, or 1.9%, to 23644.19, and the Nasdaq Composite slid 193.76 points, or 2.7%, to 6870.12, rejoining the other two major indices in negative territory for the year. A late rally brought the major averages up from their worst marks of the day -- the S&P 500 was down 3.3% at its session low.
Losses were both broad -- 11 of 11 S&P 500 sectors finished in the red -- and deep -- 8 of 11 groups lost at least 2.0%.
The consumer discretionary sector (-2.8%) was the weakest group, weighed down by a 5.2% decline in shares of Amazon (AMZN 1371.99, 75.35), which dropped after President Trump promised to intervene in the company's relationship with the U.S. Post Office, which he says is losing "a fortune" by delivering Amazon packages. The president's statement was in line with similar comments that he made last week. Meanwhile, the lightly-weighted utilities group (-0.8%) showed relative strength, closing at the top of the leaderboard.
There were a handful of headline catalysts behind Monday's mauling -- including renewed trade concerns following China's decision to follow through with tariffs on 128 products imported from the U.S. and political angst following President Trump's threat to withdraw from NAFTA if Mexico doesn't do more to secure the border -- but technical and psychological factors were also at play; the S&P 500 wiped out its 200-day simple moving average, which has been a key area of technical support, and the continued underperformance of the influential technology sector weighed on investor sentiment.
The technology space declined 2.5%, with Dow component Intel (INTC 48.92, -3.16) showing particular weakness. Intel shares dropped 6.1% in reaction to reports that Apple (AAPL 166.68, -1.10) is planning to use its own processors, instead of Intel chips, in Mac computers starting as early as 2020. Apple outperformed the broader market, losing 0.7%, while fellow mega caps Facebook (FB 155.39, -4.40), Alphabet (GOOG 1006.47, -25.32), and Microsoft (MSFT 88.52, -2.75) lost between 2.5% and 3.0%.
Despite the broad retreat, there were a few names that moved higher on Monday, including Humana (HUM 280.70, +11.87), which rallied 4.4% after a Wall Street Journal report that Walmart (WMT 85.55, -3.42) is in preliminary talks to acquire the health insurance company. Dow component UnitedHealth (UNH 217.20, +3.20) advanced 1.5% in sympathy, but the health care sector settled just a tick above the broader market, finishing with a loss of 2.1%.
Outside of equities, U.S. Treasuries ticked higher, pushing yields lower across the curve; the benchmark 10-yr yield declined one basis point to 2.73% -- its lowest level since early February. Meanwhile, West Texas Intermediate crude futures dropped 2.6% to $63.08 per barrel, gold futures advanced 1.6% to $1348.10/oz, and the CBOE Volatility Index (VIX) jumped 3.5 points, or 17.1%, to 23.37.
Markets were closed in Europe for Easter Monday, while the major stock indices in Asia opened the week on a modestly lower note.
Reviewing Monday's economic data, which was limited to the ISM Index for March and the Construction Spending report for February:
The ISM Index for March declined to 59.3 from an unrevised reading of 60.8 in February, while the Briefing.com consensus expected a reading of 60.0.
The key takeaway from the report is that the Prices Index hit its highest level (78.1) since April 2011, with price increases registered across 17 of 18 industry sectors.
Construction Spending ticked up 0.1% in February, while the Briefing.com consensus expected an increase of 0.5%. The prior month's reading was left at 0.0%.
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 Tuesday, March auto and truck sales will be released throughout the day.
Nasdaq Composite: -0.5% YTD
S&P 500: -3.4% YTD
Dow Jones Industrial Average: -4.4% YTD
Russell 2000: -2.8% YTD
IvestmentHouse - Was it Just Quarter End Driving the Action? (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
- DJ30, SP500 hold again at support, start to move higher.
- A bounce on volume to end the week and quarter, but was it just the
quarter end driving the action?
- Bounce or no, the market is in need of a few, indeed more than a few, good
leaders.
After another down week the market indices posted gains Friday on some
better volume. They held where the needed, DJ30 and SP500 at the February
closing lows, NASDAQ at one of the early 2016 trendlines. Some leaders held
the 50 day EMA and rebounded a bit, e.g. NFLX, SQ, LRCX, MU, INTC.
SP500 35.87, 1.38%
NASDAQ 114.21, 1.64%
DJ30 254.69, 1.07%
SP400 1.35%
RUTX 1.08%
SOX 2.24%
NASDAQ 100 1.86%
VOLUME: NYSE +2%, NASDAQ +7.5%. Solid above average trade on NASDAQ after a
jump in trade Wednesday as it tested the 2016 trendline. That holds some
promise similar to how NASDAQ bounced off the trendline in early February.
NYSE trade moved above average as NYSE recaptured the 200 day SMA and SP500
moved up off the 200 day. As with NASDAQ, SP500 showed similar action on
the February intraday low that tapped the 200 day and reversed on rising,
above average volume.
ADVANCE/DECLINE: NYSE +3.6:1, NASDAQ +2.2:1.
Was this the start of a bounce from support similar to the NASDAQ and SP500
February bounces from similar support levels as noted above, OR was it
simply end of the quarter ahead of a 3-day market holiday position squaring?
The answer to that question will play out this week. There needs to be more
leadership in the market, pure and simple. Some of those names above, e.g.
MU, NFLX, are at the 50 day MA that should act as support and perhaps they
move up from there to lead a rally. Many stocks that were recently leaders
or leader wannabes, however, don't have the patterns, at the moment, to
lead. If the market bounces gratis some leaders such as MU, then they can
have time to work on rebuilding their patterns. Again, that will play out
in the coming week and next.
The gist of last week was a test of the February lows on DJ30 and SP500 as
well as a hold of those lows, i.e. they did not sink lower. Now they have
to show the new break higher. Thursday was an upside relief session, but
again, with the quarter end you cannot put that much faith in it. If good
quality stocks start breaking higher and provide the move support, then the
historical pattern of corrections in otherwise good economies and markets
holds. If not, then the economy is likely not as strong as believed or
there is some other issue out there the stock market is worried about, e.g.
war -- trade or otherwise -- political upheaval, etc.
CHARTS
DJ30: After piercing lower to almost the February intraday low the prior
Friday, The Dow held at the February closing low as a floor all last week.
That keeps the Dow over the 200 day, at the prior lows, and the 61%
Fibonacci retracement of the September to January rally. Lots of support,
lots of reasons to hold and rally based upon this pattern. Now it shows if
it can.
SP500: Very similar to DJ30, testing the February closing low the prior
Friday, holding over that level all last week. In addition, that keeps
SP500 over the 200 day SMA and a potential double bottom near the 78%
Fibonacci retracement. The technical pattern is there, but SP500 needs to
find the leadership.
NASDAQ: Tried to rally early week, failed as a lot of its leaders broke
their patterns. Faded to the uptrend from early 2016, held it Wednesday on
strong volume, rallied Thursday on strong volume. NASDAQ can hold its
uptrend if it finds some leaders. NFLX, GOOG, INTC are possibilities, but
others such as NVDA just do not look that good. NASDAQ could stand to find
some other stocks to lead. STX is not NASDAQ, but it is tech and is in good
shape.
SOX: Three week fade off the top of channel trendline. No doubt that acted
as resistance and sent SOX lower. It is below the closer trendline, now at
a lower trendline off the August low. At this point everyone is watching
for where SOX makes its stand. Can do it here, will need INTC, LRCX, MU to
make good on some good patterns.
RUTX: Not many good things to say about RUTX other than it held the early
March low and the October peak. The pattern is not generating warm fuzzies
as it has a head and shoulder-ish look.
SP400: Very similar to RUTX but it is holding over the 200 day SMA and a
trendline off the August and February lows. Some possibility there with
this test, but at this juncture it will have to show it -- just as all the
indices.
LEADERSHIP
FAANG: With FB under heavy scrutiny and AMZN feeling the problems of a
President that doesn't like you, FAANG is struggling. AAPL is still
range-bound. NFLX is pretty decent at the 50 day EMA. GOOG is trying to
put in a bounce at the 200 day SMA and off the summer range highs.
Chips: Struggled as a group the past three weeks after SOX hit the top of
the range and some are not in great shape. MU is solid, NPTN is breaking
higher. INTC continues looking good. LRCX is trying to bounce off the 78%
Fibonacci retracement. KLIC looks very interesting in an inverted head and
shoulders. Some solid patterns there; they need to take the lead.
Biotechs/Drugs: Ran into trouble. There are some that are setting up, e.g.
TLGT. Drug-related stocks are working, e.g. AMAG, and now IDXX is setting
up.
Retail: Continues to look better with the President taking shots at AMZN.
DDS still looks solid to move higher. TJX, TLRD, M, KSS as well. If they
can continue it looks as if we will be buying retail. What about AMZN? It
gapped below the 50 day MA's and has yet to recover.
China: As with many sectors, Chinese stocks have some solid leaders, e.g.
ATHM, QIWI, BZUN. BABA has possibilities as it looks as if it is going to
move higher off a higher low. Others are really struggling, e.g. NTES,
BIDU, SINA, SOHU. Hot or cold.
Metals: A bit of an interesting look to keep watching, e.g. STLD, FCX. SCHN
has a potential double bottom at the 61% Fibonacci retracement. FCX is
showing one at the 61% Fibonacci retracement.
Oil: Remains in the game. MRO shook us out Wednesday but was back in the
game Thursday. APC is not bad. Many are, however.
MISC: HLF remains ready to move. SQ is holding the 50 day MA's and could
be a new entry.
MARKET STATS
DJ30
Stats: +254.69 points (+1.07%) to close at 24103.11
Nasdaq
Stats: +114.22 points (+1.64%) to close at 7063.44
Volume: 2.59B (+1.97%)
Up Volume: 1.76B (+836.25M)
Down Volume: 792.28M (-797.72M)
A/D and Hi/Lo: Advancers led 2.23 to 1
Previous Session: Decliners led 1.24 to 1
New Highs: 45 (+19)
New Lows: 80 (-33)
S&P
Stats: +35.87 points (+1.38%) to close at 2640.87
NYSE Volume: 995.465M (+7.39%)
A/D and Hi/Lo: Advancers led 3.6 to 1
Previous Session: Advancers led 1.08 to 1
New Highs: 33 (+14)
New Lows: 59 (-55)
SENTIMENT INDICATORS
VIX: 19.97; -2.90
VXN: 26.68; -3.51
VXO: 22.05; -1.74
Put/Call Ratio (CBOE): 0.95; -0.39
Bulls and Bears: Bulls dove, bounced, then dove once more. Getting a bit
out of the stratosphere, a good thing to happen, but not that low yet.
Bears are up, but still relatively weak compared to bulls.
Bulls: 49.5 versus 55.5
Bears: 17.5 versus 16.8
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: 49.5 versus 55.5
55.5 versus 54.9 versus 48.6 versus 48.1 versus 48.5 versus 41.9 versus 54.4
versus 66.00 versus 64.7 versus 66.7 versus 64.4 versus 61.9 versus 64.1
versus 64.2 versus 62.3 versus 61.5 versus 63.5 versus 64.4 versus 63.5
versus 62.3 versus 60.6 versus 60.4 versus 57.5 versus 54.3 versus 50.5
versus 47.1 versus 49.5 versus 49.5 versus 48.1 versus 50.5 versus 57.5
versus 60.0 versus 60.2 versus 57.8 versus 50.0 versus 52.5 versus 54.9
versus 51.5 versus 50.00 versus 55.8 versus 50.00 versus 51.9 versus 58.1
versus 58.7 versus 58.5 versus 54.7 versus 51.9 versus 56.3 versus 55.8
versus 49.5
Bears: 17.5 versus 16.8
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: 2.714% versus 2.781%. Bonds continue rallying after breaking up
through the 50 day MA's.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.781%
versus 2.775% versus 2.854% versus 2.813% versus 2.814% versus 2.881% versus
2.90% versus 2.852% versus 2.826% versus 2.819% versus 2.844% versus 2.866%
versus 2.896% versus 2.872% versus 2.879% versus 2.863% versus 2.879% versus
2.868% versus 2.799% versus 2.875% versus 2.893% versus 2.864% versus 2.866%
versus 2.934% versus 2.952% versus 2.893% versus 2.873% versus 2.904% versus
2.913% versus 2.833% versus 2.857% versus 2.8577% versus 2.844% versus
2.813% versus 2.805% versus 2.707% versus 2.841% versus 2.792%
EUR/USD: 1.23234 versus 1.2302. Still in the lateral move along the 50 day
MA.
Historical: 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 versus 1.21893 versus 1.23257 versus 1.2296 versus
1.2324 versus 1.22820 versus 1.23431 versus 1.2411 versus 1.25083 versus
1.2450 versus 1.23528 versus 1.22887 versus 1.22524 versus 1.2273 versus
1.2377 versus 1.24573 versus 1.2502 versus 1.2404 versus 1.2402 versus
1.23832 versus 1.24308 versus 1.24159 versus 1.24340 versus 1.23083 versus
1.22567
USD/JPY: 106.286 versus 106.81
Historical: 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 versus
106.344 versus 105.846 versus 106.42 versus 106.335 versus 106.77 versus
106.41 versus 106.105 versus 105.752 versus 106.359 versus 105.734 versus
106.03 versus 106.695 versus 107.381 versus 106.96 versus 106.886 versus
106.85 versus 107.581 versus 107.435 versus 106.294 versus 106.153 versus
106.782 versus 107.77 versus 108.669 versus 108.669
Oil: 64.94, +0.56. Setting up a handle to a 2 month cup, forming up right
below the January peak.
Gold: 1327.30, -2.70.
MONDAY
After 3 days off and the quarter end there are a few things to watch for.
First, does new money enter and help keep the Thursday move alive. Higher
volume gains that session, but that could be due to adjusting positions
ahead of quarter end. New money is good and needed, but it can run out
after a session or two.
Second, do gains hold versus the high to low action.
Third, does volatility calm down. That shows the buyers and sellers are
resolving their issues. Of course volatility can end with stocks rallying
or selling off. One side or the other will win out.
Fourth, do leaders emerge upside? Will new leaders, perhaps from metals or
drug-related , emerge? Will current leaders testing key levels reengage as
leaders? A market rally has to have leadership. A market can start a
rally, but if significant leadership fails to emerge, the rally fails as
well. Will MU, HLF, STX, NFLX, metals, drugs, retail emerge to lead?
Okay, plenty to watch for but the Dow and SP500 have set up in the double
bottom at the early February lows at the 61% and 78% Fibonacci retracement,
respectively. If these leadership stocks start to make a new break higher
with volume, we will play them based upon their patterns and the index
patterns.
Have a great weekend!
Wall Street Ends Abbreviated Week on Positive Note
29-Mar-18 16:30 ET
Dow +254.69 at 24103.11, Nasdaq +114.22 at 7063.45, S&P +35.87 at 2640.87
https://www.briefing.com/investor/markets/stock-market-update/2018/3/29/wall-street-ends-abbreviated-week-on-positive-note.htm
[BRIEFING.COM] Technology shares rebounded on Thursday, leading a broad rally on Wall Street, as investors kicked off the extended Easter weekend on a positive note.
The tech-heavy Nasdaq Composite jumped 1.6% to 7063.44, the S&P 500 climbed 1.4% to 2640.87, and the Dow Jones Industrial Average advanced 1.1% to 24103.11. The three major indices finished Thursday with weekly gains between 1.0% and 2.4%, but finished March with monthly losses between 2.7% and 3.7%.
Technology giants Microsoft (MSFT 91.27, +1.88), Facebook (FB 159.79, +6.76), and Alphabet (GOOG 1031.79, +27.23) added between 2.1% and 4.4% on Thursday, while other notable tech names like Intel (INTC 52.08, +2.48), Netflix (NFLX 295.35, +9.58), and NVIDIA (NVDA 231.59, +10.24) advanced between 3.4% and 5.0%. Apple (AAPL 167.78, +1.30) also finished in the green, adding 0.8%, but a late bout of selling pulled the company, and the broader market, from its session high.
Needless to say, the S&P's most influential sector -- information technology -- finished at the top of the sector standings, adding 2.2%. Thursday's positive performance for the tech sector was preceded by disappointing outings on Tuesday and Wednesday, during which the group declined by a total of 4.3%. The sector had a poor month, losing 4.0%, but still remains at the top of the 2018 sector standings with a year-to-date gain of 3.2%; for comparison, the S&P 500 is down 1.2% for the year.
As for the 10 remaining sectors, nine finished Thursday in positive territory, with energy (+2.2%) and materials (+1.9%) showing particular strength. The telecom services (unch) and real estate (-0.1%) sectors were the worst performers, but they didn't have much of an impact; the two groups represent just 5.0% of the broader market combined. The heavily-weighted financial group finished a step behind the benchmark index, adding 1.3%, as yields declined across the curve; the benchmark 10-yr yield dropped four basis points to 2.74%.
In the consumer discretionary sector (+1.4%), Amazon (AMZN 1447.34, +15.92) fell as much as 4.6% before rebounding to finish with a gain of 1.1%. The early weakness was attributed to a tweet from President Trump, in which he reiterated his concerns about the company, condemning it for paying "little to no taxes to state and local government" and using the U.S. Postal System as its "delivery boy." The tweet followed a Wednesday report from Axios that said Mr. Trump is looking for ways to regulate the internet giant.
Overseas, the major stock indices in Asia finished Thursday on a higher note, with Japan's Nikkei adding 0.6%, and the major bourses in Europe also advanced, adding between 0.2% and 1.3% apiece. Russia announced that it will expel 60 U.S. diplomats and order the closure of the U.S. Consulate in St. Petersburg in retaliation to similar measures taken by the U.S. and other countries following the poising of a former Russian double agent in England.
Markets in the U.S. and Europe will be closed tomorrow for Good Friday.
Reviewing Thursday's big batch of economic data, which included February Personal Income, Personal Spending, PCE Prices, and core PCE Prices, the weekly Initial Claims report, the Chicago PMI for March, and the final reading of the University of Michigan Consumer Sentiment Index for March:
Personal income climbed 0.4% in February (Briefing.com consensus +0.4%) following an unrevised increase of 0.4% in January. Meanwhile, personal spending rose 0.2% in February (Briefing.com consensus +0.2%) following an unrevised increase of 0.2% in January. The PCE Price Index increased 0.2% in February (Briefing.com consensus +0.2%), and the core PCE Price Index, which excludes food and energy, also increased 0.2% (Briefing.com consensus +0.2%). Year-over-year, the core PCE Price Index is up 1.6% after hovering at +1.5% in the last three readings.
The key takeaway from the report is that it won't influence Fed officials to significantly alter the course of monetary policy.
The latest weekly initial jobless claims count totaled 215,000, while the Briefing.com consensus expected a reading of 230,000. Today's tally was below the revised prior week count of 227,000 (from 229,000). As for continuing claims, they rose to 1.871 million from a revised count of 1.836 million (from 1.828 million).
The key takeaway from this report is that outside of some week-to-week volatility, initial and continuing claims remain at historically-low levels.
The Chicago PMI for March hit 57.4 (Briefing.com consensus 62.0), down from 61.9 in February.
The key takeaway from the report is that it echoed inflationary concerns that were expressed in the February report. Supplier delivery times reportedly increased and are considered to be ‘long' by recent standards.
The final reading of the University of Michigan Consumer Sentiment Index for March dropped to 101.4 (Briefing.com consensus 102.0) from 102.0 in the preliminary reading.
The key takeaway from the report is that even after the pullback in the final reading for March, the Sentiment Index remains at its highest level since April 2004.
Investors will receive just two pieces of data on Monday -- the ISM Index for March (Briefing.com consensus 60.0) and the Construction Spending report for February (Briefing.com consensus +0.5%). Both reports will be released at 10:00 AM ET.
Nasdaq Composite: +2.3% YTD
S&P 500: -1.2% YTD
Dow Jones Industrial Average: -2.3% YTD
Russell 2000: -0.4% YTD
Week In Review: Rebound
Equities rebounded this week, ending a two-week skid; the Nasdaq Composite climbed 1.0%, the S&P 500 jumped 2.0%, and the Dow Jones Industrial Average rallied 2.4%. Trading was volatile at times, but smoothed out on Thursday as investors wrapped up the abbreviated week on a positive note. Markets will be closed on March 30 for Good Friday.
Investors kicked off the week with a rally on Monday, pushing the major indices up between 2.7% and 3.3% apiece, following a Wall Street Journal report that the U.S. and China have started negotiating to improve American access to Chinese markets. The news helped ease fears of a trade war, which were elevated after the White House announced tariffs on Chinese imports last week -- prompting Beijing to retaliate with tariffs of its own. Microsoft (MSFT) was particularly strong on Monday, spiking around 7.5%, after Morgan Stanley raised its target price from $110 to $130 -- a new Street high.
The market reversed course on Tuesday, however, with FAANG names -- Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX), and Alphabet (GOOGL) -- leading the retreat. Market darling NVIDIA (NVDA) tumbled nearly 8.0% after announcing that it has temporarily suspended autonomous driving tests in order to learn more about last week's fatal collision involving a self-driving Uber car. Tesla (TSLA), which is a leader in autonomous driving technology, also dropped around 8.0%.
Stocks struggled for direction on Wednesday, but then rallied on Thursday ahead of the extended Easter weekend. However, unlike many of its FAANG peers, Amazon (AMZN) continued tumbling after an Axios report on Wednesday that President Trump would like to change Amazon's tax treatment, as he believes the company has gotten a free ride from taxpayers. The White House initially responded by saying there aren't any policy changes regarding Amazon at the moment, but the president reiterated his concerns about the company in a tweet on Thursday. AMZN shares lost 3.2% this week in total.
11 of 11 S&P 500 sectors finished the week with gains. Less-risky countercyclical groups like consumer staples (+3.5%), utilities (+3.0%), and telecom services (+3.1%) were the top performers, while the heavily-weighted financial sector (+2.7%) also showed relative strength. The top-weighted technology space lagged with a gain of 1.7%, while the consumer discretionary sector was among the worst performers, thanks largely to Amazon, adding 1.1%.
Investors received the Personal Income and Spending report for February on Thursday, and, for the second month in a row, it was in line with expectations. The PCE Price Index increased 1.8% year-over-year after being up 1.7% year-over-year in January, while the core PCE Price Index rose 1.6% year-over-year after three consecutive months of 1.5% year-over-year growth. The key takeaway from the report is that it won't influence Fed officials to significantly alter the course of monetary policy.
In the bond market, the yield curve flattened notably this week, with the 2s10s spread dropping seven basis points to 48 bps -- its lowest level since 2007. The yield on the benchmark 10-yr note declined seven basis points to 2.74%, while the 2-yr yield held steady at 2.26%. Most of the bond buying took place amid the equity sell off on Tuesday.
Disappointing Finish to Choppy Session
28-Mar-18 16:30 ET
Dow -9.29 at 23848.42, Nasdaq -59.58 at 6949.23, S&P -7.62 at 2605.00
https://www.briefing.com/investor/markets/stock-market-update/2018/3/28/disappointing-finish-to-choppy-session.htm
[BRIEFING.COM] Equities were up and down on Wednesday, eventually settling below Tuesday's closing levels, as influential FAANG names like Amazon (AMZN 1431.42, -65.63) and Netflix (NFLX 285.77, -14.92) dropped sharply for the second day in a row. The tech-heavy Nasdaq declined 0.9%, while the S&P 500 shed 0.3%. The Dow finished flat.
The market has struggled to find sturdy ground since a volatile drop in early February. This week's action has fully embodied that struggle; equities shot higher on Monday, pushing the S&P 500 up 2.7%, only to give back the bulk of those gains in a broad sell off on Tuesday. With the S&P 500's 50-day simple moving average (2733) out of reach, investors have been keeping an eye on the index's 200-day simple moving average (2588), which has provided support on a couple of occasions in recent weeks. The S&P 500 finished Wednesday at 2605.
Wednesday's sector standings were pretty evenly divided between advancers and decliners. Defensive groups like health care (+0.5%), consumer staples (+1.4%), and telecom services (+1.6%) were the top performers, while growth-oriented groups like consumer discretionary (-1.2%), energy (-2.0%), materials (-1.3%), and technology (-0.9%) finished at the back of the pack. The financial sector, which is the second-most influential group (behind technology), finished with a gain of 0.2%.
Amazon was a big reason that the consumer discretionary sector underperformed, as AMZN shares dropped 4.4% to a six-week low. The selling followed an Axios report that President Trump would like to change Amazon's tax treatment, alleging that it has gotten a free ride from taxpayers. The White House responded to the report, saying there aren't any policy changes regarding Amazon at the moment, but the administration is always looking at different options.
Meanwhile, energy shares declined in tandem with the price of crude oil after the Department of Energy reported that U.S. crude stockpiles increased by 1.6 million barrels last week. West Texas Intermediate crude futures dropped 0.9% to $64.61 per barrel, further distancing themselves from Friday's eight-week high.
In the technology sector, Apple (AAPL 166.48, -1.86) declined 1.1%, extending its monthly loss to 6.5%, and chipmakers pushed the PHLX Semiconductor Index lower by 2.1%. Dow component Intel (INTC 49.60, -1.59) was among the weakest semiconductor names, dropping 3.1%, while NVIDIA (NVDA 221.35, -4.17) lost 1.9%. Facebook (FB 153.03, +0.81) outperformed, however, advancing 0.5% after announcing an initiative to "put people more in control of their privacy" -- a direct response to the Cambridge Analytica data scandal.
Elsewhere, the Treasury market had a mixed outing on Wednesday. The benchmark 10-yr note extended Tuesday's gains at the start of the session, but began ticking lower following a poor $29 billion 7-yr note auction, which drew a high yield of 2.72% on a bid-to-cover of 2.34. The 10-yr note still finished in the green though, with its yield declining one basis point to 2.78%. Meanwhile, the yield on the 2-yr note advanced two basis points to 2.29%, reducing the 2s10s spread to 49 basis points -- its lowest level since 2007.
The U.S. Dollar Index advanced 0.9% to 89.76, with the greenback adding 0.8% against the euro (1.2308) and 1.5% against the yen (106.88).
Reviewing Wednesday's economic data, which included the third estimate for fourth quarter GDP, Pending Home Sales for February, the Advance International Trade in Goods report for February, and the weekly MBA Mortgage Applications Index:
The third estimate of fourth quarter GDP pointed to an expansion of 2.9%, while the Briefing.com consensus expected a reading of 2.6%. The second estimate came in at 2.5%.
The key takeaway from the report is that it does not change the general picture of economic growth at the end of 2017.
Pending Home Sales increased 3.1% in February (Briefing.com consensus +2.5%). Today's reading follows a revised 5.0% decrease in January (from -4.7%).
The Advance report for International Trade in Goods for February showed a deficit of $75.4 billion (Briefing.com consensus -$74.2 billion), up from a revised deficit of $75.3 billion in January (from -$74.4 billion).
The weekly MBA Mortgage Applications Index increased 4.8% to follow last week's decline of 1.1%.
On Thursday morning, investors will receive February Personal Income (Briefing.com consensus +0.4%), Personal Spending (Briefing.com consensus +0.2%), PCE Prices (Briefing.com consensus +0.2%), and core PCE Prices (Briefing.com consensus +0.2%), the weekly Initial Claims report (Briefing.com consensus 230K), the Chicago PMI (Briefing.com consensus 62.0), and the final reading of the University of Michigan Consumer Sentiment Index for March (Briefing.com consensus 102.0).
Nasdaq Composite: +0.7% YTD
S&P 500: -2.6% YTD
Dow Jones Industrial Average: -3.5% YTD
Russell 2000: -1.5% YTD
Reversing Course
27-Mar-18 16:30 ET
Dow -344.89 at 23857.71, Nasdaq -211.73 at 7008.81, S&P -45.93 at 2612.62
https://www.briefing.com/investor/markets/stock-market-update/2018/3/27/reversing-course.htm
[BRIEFING.COM] Equities tried to extend Monday's rebound at the start of Tuesday's session, but ended up giving back the bulk of Monday's gains instead. Technology shares led the retreat, pushing the tech-heavy Nasdaq lower by 2.9%. The S&P 500 and the Dow finished with losses of 1.7% and 1.4%, respectively.
FAANG names -- Facebook (FB 152.19, -7.87), Amazon (AMZN 1497.05, -58.81), Apple (AAPL 168.34, -4.43), Netflix (NFLX 300.69, -19.66), and Alphabet (GOOG 1005.10, -48.11) -- dropped between 2.6% and 6.1% on Tuesday, while market darling NVIDIA (NVDA 225.52, -18.96) tumbled 7.8% after announcing that it has temporarily suspended autonomous driving tests in order to learn more about last week's fatal Uber crash. Tesla (TSLA 279.18, -25.00), which is a leader in autonomous driving technology, dropped 8.2%, and Twitter (TWTR 28.07, -3.84) tumbled 12.0% in reaction to some cautious commentary from Citron Research.
Unsurprisingly, the S&P 500’s top-weighted technology sector, which houses most of the aforementioned names, finished at the bottom of Tuesday’s sector standings with a loss of 3.5%. The second-most influential sector, financials, also underperformed, losing 2.0%, and the consumer discretionary sector, which houses Amazon, lost 1.9%.
In total, seven of eleven S&P groups finished Tuesday in negative territory. Less-risky countercyclical sectors like consumer staples (+0.1%), utilities (+1.5%), and telecom services (+0.5%) were the top performers. Real estate (+0.1%) also had a relatively strong session, benefitting from a decline in Treasury yields; investors increased their purchases of U.S. Treasuries amid the equity sell off, pushing the benchmark 10-yr yield six basis points lower to 2.79% -- a seven-week low.
The S&P 500 finished a step above its session low, closing about 25 points above its 200-day simple moving average (2587). The index was up 0.6% at its best mark of the day and down 2.4% at its worst.
Reviewing Tuesday's economic data, which was limited to the Conference Board's Consumer Confidence Index for March and the S&P Case-Shiller Home Price Index for January:
The consumer confidence reading for March decreased to 127.7 (Briefing.com consensus 129.5) from the prior month's revised reading of 130.0 (from 130.8)
The key takeaway from the report is that, outside of a slight moderation in business expectations, consumers have not reported major changes to their outlook.
The S&P Case-Shiller Home Price Index for January increased 6.4%, which is slightly more than the Briefing.com consensus of +6.3%.
On Wednesday, investors will receive the weekly MBA Mortgage Applications Index at 7:00 AM ET, both the Advance International Trade in Goods report for February (Briefing.com consensus -$74.2 billion) and the third estimate for fourth quarter GDP (Briefing.com consensus 2.6%) at 8:30 AM ET, and Pending Home Sales for February (Briefing.com consensus +2.5%) at 10:00 AM ET.
Nasdaq Composite: +1.5% YTD
S&P 500: -2.3% YTD
Dow Jones Industrial Average: -3.5% YTD
Russell 2000: -1.4% YTD
Technology and Financials Lead Rebound Effort
26-Mar-18 16:30 ET
Dow +669.40 at 24202.60, Nasdaq +227.88 at 7220.54, S&P +70.29 at 2658.55
https://www.briefing.com/investor/markets/stock-market-update/2018/3/26/technology-and-financials-lead-rebound-effort.htm
[BRIEFING.COM] Stocks rebounded on Monday, reclaiming around two fifths of last week's decline, with technology and financial shares leading the charge. The S&P 500 advanced 2.7% to 2658.55, the Dow Jones Industrial Average jumped 2.8% to 24202.60, the Nasdaq Composite climbed 3.3% to 7220.54, and the Russell 2000 rose 2.2% to 1543.72.
The market opened on a solidly higher note following a Sunday report from the Wall Street Journal that the U.S. and China have started negotiating to improve American access to Chinese markets -- which helped ease fears of a trade war in the shadow of last week's tariff announcement; President Trump announced last Thursday that the U.S. will impose tariffs of up to $60 billion on Chinese imports, an act that was followed by threats of retaliation from Beijing.
However, the positive energy soon faded following the opening bell and was replaced with a feeling of nervousness, as it looked like the market might roll over; within the first two hours of trading, the S&P 500 trimmed its opening gain of 1.8% to just 0.5%. Luckily for the bulls, the benchmark index reversed course around the 2600 mark and kept climbing through the closing bell. The major averages finished the session at their best marks of the day.
Each of the S&P 500's 11 sectors advanced on Monday, with gains ranging between 0.9% and 4.0%. The top-weighted technology (+4.0%) and financials (+3.2%) sectors provided leadership throughout the session, bouncing back from last week's highly disappointing performances. Within the tech space, Microsoft (MSFT 93.78, +6.60) soared 7.6% after Morgan Stanley raised its target price from $110 to $130 -- a new Street high. Chipmakers also outperformed, evidenced by the 4.2% increase in the PHLX Semiconductor Index, and Apple (AAPL 172.77, +7.83) jumped 4.8%.
Conversely, Facebook (FB 160.06, +0.67) held the tech space's gain in check, rising just 0.4%, after the Federal Trade Commission (FTC) confirmed that it has opened a non-public investigation into the company's privacy practices following the Cambridge Analytica data scandal. The social media giant was down as much as 6.5% on Monday, touching a nine-month low, before bouncing back.
In other corporate news, home improvement retailer Lowe's (LOW 89.30, +5.53) rallied 6.6% after announcing that its CEO, Robert Niblock, will retire after 13 years at the helm, and Finish Line (FINL 13.83, +3.28) spiked 31.1% after agreeing to be acquired by UK-based JD Sports Fashion for $13.50 per share in cash; that represents a premium of 28.0% from Friday's closing price. The total value of the deal is worth approximately $558 million.
The lightly-weighted utilities, consumer staples, telecom services, and real estate groups -- most of which are countercyclical -- were the worst-performing sectors on Monday, but still finished with gains between 0.9% and 1.4%. Meanwhile, the consumer discretionary sector (+2.9%) finished behind technology and financials at the top of the sector standings, led by internet retail giant Amazon (AMZN 1555.86, +60.30), which advanced 4.0%.
In the bond market, U.S. Treasuries ended Monday on a mostly lower note, pushing yields higher across the curve; the yield on the benchmark 10-yr Treasury note ticked up one basis point to 2.84%. The 2-yr yield advanced three basis points to 2.29% following a $30 billion 2-yr note auction that drew a high yield of 2.31% on a bid-to-cover of 2.91.
Investors did not receive any notable economic data on Monday, but will receive two reports -- the S&P Case-Shiller Home Price Index for January (Briefing.com consensus 6.3%) and the Conference Board's Consumer Confidence Index for March (Briefing.com consensus 129.5) -- on Tuesday morning.
Nasdaq Composite: +4.6% YTD
S&P 500: -0.6% YTD
Dow Jones Industrial Average: -2.1% YTD
Russell 2000: +0.5% YTD
InvestmentHouse - Ugly Move, Panic Was Induced (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
- Stocks make the mistake of trying to rally early, pay for it with another
large decline.
- DJ30 at the February lows, SP500 at the doorstep as the test is on.
- After all this selling there are stocks, very good stocks, still in
position to rally after a routine test if the indices can find bottom at the
February lows.
Friday stocks sold again, not early as wanted as the Dow actually started
positive. Indeed, it rallied upside around 140 points. All that did was
give the sellers their shot and they took it. The Dow reversed 575 points
high to close.
SP500 -55.43, -2.10%
NASDAQ -174.01, -2.43%
DJ30 -424.69, -1.77%
SP400 -1.94%
RUTX -2.19%
SOX -3.29%
NASDAQ 100 -2.61%
VOLUME: NYSE +11%, NASDAQ +1%. NYSE trade higher but still just barely
above average. NASDAQ trade above average for a second session and a bit
higher, really picking up Thursday and Friday.
ADVANCE/DECLINE: NYSE -4:1, NASDAQ -3.7:1. Solid again but still not
blowout that a -10:1 reading shows you.
Ugly move, panic was induced. Heard the afterhours financial stations
talking about the selling. We heard the phrase that pays: this is different
from the early February selling, a pundit explained, because the news was
different: tariffs, changes in the Trump administration that were more
confrontational, raising the risk of confrontation.
Ah, the old 'it's different this time' statement. When you hear it in
conjunction with ugly selling, it has meaning. Usually that means it is not
different this time. Whatever the cause, humans react the same way. Thus
the machines they program with their trading styles react the same way.
That means that patterns typically work and repeat the past.
Is there a pattern? We think so. There is the test of the prior low that
so often happens after some serious downside. There is also a pattern
setting up. There are also still stocks in quite good position despite the
2 weeks of selling and this week's gash lower.
Okay, so how about a closer look at the Dow. The 575 point high to low move
took the Dow below the February closing low and within 173 points of the
intraday low. That also takes DJ30 just over the 200 day SMA (23,357;
closed at 23,533). It also puts DJ30 at the October/November lateral
consolidation. Further, that has the Dow back near the 61% Fibonacci
retracement of the September 2017 to late January all-time high.
Meaning? You look for a test of the prior low at key levels. You look for
a pattern to establish. Key levels: 61% Fibonacci retracement, prior
February low, October/November consolidation, 200 day SMA. Pattern:
potential double bottom. Potential because the Dow is at the level, but it
is not showing signs of slowing the selling as of the Friday close. That
likely comes early next week with a reach lower that then recovers to a doji
near these support levels.
That is the outline.
SP500 is very similar as DJ30 and SP500 have moved rather lockstep though
DJ30 is the weaker. SP500 is spot on the February closing low and the 200
day SMA. It is also putting in its own potential double bottom just over
the 78% Fibonacci retracement of the September to January rally. Closed on
the low so no indication of a bounce yet, but lots of support at this level.
A dip lower, recovery to a doji or better is a good bottoming indication.
SP400 midcaps are near the 200 day SMA and the October/November 7 week
consolidation. Still well above the closing and intraday lows from
February.
NASDAQ broke its December to March trendline and is 72 points from the
longer term trendline from early 2016. It is also closing in on the 50%
Fibonacci retracement of the September to January run. That trendline is
going to be important, particularly if DJ30 and SP500 fall early week and
reverse at the February lows. NASDAQ could then put in a higher low, albeit
not that much higher than the February closing low.
SOX broke the 50 day MA and the lower channel line Friday. It is still al
long way from the February low -- it was the market leader so it put in a
lot of upside. With DJ30, SP500 at the February lows already, if they
reverse SOX will be in position to lead again.
RUTX exploded lower Friday in a move made dramatic by how well it had held
up to then. Broke the October high, still holding over the early March low
hit on that dip/test of the initial move off the February low. Pretty
amazing drop, at some support, kind of problematic now after holding up so
well.
Why the detailed index rundown right out of the gate? You have to start
looking for reversals after this kind of selling, and particularly when the
indices get near the prior selloff low. Different this time? It could be,
but we are not playing it as different.
LEADERSHIP
FAANG: AMZN and NFLX started showing cracks as the former broke the 20 day
EMA and is halfway to the 50 day MA on strong volume. NFLX broke the 20 day
but volume remained well below average. Testing, not breaking. FB sold hard
again; broken. AAPL is almost to the 200 day SMA; back to the drawing board
for it in its 5 month range. GOOG dove lower again and is near the 200 day
SMA. At least it is near a potential support level.
Chips: Not all candy and nuts with some big names breaking lower, e.g. MU,
AMAT. XLNX sold to the 50 day EMA in one move from the 20 day. LRCX is a
the 50 day EMA. INTC broke the 20 day MA though is not tanking. SMTC is
back to testing the 10 day EMA. ON at the 20 day. Many are starting to
sell harder and we will see if they find new bids to start the week.
Drugs/biotech: Smaller remains better, e.g. PTCT, IMGN, ARRY (nice 50 day
MA test). Some are not, e.g. INFI. The big names are terrible, e.g. AMGN,
BIIB.
Software: Cracking. CRM went on through the 50 day MA. RHT broke the 20
day MA; it was in need of a test. VMW is holding up relatively well. DATA
testing the 50 day MA.
Retail: Holding up better than most. DDS still holding a very nice test.
TJX did slip to the 50 day MA, but low volume. KSS is holding its pattern
while M fell to test the 50 day EMA in a not bad pullback. LULU not bad.
RL also holding at the 50 day MA in its consolidation.
China: Really struggling. ATHM is not bad, testing the 20 day on lighter
volume. QIWI not bad, testing a bit lower on light trade. YNDX sold Friday
to the bottom of the range but on very light trade. BABA sold hard a second
session, BIDU sold to the 200 day MA, BZUN
Transports: Very good relative strength. KSU holding well in its range.
SAIA in trucks at the 50 day. JBHT holding its pattern. Airlines cracked
Thursday and sold more Friday.
Oil: Paused after a solid Thursday move. APC surged but gave up most of
the move. MRO Testing its very nice Wednesday surge. DO testing its nice
break higher as well. Not bad.
Financial: Crushed. JPM, BAC. GS almost at the 200 day SMA already.
MISC: HLF still holding very well. GRUB holding the 20 day EMA. STX
cracked for a deeper test. SQ fell to the 20 day EMA.
MARKET STATS
DJ30
Stats: -424.69 points (-1.77%) to close at 23533.20
Nasdaq
Stats: -174.01 points (-2.43%) to close at 6992.67
Volume: 2.39B (+1.27%)
Up Volume: 425.8M (-79.16M)
Down Volume: 1.94B (+100M)
A/D and Hi/Lo: Decliners led 3.74 to 1
Previous Session: Decliners led 4.09 to 1
New Highs: 25 (-14)
New Lows: 109 (+47)
S&P
Stats: -55.43 points (-2.10%) to close at 2588.26
NYSE Volume: 1B (+11.11%)
A/D and Hi/Lo: Decliners led 3.97 to 1
Previous Session: Decliners led 4.23 to 1
New Highs: 16 (-9)
New Lows: 215 (+87)
SENTIMENT INDICATORS
VIX: 24.87; +1.53
VXN: 28.35; +1.72
VXO: 24.70; +2.59
Put/Call Ratio (CBOE): 1.54; +0.32
Bulls and Bears: Bulls rebounded, but bears saw a substantial rise in
pessimism. Bulls more bullish, bears more bearish. It would appear the
bears had the better take on it.
Bulls: 55.5 versus 54.9
Bears: 16.8 versus 15.7
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 55.5 versus 54.9
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: 16.8 versus 15.7
15.7 versus 15.5 versus 14.4 versus 14.6 versus 14.4 versus 15.5 versus 12.6
versus 12.8 versus 12.7 versus 13.5 versus 15.2 versus 15.1 versus 15.2
versus 15.1 versus 15.1 versus 15.4 versus 15.4 versus 14.4 versus 14.4
versus 15.1 versus 15.2 versus 15.1 versus 17.0 versus 17.1 versus 19.0
versus 20.2
OTHER MARKETS
Bonds: 2.813% versus 2.806%. Bonds up on the week, moving to the 50 day MA,
trying to reverse trend.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.814%
versus 2.881% versus 2.90% versus 2.852% versus 2.826% versus 2.819% versus
2.844% versus 2.866% versus 2.896% versus 2.872% versus 2.879% versus 2.863%
versus 2.879% versus 2.868% versus 2.799% versus 2.875% versus 2.893% versus
2.864% versus 2.866% versus 2.934% versus 2.952% versus 2.893% versus 2.873%
versus 2.904% versus 2.913% versus 2.833% versus 2.857% versus 2.8577%
versus 2.844% versus 2.813% versus 2.805% versus 2.707% versus 2.841% versus
2.792%
EUR/USD: 1.2351 versus 1.23301. Back and forth but still in the lateral
move over the 50 day EMA.
Historical: 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 versus 1.21893 versus 1.23257 versus
1.2296 versus 1.2324 versus 1.22820 versus 1.23431 versus 1.2411 versus
1.25083 versus 1.2450 versus 1.23528 versus 1.22887 versus 1.22524 versus
1.2273 versus 1.2377 versus 1.24573 versus 1.2502 versus 1.2404 versus
1.2402 versus 1.23832 versus 1.24308 versus 1.24159 versus 1.24340 versus
1.23083 versus 1.22567
USD/JPY: 104.789 versus 104.829. Broke hard lower from the 20 day EMA
Wednesday to Thursday, then held the line Friday. Already weak.
Historical: 104.829 versus 105.892 versus 106.478 versus 105.945 versus
105.946 versus 106.344 versus 105.846 versus 106.42 versus 106.335 versus
106.77 versus 106.41 versus 106.105 versus 105.752 versus 106.359 versus
105.734 versus 106.03 versus 106.695 versus 107.381 versus 106.96 versus
106.886 versus 106.85 versus 107.581 versus 107.435 versus 106.294 versus
106.153 versus 106.782 versus 107.77 versus 108.669 versus 108.669
Oil: 65.88, +1.58. Surging upside and now putting the moves on the January
peak at 66.66.
Gold: 1339.90, +22.50. Big breakout Friday toward the January and February
highs.
MONDAY
Friday did not have that opening dive we were looking for followed by short
covering. Instead it rallied then had to reverse, and there were no bids
ready in the afternoon as they were used in the morning.
Monday we watch to see if the DJ30, SP500 February lows act as support and
work a reversal. The setup is there, the historical pattern is there,
enough leaders are still in decent enough patterns to put forth a serious
leadership effort if DJ30 and SP500 are close to reversal levels. Now, if
it is only not different this time.
If there is the reversal we will be looking at leadership quality stocks
that are still in decent enough patterns over support. LRCX, ON, SMTC,
MLNX, BZUN, MRO, DO, ARRY, PANW, NTNX -- testing but in very good position.
We would even add to others such as NFLX, some China stocks, etc.
If it is different this time, there will still be a rebound move, a relief
move. After this much selling you want to play the downside after a relief
move upside fails versus attempting to get on board after Thursday and
Friday.
Have a great weekend!
Piling on the Losses
23-Mar-18 16:30 ET
Dow -424.69 at 23533.20, Nasdaq -174.01 at 6992.66, S&P -55.43 at 2588.26
https://www.briefing.com/investor/markets/stock-market-update/2018/3/23/piling-on-the-losses.htm
[BRIEFING.COM] Stocks dropped again on Friday, piling on losses for the week; the S&P 500 tumbled 2.1% to 2588.26, the Nasdaq Composite declined 2.4% to 6992.67, and the Dow Jones Industrial Average slid 1.8% to 23533.20 -- its worst close since November 2017. The three major indices finished the week with losses between 5.7% and 6.5%.
Tariff talk carried over into Friday's session after China urged the U.S. to "pull back from the brink" following President Trump's Thursday decision to implement tariffs of up to $60 billion on Chinese imports -- which he says are a response to China's alleged intellectual property theft against U.S. tech companies. Beijing threatened to retaliate with tariffs on 128 U.S. products -- including wine, pork, fresh fruit, ethanol, and steel -- but investors took solace in the fact that those products represent a mere $3 billion of total value -- barely a drop in the bucket.
While fear of a trade war likely played a role in Friday's sell off, several other factors also persuaded buyers to stay on the sidelines, including the understanding that the Fed is operating with a tightening bias, the underperformance of the top-weighted technology and financials sectors, and the continued lack of technical support -- the S&P 500 has been beneath its 50-day simple moving average (2742) since Monday. It's worth noting that the benchmark index finished Friday just a tick above its 200-day simple moving average (2585).
All 11 S&P sectors finished in negative territory, with the financials (-3.0%), technology (-2.7%), and health care (-2.1%) sectors leading the retreat. The energy sector was the top performer, benefiting from a 2.4% increase in WTI crude ($65.87/bbl), but still finished with a loss of 0.6%.
In earnings news, Micron (MU 54.21, -4.71) tumbled 8.0% on Friday despite beating profit estimates for its fiscal second quarter and raising its earnings guidance for Q3, while Dow component Nike (NKE 64.63, +0.21) finished with a gain of 0.3% after reporting better-than-expected earnings and revenues for its fiscal third quarter.
Overseas, equity markets in Asia sold off sharply on Friday, with China's Shanghai Composite and Japan's Nikkei losing 3.4% and 4.5%, respectively. Meanwhile, the major bourses in Europe also finished the week on a broadly lower note, losing between 0.4% and 1.8%. The Euro Stoxx 50 (-1.3%) closed at its lowest level in more than a year.
Reviewing Friday's economic data, which was limited to the February readings for Durable Goods Orders and New Home Sales:
February durable goods orders climbed 3.1%, which is more than the 1.5% increase expected by the Briefing.com consensus. The prior month's reading was revised to -3.5% (from -3.7%). Excluding transportation, durable orders increased 1.2% (Briefing.com consensus +0.6%) to follow the prior month's revised decrease of 0.2% (from -0.3%).
The key takeaway from the report is that it showed a welcome rebound in business spending that has mitigated some of the nervousness about the loss of economic momentum seen in the data of late.
New Home Sales in February hit an annualized rate of 618,000, which is below the Briefing.com consensus of 620,000. The January reading was revised to 622,000 (from 593,000).
The key takeaway from the report is that new home sales declined for the third consecutive month, but are up 0.5% year-over-year.
Investors will not receive any economic data on Monday.
Nasdaq Composite: +1.3% YTD
S&P 500: -3.2% YTD
Dow Jones Industrial Average: -4.8% YTD
Russell 2000: -1.7% YTD
Week In Review: Another Negative (and Noisy) Week
Equities dropped sharply this week, giving up ground for the second week in a row, as investors took in the latest policy directive from the Fed, a new round of tariffs from the White House, and cries for greater data regulation following a scandal involving Facebook (FB). The S&P 500, the Nasdaq Composite, and the Dow Jones Industrial Average finished with losses between 5.7% and 6.5%, which marks their worst week since the big sell off in early February.
Facebook kicked off the week by declining nearly 7.0% on Monday following reports that research firm Cambridge Analytica mined the data of 50 million Facebook users without their consent, and then used that data to deliver targeted pro-Trump ads during the 2016 presidential campaign. The incident has given new life to proponents of data regulation and, in turn, been a headwind for shares of social media companies, which would likely see a decline in profits due to said regulations.
Investors turned their attention to monetary policy on Wednesday when the Federal Reserve increased the fed funds target range by 25 basis points to 1.50%-1.75%, as widely expected, and left its forecast for a total of three rate hikes this year intact. The latter was a relief for investors, who thought that the central bank might raise its 2018 forecast to include a fourth rate increase. However, the Fed does anticipate that it will need to be somewhat more aggressive in tightening policy over the next two years (2019-2020).
Trade war fears came back into the mix on Thursday after President Trump signed a presidential memorandum that allows for tariffs on up to $60 billion worth of Chinese goods. The tariffs, which the president says are punishment for China's alleged intellectual property theft against U.S. tech companies, prompted a retaliation response from China, which said it plans to levy duties of up to $3 billion on U.S. imports -- a drop in the bucket considering the overall value of imported goods to China.
11 of 11 S&P sectors finished the week in negative territory, with the top-weighted technology (-7.9%), financials (-7.2%), and health care (-6.8%) groups leading the retreat. The energy sector (-0.9%) was the top performer, benefiting from an increase in the price of crude oil; West Texas Intermediate crude futures jumped 5.7% to $65.87 per barrel -- their best level since late January. The crude rally was helped by the EIA's weekly inventory report, which showed that U.S. crude stockpiles declined for the first time in three weeks.
A breakdown of technical support played into this week's selling after the S&P 500 dropped comfortably below its 50-day simple moving average (2743) at Monday's opening bell. The benchmark index finished Friday just a tick above its 200-day simple moving average (2585).
Wall Street Tumbles Amid Flurry of Headlines
22-Mar-18 16:30 ET
Dow -724.42 at 23957.89, Nasdaq -178.61 at 7166.67, S&P -68.24 at 2643.69
https://www.briefing.com/investor/markets/stock-market-update/2018/3/22/wall-street-tumbles-amid-flurry-of-headlines.htm
[BRIEFING.COM] Stocks tumbled on Thursday as a slew of leery headlines left buyers on the sidelines. The S&P 500 lost 2.5%, dropping into negative territory for the year (-1.1%) and extending its week-to-date decline to 3.9%, while the Nasdaq and the Dow tumbled 2.4% and 2.9%, respectively.
There was little doubt as to where the market was headed at Thursday's opening bell, as equity futures were down big in overnight trading. There wasn't a particular catalyst for the negative disposition, but disappointing PMI readings in the eurozone and Japan, an unsatisfying apology from Facebook's (FB 164.89, -4.50) CEO Mark Zuckerberg regarding the Cambridge Analytica data breach, and Wednesday's rate hike from the Fed didn't exactly bode well for investor sentiment.
The biggest headline catalyst, however, was President Trump's decision to impose tariffs of up to $60 billion on Chinese imports; Mr. Trump officially signed a presidential memorandum on Thursday afternoon. However, the decision wasn't a surprise -- Reuters first reported the president's desire to punish China for intellectual property theft via tariffs last week -- and actually had a silver lining considering the tariffs will only be implemented after a consultation period. Still, the duties do give new energy to the trade war debate.
Selling picked up notably in the final hour of the session, with the S&P 500 nearly doubling its earlier loss. The financial sector led the retreat, dropping 3.7%, as Treasury yields tumbled across the curve; the benchmark 10-yr yield declined eight basis points to 2.83%, while the 2-yr yield slid three basis points to 2.28%. The industrial sector (-3.3%) also showed notable weakness, while most of the remaining groups finished with losses of more than 2.0%.
The most influential sector, information technology, declined 2.7% -- a discouraging sign for investors who have looked to the sector for leadership; the tech group led last year's rally and is still the top-performing sector of 2018 despite Thursday's slide, up 4.3% year to date. Accenture (ACN 150.23, -11.80) was the tech sector's worst-performing component on Thursday, tumbling 7.3%, despite beating earnings and revenue estimates for its fiscal second quarter and raising its yearly guidance.
In other corporate news, AbbVie (ABBV 98.10, -14.35) shares dropped 12.8% after the drugmaker provided a disappointing update on its experimental cancer drug Rova-T, saying data from a phase two trial was not strong enough to justify seeking accelerated approval. The health care sector lost 2.9%.
On a positive note, the rate-sensitive utilities sector advanced 0.4%, benefiting from the decline in Treasury yields.
Investors received several pieces of economic data on Thursday morning, including the weekly Initial Jobless Claims Report, the FHFA Housing Price Index for January, and the Conference Board's Leading Economic Index for February:
The latest weekly initial jobless claims count totaled 229,000, while the Briefing.com consensus expected a reading of 225,000. Today's tally was above the unrevised prior week count of 226,000. As for continuing claims, they declined to 1.828 million from a revised count of 1.885 million (from 1.879 million).
The key takeaway from this report is that it covered the period in which the survey for the March employment report was taken, so the low level of initial claims will feed estimates for another strong gain in nonfarm payrolls.
The FHFA Housing Price Index increased 0.8% in January (Briefing.com consensus +0.4%), while the December reading was revised to +0.4% from +0.3%.
The Conference Board's Leading Economic Index increased 0.6% in February (Briefing.com consensus +0.5%). The prior month's reading was revised to +0.8% from +1.0%.
The key takeaway from the report is that the strength among the leading indicators remained widespread, with eight of its ten components making positive contributions.
On Friday, investors will receive just two economic reports -- Durable Goods Orders for February (Briefing.com consensus +1.5%) and New Home Sales for February (Briefing.com consensus 620K) -- which will be released at 8:30 AM ET and 10:00 AM ET, respectively.
Nasdaq Composite: +3.8% YTD
S&P 500: -1.1% YTD
Dow Jones Industrial Average: -3.1% YTD
Russell 2000: +0.6% YTD
Sharp Swings Following Rate Hike
21-Mar-18 16:30 ET
Dow -44.96 at 24682.31, Nasdaq -19.02 at 7345.28, S&P -5.01 at 2711.93
https://www.briefing.com/investor/markets/stock-market-update/2018/3/21/sharp-swings-following-rate-hike.htm
[BRIEFING.COM] Stocks swung sharply on Wednesday afternoon following the release of the Fed's latest policy directive, which increased the fed funds target range by 25 basis points to 1.50%-1.75%. The S&P 500, the Nasdaq Composite, and the Dow Jones Industrial Average eventually settled with modest losses between 0.2% and 0.3%, but the small-cap Russell 2000 outperformed, finishing with a gain of 0.6%.
The rate hike wasn't a surprise as investors had long expected that the Fed would increase rates at its March meeting. What investors weren't sure of, however, was whether the Fed would stick to its forecast of three rate hikes for 2018, thinking it might bump up that number to four. To the market's relief, the former proved to be true -- the Fed is calling for just two additional rate hikes this year (three in total) -- but officials did raise their rate-hike projections for 2019; they're now calling for three hikes next year, up from two in December.
Equities were volatile following the decision, with the S&P 500 jumping to a new session high (+0.8%) and then to a new session low (-0.3%) within a span of 45 minutes. Similarly, the Treasury market seesawed a bit, eventually finishing the session on a mixed note; the yield on the benchmark 10-yr note finished three basis points above its Tuesday close at 2.91%, while the Fed-sensitive 2-yr yield dropped three basis points to 2.31%.
Only three of eleven S&P sectors finished Wednesday in positive territory -- industrials (+0.1%), materials (+1.1%), and energy (+2.6%). The energy group was strong throughout the session, benefiting from a rise in the price of crude oil; West Texas Intermediate crude futures jumped 3.0% to $65.45 per barrel, their best level in nearly seven weeks, after the Department of Energy reported that U.S. crude inventories declined by 2.6 million barrels last week.
On the flip side, the consumer staples sector finished at the bottom of the sector standings with a loss of 1.3%. General Mills (GIS 45.51, -4.42) led the group lower, dropping 8.9%, after lowering its profit guidance for fiscal year 2018. The top-weighted technology sector (-0.6%) also underperformed, but Facebook (FB 169.39, +1.24) managed to advance 0.7% following heavy losses on Monday and Tuesday, which were due to the Cambridge Analytica scandal.
Wednesday's economic data included Existing Home Sales for February, the Current Account Balance for the fourth quarter, and the weekly MBA Mortgage Applications Index:
Existing home sales increased 3.0% in February to an annualized rate of 5.54 million units (Briefing.com consensus 5.42 million). The January reading was left unrevised at 5.38 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 current account deficit for the fourth quarter totaled $128.2 billion (Briefing.com consensus -$125.0 billion). The third quarter deficit was revised to $101.5 billion from $100.6 billion.
The weekly MBA Mortgage Applications Index decreased 1.1% to follow last week's uptick of 0.9%.
On Thursday, investors will receive the weekly Initial Jobless Claims Report (Briefing.com consensus 225K) at 8:30 AM ET, the FHFA Housing Price Index for January (Briefing.com consensus +0.4%) at 9:00 AM ET, and The Conference Board's Leading Economic Index for February (Briefing.com consensus +0.5%) at 10:00 AM ET.
Nasdaq Composite: +6.4% YTD
S&P 500: +1.4% YTD
Dow Jones Industrial Average: -0.2% YTD
Russell 2000: +2.9% YTD
Wall Street Trims Monday Losses Ahead of Fed Decision
20-Mar-18 16:30 ET
Dow +116.36 at 24727.27, Nasdaq +20.06 at 7364.30, S&P +4.02 at 2716.94
https://www.briefing.com/investor/markets/stock-market-update/2018/3/20/wall-street-trims-monday-losses-ahead-of-fed-decision.htm
[BRIEFING.COM] Stocks reclaimed a small portion of Monday's decline in choppy trade on Tuesday as investors began gearing up for the Fed's latest policy directive, which will cross the wires on Wednesday afternoon. The S&P 500 advanced 0.2%, trimming its weekly loss to 1.3%, while the Nasdaq climbed 0.3%, and the Dow jumped 0.5%.
The technology sector remained a focal point on Tuesday after leading Monday's sell off, and, for the most part, sentiment within the sector shifted; around three quarters of S&P 500 tech names finished in the green. However, Facebook (FB 168.15, -4.41) was a notable laggard for the second straight session, losing 2.6%, following reports that the Federal Trade Commission (FTC) is investigating whether the company violated a 2011 settlement regarding data privacy when research firm Cambridge Analytica obtained the personal data of 50 million users without their consent.
The Cambridge Analytica incident, which was first reported over the weekend, has been met with cries for greater government regulation, and has prompted lawmakers on Capitol Hill to ask for hearings with CEOs from social media companies, including Twitter (TWTR 31.35, -3.63), which dropped 10.4% on Tuesday. Twitter was also dealing with reports that Israel is considering sanctions against the company for allegedly ignoring requests to remove content that supports terrorism.
Oracle (ORCL 47.05, -4.90) also weighed on the tech group, losing 9.4%, after its better-than-expected quarterly earnings were overshadowed by a disappointing pace of growth in its cloud computing business and the realization that a lower tax rate helped drive the positive earnings surprise.
In the end, the technology sector finished Tuesday flat, closing near the middle of the sector standings. In general, cyclical sectors outperformed their countercyclical peers. The top-performing sectors were consumer discretionary (+0.6%) and energy (+0.9%), while consumer staples (-0.3%), utilities (-0.5%), and telecom services (-1.0%) were the worst-performing groups.
The energy sector benefited from an increase in the price of crude oil; West Texas Intermediate crude futures climbed 2.2% to $63.42 per barrel, hitting a three-week high. Heightened tensions between Saudi Arabia and Iran helped underpin the commodity, as did projections for a decline in Venezuela production due to the country's ongoing economic crisis.
In the bond market, U.S. Treasuries sold off on Tuesday, pushing yields higher across the curve; the benchmark 10-yr yield climbed four basis points to 2.88%, while the 2-yr yield jumped five basis points to 2.34%, which is its highest level since September 2008.
Investors didn't have any economic data to digest on Tuesday, turning their attention to Wednesday's rate-hike decision instead. The market is all but certain that the Fed will vote to raise the Fed funds target range by 25 basis points on Wednesday, so the Fed's economic and rate-hike projections will be the real main event. The CME FedWatch Tool is currently pointing towards a total of three rate hikes this year--although the chances for a fourth hike are sitting at 39.9%.
Also of note, President Trump is reportedly planning to announce $60 billion worth of annual tariffs on Chinese imports at the end of the week. The tariffs, which were first reported last Wednesday, will target more than 100 products, which the president argues were developed using trade secrets from American companies.
Nasdaq Composite: +6.7% YTD
S&P 500: +1.6% YTD
Dow Jones Industrial Average: unch YTD
Russell 2000: +2.3% YTD
Facebook Leads Broad Retreat
19-Mar-18 16:30 ET
Dow -335.60 at 24610.91, Nasdaq -137.74 at 7344.24, S&P -39.09 at 2712.92
https://www.briefing.com/investor/markets/stock-market-update/2018/3/19/facebook-leads-broad-retreat.htm
[BRIEFING.COM] U.S. equities took a beating on Monday, with declining issues outnumbering advancing issues nearly four to one on the New York Stock Exchange. The S&P 500 and the Dow Jones Industrial Average dropped 1.4% apiece, while the tech-heavy Nasdaq Composite lost 1.8% as technology shares underperformed.
Facebook (FB 172.56, -12.53) was the center of attention following weekend reports that research firm Cambridge Analytica gained inappropriate access to data on 50 million Facebook users. The alleged incident sent Facebook shares lower by 6.8% and was met with cries for greater regulation on data collection--which, in turn, weighed on fellow data collectors like Alphabet (GOOG 1099.82, -35.91, -3.2%), Twitter (TWTR 34.98, -0.60, -1.7%), and Snap (SNAP 16.42, -0.59, -3.5%).
Unsurprisingly, the technology sector--which is the most influential of the 11 S&P sectors, representing around a quarter of the broader market--finished at the bottom of the sector standings with a loss of 2.1%. The energy (-1.7%) and health care (-1.7%) sectors were the next-worst performers, while the financials (-0.9%) and industrials (-0.8%) groups showed relative strength, finishing at the top of the day's leaderboard.
The major averages were lower at the start of Monday's session, with the S&P 500 immediately dropping below its 50-day simple moving average (2748). Selling steadily drove the market lower into the afternoon, but a late bout of buying helped make things look somewhat better by the close. At its best mark of the day, the S&P 500 was down 0.4% and, at its worst, held a loss of 2.1%. The Nasdaq was down 2.6% at its session low, while the Dow never lost more than 2.0%.
U.S. Treasuries didn't receive much buying interest despite the equity sell off, with the benchmark 10-yr yield finishing unchanged at 2.84%. However, the defensive disposition was evident in the CBOE Volatility Index (VIX 19.43, +0.62), which spiked 25%, hitting a two-week high.
With no economic data due until midweek, investors turned their attention to the Fed's rate decision, which will be released on Wednesday afternoon. The market is all but certain that the central bank will raise rates, but the Fed's policy directive will still be highly influential as it will contain updated economic and rate hike projections.
Nasdaq Composite: +6.4% YTD
S&P 500: +1.5% YTD
Dow Jones Industrial Average: -0.4% YTD
Russell 2000: +2.3% YTD
InvestmentHouse - Expect a Rate Hike of 25BP (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
- Expiration shows a lot of volume but still not a lot of movement.
- RUTX, SP400 show buying interest on expiration, bouncing off their tests.
- SOX, NASDAQ remain in position to try for new highs once more while SP500
and DJ30 remain quite problematic.
- If FAANG, with its current patterns, breaks higher, the entire group
likely goes higher, with chips, big tech, China stocks going as well.
- FOMC is the headline data point for the week, and a hike of 25BP is
expected.
- Lots of upside setups as the indices test the recovery moves. Can they
break higher, and if so, will the sellers re-enter and sell as on Tuesday?
And the market goes . . . nowhere. Still. Stocks tried to continue higher
early week but reversed Tuesday. NASDAQ and SOX gave up new highs. Sellers
came into the market as the leading indices hit fresh highs. Not promising.
The stock indices mostly sold the balance of the week. It was not, however,
a continuation of the Tuesday high volume selloff. Volume dropped, the
selling intensity mitigated. Indeed, after Tuesday it would be a
misrepresentation to say the selling had any intensity at all. The sellers
left, volume dropped, and stocks edged lower and laterally. After a rude
slap Tuesday with NASDAQ and SOX trying to break the top of their channels,
it was a very ordinary pullback. Ordinary and somewhat encouraging.
With SOX and NASDAQ at the top of their channels, however, the market will
have to once again defy the odds and beat the channel resistance. Thus far
they have beat the odds by avoiding a drop back to the February lows. Of
course after Tuesday they looked primed to go find them. Then the selling
intensity stalled. They are not free of that monkey on their back just yet,
but they consolidated instead of selling off, and that let a lot of stocks
form some pretty good pullbacks to support. Not new bases, just testing the
recovery runs higher. Thus, as with SOX and NASDAQ, they are in nice
consolidations, one that can break higher again, but they are also still
sitting on top of nice moves already. This has to be a real bull run to
break them all higher again. They look darn good to do it, but as noted,
they have to continue defying the odds.
Friday the indices were basically flat, except for RUTX and SP400. The
small caps and midcaps jumped nicely off the 10 day EMA and 50 day SMA,
respectively. At expiration big money was moving into domestically
sensitive areas. And it was not selling off the recent leaders either.
SP500 4.68, 0.17%
NASDAQ 0.25, 0.00%
DJ30 72.85, 0.29%
SP400 0.70%
RUTX 0.60%
SOX 0.03%
NASDAQ 100 -0.16%
VOLUME: NYSE +208%, NASDAQ +55%. Expiration, rebalance, tons of trade,
doesn't mean anything.
ADVANCE/DECLINE: NYSE +2:1, NASDAQ +1.7:1
The consensus, at least what we are reading and hearing, is that the market
is not supposed to go up anymore. The Fed is engaged in what is being
called 'quantitative tightening' (QT), it is also going to hike rates next
Wednesday and purportedly 2, maybe 3 more times this year, interest rates
are rising. There is likely more, it is just not worth reciting them.
At the same time here in the office we see a lot of patterns that look
really good to move higher. Some have not made big moves, others have put
in solid upside but have great tests in progress. While history indicates a
test of the prior lows is still a possibility, it would be foolish to ignore
good setups. The market makes a habit of not doing what everyone expects of
it. Thus we are watching these stocks and indeed buying some this past week
on the pullback when some good moves were made. We will see if those pan
out and if more join them next week off what looked to be a sharp reversal
that, at least for last week, died on the vine and allowed some really good
pullback setups.
Thursday I said the indices were at a key pullback, a lick log for some.
Still that way after Friday, though RUTX and SP400 bounced off support. We
will see if next week they can continue and other indices move with them.
Then, most importantly, can they hold any new breaks higher without getting
the Tuesday treatment. That will be the key tell for the next attempt to
move higher.
THE MARKET
CHARTS
NASDAQ/SOX: Both of these indices broke to new highs last week. SOX broke
through its upper channel line, NASDAQ likely touched what could be the
upper channel line for a new channel. Both indices faded in a sharp Tuesday
high to low reversal session. The rest of the week they were lower, but the
sellers basically left. After Tuesday there was no heavy selling. None of
the indices could hold an early gain, but there was no high volume dumping
as on Tuesday. That leaves NASDAQ and SOX in tight lateral consolidations
over the 10 day EMA and in position to defy the odds and continue with more
upside. As noted Thursday, an important time for these two indices. And
all the other indices.
RUTX: Three-session test to the 10 day EMA, a bounce Friday. Expiration,
cannot make too much of it, but it is notable that the index approached the
January high, put in a rather normal test of the 10 day, then started to
bounce as it was bought more than other indices. It too is at an important
point, but it too is also showing promise.
SP400: Midcaps showed buying Friday as well, even more so than RUTX.
Cleared the 50 day SMA and the December high the prior Friday, then came
back to test that move and held. Still inside the selloff from January to
February, and that makes all moves inside that level suspect, particularly
one of these with the lack of an upside base or pattern. Still this is
promising and how the midcaps react this week, as with the other indices, is
quite important.
SP500: SP500 definitely looks better than it did early week as it managed
to hold the 50 day SMA with a pair of tight doji Thursday and Friday. It
broke through the 50 day two Fridays back and then this fade. It set itself
up for a possible bounce, but overall the pattern makes me a skeptic. You
can see the outline of an upward pointing wedge from the February selloff to
present, all contained inside that selloff. That is not a bullish pattern.
We will see how SP500 performs this week off the 50 day SMA test.
DJ30: DJ30's pattern is even harder to interpret. The selloff, then a slow
rise in arguably a channel and arguably a triangle. Last week it put in a
lower high and faded to the lower trendline. Still looks weak, but it has
put itself in a position where it could bounce near term.
LEADERSHIP
Chips: And still testing. Some have put themselves in position to move
higher, e.g. ON, SLAB, TXN, MU, XLNX. Others are almost there but appear to
need more work, e.g. LRCX, SWKS. As with SOX, they are getting into
position to bounce, but can they do so at these levels?
FAANG: This group poses the same question as chips, even to a higher
degree: can they move at these levels. If so, then I would say the entire
group is a buy. FB has set up something of a double bottom with handle.
AAPL is in a nice 10 day EMA test after breaking to a new high. AMZN is in
a 1-2-3-4 test of the 10 day EMA after a new high. NFLX is holding the 10
day EMA in a tight range after the breakout was tossed back Monday. GOOG is
very similar to FB with a double bottom with handle. Again, if the market
is going to move up, these patterns are ones that can make that move.
China: NTES broke higher Thursday, held it Friday. BIDU is testing the 10
day, looks good to go. BABA gapped up off the 50 day MA Thursday. YNDX is
in excellent position to break higher. ATHM is in very good position. CTRP
is showing buying and VIPS is in a good consolidation. HTHT gapped lower
Wednesday, not helping us at all, but it did hold the prior low and is
bouncing.
Drugs/Biotechs: Up and down but overall still working well. IMGN with a
new high Friday. VCEL in a great pennant. PTCT moved higher last week.
IMMU, ARRY stumbled and we exited. Big names continue to underperform the
smaller ones, e.g. AMGN, GILD.
Internet: LLNW continues the nice tight lateral move, but it is time to
make the break. AKAM started upside Thursday, waffled Friday, but still
looks as if it will give an entry.
Software: Holding up well enough, not inspiring with new entry points just
yet. VMW has set up the FB/GOOG double bottom -- of sorts -- pattern. FFIV
is still holding the 20 day MA. RHT consolidated laterally on the week as
the 10 day EMA caught up to it. CRM testing the 10 day EMA. MSFT near the
20 day EMA, still trending higher.
Retail: There are some that look as if they can make new breaks higher.
DDS, M, KSS, TJX. WSM did break higher Thursday. TGT is trying to form up
a pattern. WMT sold to the 200 day SMA and Friday bounced; will see if
anything comes of that. There are also some good moves, e.g. PII as it
broke higher Friday. Note the PII pattern: it is very similar to FB, GOOG,
CAT -- will they break higher as well from this pattern?
MARKET STATS
DJ30
Stats: +72.85 points (+0.29%) to close at 24946.51
Nasdaq
Stats: +0.25 points (0.00%) to close at 7481.99
Volume: 3.08B (+54.77%)
Up Volume: 1.88B (+1.124B)
Down Volume: 1.15B (-50M)
A/D and Hi/Lo: Advancers led 1.67 to 1
Previous Session: Decliners led 1.31 to 1
New Highs: 109 (+26)
New Lows: 41 (-9)
S&P
Stats: +4.68 points (+0.17%) to close at 2752.01
NYSE Volume: 2.5B (+207.77%)
A/D and Hi/Lo: Advancers led 2.03 to 1
Previous Session: Decliners led 1.71 to 1
New Highs: 40 (+8)
New Lows: 90 (-46)
SENTIMENT INDICATORS
VIX: 15.80; -0.79
VXN: 17.64; -0.81
VXO: 14.11; -0.62
Put/Call Ratio (CBOE): 0.96; +0.07
Bulls and Bears: The rally to new highs on NASDAQ and SOX two weeks back of
course brought the bulls back in with a solid bump of over six points.
Heck, that is a big bump. Bears were not convinced, and they actually rose
0.2 even as the market rallied.
Bulls: 54.9 versus 48.6
Bears: 15.7 versus 15.5
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 54.9 versus 48.6
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: 15.7 versus 15.5
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: 2.844 versus 2.826%. Bonds rallied last week, clearing the 20 day
EMA Tuesday. Rallied to the 50 day EMA then lost some ground Friday. The
move leads some to speculate if bonds are about to rally. A break through
the 50 day MA's would be the most important move for that direction.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.826%
versus 2.819% versus 2.844% versus 2.866% versus 2.896% versus 2.872% versus
2.879% versus 2.863% versus 2.879% versus 2.868% versus 2.799% versus 2.875%
versus 2.893% versus 2.864% versus 2.866% versus 2.934% versus 2.952% versus
2.893% versus 2.873% versus 2.904% versus 2.913% versus 2.833% versus 2.857%
versus 2.8577% versus 2.844% versus 2.813% versus 2.805% versus 2.707%
versus 2.841% versus 2.792% versus 2.713% versus 2.72% versus 2.72% versus
2.66% versus 2.66% versus 2.639% versus 2.617% versus 2.656% versus 2.661%
versus 2.618% versus 2.587% versus 2.535% versus 2.55% versus 2.559% versus
2.551% versus 2.482%
EUR/USD: 1.2287 versus 1.2304. Euro fell to the 50 day EMA on the week,
but it continues a 2 month lateral move that is consolidating the prior
rally.
Historical: 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 versus 1.21893 versus 1.23257 versus 1.2296
versus 1.2324 versus 1.22820 versus 1.23431 versus 1.2411 versus 1.25083
versus 1.2450 versus 1.23528 versus 1.22887 versus 1.22524 versus 1.2273
versus 1.2377 versus 1.24573 versus 1.2502 versus 1.2404 versus 1.2402
versus 1.23832 versus 1.24308 versus 1.24159 versus 1.24340 versus 1.23083
versus 1.22567 versus 1.22169 versus 1.2241 versus 1.2198 versus 1.22698
versus 1.22060 versus 1.20608 versus 1.19507 versus 1.19322 versus 1.19662
versus 1.20313 versus 1.20756 versus 1.20177 versus 1.20573 versus 1.2001
versus 1.1936 versus 1.1936 versus 1.18998
USD/JPY: 106.00 versus 106.344. Dollar is in a 4 week lateral range below
the 10 day EMA, trying to find some support for a break higher through the
20 day EMA that has held it in check since early January.
Historical: 106.344 versus 105.846 versus 106.42 versus 106.335 versus
106.77 versus 106.41 versus 106.105 versus 105.752 versus 106.359 versus
105.734 versus 106.03 versus 106.695 versus 107.381 versus 106.96 versus
106.886 versus 106.85 versus 107.581 versus 107.435 versus 106.294 versus
106.153 versus 106.782 versus 107.77 versus 108.669 versus 108.669 versus
108.797 versus 108.88 versus 109.33 versus 109.58 versus 108.651 versus
110.001 versus 109.46 versus 109.50 versus 108.77 versus 108.84 versus
108.601 versus 109.411 versus 109.033 versus 110.159
Oil: 62.41, +1.22. Still in the lateral move that started with the
February selling.
Gold: 1312.30, -5.5. Unable to hold near the 50 day EMA and breaking lower
again.
MONDAY
It is FOMC week and this time it is expected the Fed will hike rates 25 BP,
one of those 3 hikes for 2018. More important than the hiking is the QT,
the 'quantitative tightening' as the Fed removes the buys of the junk assets
from its balance sheet, the 'give us your poor, your wretched junk assets
yearning for a buyer of last resort' program. As with that immigration
period, there comes a time when you don't need them anymore, and just as
immigration was shut down in the 1930's until the 1960's, the asset buying
program is unneeded.
Okay, so FOMC is the big dog but there is also Existing Home Sales, Leading
Economic Indicators, Durable Goods Orders, and New Home Sales. Enough to
keep things interesting as the Fed digests the stronger than expected
Industrial production for February (1.1% vs 0.3% exp vs -0.3% January) and
Capacity Utilization (78.1% vs 77.7% exp vs 77.4% January). Michigan
sentiment was also up at 102.0 from 99.7 in February. If the FOMC raises as
expected, that should at least not rattle markets.
This is one of those situations where we see a lot of really interesting
upside patterns, but most of which are tests of upside moves. The leading
indices have recovered much or all of the February losses. They rallied to
new highs or close thereto and are now testing those moves.
The big question, the huge question, is whether they can use the
consolidations to break higher yet again, putting in new highs that can
hold. If there is a fail at this point, it is likely an epic one that leads
to a test of the February low. If not, then there will be some good buys
and moves to profit from, even if they are at higher highs and leave you
with that uncomfortable feeling that there is that low still hanging out
there.
Recall in October I wrote that we just had to get used to the idea of buying
the FAANG and letting them work for us even if not much else was working?
That paid off huge for us. This is developing into one of those situations
where we just have to accept it for what it is, and if the moves are made,
buy them. Heck, isn't that what we ALWAYS do? We can contemplate,
postulate, speculate, and other 'ates that we want, but when it comes down
to it, you look at good patterns up or down, and if they make the moves,
then you follow the moves.
Key for this area, given the Tuesday action, is how any new breaks higher,
to new highs particularly, are treated. If they get the same old smack in
the face that Tuesday saw, that shows the sellers are still ready, willing,
and able to sell at this level. Breaks higher that fail shortly thereafter
are of course not good action, and if they start popping up all over the
place, that tells you the sellers are using each move higher to unload
shares and that a downturn is coming.
Thus, Tuesday was a warning, but just a warning because the sellers left and
stocks consolidated nicely. The next breaks higher off these pullbacks,
however, will really be the moves that tell the market's near-term tale.
Have a great weekend!
Upbeat Finish to Disappointing Week
16-Mar-18 16:30 ET
Dow +72.85 at 24946.51, Nasdaq +0.25 at 7481.98, S&P +4.68 at 2752.01
https://www.briefing.com/investor/markets/stock-market-update/2018/3/16/upbeat-finish-to-disappointing-week.htm
[BRIEFING.COM] Wall Street wrapped up a disappointing week on a positive note on Friday, in what was a quiet and fairly range-bound session. The S&P 500 advanced 0.2%, breaking a four-session losing streak, while the Dow and the small-cap Russell 2000 added 0.3% and 0.6%, respectively. The tech-heavy Nasdaq underperformed, closing a tick higher.
Gains were modest, but broad, with nine of eleven S&P sectors closing in the green. The energy group (+1.0%) was the top performer, benefiting from a jump in the price of crude oil; WTI crude futures rallied 2.0% to $62.35 per barrel. Conversely, the top-weighted technology sector (-0.1%) finished at the bottom of the leaderboard.
The technology group struggled for much of the session, keeping the broader market's gain in check, with Broadcom (AVGO 254.87, -12.89) showing particular weakness; the chipmaker dropped 4.8% even though it beat quarterly profit estimates. Tech-giant Alphabet (GOOGL 1134.42, -16.19) also struggled, losing 1.4%, but Adobe Systems (ADBE 225.55, +6.68) bucked the trend, rallying 3.1% after beating both earnings and revenue estimates for its fiscal first quarter.
Overseas, equity indices in the Asia-Pacific region ended Friday broadly lower, with Japan's Nikkei losing 0.6%, while the major bourses in Europe finished with gains of around 0.3% apiece. The U.S. dollar climbed 0.2% against the euro to 1.2287, but dropped 0.2% against the yen to 106.08.
In the bond market, U.S. Treasuries closed the week on a lower note, sending yields higher across the curve. The benchmark 10-yr yield climbed two basis points to 2.84%, while the 2-yr yield ticked up one basis point to 2.29%, which is its highest level since September 2008.
The relative weakness in the 10-yr note steepened the yield curve a bit, pushing the 10-2 spread to 55 basis points. This steepening helped underpin the financial sector (+0.2%) on Friday, but a decline in shares of Wells Fargo (WFC 55.90, -0.93) weighed on the group, leaving it roughly in line with the broader market. WFC shares lost 1.6% following a Wall Street Journal report that a federal investigation into the bank's sales practices now includes its wealth-management unit.
Investors received several pieces of economic data on Friday, including February Housing Starts and Building Permits, February Industrial Production and Capacity Utilization, the preliminary reading of the University of Michigan Consumer Sentiment Index for March, and the Job Openings and Labor Turnover Survey for January:
Housing starts decreased to a seasonally adjusted annualized rate of 1.236 million units in February (Briefing.com consensus 1.283 million), down from a revised 1.329 million units in January (from 1.326 million). Building permits decreased to a seasonally adjusted 1.298 million in February (Briefing.com consensus 1.330 million) from a revised 1.377 million in January (from 1.396 million).
Starts and permits were weaker than expected, yet the key takeaway is that there was some underlying detail in the report that helped offset the headline misses, namely the increase in single-family starts and the uptick in the number of units under construction.
Industrial Production increased 1.1% in February (Briefing.com consensus +0.3%), while the January reading was revised to -0.3% (from -0.1%). Meanwhile, Capacity Utilization ticked up to 78.1% (Briefing.com consensus 77.7%) from a revised reading of 77.4% in January (from 77.5%).
The key takeaway from the report is twofold: (1) manufacturing output was a core driver of the increase in industrial production and (2) capacity utilization hit its highest rate since January 2015, which will keep inflation expectations alive in the market narrative.
The preliminary reading of the University of Michigan Consumer Sentiment Index for March rose to 102.0 (Briefing.com consensus 99.5) from 99.7 in February.
The key takeaway from the report is that the gain in the Sentiment Index was driven entirely by households with incomes in the bottom third. Another notable takeaway is that near-term inflation expectations increased to their highest level in several years.
The January Job Openings and Labor Turnover Survey showed that job openings increased to 6.312 million from a revised 5.667 million (from 5.811 million) in December.
On Monday, investors will not receive any economic data.
Nasdaq Composite: +8.4% YTD
S&P 500: +2.9% YTD
Dow Jones Industrial Average: +0.9% YTD
Russell 2000: +3.3% YTD
Week In Review: Three Steps Forward, Two Steps Back
Equities reversed course this week, undoing about a third of last week's rally, as investors continued to search for equilibrium following the abrupt sell off in early February. Since that drop, the S&P 500 has had three up weeks and two down weeks, reclaiming around 60% of its nearly 300-point plunge. The S&P 500 lost 1.2% this week, while the Nasdaq Composite and the Dow Jones Industrial Average declined 1.0% and 1.5%, respectively.
Trade war talk continued this week following reports that President Trump is seeking to hit China with steep tariffs and investment restrictions as early as next week. Those tariffs, which are expected to total as much as $60 billion, would initially be targeted towards information technology, telecommunications, and consumer electronic products as punishment for alleged intellectual property theft, but could eventually expand to a broader range of products.
The proposed tariffs were cited as the primary driver of this week's sell off, as many believe they could lead to a tit-for-tat trade war between the world's two largest economies. Peter Navarro, Director of the White House National Trade Council, attempted to ease the tariff-induced fears in a CNBC interview on Thursday, assuring viewers that the U.S. can implement tariffs "in a way that is peaceful and will improve and strengthen the trading system."
In other political developments, the White House made some notable personnel changes this week--CIA Director Mike Pompeo replaced Rex Tillerson as Secretary of State, and longtime CNBC personality Larry Kudlow replaced Gary Cohn, who resigned last week, as the president's top economic advisor--and the New York Times reported on Thursday that Special Counsel Robert Mueller has subpoenaed the Trump Organization for documents, some of which relate to Russia.
Nine of eleven S&P sectors finished the week in negative territory, with materials (-3.2%) being the weakest performer. Materials giant Monsanto (MON) dropped 4.8% on Thursday following news that its pending merger with Bayer will likely face additional hurdles from antitrust officials.
Meanwhile, the consumer staples (-2.1%), industrials (-2.0%), and financials (-2.4%) sectors also showed particular weakness. Financials suffered amid a flattening of the yield curve, which doesn't bode well for lenders, as they rely on the difference between what they spend on deposits and what they charge for loans. The yield on the 2-yr note climbed three basis points to 2.29%, while the benchmark 10-yr yield dropped six basis points to 2.84%, cutting the 10-2 spread to 55 bps--its lowest level since late January.
On a positive note, the rate-sensitive utilities (+2.6%) and real estate (+1.3%) sectors finished the week in the green.
Investors received several influential economic reports this week, including the February readings for the Consumer Price Index, the Producer Price Index, Retail Sales, Housing Starts, and Building Permits. In short, the data didn't really give investors a reason to adjust their rate-hike expectations; it's all but certain that the Fed will hike rates at its meeting next week, and the Fed funds futures market is still pointing towards a total of three rate hikes this year--although the chances for a fourth hike are sitting at 34.3%.
S&P 500 Ends Up & Down Session A Tick Lower
15-Mar-18 16:30 ET
Dow +115.54 at 24873.66, Nasdaq -15.07 at 7481.73, S&P -2.15 at 2747.33
https://www.briefing.com/investor/markets/stock-market-update/2018/3/15/s-and-p-500-ends-up--and--down-session-a-tick-lower.htm
[BRIEFING.COM] Stocks initially tried to move higher on Thursday, then lower, but the S&P 500 ultimately ended the session little changed, losing 0.1%. The Nasdaq Composite and the Russell 2000 also finished lower, losing 0.2% and 0.5%, respectively, while the Dow Jones Industrial Average outperformed, advancing 0.5%.
The S&P 500 was slightly higher through the first hour of trading, sitting just above its 50-day simple moving average, but jumped to new highs following a CNBC interview with Peter Navarro, Director of the White House National Trade Council. Mr. Navarro tried to ease fears that the recently imposed tariffs, and future ones, could lead to a trade war, saying that the U.S. can implement them "in a way that is peaceful and will improve and strengthen the trading system." The upbeat sentiment didn't last long though, as the S&P 500 quickly returned to its previous levels.
From there, the equity market trended sideways into the afternoon and then dropped to new lows following the release of a New York Times report that Special Counsel Robert Mueller subpoenaed the Trump Organization for documents, some of which relate to Russia. Buyers didn't let the S&P 500 drop too far below its 50-day simple moving average though, keeping technical damage to a minimum.
The S&P 500 was down 0.3% at its worst mark of the day and was up 0.5% at its best. The 11 S&P sectors finished mostly lower, with three advancing and eight declining. The industrial sector (+0.3%) was the top performer, while materials (-1.3%), consumer staples (-0.6%), and energy (-0.4%) finished at the bottom of the sector standings.
Monsanto (MON 117.20, -5.95) weighed on the materials space, losing 4.8%, after reports that its pending merger with Bayer will face additional hurdles from antitrust officials. Meanwhile, in the consumer staples group, Walmart (WMT 87.51, -0.16) dropped sharply following reports that a former executive filed a lawsuit against the company, alleging that it issued misleading e-commerce results, but shares were able to bounce back to finish lower by just 0.2%.
News that the Federal Energy Regulatory Commission has revised its policies so that master limited partnerships (MLPs) will no longer be able to recover an income tax allowance for the cost of service weighed on the energy space, with Williams Companies (WMB 26.69, -1.45) losing 5.2%.
In earnings news, Dollar General (DG 93.44, +4.24) rallied 4.8% after reporting an increase of 3.3% in same store sales for the fourth quarter and issuing better-than-expected earnings and revenue guidance for fiscal year 2019.
The Treasury market walked a fairly quiet line on Thursday, with the exception of the 2-yr note, which saw sellers making some noise that drove its yield up three basis points to 2.28%. The benchmark 10-yr yield finished unchanged at 2.82%, leaving the 10-2 spread at 54 basis points, which is its lowest level since late January.
Investors received a large batch of economic data on Thursday that included export and import prices for February, the weekly Initial Claims report, the Empire State Manufacturing Survey for March, the Philadelphia Fed Index for March, and the NAHB Housing Market Index for March:
Import prices excluding oil rose 0.5% in February after increasing a revised 0.5% in January (from 0.4%). Export prices excluding agriculture increased 0.2% in February after rising a revised 0.8% in January (from 0.9%).
The price index for fuel imports was down 0.6% in February, so the key takeaway from the report is that the import price increase was driven by nonfuel prices, which is to be expected somewhat given the weakness in the dollar.
The latest weekly initial jobless claims count totaled 226,000, as expected. Today's tally was below the revised prior week count of 230,000 (from 231,000). As for continuing claims, they rose to 1.879 million from a revised count of 1.875 million (from 1.870 million).
The key takeaway from the report is that the initial claims level will continue to drive expectations for another solid gain in nonfarm payrolls in March.
The Empire Manufacturing Survey for March rose to 22.5 (Briefing.com consensus 15.0) from the prior month's unrevised reading of 13.1.
The Philadelphia Fed Survey for March decreased to 22.3 (Briefing.com consensus 23.7) from an unrevised 25.8 in February.
The key takeaway from the report is that 64% of firms reported labor shortages while 70% of firms highlighted skills mismatches between requirements and available labor. These responses could be a potential harbinger of wage inflation.
The NAHB Housing Market Index for March decreased to 70 (Briefing.com consensus 72) from a revised reading of 71 in February (from 72).
On Friday, investors will get another heavy dose of data, including February Housing Starts (Briefing.com consensus 1283K) and Building Permits (Briefing.com consensus 1330K), February Industrial Production (Briefing.com consensus +0.3%) and Capacity Utilization (Briefing.com consensus 77.7%), the Job Openings and Labor Turnover Survey for January, and the preliminary reading of the University of Michigan Consumer Sentiment Index for March (Briefing.com consensus 99.5).
Nasdaq Composite: +8.4% YTD
S&P 500: +2.8% YTD
Dow Jones Industrial Average: +0.6% YTD
Russell 2000: +2.7% YTD
Wall Street Extends Weekly Decline
14-Mar-18 16:30 ET
Dow -248.91 at 24758.12, Nasdaq -14.20 at 7496.80, S&P -15.83 at 2749.48
https://www.briefing.com/investor/markets/stock-market-update/2018/3/14/wall-street-extends-weekly-decline.htm
[BRIEFING.COM] The S&P 500 moved lower for the third consecutive session on Wednesday, losing 0.6%, as fears over a potential trade war continued linger. The Dow Jones Industrial Average did even worse, losing 1.0%, while the tech-heavy Nasdaq Composite held up relatively well, shedding just 0.2%.
Coming off last week's decision to impose tariffs on steel and aluminum imports, President Trump is now reportedly seeking to hit China with steep tariffs and investment restrictions that could be applied as early as next week. Those tariffs, which are expected to total as much as $60 billion, would initially be targeted towards information technology, telecoms, and consumer electronics as punishment for alleged intellectual property theft, but could eventually be much broader.
The White House also clarified a tweet that the president released last week, saying that Mr. Trump is looking to reduce China's trade surplus with the U.S. by $100 billion, and announced that longtime CNBC personality Larry Kudlow will replace Gary Cohn as President Trump's top economic advisor, as expected.
Stocks opened Wednesday's session with modest gains despite the continued tariff talk, but started moving lower almost immediately. The S&P 500 tested its 50-day simple moving average several times throughout the session, but buyers never let the index get too far below the key technical level. The benchmark index traded as low as 2744, but finished two points above its 50-day simple moving average at 2749.
Investors had a sizable batch of economic data to digest on Wednesday, including the February readings for the Producer Price Index and Retail Sales. Retail Sales disappointed, declining for a third straight month (-0.1% actual vs +0.3% Briefing.com consensus), but the January decrease was reduced to 0.1% from 0.3%.
The Producer Price Index, meanwhile, rose 0.2% in February, more than the Briefing.com consensus of 0.1%, and the core Producer Price Index also jumped 0.2%, as expected. Those monthly changes leave the PPI up 2.8% year over year (up from 2.7% in January) and the core CPI up 2.5% year over year (up from 2.2% in January).
All in all, Wednesday's data didn't give investors any reason to believe the Fed will hike rates more than three times this year. The year-over-year uptick in producer prices is notable, yet concerns about that trend were tempered somewhat by the realization that Tuesday's release of the Consumer Price Index for February didn't show any worrisome pass through effects to consumers.
Investors also received the Business Inventories report for January, which increased 0.6% as expected, but it didn't have much impact on trading.
U.S. Treasuries recorded their third consecutive advance on Wednesday, settling near session highs. The benchmark 10-yr yield, which moves inversely to the price of the 10-yr Treasury note, declined four basis points to 2.82%, while the 2-yr yield slipped just one basis point to 2.25%, resulting in a flattening of the yield curve.
That flattening weighed on financials, as lenders rely on the difference between what they spend on deposits and what they charge for loans. The S&P's financial sector lost 1.2%, finishing alongside industrials (-1.1%), materials (-1.3%), and consumer staples (-1.3%) at the bottom of the sector standings.
Two of eleven sectors finished in the green though--the rate-sensitive utilities (+1.0%) and real estate (+0.1%) spaces.
In corporate news, Signet Jewelers (SIG 38.22, -9.69) tumbled 20.2%, hitting its lowest level in more than six years, after the diamond retailer reported a 5.2% decline in same store sales for the fourth quarter and lowered its guidance for fiscal year 2019. Meanwhile, Broadcom (AVGO 260.59, -0.63) lost 0.2% after terminating its offer to acquire Qualcomm (QCOM 60.12, +0.42) following an order from President Trump.
Looking ahead, investors will receive a big batch of economic data on Thursday, including export and import prices for February, the weekly Initial Claims report (Briefing.com consensus 226K), the Empire State Manufacturing Survey for March (Briefing.com consensus 15.0), the Philadelphia Fed Index for March (Briefing.com consensus 23.7), and the NAHB Housing Market Index for March (Briefing.com consensus 72). All but the NAHB Housing Market Index will be released at 8:30 AM ET; the NAHB Index will be released at 10:00 AM ET.
Nasdaq Composite: +8.6% YTD
S&P 500: +2.8% YTD
Dow Jones Industrial Average: +0.2% YTD
Russell 2000: +3.2% YTD
Technology and Financials Lead Tuesday Tumble
13-Mar-18 16:30 ET
Dow -171.58 at 25007.03, Nasdaq -77.31 at 7511.00, S&P -17.71 at 2765.31
https://www.briefing.com/investor/markets/stock-market-update/2018/3/13/technology-and-financials-lead-tuesday-tumble.htm
[BRIEFING.COM] U.S. equities got off to a good start on Tuesday, but began declining soon thereafter, finishing the session on a broadly lower note. The S&P 500 and the Dow Jones Industrial Average ended with losses of 0.6% and 0.7%, respectively, while the Nasdaq Composite, which hit new all-time highs in the two prior sessions, dropped 1.0%.
The top-weighted technology and financials sectors, which comprise around 40% of the broader market combined, led Tuesday's tumble, dropping 1.2% and 1.1%, respectively. Cyclical sectors underperformed in general, while some countercyclical groups, like health care (+0.2%) and utilities (+0.2%), actually finished in the green.
Qualcomm (QCOM 59.70, -3.11) was the worst-performing component in the S&P 500 with a loss of 5.0%. The semiconductor giant sold off after President Trump blocked Broadcom's (AVGO 261.22, -1.62) takeover effort, citing risks to national security. Dow component General Electric (GE 14.43, -0.67) also had a disappointing performance, dropping 4.4%, after JP Morgan slashed its price target from $14 to $11, which is the lowest price forecast among the 16 research firms that cover GE.
The major averages were either at, or below, their flat lines by midday, but selling accelerated in the afternoon following a Politico headline that the White House could announce "steep" tariffs and investment restrictions on China as soon as next week. The threat of such action against China has been present for some time, so the headline wasn't unexpected per se. However, it did serve as a sobering reminder that the trade war issue is still simmering and could soon hit a boiling point if China decides to retaliate.
Separately, President Trump ousted Secretary of State Rex Tillerson on Tuesday and nominated CIA Director Mike Pompeo to replace him.
Investors received some key inflation data on Tuesday, the Consumer Price Index for February, and breathed a sigh of relief after it showed that consumer inflation is not accelerating in a worrisome fashion. The CPI increased 0.2% last month, as expected, after rising 0.5% in January. Meanwhile, the core CPI, which is seen as a better long-term gauge of inflation as it excludes the volatile categories of food and energy, also met expectations with a 0.2% month-over-month increase, down from 0.3% in January.
With those monthly changes, total CPI was up 2.2% year over year, which is more than the 2.1% reading registered in January, and core CPI was up 1.8%, unchanged from the 12 months ending January. The Fed aims for a year-over-year increase of 2.0% in core inflation, but prefers to use the PCE Price Index over the CPI.
In the bond market, U.S. Treasuries ended Tuesday on a mostly higher note, with longer-dated issues pacing the advance. The benchmark 10-yr yield, which moves inversely to the price of the 10-yr Treasury note, slipped two basis points to 2.85%. Meanwhile, the 2-yr yield finished flat at 2.26%.
Looking ahead, investors will receive a sizable batch of economic data on Wednesday: Retail Sales for February (Briefing.com consensus +0.3%) and the Producer Price Index for February (Briefing.com consensus +0.1%) will both be released at 8:30 AM ET, while the less influential Business Inventories report for January (Briefing.com consensus +0.6%) will cross the wires at 10:00 AM ET. Also of note, the Energy Information Administration will release its weekly crude inventory report at 10:30 AM ET.
Nasdaq Composite: +8.8% YTD
S&P 500: +3.4% YTD
Dow Jones Industrial Average: +1.2% YTD
Russell 2000: +3.7% YTD
Mixed Finish to Monday's Session
12-Mar-18 16:30 ET
Dow -157.13 at 25178.61, Nasdaq +27.51 at 7588.31, S&P -3.55 at 2783.02
https://www.briefing.com/investor/markets/stock-market-update/2018/3/12/mixed-finish-to-mondays-session.htm
[BRIEFING.COM] Stocks kicked off the week with a quiet performance on Monday that left the broad-based S&P 500 a tick below its unchanged mark (-0.1%). The Dow Jones Industrial Average took a more substantial hit (-0.6%), while the Nasdaq Composite outperformed (+0.4%), climbing to a new all-time high for the second consecutive session.
Noteworthy news was in short supply on Monday, leading to lighter-than-usual trading volume. Investors continued to digest the February jobs report, which prompted a big rally on Friday, and started looking ahead to this week's batch of influential economic data--beginning with the Tuesday release of the Consumer Price Index for February (Briefing.com consensus +0.2%).
The 11 S&P sectors finished Monday pretty evenly mixed; six declined while five advanced.
Industrials (-1.2%) was the weakest sector by a considerable margin, with more than three quarters of its components finishing in the red. Dow components Boeing (BA 344.19, -10.33), Caterpillar (CAT 154.50, -3.75), and United Tech (UTX 131.50, -2.57) showed particular weakness, losing between 1.9% and 2.9%.
Conversely, technology (+0.3%) was among the top-performing sectors, with chipmakers setting the pace. Broadcom (AVGO 262.84, +9.06) advanced 3.6% following a Wall Street Journal report that Intel (INTC 51.52, -0.67) might look to acquire Broadcom, which is currently in pursuit of an acquisition itself; namely, the company is seeking to acquire Qualcomm (QCOM 62.81, -0.22). A combined Broadcom/Qualcomm would pose a serious competitive threat to Intel, hence Intel's desire to enter the mix.
Meanwhile, fellow chipmaker Micron (MU 59.37, +4.78) spiked 8.8% after its target price was raised to $100 from $55 at Nomura Instinet.
In the bond market, U.S. Treasuries moved modestly higher on Monday, pushing yields down across the curve; the benchmark 10-yr yield slipped two basis points to 2.87%. A $21 billion 10-yr note auction drew a high yield of 2.889% on a bid-to-cover of 2.50--slightly above the average of the prior 12 auctions.
Economic data was limited to the Treasury Budget for February, which showed a deficit of $215.2 billion (Briefing.com consensus -$216.0 billion) versus a deficit of $192.0 billion for February 2017. The Treasury Budget data is not seasonally adjusted, so the February deficit cannot be compared to the $49.2 billion surplus registered in January.
In Washington, reports indicated that longtime CNBC personality Larry Kudlow is the front runner to replace Gary Cohn as President Trump's top economic advisor. Mr. Kudlow is a proponent of free trade and served in the Office of Management and Budget during the Reagan administration.
Nasdaq Composite: +9.9% YTD
S&P 500: +4.1% YTD
Dow Jones Industrial Average: +1.9% YTD
Russell 2000: +4.3% YTD
InvetmentHouse - 224K Manufacturing Jobs Came Back (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
- Jobs report just right, NKorea disarmament prospects provide solid upside
catalyst.
- 'Not since 1980's' statistics showing up in the jobs report.
- Household survey says: 1.006M jobs added in February.
- 224K manufacturing jobs in 12 months came back when they were never coming
back.
- SOX, NASDAQ leads the way. SOX is so successful it is almost at its upper
channel line.
- Will SP500, DJ30 finally come around to help the move?
- Many stocks are extended, but looking for others that have had time to
base to come up with some leadership.
Two words come to mind describing the market. I used 'resilient' to
describe the market after the tariff fears and the Cohn resignation could
not take it down. Friday the first word I said when the Jobs Report was
released was 'goldilocks.' One of the other words (okay, a third word) was
'remarkable' when the prospect of NKorea disarming was broached.
The market proved resilient despite the headwinds, and with a goldilocks
jobs report and the possibility of NKorea denuclearizing it proved it could
defy the odds: SOX broke to a new high midweek, and Friday NASDAQ and NASDAQ
100 joined it as they all powered to new all-time highs. The other indices
are not there yet, but the RUTX continues to scream higher and it will be
there soon enough after 5 of 6 days sharply higher.
SP500 47.60, 1.74%
NASDAQ 132.86, 1.79%
DJ30 440.53, 1.77%
SP400 1.64%
RUTX 1.60%
SOX 2.08%
NASDAQ 100 1.93%
VOLUME: NYSE +6%, NASDAQ +1%. No great shakes but NASDAQ moved farther
above average though NYSE remained low.
ADVANCE/DECLINE: NYSE 2.8:1, NASDAQ 2.8:1. Not huge, but the upside A/D has
been very solid to very good during the run higher.
Jobs are 'just right'
Why the goldilocks moniker? Because it gave the market everything it
wanted. Much stronger than expected jobs created, a jobs mix not seen in
the 8 years of the prior administration, jumping participation, record lows
in minority unemployment, a rising workweek, and . . . wage growth lower
than expected. For the market, that is goldilocks.
Wages are unfairly and wrongly labeled as impacting inflation. That is the
Phillips Curve myth. However, given that the Fed is controlled by those
from Princeton versus those from Chicago or Austrian scholars, the Phillips
Curve is the idol the current Fed worships. Thus the market knows that what
is pleasing to the PCurve keeps the Fed calmer.
Shades of the early 1980's: yes, history does repeat in economics as well.
Before I go into the jobs report details I want to note one thing: the
number of workers added to the workforce. +806,000. That is the highest
since June 1983. That is a significant year. The Reagan Emergency Economic
Recovery Act was enacted and the benefits were showing up. After a decade
of economic dormancy during high tax and high regulation policies had the
rest of the world and even many in the US thinking the US would no longer be
a world growth leader, the regulations were rolled back, taxes were cut, tax
incentives to invest were in place, and the economy took off. GDP surges,
jobs surges, earnings surges, stock surges. Indeed, in one month in that
recovery 1,000,000 jobs were created.
The most recent cycle is matching that prior one. A decade or more of
anti-growth policies in the form of more regulations (yes, Bush was a
regulator and a taxer with poor economic policies, and Obama was worse by a
factor of 10) had the US economy again in a no-growth zone. The prior
administration excused its poor performance with the old 'things were so bad
of course you get a weak recovery' lie (when the opposite is true -- when
you use the right policies) and the 1970's 'hey, we just cannot grow the way
we used to' nonsense.
No, when you enact the right policies in our system you get growth. Yes we
have strayed far from capitalism, so much so that when we have periods like
the 1970's and 2000's to 2016 where we move even more toward socialism,
capitalism gets the blame. Yet when we move again away from socialism and
back toward more free enterprise, i.e. less government regulation, letting
people keep more of their money -- in other words getting back to freer
markets where people have the incentive to take risk and invest (improving
the risk/reward equation) -- we see economic activity jump, jobs are
created, the standard of wealth rise. Wages are still lagging, but they
will come -- IF we stay on the path of incentives that foster investment in
the US and thus the creation of new companies out of new ideas, new
technologies, and new inventions. It happened in the 1980's and into the
1990's, and there is no reason it cannot and should not happen again.
Now, on with the countdown.
The Jobs Numbers
Non-Farm Payrolls, February: 313K vs 210K exp vs 239K prior (from 200K)
Unemployment: 4.1% vs 4.0% exp vs 4.1 prior.
Black unemployment: 6.9% versus 7.8% January. Another record low, smashing
the prior record low. Hispanic unemployment also at a record low.
Household survey:
785K jobs added
Unemployed: +22K
Full-time jobs: 729K, a near record (794K September 2017)
Part-time jobs added: 277K
Total jobs added: 1,006,000. That is the largest monthly gain in the 2000's
and harkens back to the mid-1980's when under Reagan the US produced over
1,000,000 monthly jobs but that was via the Non-Farms number, the company
reported numbers, not the household survey.
Wages: 0.1% vs 0.2% exp vs 0.3% January. 2.6% year/year versus 2.8%
(revised from 2.9%).
This was the 'light inflation' aspect of the report that let the market
appreciate the other good numbers.
Average Workweek: 34.5 vs 34.4 expected vs 34.4 January (from 34.3)
This is very welcome and out of this the higher wages will emerge.
Remember, under the ACA workers with more than 29 hours/week were subject to
the tax. With that eliminated (less regulation, right?) workers are free to
work as many hours as they can, and employers will let them work as many as
they want because there is no additional tax for letting someone work.
I bet you NEVER heard it put that way did you? The ACA taxes work. If you
work too much you are taxed. The government created a disincentive for
employers to let its employees work full time. And then the government
complained to companies as to why wages were lower (the tax) and why
employees were unable to work as much (the tax).
Kind of like our entitlement system: if you actually work too much, you get
a lot less. So, people who are anywhere close to that level of work won't
do it or else suffer a lot more penalty from losing benefits from working
'too much.' It is not their fault; the system was set up that way and they
are making a rational economic decision. To avoid this, why on earth would
you make benefits for not working available to someone who is fully able to
work? Our system is full of reverse incentives created by people who wanted
to help out but had no earthly concept of economic cause and effect. Or
human nature for that matter.
Participation: 63.0%, +0.3% mo/mo. This is one of the biggest jumps in
participation since 2016. Recall rates were heading lower, and lower, and
lower under the Obama administration because why? The incentives were not
to work. "You see, there is only one constant. One universal. It is the
only real truth: causality. Action, reaction. Cause and effect."
The Merovingian, aka the Frenchman in 'The Matrix Reloaded.'
Workers entering the work force: 806,000. As noted, the highest since June
1983 as the US embarked upon over 20 years of remarkable expansion.
This is where the jobs are:
Construction 61K
Manufacturing: 31K (224K 12 months, greatest since 1998; 263K since
election)
Retail: 50K
Professional: 50K
Mining: 9K
Information tech: -12K
Overall Goods producing: +100K
Overall services: +187K
This report was termed by Rick Santelli as 'great.' Rick doesn't put out
words lightly. Forgive me; I have to say it: is America getting great
again?
THE MARKET
THE CHARTS
NASDAQ was up sharply and put in a new high, but have to go with SOX first
as it led the way. This is not just another move. The indices defied
history in moving to higher highs. This does not mean that SP500, DJ30 have
to hit new highs, but there is strength showing that is not usual for these
patterns.
SOX: SOX edged to a new high midweek, then Friday sealed the deal with a
gap and rally. Nice move and SOX is clearly the market leader. It set up a
potential head and shoulders top but blasted that apart with this last
rally, turning a potential negative into just another rotation in the
uptrend channel from the fall. It got dicey early February, but with many
chips selling ahead of the market, they had already formed bases and were
ready to lead. That said, SOX is now closing in on the top of its channel,
closing at 1431 with the upper trendline at 1445 to 1450. Success means you
have to test at times.
NASDAQ: Gap and rally past the January high, closing out at the high on
rising, above average trade. NASDAQ defies the typical selling pattern thus
far. New highs are no guarantee they have to hold, but it has plenty of
leadership including many chip stocks.
RUTX: Not a new high but a strong 5 of 6 sessions has it past the 78%
Fibonacci retracement and on the way to the high (1616, closed at 1597). As
with NASDAQ, the 78% level did not stop the move though it still could form
an ABCD top given it is below the prior high. Just observing and noting
that is still a possibility, but the small caps are acting very positive,
suggesting the economics are better.
SP400: The midcaps broke through a resistance level themselves Friday,
clearing the November/December levels as well as the 50 day SMA and the 61%
Fibonacci retracement. Already right at the 78% level (1951) where there is
price resistance as well. That said, it is following and if the others move
up, it does as well. It is not helping out, however, and if things falter
it has its own ABCD pattern that could lead to some interesting downside.
SP500: A definite laggard, and though it was up, volume was still tepid as
SP500 matched the late February peak. It is a pattern similar to what
NASDAQ showed and rallied from so it is not necessarily a bag of chopped
liver. Perhaps its time will come this week and it follows in NASDAQ's
footsteps after SOX hits the upper channel line and needs to take a breather
along with NASDAQ.
DJ30: Could not even muster a move to match the late February high a la
SP500. Stalled at the 50 day SMA on a bit better trade, though nothing near
average. Even the DJ20 transports are matching the late February high right
now.
LEADERSHIP
The same groups keep leading higher: Chips, FAANG, biotech, tech.
Chips: A banner session of course. LRCX, AMAT, TXN, QRVO, SLAB. Perhaps a
bit overstretched in some cases while others are still solid with room to
run.
FAANG: NFLX surged to another higher high as did AMZN. FB overcame a report
that usage was down 24%; FB still does not look great. AAPL rallied to
match the February and January twin peaks. GOOG gapped and rallied past the
late February peak and is at the upper gap point from the first big and
nasty gap lower to start February.
China: Quiet though BIDU put in a good move. BABA up on the week along
with QIWI, while HTHT, SINA, YNDX were quiet or down to end the week.
Drugs/Biotechs: Mixed but still solid. Some are testing already after good
moves, others starting upside. AMGN rallied well Friday. BLUE added upside
all week. PTCT looks great. ARRY taking a pause. INFI started back
upside.
Software: RHT added more all week but we decided Friday to take the last of
a big 450%ish gain. FFIV is trying to hang on at the 20 day EMA after
flopping to there Thursday. MSFT at a new high on volume Friday. VMW
recovered on the week, but is at the 50 day MA and has slowed a bit.
Retail: Decent to struggling. DDS remains solid but COST, ROST wandering.
JWN at the 50 day MA in a test. DLTR bombed lower on the week. TGT sold
through the 50 day MA's. Not a great week for the retail sector.
Financial: JPM bounced from the 50 day EMA on the week as did BAC. WFC is
trying its hand at a double bottom from the 200 day SMA. GS is again
bumping at the January high as it slowly, slowing trends higher.
MARKET STATS
DJ30
Stats: +440.53 points (+1.77%) to close at 25335.74
Nasdaq
Stats: +132.86 points (+1.79%) to close at 7560.81
Volume: 2.3B (+1.32%)
Up Volume: 1.61B (+280M)
Down Volume: 662.82M (-254.57M)
A/D and Hi/Lo: Advancers led 2.82 to 1
Previous Session: Advancers led 1.15 to 1
New Highs: 250 (+66)
New Lows: 16 (-10)
S&P
Stats: +47.60 points (+1.74%) to close at 2786.57
NYSE Volume: 812.332M (+6.20%)
A/D and Hi/Lo: Advancers led 2.75 to 1
Previous Session: Advancers led 1.37 to 1
New Highs: 132 (+29)
New Lows: 45 (+5)
SENTIMENT INDICATORS
VIX: 14.64; -1.90
VXN: 17.30; -1.96
VXO: 13.91; -2.22
Put/Call Ratio (CBOE): 0.81; -0.09
Bulls and Bears: Of course there was a huge drop in bulls the past several
weeks, with no real improvement the past week, as the market started back
upside. SOX is up 3 of 4 weeks as sentiment plunged. NASDAQ the same.
Sentiment is quite obviously a contrary indicator.
Bulls: 48.6 versus 48.1
Bears: 15.5 versus 14.4
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 48.6 versus 48.1
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: 15.5 versus 14.4
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: 2.896% versus 2.872%
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.872%
versus 2.879% versus 2.863% versus 2.879% versus 2.868% versus 2.799% versus
2.875% versus 2.893% versus 2.864% versus 2.866% versus 2.934% versus 2.952%
versus 2.893% versus 2.873% versus 2.904% versus 2.913% versus 2.833% versus
2.857% versus 2.8577% versus 2.844% versus 2.813% versus 2.805% versus
2.707% versus 2.841% versus 2.792% versus 2.713% versus 2.72% versus 2.72%
versus 2.66% versus 2.66% versus 2.639% versus 2.617% versus 2.656% versus
2.661% versus 2.618% versus 2.587% versus 2.535% versus 2.55% versus 2.559%
versus 2.551% versus 2.482% versus 2.456% versus 2.463% versus 2.464% versus
2.405% versus 2.434% versus 2.412% versus 2.474% versus 2.485% versus 2.484%
versus 2.501% versus 2.459% versus 2.398% versus 2.351%
EUR/USD: 1.2305 versus 1.2305
Historical: 1.2305 versus 1.24017 versus 1.2411 versus 1.2344 versus 1.23187
versus 1.22822 versus 1.21894 versus 1.21893 versus 1.23257 versus 1.2296
versus 1.2324 versus 1.22820 versus 1.23431 versus 1.2411 versus 1.25083
versus 1.2450 versus 1.23528 versus 1.22887 versus 1.22524 versus 1.2273
versus 1.2377 versus 1.24573 versus 1.2502 versus 1.2404 versus 1.2402
versus 1.23832 versus 1.24308 versus 1.24159 versus 1.24340 versus 1.23083
versus 1.22567 versus 1.22169 versus 1.2241 versus 1.2198 versus 1.22698
versus 1.22060 versus 1.20608 versus 1.19507 versus 1.19322 versus 1.19662
versus 1.20313 versus 1.20756 versus 1.20177 versus 1.20573 versus 1.2001
versus 1.1936 versus 1.1936 versus 1.18998 versus 1.18593 versus 1.18628
versus 1.18658 versus 1.18792 versus 1.18408 versus 1.17703 versus 1.1752
versus 1.17798 versus 1.18392 versus 1.17430
USD/JPY: 106.77 versus 106.41
Historical: 106.41 versus 106.105 versus 105.752 versus 106.359 versus
105.734 versus 106.03 versus 106.695 versus 107.381 versus 106.96 versus
106.886 versus 106.85 versus 107.581 versus 107.435 versus 106.294 versus
106.153 versus 106.782 versus 107.77 versus 108.669 versus 108.669 versus
108.797 versus 108.88 versus 109.33 versus 109.58 versus 108.651 versus
110.001 versus 109.46 versus 109.50 versus 108.77 versus 108.84 versus
108.601 versus 109.411 versus 109.033 versus 110.159 versus 110.159 versus
110.70
Oil: 62.04, +1.92. After breaking below the 50 day MA, Oil rebounded, but
still in a lateral move along the 50 day MA the past four weeks.
Gold: 1324.00, +2.30. Gold has stalled out at the 50 day MA's as well, but
is still in a pretty good pattern.
MONDAY
Big moves on all the indices with some to new highs, others still dealing
with old highs. Many stocks have moved very well in their leadership rolls,
e.g. chips. There are still stocks out there with potential to rally but
some of the leadership groups such as SOX are nearing resistance and will
need a test.
Those stocks that have sprinted won't present a lot of good new buys, but
perhaps other areas that have lagged are getting the time they need to
complete patterns and can join the move higher, giving it some breadth and
perhaps taking the lead on the upside move.
With the market moving you want to continue moving into stocks that are
setting up then breaking higher. If more continue to do so, then you will
see RUTX, SP400 and even the large cap NYSE make new highs as well.
Leadership will have to fan out more to get all to new highs.
There is also the possibility that SOX hits the top of its channel and falls
along with NASDAQ, and that results in the NYSE indices breaking back lower.
RUTX, SP400 still have potential ABCD downside patterns while SP500 and DJ30
have mid-recovery double tops. Have to keep that in mind if inflation
worries come back around.
What may happen Monday is a bit of give back after such a huge end to the
week on such an emotional high (jobs, NKorea). That would be just fine as
we can use that perhaps to get some better entries on stocks that started to
break higher but we did not want to chase on a Friday. Buy on Monday, sell
on Friday, right? Okay, there are a few twists in there of course, but
after such good happy time moves to end a week, then a bit of give back
early week is normal. Again, we want to use that to enter well-positioned
stocks that made a break higher but are testing it.
Again, the market was resilient, buying time, holding gains, letting
patterns set up in the recovery. Then when good news hit, it was upside
again. We bought positions on the week, had positions working, and are for
the most part pleased with the moves. Some are just not performing with the
market as is the case sometimes, and those are disappointing, e.g. LULU.
Nice break higher, gave it back, holding support but could not participate
Friday. Will see if money shifts back their way this week as we let winners
work and look for new areas, preferably after a brief pullback, to put money
to work.
Have a great weekend!
Nasdaq Hits New Record Following February Jobs Report
09-Mar-18 16:30 ET
Dow +440.53 at 25335.74, Nasdaq +132.86 at 7560.80, S&P +47.60 at 2786.57
https://www.briefing.com/investor/markets/stock-market-update/2018/3/9/nasdaq-hits-new-record-following-february-jobs-report.htm
[BRIEFING.COM] Stocks advanced on Friday, climbing steadily over the course of the session, as investors cheered the Employment Situation Report for February, which showed strong jobs growth while keeping inflation concerns at bay. The Nasdaq Composite climbed 1.8% to finish at a new record high (7560.81), its first record finish since before a volatile round of selling at the beginning of February. Meanwhile, the S&P 500 and the Dow Jones Industrial Average advanced 1.7% and 1.8%, respectively.
Nonfarm payrolls increased by 313,000 in February, blowing past the Briefing.com consensus estimate of 210,000, and the January increase was revised upward to 239,000 (from 200,000). Meanwhile, average hourly earnings increased 0.2%, as expected, which brought the year-over-year increase down to 2.6% from 2.8% in January. The unemployment rate stayed at 4.1%, which is slightly higher than the Briefing consensus estimate of 4.0%, but still good enough for a 17-year low, and the average workweek ticked up to 34.5 from a revised 34.4 in January (Briefing.com consensus 34.4).
In short, it was another 'Goldilocks' report, pointing to strong economic growth via the impressive nonfarm payroll additions while at the same time giving the market no reason to believe that the Fed will need to be more aggressive in its path to normalization--evidenced by the deceleration in year-over-year wage growth.
U.S. Treasuries sold off in reaction to the jobs report, pushing yields back towards the multi-year highs they hit a couple of weeks ago; the benchmark 10-yr yield advanced to 2.89% after finishing Thursday at 2.87%. The uptick in yields helped underpin the financial sector (+2.5%), which finished at the top of the sector standings.
Within the financial space, Goldman Sachs (GS 270.77, +4.43) settled behind its peers following reports that its CEO Lloyd Blankfein is preparing to step down after serving at the helm for more than 12 years. Co-presidents Harvey Schwartz and David Solomon are the two front runners to replace Mr. Blankfein.
10 of 11 S&P groups finished Friday in the green, with the lightly-weighted telecom services space (-0.1%) being the lone laggard. In addition to financials, industrials (+2.2%), technology (+2.0%), materials (+1.9%), and energy (+1.9%) outperformed, while the consumer staples (+0.6%), real estate (+0.7%), and utilities (+0.3%) groups were relatively week. The energy space was helped by an increase in the price of crude oil, with West Texas Intermediate crude futures climbing 3.1% to $62.05 per barrel following a two-day skid.
News that President Trump accepted an invitation to meet with North Korean leader Kim Jong Un helped underpin Wall Street on Friday. The meeting, which will reportedly take place by the end of May, would mark the first meeting between a sitting U.S. president and a member of the Kim dynasty.
In addition, investors were still chewing on President Trump's tariff announcement on Friday, which went better than many were expecting. The president officially approved tariffs on steel and aluminum imports shortly before Thursday's closing bell, but gave Canada and Mexico an exemption and said that other countries might also receive an exemption depending on their willingness to renegotiate trade deals with the U.S.
Nasdaq Composite: +9.5% YTD
S&P 500: +4.2% YTD
Dow Jones Industrial Average: +2.5% YTD
Russell 2000: +4.0% YTD
Week In Review: Bulls Bounce Back, Nasdaq Navigates to New Records
U.S. equities rallied this week, more than reclaiming last week's losses, as investors navigated their way through a host of happenings, including a battle over tariffs in Washington, the latest European Central Bank policy meeting, and the release of the Employment Situation Report for February. The tech-heavy Nasdaq Composite led the charge with a weekly gain of 4.2%, closing Friday at a new all-time high, while the S&P 500 and the Dow Jones Industrial Average advanced 3.5% and 3.3%, respectively.
The tariff saga continued this week as some congressional Republicans and officials within the White House urged President Trump to reconsider the duties on steel and aluminum imports that he proposed last week, fearing that they could cause a trade war. The president refused to back down though, leading to the resignation of his top economic advisor Gary Cohn on Tuesday.
Mr. Trump signed a proclamation to implement the tariffs on Thursday afternoon, but, to the market's delight, exempted Canada and Mexico. The president also left open the possibility of exemptions for other countries depending on their willingness to renegotiate trade deals. The tariffs will take effect on March 23.
Overseas, the European Central Bank left its key policy rates unchanged on Thursday, as expected, and removed from its policy statement a promise to increase its bond purchases if needed. The latter move was seen as a small step towards normalization following years of ultra-accommodative policy. In addition, the ECB reaffirmed that its net asset purchases will remain at a monthly pace of EUR30 billion until the end of September 2018, or beyond, if necessary.
In Asia, North Korean leader Kim Jong Un on Thursday extended an invitation to meet with President Trump, which Mr. Trump accepted. The summit, which will reportedly take place by the end of May, would mark the first face-to-face meeting between a sitting U.S. president and a sitting North Korean leader.
The Employment Situation Report for February was released on Friday morning, showing robust job growth and a deceleration in the year-over-year change in average hourly earnings. Nonfarm payrolls increased by 313,000 (Briefing.com consensus 210K), while average hourly earnings increased 0.2%, as expected, and the unemployment rate stayed at 4.1% (Briefing.com consensus 4.0%). The report helped Wall Street close out the week on a positive note, boosting the major averages more than 1.5% apiece on Friday.
11 of 11 S&P sectors finished with weekly gains. Economically-sensitive groups like financials (+4.4%), technology (+4.3%), industrials (+4.4%), and materials (+4.1%) were the top-performing sectors, while countercyclical spaces like consumer staples (+1.7%), utilities (+0.8%), and telecom services (+1.8%) showed relative weakness.
Following this week's rally, the S&P 500 is about 3.0% below its record high (2873), which is a big improvement from -10.1% at the bottom of the February sell off.
Late Rally Following Trump Signature on Tariffs
08-Mar-18 16:30 ET
Dow +93.85 at 24895.21, Nasdaq +31.30 at 7427.94, S&P +12.17 at 2738.97
https://www.briefing.com/investor/markets/stock-market-update/2018/3/8/late-rally-following-trump-signature-on-tariffs.htm
[BRIEFING.COM] U.S. equities ticked higher on Thursday as investors awaited President Trump's official approval of tariffs on steel and aluminum imports, which he gave minutes before the closing bell. The S&P 500 finished with a gain of 0.5%, closing at its best mark of the day, while the Dow and the Nasdaq added 0.4% apiece.
The market drifted near its unchanged mark through most of Thursday's session, but volatility started to pick up in the afternoon following an Associated Press report that Canada and Mexico will be exempt indefinitely from the president's proposed tariffs; earlier reports said that the two countries would be exempt initially, but a continuation of that status was based on their willingness to renegotiate the North American Free Trade Agreement (NAFTA).
From there, equities bounced around during President Trump's press conference, which began just 30 minutes before the closing bell. The president signed two proclamations that implemented the tariffs on steel and aluminium imports, but exempted Mexico and Canada. However, Mr. Trump said he will give other nations the opportunity to justify why they should also not be included, emphasizing that he is seeking "fairness."
10 of 11 S&P sectors finished in positive territory, with countercyclical groups like health care (+0.7%), consumer staples (+0.9%), and utilities (+0.7%) closing at the top of the leaderboard. The energy sector (-0.1%) was the one declining group.
In corporate news, Express Scripts (ESRX 79.72, +6.30) jumped 8.6% after agreeing to be acquired by Cigna (CI 172.00, -22.25) for approximately $67 billion in cash and stock; conversely, Cigna dropped 11.5%. Meanwhile, Kroger (KR 22.98, -3.25) tumbled 12.4% to a three-month low after issuing disappointing profit guidance, and Costco (COST 185.69, -1.67) lost 0.9% after missing earnings estimates for its fiscal second quarter.
Meanwhile, Treasury yields settled Thursday a tick lower, with the benchmark 10-yr yield slipping one basis point to 2.87%.
In Europe, the European Central Bank left its key policy rates unchanged on Thursday, as expected, and removed from its policy statement a promise to increase its bond purchases if needed. The latter move was seen as a small step towards normalization following years of ultra-accommodative policy. In addition, the ECB reaffirmed that its net asset purchases will remain at a monthly pace of EUR30 billion until the end of September 2018, or beyond, if necessary.
The euro dropped 0.9% against the U.S. dollar to 1.2303 following the ECB decision, hitting a one-week low, while European equities rallied to new session highs. France's CAC led the charge, finishing Thursday with a gain of 1.3%, while Germany's DAX and the UK's FTSE added 0.9% and 0.6%, respectively.
In Asia, equity indices also ended Thursday in positive territory, adding between 0.5% and 1.5%.
Investors received just one economic report on Thursday, weekly Initial Claims, which came in higher than expected (231K actual vs 220K Briefing.com consensus). As for continuing claims, they declined to 1.870 million from a revised count of 1.934 million (from 1.931 million). The report will likely be glossed over as it doesn't alter the market's perspective on the claims trend, and it comes just one day ahead of the much more influential Employment Situation Report for February.
The Employment Situation Report for February will be released at 8:30 AM ET on Friday, and the Briefing.com consensus expects that it will show the addition of 210,000 nonfarm payrolls, an increase of 0.2% in average hourly earnings, and an unemployment rate of 4.0% (down from 4.1% in January).