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Afternoon Rally Leaves Stocks Little Changed
07-Mar-18 16:30 ET
Dow -82.76 at 24801.36, Nasdaq +24.64 at 7396.64, S&P -1.32 at 2726.80
https://www.briefing.com/investor/markets/stock-market-update/2018/3/7/afternoon-rally-leaves-stocks-little-changed.htm
[BRIEFING.COM] An afternoon rally left the U.S. equity market little changed on Wednesday as investors contemplated the resignation of White House Chief Economic Advisor Gary Cohn. The S&P 500 finished a tick below its flat line (-0.1%), breaking a three-session winning streak, while the Nasdaq did a little better (+0.3%) and the Dow did a little worse (-0.3%).
President Trump's proposed tariffs, which include a 25% duty on steel imports and a 10% duty on imports of aluminum, were reportedly the rift that caused Mr. Cohn's departure, which, in turn, underlined the seriousness of the White House on the matter. Mr. Trump indeed looks poised to push the tariffs forward, despite fears that they could lead to a trade war, with reports indicating that he would like to sign a presidential proclamation as early as Thursday.
It's worth noting, however, that White House Press Secretary Sarah Huckabee Sanders said there could be carve outs for NAFTA partners Mexico and Canada. The suggestion that the tariffs may not be applied in a universal fashion helped dial back the bearish sentiment on Wall Street.
The equity market looked as if it might give back all of its weekly gain immediately following news of Mr. Cohn's resignation, with the S&P 500 futures losing as much as 1.7% overnight. However, stocks quickly made a rebound attempt after opening lower. That attempt failed, but a second attempt in the afternoon proved successful, bringing the S&P 500 all the way back from a loss of 1.0%. The benchmark index touched positive territory for the first time with less than 30 minutes left in the session, but ticked back into the red in the final minutes.
Only three of eleven S&P 500 sectors finished in the green, but two of those three--technology (+0.6%) and health care (+0.5%)--are heavily-weighted, comprising around 40% of the broader market combined. Autodesk (ADSK 137.70, +17.83) was the tech sector's top-performing component, rallying 14.9%, after reporting better-than-expected earnings and revenues for the fourth quarter.
In other earnings news, Dollar Tree (DLTR 89.25, -15.11) and Ross Stores (ROST 75.40, -5.11) dropped sharply after both companies issued disappointing profit guidance; Dollar Tree also missed earnings estimates for the fourth quarter. The two retailers lost 14.5% and 6.4%, respectively.
Small caps outperformed in the midweek session, pushing the Russell 2000 higher by 0.8%, likely due to the fact that a trade war wouldn't have as harsh of an impact on smaller companies, which rely more on domestic consumers. Likewise, the S&P Mid Cap 400 added 0.2%.
Overseas, Asian equities sold off on Wednesday, but European shares advanced, with Germany's DAX (+1.1%) setting the pace. All eyes will be on the ECB's Governing Council meeting on Thursday, especially ECB President Mario Draghi's post-decision press conference. Any sense that the central bank might dial back its ultra-accommodative policy measures could lead to a knee-jerk reaction in the financial markets.
Investors received a big batch of economic data on Wednesday, highlighted by a higher-than-expected trade deficit for January (-$56.6 billion actual vs -$55.0 billion Briefing.com consensus), which marked the biggest deficit since October 2008. The key takeaway from the report is that trade will again be a drag on first quarter GDP growth.
The ADP National Employment Report for February, which is a prelude to Friday's Employment Situation Report, was also released, showing a larger-than-expected increase in nonfarm payrolls (235K actual vs 193K Briefing.com consensus). However, the ADP reading has proven unreliable in predicting the BLS nonfarm payrolls figure.
Elsewhere, U.S. Treasuries alternated between gains and losses on Wednesday, finishing little changed; the benchmark 10-yr yield climbed one basis point to 2.88%. Meanwhile, West Texas Intermediate crude futures dove 2.2% to $61.63 per barrel after the EIA reported U.S. crude inventories increased 2.4 million barrels last week. Estimates called for a build of around 2.7 million barrels.
Stocks Notch Third Straight Win, But Struggle For Direction
06-Mar-18 16:30 ET
Dow +9.36 at 24884.12, Nasdaq +41.30 at 7372.00, S&P +7.18 at 2728.12
https://www.briefing.com/investor/markets/stock-market-update/2018/3/6/stocks-notch-third-straight-win-but-struggle-for-direction.htm
[BRIEFING.COM] Stocks finished modestly higher on Tuesday, notching their third consecutive victory, following a hard-fought battle between the bulls and the bears. The S&P 500 advanced 0.3%, while the Nasdaq Composite climbed 0.6% and the Dow Jones Industrial Average closed flat. The small-cap Russell 2000 outperformed, rallying 1.0%.
Investors continued weighing the possibility of a trade war on Tuesday, but pushback from some senior Republicans regarding tariffs on steel and aluminum imports, which President Trump pledged to implement last Thursday, helped ease concerns. House Speaker Paul Ryan (R-WI) encouraged the White House to narrow the focus of its plan, saying the current proposal--a 25% tariff on steel imports and a 10% tariff on imported aluminum--is too broad and leaves the U.S. open to retaliation.
Meanwhile, on the Korean Peninsula, reports indicated that North Korea and South Korea will hold their first summit in more than a decade in late April. North Korea is also reportedly open to discussing the end of its nuclear weapons program as long as the ruling regime is guaranteed security in return. However, investors remained skeptical as North Korea has a poor track record of keeping its promises.
U.S. equities opened Tuesday's session modestly higher following a positive overnight performance from overseas markets, but struggled to find sturdy ground. The S&P 500 drifted near its unchanged mark throughout the session (2721)--adding no more than 0.4% and limiting its loss to 0.4%--as it eyed its 50-day simple moving average (2738) off in the distance. The benchmark index never actually challenged the key technical level, backing away each time it looked as if it might make a run.
Nine of eleven S&P 500 sectors finished the session in positive territory, with the lightly-weighted materials space (+1.1%) leading the charge. The consumer discretionary sector (+0.7%) also outperformed despite a 4.5% decline in the shares of Target (TGT 71.79, -3.35). The retailer followed up a slightly disappointing fourth quarter earnings report with news that it will raise its minimum wage to $12 an hour (from $11) this spring and hopes to reach $15 an hour by 2020.
On the flip side, the utilities sector (-1.4%) finished at the bottom of the sector standings, giving back about three quarters of its Monday advance. The heavily-weighted health care sector also underperformed, closing with a loss of 0.1%.
Outside of the equity market, U.S. Treasuries finished Tuesday flat, leaving the benchmark 10-yr yield at 2.88%. Meanwhile, the U.S. Dollar Index closed below 90.00 for the first time in a week, dropping 0.4% to 89.57, and West Texas Intermediate crude futures finished flat at a price of $62.60 per barrel.
Investors received just one economic report on Tuesday, January Factory Orders, which showed a larger-than-expected decline (-1.4% actual vs -1.3% Briefing.com consensus). The key takeaway from the report is that it wasn't so much a reflection of a business downturn as it was a case of some understandable softness on the back of an extended pickup in new order activity.
Nasdaq Composite: +6.8% YTD
S&P 500: +2.0% YTD
Dow Jones Industrial Average: +0.7% YTD
Russell 2000: +1.7% YTD
Wall Street Starts the Week on a Positive Note
05-Mar-18 16:20 ET
Dow +336.70 at 24874.76, Nasdaq +72.84 at 7330.70, S&P +29.69 at 2720.94
https://www.briefing.com/investor/markets/stock-market-update/2018/3/5/wall-street-starts-the-week-on-a-positive-note.htm
[BRIEFING.COM] Equities opened the week with a comfortable victory on Monday, reclaiming around half of last week's losses. The Dow Jones Industrial Average led the rally, jumping 1.4%, while the S&P 500 and the Nasdaq Composite climbed 1.1% and 1.0%, respectively, and the small-cap Russell 2000 added 0.8%.
The threat of a trade war was still on investors' minds on Monday morning, leading to a lower open on Wall Street, but House Speaker Paul Ryan (R-WI) helped ease concerns by publicly opposing the tariffs on steel and aluminum imports that President Trump proposed last week. Mr. Trump responded by saying that he was "not backing down" from his plan, but he did leave a door cracked for Canada and Mexico, saying that the two countries may be able to sidestep the tariffs if they agree to a "new and fair" NAFTA deal.
The S&P 500 opened with a loss of around 0.6%, but started climbing about an hour into the session. The benchmark index eventually finished just a tick below session high, with each of its eleven sectors settling in positive territory. The utilities group (+2.0%) led the charge, but the influential financial sector (+1.4%) wasn't far behind. The heavily-weighted health care and technology spaces were the weakest performers, but still finished with gains of 0.9% apiece.
In corporate news, the U.S. government ordered Qualcomm (QCOM 64.01, -0.73) to delay its much-anticipated shareholder meeting, which was originally scheduled for Tuesday, as it reviews Broadcom's (AVGO 246.98, -3.89) hostile bid to takeover the company. The shareholder meeting was expected to feature a vote on whether to replace six of 11 directors with nominees put forth by Broadcom. Bloomberg reported on Monday afternoon that Broadcom was on track to win the six seats.
Overseas, equity indices in Europe finished mostly higher, but Italy's MIB (-0.4%) underperformed after Sunday's national elections failed to produce a clear winner. Meanwhile, in Germany, the CDU and SPD parties agreed on their governing coalition, thereby removing any leadership uncertainty in Europe's largest and most influential economy.
In Asia, stock markets finished on a mixed note, with Hong Kong's Hang Seng (-2.3%) showing relative weakness.
Investors received just one piece of economic data on Monday, the ISM Services Index for February, which came in better than expected (59.5 actual vs 58.8 Briefing.com consensus). The key takeaway from the report is that business activity in the non-manufacturing sector is still running at a healthy level, which is contributing to rising costs.
Outside of equities, U.S. Treasuries finished Monday on a lower note, pushing yields higher across the curve; the benchmark 10-yr yield climbed two basis points to 2.88%. Meanwhile, West Texas Intermediate crude futures rallied 2.2% to $62.56 per barrel as energy leaders from around the globe headed to Houston for CERAWeek.
InvestmentHouse - Too Many Stories Hit the Market (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
- Stocks sell farther early Friday, reverse in a pre-weekend short covering
move. All but Dow turn positive.
- Too many stories hit the market: tariffs, Japan QE end, Fed rate hikes,
Putin's bomb.
- Perhaps more upside to the new week, but the probabilities still suggest
another drop.
- Still very good leadership groups and stocks, but that does not guarantee
a climb to a new high from here.
- Market is not in a new trend so we stay with less money in the market as
we wait for the next big move and then the next trend.
After breaking higher the prior Friday and Monday, clearing the weeklong
consolidation, stocks sold Tuesday into Friday. Japan's Kuroda rather
unexpectedly musing it might be time to end QEJ (QE Japan). The US
announcing metals tariffs, others vowing retaliation and the US vowing
retaliation to retaliations. Interest rates, the Federal Reserve gone wild
(supposedly), Russia's Putin bragging my missile is bigger than yours. That
makes for a nice, steady market.
As for the tariffs, after the initial round of outrage, Trump said trade
wars were good and boasted they are easy to win. Oh, that is a relief. I
thought this history thing was a problem. Okay, I see it. For decades the
US has let China and others get away with agreements and 'understandings'
that advantaged them and seriously disadvantaged US producers. When they
have a cushy deal for a long time, and you then come in and say 'it is time
to adjust the terms now that you are on your feet and doing well,' they
squeal like stuck pigs. Or more politically, it 'outrages the global
community.' The nerve. You help them out, they prosper, now you want to
move back to an even playing field. 'Foul' they cry. Okay, I guess we
should have just crushed your businesses into pulp when we had the
advantage. Instead we helped you out and now you cannot admit your good
fortune and continue to work hard.
Instead the WTO threatens sanctions, purportedly to even things back out.
The irony, of course, is that the US is simply attempting to move back to a
deal that is for equals now that the other countries have their industries
working well. The WTO and impacted countries, however, react in a manner
that would make the arrangement even further skewed in their favor. You
truly get no good will for acting with good will toward other countries.
You give, they prosper, you then say there is no longer any need to give,
and then you are a villain to be condemned. Again, why then bother to be
nice in the first place? You get nothing for it. Other than, of course,
'death to America.'
Market action.
Three days hard down, Friday the same with futures opening sharply lower and
stocks selling off through the first hour. In that first hour, however,
they found support and started to recovery. A midmorning test lower put in
a higher low and stocks managed to rally to the close.
Short covering? Sure it was. As noted in the pre-market alert, after the
3+ days downside and ahead of the weekend a short covering bounce could
ensue. It did and stocks made that recovery, though not all made it back to
positive.
SP500 13.58, 0.51%
NASDAQ 77.31, 1.08%
DJ30 -70.92, -0.29%
SP400 1.10%
RUTX 1.71%
SOX 1.76%
NASDAQ 100 0.90%
VOLUME: NYSE -10%, NASDAQ -8%. Lower trade on the rebound from the selling
sessions, though still above average. At least there were a significant
number buying and covering shorts.
ADVANCE/DECLINE: NYSE 1.7:1, NASDAQ 3:1. Decent breadth. Not as strong as
the downside when the selling started, but stronger than the Thursday
downside breadth.
Thursday I discussed NASDAQ and SOX as being in position to bounce. Okay,
they did, just took them a bit longer. And it was a good bounce as SOX
tested farther to the 50 day MA and then reversed smartly. NASDAQ gapped
below the 50 day MA and then reversed. Those were the two we though had a
shot and they made pretty good runs at it, particularly SOX.
If the market is going to rally again from here it is because of those two,
perhaps you can throw in RUTX as well. The small caps out in another
downside session but held the Thursday low and reversed, holding some key
support levels.
SP500 was so-so, gapping lower then recovering to positive, but lower trade
and not taking back any significant levels. DJ30 similar and it did not
even make it back to positive. SP400 put in a decent move, but it closed
still below important levels.
Can SOX and NASDAQ, and perhaps RUTX, drag the others back up? Their
components certainly showed the kind of firepower Friday that could do it,
but they are not the entire market. NFLX moved to a new high on a strong
breakout with volume. INTC bounced sharply off support. CSCO held
beautifully and bounced. MU strong. They can lead, but they have to show
they can drag the others back with them.
We did close some positions and picked up some. Wish we had not closed AMZN
but we did keep one open so we still have some upside exposure there. If
NFLX continues upside on this breakout, you have to look at adding
positions. Even if the market doesn't follow, NFLX doesn't seem to care.
THE MARKET
CHARTS
SOX: Sold into Thursday but bounced off a tap at the 50 day MA. Friday a
gap to the 50 day SMA set up a rebound, taking back all the Thursday loss.
By the way, Thursday's close held the November peak, an important level.
SOX does not look bad, indeed, it looks the best of the group.
NASDAQ: After selling to the 50 day SMA on the Thursday close, NASDAQ
gapped below both 50 day MA. It held 7100, reversed upside. Decent action,
held where it had to, but not the same strength as SOX.
RUTX: Sold again Friday morning, matched the Thursday low, but as on
Thursday, rebounded. This time it did not just hold the October high but
blew past it as well. Nice recovery from a support level, but frankly its
chart is far from providing any upside warm feelings. It sold hard for 2+
sessions and then bounced hard for a session. 1550 is key for it (closed at
1533).
SP400: Sold again Friday, but reversed off support at 1840, posting a solid
gain. Nice relief move, but the pattern is not great, has resistance
overhead at 1900 (closed at 1878), and the pattern is overall bearish until
it can make an important upside break.
SP500: Broke lower in the ABCD downside pattern and solid three sessions
and then into Friday before it recovered to a modest gain. Still at
resistance, so this lower volume bounce is suspect indeed. A move to the 50
day MA's on continued lighter trade than the selling sets up the return trip
to the February low.
DJ30: The only index that did not recover to positive Friday. Gapped,
sold, recovered, but came up short just below the December consolidation
resistance. Not looking great as it sold off in its own ABCD downside
pattern. After a short bounce that perhaps mimics DJ30, it likely rolls
back over.
LEADERSHIP
Chips: Again one of the best upside groups, having come from trash to
tolerable. MU, AMAT, QRVO, XLNX, NVDA have workable patterns. LRCX is
still good and MLNX made a quick test and is looking good to move upside.
FAANG: NFLX is the cream of the crop with its new breakout. FB sold to
near the 200 day SMA and is trying to bounce. AAPL held the 50 day SMA and
rebounded, but is still locked in its range. AMZN fell to the 20 day EMA,
bounced on very solid trade. GOOG gapped lower again, but did reversed to
positive; could not recover the 50 day MA's.
Software: RHT, FFIV bounced nicely off test. BLKB, MSFT not bad bounces
either. VMW gapped sharply lower; great. Overall, however, still a good
group.
Metals: No major move Friday, but with their patterns, that is not bad
news. STLD held the 20 day EMA and bounced some in a nice pattern. RS held
its pattern well. SCHN shook us out unfortunately. FCX has now test up an
interesting pattern.
Drugs/Biotech: Still some good patterns and action. IMGN bouncing off the
10 day EMA test. IMMU moving up off a 50 day MA test. PTCT shook us out of
a position but recovered. VCEL moving back upside on volume. ARRY
bouncing. AMGN reversed off its doji, showing big volume.
Financial: Some 50 day MA tests in progress. BAC, JPM tested and started
to bounce. GS still below the 50 day. C bad.
Retail: Some impressive moves, solid holds, and interesting patterns. DDS
explodes higher again. TGT holding decently in a nice developing pattern
over the 50 day MA. TLRD not gad. ROST keeps hanging on for now. HD
gapped to the 78% Fibonacci retracement for what could be a double bottom at
that level. KSS sold to the 50 day MA then reversed sharply upside Friday.
There is good promise here.
MARKET STATS
DJ30
Stats: -70.92 points (-0.29%) to close at 24538.06
Nasdaq
Stats: +77.31 points (+1.08%) to close at 7257.87
Volume: 2.29B (-8.03%)
Up Volume: 1.66B (+817.87M)
Down Volume: 603.84M (-1.016B)
A/D and Hi/Lo: Advancers led 2.99 to 1
Previous Session: Decliners led 1.42 to 1
New Highs: 64 (+31)
New Lows: 72 (-30)
S&P
Stats: +13.58 points (+0.51%) to close at 2691.25
NYSE Volume: 900M (-10.00%)
A/D and Hi/Lo: Advancers led 1.71 to 1
Previous Session: Decliners led 1.5 to 1
New Highs: 27 (+12)
New Lows: 165 (-4)
SENTIMENT INDICATORS
VIX: 19.59; -2.88
VXN: 21.53; -3.21
VXO: 19.08; -1.36
Put/Call Ratio (CBOE): 1.16; -0.13
Bulls and Bears: The plunge slowed for the bulls, but there is already a
massive drop in place the past three weeks.
Bulls: 48.1 versus 48.5
Bears: 14.4 versus 14.6
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: 48.1 versus 48.5
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: 14.4 versus 14.6
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: 2.868% versus 2.799%. After moving higher on the week and a solid
break higher Thursday, bonds sold back from the 20 day EMA test.
Historical: the last sub-2% rate was in November 2016 (1.867%). 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: 1.23187 versus 1.22822. Euro bounced after 2 weeks of selling,
moving back over the 50 day MA Friday after a reversal Thursday.
Historical: 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: 105.734 versus 106.03. Dollar sold off Wednesday to Friday,
testing the mid-February low and showing a doji. Perhaps a double bottom?
Historical: 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: 61.25, +0.26. Oil sold on the week from a lower high, holding at some
support at 60.00, bouncing twice off the low there Thursday and Friday.
Looks weaker, however, likely tries an ABCD setup. That means, however, more
near term weakness.
Gold: 1323.40, +18.20. Gold could not make up its mind on the week, though
it was lower. Sold hard Tuesday and again Thursday, falling through the 50
day MA. Friday a bounce, but it did not change the pattern. Very jumbled
right now as it could not hold an easy 50 day MA test.
MONDAY
A flood of data on the week starting with ISM Services Monday followed by
the jobs data Wednesday, Thursday, and Friday.
Important, may make a difference to the market in the end, but right now
stocks are on a bumpy road that is likely not at its end just yet.
SOX looks better and better, NASDAQ is decent, RUTX is trying. There are
still several leadership groups that still sport very nice patterns.
Promising, but the market started to sell again last week and likely it sees
out the historical pattern. The Friday bounce was no doubt short covering,
and perhaps SOX and NASDAQ can help keep the move upside to start the week.
It did sell from an ABCD downside pattern and it is possible the downdraft
is over.
After a day or two, however, I would not be surprised if the move runs out
of gas and the final test toward the February low is on. The leadership
looks good and it could lead the market higher. What likely happens as the
market sells again to test the prior low, and during that time these stocks
can hold up and be ready for the bounce. Other stocks can use that to work
on their bases. That is the usual scenario.
Friday was interesting, a solid short covering move. The next point of note
is how stocks open Monday. A bounce and we see how it holds, for the day or
more. A bounce can turn into something really solid given how many quality
stocks there are in good patterns, but it has to prove it. For those stocks
that bounce but are lagging, using the move higher to exit is not a bad
strategy. Using the move higher to exit some March options is also not a
bad idea.
New positions? There are patterns that look good still and are moving well.
You cannot ignore NFLX. We can play some of them as they bounce, but as
before, knowing any bounce now is still just likely a relief move.
The probabilities are that the market is not through the selling episode
yet. A bounce could turn to a new high but likely stalls out and then makes
that second drop that usually puts an end to a selloff . . . IF the economy
is still solid, if the Fed is not on the path to wreck it, if war does not
erupt, if the trade issues don't explode.
A few ifs, but for now we play the market that has the most probabilities,
and that is a test to the prior lows. The more immediate question is
whether the market can make more upside than just the Friday move before it
stalls and falls. Again, we want to use the move higher to position better
for the likelihood of a second drop.
The reason is this is a tumultuous time in the market. Trends are in flux
and thus moves are for most stocks shorter term. That is why while we have
positions, we don't have a lot of money in the market right now. Too easy
to get whipsawed. When the break lower occurs, if it does, sure we want to
play that downside short term. Then when a new move starts, if there are
very good patterns to play, that is a time to put more money in. If the
move lower does not come, we play leaders upside, and if more and more join
in and the market breaks out, we put more money to work.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 7257.87
Resistance:
7300 from a modest mid-January consolidation
7400 is some price resistance from both sides of the mid-January all-time
high
7438 is the February lower high
7506 is the January 2018 all-time high
Support:
7240, the upper gap point from early February 2018
The 50 day EMA at 7145
6918 - 6980 are price points from November/December 2017
6914 is the late November all-time high
6796 is the early November 2017
6641 is the October high
The 200 day SMA at 6635
6630 is the February 2018 selloff intraday low
6477 is the September intraday high
6461 is the July 2017 prior all-time high
6450 is the early September high
6341.70 is the all-time high from early June.
6300 is the mid-June interim high
6205 is the late May all-time high
5996 is the recent May 2017 low
5937 is the all-time high from April
5915 is the tops of the March to April 2017 range
5910 is the lower gap point from mid-April
5800 from the February consolidation lows
S&P 500: Closed at 2691.25
Resistance:
2694 is the mid-December peak
The 50 day EMA at 2713
2744 is the 61% Fibonacci retracement of the selloff
2751 from early January 2018
2762 is the upper gap point from early February
2789 is the February lower high
2808 from the mid-January consolidation. Some support, not that strong.
2850 from a January 2018 gap point
2873 is the January all-time high
Support:
2597 is the November 2017 high
2584 is the upper channel line from the March 2009 uptrend channel
The 200 day SMA at 2561
2532 is the February 2018 intraday selloff low
2491 is the August all-time high
2480 the late August and early August highs
2453.46 is the June prior all-time closing high
2409 is the July 2017 closing low
2406 is the all-time high from May 2017
2401 is the March 2017 all-time high
2352 is the May 2017 low
Dow: Closed at 24,538
Resistance:
24,835 is the mid-December consolidation range
The 50 day EMA at 25,000
The 61% Fibonacci retracement at 25391
The lower gap point from February at 25,521
25,800 is the February lower high
26,000 from mid-January consolidation
26,439 is a gap point from the January high
January 2018 all-time high 26,617
Support:
23,608 is the early November high
23,602 is the early November 2017 high
23,360 is the intraday low form the February selloff
The 200 day SMA at 23,077
22,420 is the September high
22,179 is the August 2017 all-time high
22,086 is the mid-August lower high
21,681is the July prior all-time high
21,638 is the July 2017 closing high
21,529 is the June 2017 high
Ending the Week on a Positive Note
02-Mar-18 16:30 ET
Dow -70.92 at 24538.06, Nasdaq +77.31 at 7257.86, S&P +13.58 at 2691.25
https://www.briefing.com/investor/markets/stock-market-update/2018/3/2/ending-the-week-on-a-positive-note.htm
[BRIEFING.COM] Wall Street finished a disappointing week with a mostly positive outing on Friday. The S&P 500 and the Nasdaq finished with gains of 0.5% and 1.1%, respectively, largely thanks to a late rally that left the two indices at their best marks of the day. Meanwhile, the Dow lost 0.3%, and the small-cap Russell 2000 jumped 1.7%.
President Trump's decision to impose tariffs on steel and aluminum imports, which was announced on Thursday, prompted threats of retaliation from leaders around the globe and sent stocks lower in Asia and Europe overnight. Wall Street joined the global sell off at the opening bell, with the S&P 500 quickly dropping 1.0%, but the market started to regain its footing about an hour into the session. By midday, the S&P 500 had climbed all the way back to its unchanged mark.
The outperformance of the heavily-weighted health care (+1.0%) and technology (+1.0%) sectors, which represent around 40.0% of the broader market combined, helped lift the benchmark index. Within the health care group, biotechnology shares showed particular strength, evidenced by the 2.4% increase in the iShares Nasdaq Biotechnology ETF (IBB 109.65, +2.61). Meanwhile, chipmakers were among the top performers in the tech space, pushing the PHLX Semiconductor Index higher by 1.8%.
In total, seven of eleven S&P 500 sectors finished in the green. Health care and technology were the best performers, while real estate (-0.4%) was the worst.
The latest batch of fourth quarter earnings included several retail names, including Gap (GPS 34.18, +2.48, +7.8%), Nordstrom (JWN 53.04, +2.93, +5.9%), Foot Locker (FL 40.04, -5.84, -12.7%), and J.C. Penney (JCP 3.71, -0.21, -5.4%). The results were mostly better than expected (GPS, FL, and JCP all beat earnings estimates, while JWN missed).
Meanwhile, Dow component McDonald's (MCD 148.27, -7.43) dropped 4.8%, hitting its lowest level in more than nine months, after RBC Capital Markets trimmed its target price for MCD shares to $170 from $190, citing a disappointing launch for the fast food giant's $1, $2, $3 menu.
Elsewhere, U.S. Treasuries gave back most of their Thursday advance on Friday, pushing yields higher across the curve; the benchmark 10-yr yield jumped five basis points to 2.86%. The 10-yr yield finished the week lower by one basis point and nine basis points below the four-year high it hit on February 21.
In currencies, the yen advanced 0.5% against the U.S. dollar to 105.72, which is its best level since November 2016, after Bank of Japan Governor Haruhiko Kuroda said the BoJ would consider exiting from its aggressive monetary easing as early as 2019. Meanwhile, the euro jumped 0.5% against the greenback to 1.2329.
Friday's economic data was limited to the final reading of the University of Michigan Consumer Sentiment Index for February:
The final reading of the University of Michigan Consumer Sentiment Index for February dipped to 99.7 (Briefing.com consensus 99.5) from 99.9 in the preliminary reading.
The key takeaway from the report is that consumer sentiment remains near multi-year highs with consumers showing little concern about the prospect of rising interest rates.
On Monday, investors will receive the ISM Services Index for February (Briefing.com consensus 58.8) at 10:00 AM ET.
Nasdaq Composite: +5.1% YTD
S&P 500: +0.7% YTD
Dow Jones Industrial Average: -0.7% YTD
Russell 2000: -0.2% YTD
Week In Review: Selling Resumes
Stocks tumbled this week, with the S&P 500 dropping 2.0%. The Nasdaq Composite did a little better, and the Dow Jones Industrial Average did a little worse, losing 1.1% and 3.1%, respectively. The small-cap Russell 2000 showed relative strength, but still finished lower by 1.0%.
The week actually began on a positive note, with the S&P 500 jumping 1.2% on Monday, but took a turn for the worst on Tuesday when new Fed Chairman Jerome Powell testified before the House Financial Services Committee. Mr. Powell's prepared remarks didn't contain any surprises, calling for a continued path of gradual rate hikes. However, in the Q&A session, Mr. Powell noted that his economic projections have increased since the December FOMC meeting, prompting a negative reaction on Wall Street due to concerns that the Fed may hike rates more than expected.
The Fed forecasted three rate hikes for 2018 at its December meeting, but, in light of Mr. Powell's upwardly revised growth projections, investors have increased their expectations for a fourth hike. The CME FedWatch Tool places the chances of a fourth rate hike at 30.7%, up from 24.4% last week. The chances of a March rate hike are at 83.1%.
Fast-forwarding to Thursday, the equity market was dealt another blow, this time from President Trump, who announced that he'll be imposing tariffs on steel and aluminum imports--25% for steel and 10% for aluminum. Mr. Trump's decision prompted concerns about higher prices and retaliation from China and other trading partners.
However, outside of fundamental factors affecting this week's sell off, it's also important to note that the S&P 500 broke below its 50-day moving average, a key technical level that's provided the market with support since the 2016 presidential election. The benchmark index dropped below its 50-day moving average for the first time in five months during the big sell off at the beginning of February and has ticked back above it a few times since--most notably on Monday, when the S&P 500 hit a three-week high.
The S&P 500 initially found support at its 50-day moving average on Wednesday, but selling accelerated after the index broke through the level on its second attempt. If this week's selling continues, investors will be looking for other potential areas of support, including the S&P 500's February low (2581) and its 200-day moving average (2561).
11 of 11 S&P 500 sectors finished the week in negative territory, with industrials (-3.3%) and materials (-4.0%) being the weakest performers. The technology (-0.8%), consumer staples (-1.3%), and telecom services (-0.7%) groups exhibited relative strength, but the remaining sectors lost between 2.0% and 2.9%.
A slew of retailers reported earnings this week. TJX (TJX) rallied 7.0% on Wednesday after reporting better-than-expected earnings and revenues for the fourth quarter and raising its profit guidance. Conversely, Lowe's (LOW) dropped 6.5% in the same session after missing Q4 earnings estimates and lowering its profit guidance for fiscal year 2019. The SPDR S&P Retail ETF (XRT) finished the week lower, but ahead of the broader market, losing 1.4%.
In other corporate news, Comcast (CMCSA) dropped 7.4% on Tuesday after upping a bid from 21st Century Fox (FOXA) for a large stake in British broadcaster Sky.
Wall Street Extends Skid to Three Days
01-Mar-18 16:30 ET
Dow -420.22 at 24608.98, Nasdaq -92.45 at 7180.55, S&P -36.16 at 2677.67
https://www.briefing.com/investor/markets/stock-market-update/2018/3/1/wall-street-extends-skid-to-three-days.htm
[BRIEFING.COM] Stocks tumbled for the third day in a row on Thursday, with the major averages losing between 1.3% and 1.7%.
The market kept close to its flat line for the first half of Thursday's session as investors debated their next move following Wednesday's breaching of the S&P 500's 50-day simple moving average. Stocks started slipping in the early afternoon, but began a decisive retreat not long after President Trump announced new tariffs on steel and aluminum imports. The tariffs, which are 25% for steel imports and 10% for imported aluminum, prompted concerns about higher prices and a potential retaliation from China and other countries.
Steel names U.S. Steel (X 46.01, +2.50), AK Steel (AKS 5.65, +0.49), Nucor (NUE 67.53, +2.13), and Steel Dynamics (STLD 48.10, +1.85) outperformed following the news, adding between 3.3% and 9.5%, while aluminum producer Century Aluminum (CENX 20.48, +1.43) spiked 7.5%.
However, automakers reacted negatively to the tariffs, which will likely weigh on their profit margins. General Motors (GM 37.79, -1.56), Ford Motor (F 10.29, -0.32), and Fiat Chrysler (FCAU 20.59, -0.60) dropped between 2.8% and 4.0%, while Toyota Motor (TM 130.39, -4.21) and Honda Motor (HMC 35.12, -0.97) lost 3.1% and 2.7%, respectively. Automakers also reported U.S. sales for February on Thursday, which, for the most part, declined year over year.
Looking at the broader market, 11 of 11 S&P 500 sectors finished Thursday in negative territory, with six settling with losses of at least 1.0%. The heavily-weighted financials (-1.9%), industrials (-1.9%), technology (-1.7%), and health care (-1.6%) sectors, which represent around 65.0% of the broader market combined, were the weakest performers. Conversely, the energy (-0.2%), utilities (-0.1%), and telecom services (-0.3%) sectors held up relatively well.
Stocks bounced back a bit in the final hour of trading, leaving the major averages a ways above their worst marks of the day; at their session lows, the S&P 500, the Nasdaq, and the Dow held losses between 2.0% and 2.3%. The small-cap Russell 2000 showed relative strength on Thursday, losing just 0.3%.
In Washington, Fed Chairman Jerome Powell wrapped up his first semiannual monetary policy testimony on Thursday with an appearance before the Senate Banking Committee, but he didn't really provide investors with any new information. The market still projects three rate hikes for 2018, but a fourth hike is certainly on the table; according to the CME FedWatch Tool, the chances of a fourth hike currently sit at 28.1%, down slightly from 31.9% on Wednesday.
The U.S. Treasury market recorded its second consecutive day of gains on Thursday, pushing yields lower across the curve. The yield on the benchmark 10-yr note dropped seven basis points to 2.80%, which puts it 15 basis points below the four-year high it touched last week. Meanwhile, the 2-yr yield dropped six basis points to 2.20%.
In currencies, the U.S. Dollar Index retreated from a six-week high, dropping 0.4% to 90.22.
Reviewing Thursday's economic data, which included Personal Income and Spending for January, the PCE Price Index and the core PCE Price Index for January, weekly Initial Claims, the ISM Index for February, and Construction Spending for January:
Personal income climbed 0.4% in January (Briefing.com consensus +0.3%) following an unrevised increase of 0.4% in December. Meanwhile, personal spending rose 0.2% in January (Briefing.com consensus +0.2%) following an unrevised increase of 0.4% in December.
The PCE Price Index increased 0.4% in January (Briefing.com consensus +0.4%), while the core PCE Price Index, which excludes food and energy, increased 0.3% (Briefing.com consensus +0.3%). Year-over-year, the core PCE Price Index is up 1.5%, unchanged from the last two readings.
The key takeaway from the report is that it won't shift the prevailing perspective that the Fed is expected to raise the fed funds rate at least three times this year.
The latest weekly initial jobless claims count totaled 210,000, while the Briefing.com consensus expected a reading of 227,000. Today's tally was below the revised prior week count of 220,000 (from 222,000). As for continuing claims, they rose to 1.931 million from a revised count of 1.874 million (from 1.875 million).
The trend in initial claims, which held below 300,000 for the 156th straight week, will support the Fed's thinking that tight labor markets should ultimately invite a pickup in wage inflation.
The ISM Index for February climbed to 60.8 from an unrevised reading of 59.1 in January, while the Briefing.com consensus expected a reading of 58.4.
The key takeaway is that the Prices Index hit its highest level since May 2011. That will feed into fears about manufacturers passing through higher input costs to their customers, which will buttress inflation expectations.
Construction Spending was flat in January (0.0%), while the Briefing.com consensus expected an increase of 0.3%. The prior month's increase was raised to 0.8% from 0.7%.
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 Friday, investors will receive the final reading of the University of Michigan Consumer Sentiment Index for February (Briefing.com consensus 99.5) at 10:00 AM ET.
Nasdaq Composite: +4.0% YTD
S&P 500: +0.2% YTD
Dow Jones Industrial Average: -0.5% YTD
Russell 2000: -1.8% YTD
Wall Street Gives Back Monday's Gains As Powell Testifies on Capitol Hill
27-Feb-18 16:25 ET
Dow -299.24 at 25410.03, Nasdaq -91.11 at 7330.35, S&P -35.32 at 2744.28
https://www.briefing.com/investor/markets/stock-market-update/2018/2/27/wall-street-gives-back-mondays-gains-as-powell-testifies-on-capitol-hill.htm
[BRIEFING.COM] Equities dropped on Tuesday, giving back all of their Monday gains, as new Fed Chairman Jerome Powell delivered his first semiannual testimony on Capitol Hill. The S&P 500 tumbled 1.3%, while the Nasdaq Composite and the Dow Jones Industrial Average lost 1.2%. The major averages finished at their worst marks of the day following a sharp sell off in the final minutes. Meanwhile, the small-cap Russell 2000 underperformed with a loss of 1.5%, returning to its flat line for the year.
Fed Chairman Powell's prepared remarks, which were released before the opening bell, didn't contain any surprises. Mr. Powell stayed largely in line with his predecessor Janet Yellen, saying that he expects further gradual rate increases based on the economic outlook and that risks to the economy are roughly balanced.
Wall Street opened little changed following the release of Mr. Powell's prepared statement, then started ticking higher as he began fielding questions from the House Financial Services Committee. However, stocks dove into negative territory after Mr. Powell said his economic projections have increased since the December FOMC meeting, prompting investors to adjust their rate-hike expectations.
According to the CME FedWatch Tool, the market is still projecting three rate hikes for 2018, but the probability of a fourth rate hike increased to 33.1% from 24.4% on Monday. Meanwhile, the probability of a rate hike at the March FOMC meeting increased to 87.4% from 78.9% on Monday.
U.S. Treasuries moved lower in tandem with the equity market following Mr. Powell's aforementioned comment, pushing yields back towards the multi-year highs they hit last week. The 2-yr yield ended three basis points higher at 2.26%, one basis point below last Wednesday's nine-year high, while the benchmark 10-yr yield climbed five basis points to 2.91%, which is four basis points below the four-year high it hit last Wednesday.
The rise in yields helped the S&P 500's financial sector keep ahead of the broader market on Tuesday, but the group still finished with a loss of 0.9%. The top-weighted technology sector also outperformed with a loss of 0.9%, but the nine remaining groups finished with losses between 1.0% and 2.2%.
The consumer discretionary sector (-2.1%) was among the weakest groups, with Comcast (CMCSA 36.66, -2.92) dropping 7.4% to a three-month low after upping a bid from 21st Century Fox (FOXA 37.63, -1.18) to $31 billion for a large stake in British pay-television broadcaster Sky. Fox already owns 39% of Sky, but was looking to acquire the remaining stake. The news also weighed on Dow component Walt Disney (DIS 104.87, -4.94), which agreed to buy a big chunk of assets from Fox, including its stake in Sky. Fox and Disney lost 3.0% and 4.5%, respectively, on Tuesday.
Elsewhere within the consumer discretionary space, Macy's (M 28.40, +3.5) rallied 3.5%, hitting a 10-month high, after beating earnings estimates for the fourth quarter and issuing above-consensus guidance for fiscal year 2019. Conversely, AutoZone (AZO 654.47, -81.43) dropped 11.1% after missing quarterly profit estimates.
Overseas, equity indices in the Asia-Pacific region ended Tuesday on a mixed note, with Japan's Nikkei (+1.1%) showing relative strength, while the major European bourses ended a tick lower. The U.S. Dollar Index jumped 0.6% to 90.33, hitting its best level since February 9, with the greenback adding 0.7% against the euro (1.2232) and 0.4% against the Japanese yen (107.37).
Investors received several economic reports on Tuesday, including Durable Orders for January, the Consumer Confidence Index for February, International Trade in Goods for January, the S&P Case-Shiller Home Price Index for December, and the FHFA Housing Price Index for December:
January durable goods orders fell 3.7%, which is more than the 2.0% decrease expected by the Briefing.com consensus. The prior month's reading was revised to +2.6% (from +2.9%). Excluding transportation, durable orders decreased 0.3% (Briefing.com consensus +0.5%) to follow the prior month's revised increase of 0.7% (from +0.6%).
The key takeaway from the report is that there wasn't a lot of carryover order momentum from December, suggesting first quarter activity is proceeding at a slower pace.
The consumer confidence reading for February increased to 130.8 (Briefing.com consensus 126.5) from the prior month's revised reading of 124.3 (from 125.4).
The key takeaway from the report is that consumers are feeling more upbeat about current conditions, led by attitudes pertaining to business and labor market conditions.
The Advance report for International Trade in Goods for January showed a deficit of $74.4 billion (Briefing.com consensus -$72.2 billion), up from a revised deficit of $72.3 billion in December (from -$71.6 billion).
The Case-Shiller 20-city Index increased 6.3% in December (Briefing.com consensus +6.4%), while the November increase was left unrevised at 6.4%.
The FHFA Housing Price Index rose 0.3% in December (Briefing.com consensus +0.4%), while the November increase was revised to 0.5% from 0.4%.
On Wednesday, investors will receive another sizable batch of economic data: the weekly MBA Mortgage Applications Index will be released at 7:00 AM ET, the second estimate of fourth quarter GDP (Briefing.com consensus +2.5%) will be released at 8:30 AM ET, the Chicago PMI for February (Briefing.com consensus 64.5) will be released at 9:45 AM ET, and Pending Home Sales for January (Briefing.com consensus +0.4%) will be released at 10:00 AM ET.
Nasdaq Composite: +6.2% YTD
S&P 500: +2.6% YTD
Dow Jones Industrial Average: +2.8% YTD
Russell 2000: +0.1% YTD
Kicking Off the Week on a Positive Note
26-Feb-18 16:30 ET
Dow +399.28 at 25709.27, Nasdaq +84.07 at 7421.46, S&P +32.30 at 2779.60
https://www.briefing.com/investor/markets/stock-market-update/2018/2/26/kicking-off-the-week-on-a-positive-note.htm
[BRIEFING.COM] Stocks rallied for a second consecutive session on Monday, finishing at their best marks of the day. The Dow Jones Industrial Average climbed 1.6%, while the S&P 500 and the Nasdaq Composite jumped 1.2% apiece. The Russell 2000 underperformed, but still finished with a gain of 0.7%.
For the month of February, the tech-heavy Nasdaq is now in positive territory (+0.1%), while the S&P 500 and the Dow are down a little more than 1.5% apiece. Still, that's up from losses of around 8.7% at their lowest points on February 8.
Friday's breaching of the S&P 500's 50-day simple moving average and the continued decline of the CBOE Volatility Index (VIX 15.93, -0.56), which has nearly returned to levels seen prior to Wall Street's big sell off at the beginning of February, helped fuel a bullish bias on Monday. In terms of news, Monday's session was fairly uneventful.
10 of 11 S&P 500 sectors settled in positive territory, with the top-weighted technology (+1.6%) and financials (+1.5%) sectors being among the top-performing groups. The industrials sector (+1.4%) and the lightly-weighted telecom services sector (+1.8%) also outperformed.
With the tech space, Qualcomm (QCOM 66.98, +3.66) showed particular strength, jumping 5.8%, after reports that the company is open to being acquired by Broadcom (AVGO 252.95, -0.76) should Broadcom raise its bid to $160 billion, which is more than $90 per share. HP (HPQ 23.46, +1.33) also outperformed, rising 6.0%, after JPMorgan upgraded HPQ shares to 'Overweight' from 'Neutral' following last week's earnings.
On the downside, the rate-sensitive utilities sector finished in negative territory, losing 0.3%, as Treasury yields climbed intraday to finish just slightly below Friday's closing levels. The yield on the 10-yr note finished one basis point lower at 2.86% after trading as low as 2.83% in the early morning. Meanwhile, the yield on the 2-yr note also lost one basis point, dropping to 2.23%.
Like utilities, the real estate (+0.4%) and materials (+0.5%) sectors also underperformed, but still finished in positive territory.
Monday's economic data was limited to the New Home Sales report for January; New Home Sales hit an annualized rate of 593,000 in January, which is below the revised December rate of 643,000 (from 625,000), and lower than the Briefing.com consensus of 645,000. The key takeaway from the report is that new home sales were down 1.0% year-over-year in January, suggesting perhaps that high prices and rising mortgage rates have curtailed new contract signings.
Looking ahead, investors will receive a number of economic reports on Tuesday: Durable Orders for January (Briefing.com consensus -2.0%) and International Trade in Goods for January (Briefing.com consensus -$72.2 billion) will be released at 8:30 AM ET, the S&P Case-Shiller Home Price Index for December (Briefing.com consensus +6.4%) and the FHFA Housing Price Index for December (Briefing.com consensus +0.4%) will be released at 9:00 AM ET, and the Consumer Confidence Index for February (Briefing.com consensus 126.5) will be released at 10:00 AM ET.
In addition, Jerome Powell will testify before the House Financial Services Committee at 10:00 AM ET on Tuesday, marking his first appearance as Fed Chairman. Mr. Powell's prepared testimony will cross the wires prior to his appearance (8:30 AM ET).
Nasdaq Composite: +7.5% YTD
S&P 500: +4.0% YTD
Dow Jones Industrial Average: +4.0% YTD
Russell 2000: +1.6% YTD
InvestmentHouse - Money Leaves the Market (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
- Stock indices resume the upside rally after the pause.
- Solid breadth, pathetic volume as NASDAQ leads higher.
- Fed speakers try to tone down the hawkish rhetoric, but they will have to
acknowledge their Phillips Curve -- or make excuses not to a la Yellen.
- Money leaves the market just as the market consolidates and breaks higher.
- Still some decent patterns in some leaders, others forming up and moving
up.
- Okay, so a further rebound, but still have to watch for it to fade and be
ready either way.
If only it was not Friday. Stock futures were higher, a dip at the open was
bought, and the stock indices rallied the entire session, sprinting upside
in the afternoon. New recovery closing highs for all indices as stocks
broke higher from the four-day lateral consolidation. NASDAQ, NASDAQ 100,
and SOX were the clear leaders based upon their patterns and the move made.
The NYSE indices all put in new rally closing highs as noted, but not as
definitive given they are still inside the price ranges of the past week
given the back and forth intraday volatility.
Nonetheless, for a relief rally, this was a really good new move upside.
Volume was pitiful, but it is a relief rally. Breadth was excellent as
funds bought all segments. It looks as if the indices are going to extend
the relief move higher and try to make it a new uptrend move. That remains
to be seen. We gladly let positions continue higher and bought a couple
more (AMGN, IMMU). It was Friday, however, and Fridays can be quite
deceitful in relief moves. Regardless, the indices posted nice gains and
even if they give back some early week, the move was solid enough, for a
relief rally at least.
SP500 43.34, 1.60%
NASDAQ 127.30, 1.77%
DJ30 347.51, 1.39%
SP400 1.22%
RUTX 1.25%
SOX 2.19%
NASDAQ 100 1.99%
VOLUME: NYSE -13%, NASDAQ -2%. Well below average trade for NASDAQ and much
lower below average for NYSE. The consolidation was low volume, a good
thing, but you would like to see just a bit more volume upside. Oh well;
relief rally. And Friday.
ADVANCE/DECLINE: NYSE 4.4:1, NASDAQ 2.8:1. Quite solid breadth, always an
upside positive.
The Fed talks too much, but what is new?
Five Fed members spoke Friday, but their comments did not bother the
markets. On sum they said the economy could be past full employment, but
wage increases were just 'moderate.' Of course the Fed fixates on this
given its Phillips Curve worship, but history shows no correlation between
wages and inflation, something Treasury Secretary Mnuchin had the courage to
say this week. The Fed also sees market prices as high as economic growth
continues to improve. Sounds pretty rosy, even with the Fed's Phillips
Curve fixation.
Once again the market works against the latecomers.
It is important to follow the money, but it is also important to juxtapose
that with sentiment and how the latter works. BAC and Lipper reported stock
fund outflows of $-2.4B and $-4.6B for the week as the late comers pulled
their money from the market. They came in late, got rattled by the
volatility that hit almost immediately, then tucked tail and ran. AS SURE
AS THE SUN RISES, the market used the money withdrawals to consolidate the
rally (we talked about it all week), and once the figures were reported,
once they were gone, the market jumped with all indices logging gains well
over 1%. As the Frenchman in 'The Matrix' trilogy would say, cause and
effect, though he was discussing bodily functions versus money movement in
stock funds.
Relief rally back on, at least through Friday.
Good breaks upside as the relief move resumed after a 4-day pause for most
of the indices. Good consolidation, no breakdowns set the move up. Looking
out over the market, there were not a lot of strong new moves in individual
stocks. FAANG was up with AAPL and FB solid, but the group was not blowout.
Some big name techs really helped NASDAQ, e.g. CSCO, MSFT, INTC. Financials
were up but not crushing it. Drugs/biotech were again solid. Individual
strong moves here and there, but mostly it was a general move higher as the
breadth indicates.
Light volume but good breadth and solid percentage gains after a lateral
consolidation. Certainly good enough for a continued relief move. The move
should hold and continue next week to test higher recovery highs. Then
again, it was Friday and strange moves can occur on Fridays with low volume
in a bounce. Okay, we won't read too much into that and enjoy the ride with
our current positions, the newer ones added, and still look for some more
upside because - - the move may turn into a new upside leg to new highs
(stranger things have happened) or it advances some more and toward the
prior highs before it falters. Of course a continued relief move sucks new
money back into it, and then rolls over making chumps, again, out of all the
people just getting in. That is why you also keep the downside plays
updated and ready to go.
THE MARKET
CHARTS
NASDAQ: After gapping over the 50 day MA's two Thursdays back and a
four-session volatile but lateral consolidation, NASDAQ gapped higher and
rallied to a far and away new rally closing high. Volume was pathetic as it
remained as low as it was in the consolidation, but it is a relief rally, at
least for now, and volume is not that big of a deal. NASDAQ is now 20
points through the 78% Fibonacci retracement and is 10 points from entering
the second gap lower in the selling. Potential resistance there (7347) as
well as the gap fill at 7386.
SOX: Gapped off the 2-day test of the Tuesday strong upside move. New
closing high for the rebound, just edging past the November peak
representing a potential top to a right should in a head and shoulders
pattern. SOX is trying to move on through and break up that possibility.
The 78% Fibonacci retracement is still just overhead (1351.87).
SP500: New closing high for the recovery rally though still below the
Wednesday and prior Friday intraday highs. Pathetic volume. I mean
pathetic. Again, however, a relief move so giddy up, right? Just past the
61% Fibonacci retracement (2743.51) and into the third gap zone from the
selling gaps (the first one on the way back up). Still tons of overhead
supply, but it is moving up in a continuation of the relief bounce so it is
what it is and we take advantage of it.
DJ30: Moved up through the 50 day SMA on the close and put in a new rally
closing high, but just by a token amount. Terrible volume as well, but . .
. DJ30 is still below the 61% Fibonacci retracement touched the prior
Friday, and that means it is still not even in the gap zone (there were only
two for DJ30). Unlike NASDAQ and even SP500, not a great move.
RUTX: RUTX did not clear the intraday highs of the lateral consolidation,
just made it to the 61% Fibonacci retracement of the selling, and did not
take out the December consolidation. That said, Friday was quite a move
upside in itself, and the gains in small caps really fueled that strong NYSE
breadth.
SP400: Similar to DJ30, the midcaps were somewhat underwhelming. Bounced,
put in a very nominal new closing high, did not come near taking out the
intraday highs on the week, barely entered the third gap zone from the
selling, and is at the bottom of the December consolidation. Uninspired?
Perhaps. Just following the other indices? Yes.
LEADERSHIP
FAANG: FB actually showed some strength, moving up through the 50 day MA's.
AAPL was solid as it cleared the 4-day consolidation with a gap on rising
trade; still didn't help the Dow that much. AMZN was up but boring. NFLX
similar, unable to put in a new high over the January high. GOOG was
better, continuing the move up through the 50 day MA's though volume was
quite low.
Metals: Did not participate Friday, but put in an excellent consolidation of
their last moves on the week: STLD, SCHN, RS. SID is so-so; may need to
focus on RS or STLD for a new entry in this area.
Big Techs: Solid moves in not bad patterns, e.g. CSCO, MSFT, INTC, AAPL.
Drugs/Biotech: AMGN posted a nice move off a rebound consolidation. GILD
is still in a nice pattern. Smaller issues not bad, e.g. IMMU, ARRY, VCEL,
IMGN, BLUE.
Financial: GS, MS solid enough but still just so-so patterns. JPM posted a
higher high though on no volume. Best of the group. BAC, C posted very
modest moves.
Chips: Breaking higher in many areas of the group. MU looks good, SWKS not
bad. LRCX is setting up for more upside. QRVO still looks good. INTC
sports a good break higher, and MLNX gapped upside with a breakaway move.
There is leadership potential, but it is not across the board.
Retail: Still showing decent patterns in many instances, e.g. DDS, LOW, TGT.
Some apparel such as LULU looks interesting.
MARKET STATS
DJ30
Stats: +347.51 points (+1.39%) to close at 25309.99
Nasdaq
Stats: +127.31 points (+1.77%) to close at 7337.39
Volume: 1.88B (-2.08%)
Up Volume: 1.5B (+676.15M)
Down Volume: 351.4M (-718.6M)
A/D and Hi/Lo: Advancers led 2.83 to 1
Previous Session: Decliners led 1.41 to 1
New Highs: 69 (+5)
New Lows: 61 (+7)
S&P
Stats: +43.34 points (+1.60%) to close at 2747.30
NYSE Volume: 724.7M (-12.94%)
A/D and Hi/Lo: Advancers led 4.43 to 1
Previous Session: Advancers led 1.1 to 1
New Highs: 45 (+13)
New Lows: 31 (-48)
SENTIMENT INDICATORS
VIX: 16.49; -2.23
VXN: 18.16; -2.75
VXO: 14.92; -2.85
Put/Call Ratio (CBOE): 1.01; -0.11. Shorts forced to cover as the market
broke higher again.
Bulls and Bears: A veritable plummet in bulls ongoing, breaking below 50
for the first time since the second half of 2016. Bears remain in
hibernation.
Bulls: 48.5 versus 51.9
Bears: 14.6 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: 48.5 versus 51.9
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: 14.6 versus 14.4
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: 2.866% versus 2.934%. Bonds bounced Thursday and Friday from the
Wednesday dive lower post FOMC minutes. The move higher took them back to
the 10 day EMA, however, and that only tests the downtrend and does not
change it.
Historical: the last sub-2% rate was in November 2016 (1.867%). 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: 1.22960 versus 1.2324. Fell to the 50 day EMA midweek and held
there, still in the uptrend and in opposition to bounce back up against the
dollar.
Historical: 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: 106.886 versus 106.85. After rallying to the 20 day EMA to
through Tuesday, the dollar faded into Friday. Tested the 20 day EMA on the
bounce, faded, but we will see if the dollar puts in a higher low and tries
to rally and take out the 20 day.
Historical: 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: 63.55, +0.78. Oil moved higher Thursday and Friday after a pause at
the 50 day EMA on its recovery move. Not bad action after testing the
November/December consolidation.
Gold: 1330.30, -2.40. Fell to the 50 day MA on the week, unable to rally
off that level, but overall still in a good upside move. Inflation worries
fell a bit on a perceived more hawkish Fed, but the trend is still higher.
MONDAY
A new break higher, but it was Friday and sometimes a light volume Friday
move is countered or at least tested a bit on Monday. A bit of testing is
not bad. Friday is not our favorite time to buy. The old adage, buy on
Monday, sell on Friday has truth to it. Thus you can see a late week move
tested early week, providing better entry points.
Given Friday was upside by 1.22% and more on the indices, a bit of a dip to
test is welcome in playing the rest of current rally, whether it is just up
to the prior highs or turns into something more. Thus a bit of a pullback
on Monday even into Tuesday is opportunity, as long as the pullback does not
slam back on screaming volume.
Now, while volume has not been a key ingredient on a relief move, if the
move is going to take on 'new bull rally' status it will need to ultimately
show strong volume on breakout moves. For now low volume can be overlooked.
In new high territory it must show real volume. Why? Because this is not
Yellen's Fed anymore and the general idea among smart people is that the Fed
under Powell is not going to be such an easy money, always back the
financial markets kind of Fed.
But, before that point, the market can deliver more upside that we can take
advantage of. A bit of a test early week helps set the table for playing
the move back up when it resumes. If there is no test, well okay then, we
can pick up well-positions stocks, but I personally don't want to chase say
an SP500 gap upside.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 7337.39
Resistance:
7400 is some price resistance from both sides of the mid-January all-time
high
7506 is the January 2018 all-time high
Support:
7300 from a modest mid-January consolidation
7240, the upper gap point from early February 2018
The 50 day EMA at 7114
6918 - 6980 are price points from November/December 2017
6914 is the late November all-time high
6796 is the early November 2017
6641 is the October high
6630 is the February 2018 selloff intraday low
The 200 day SMA at 6607
6477 is the September intraday high
6461 is the July 2017 prior all-time high
6450 is the early September high
6341.70 is the all-time high from early June.
6300 is the mid-June interim high
6205 is the late May all-time high
5996 is the recent May 2017 low
5937 is the all-time high from April
5915 is the tops of the March to April 2017 range
5910 is the lower gap point from mid-April
5800 from the February consolidation lows
S&P 500: Closed at 2747.30
Resistance:
2744 is the 61% Fibonacci retracement of the selloff
2751 from early January 2018
2762 is the upper gap point from early February
2808 from the mid-January consolidation. Some support, not that strong.
2850 from a January 2018 gap point
2873 is the January all-time high
Support:
The 50 day EMA at 2711
2694 is the mid-December peak
2597 is the November 2017 high
2584 is the upper channel line from the March 2009 uptrend channel
The 200 day SMA at 2553
2532 is the February 2018 intraday selloff low
2491 is the August all-time high
2480 the late August and early August highs
2453.46 is the June prior all-time closing high
2409 is the July 2017 closing low
2406 is the all-time high from May 2017
2401 is the March 2017 all-time high
2352 is the May 2017 low
Dow: Closed at 25,309.99
Resistance:
The 61% Fibonacci retracement at 25391
The lower gap point from February at 25,521
26,000 from mid-January consolidation
26,439 is a gap point from the January high
January 2018 all-time high 26,617
Support:
The 50 day EMA at 24,993
24,835 is the mid-December consolidation range
23,608 is the early November high
23,602 is the early November 2017 high
23,360 is the intraday low form the February selloff
The 200 day SMA at 22,974
22,420 is the September high
22,179 is the August 2017 all-time high
22,086 is the mid-August lower high
21,681is the July prior all-time high
21,638 is the July 2017 closing high
21,529 is the June 2017 high
Friday Rally Leaves Stocks Higher for the Week
23-Feb-18 16:30 ET
Dow +347.51 at 25309.99, Nasdaq +127.30 at 7337.39, S&P +43.34 at 2747.30
https://www.briefing.com/investor/markets/stock-market-update/2018/2/23/friday-rally-leaves-stocks-higher-for-the-week.htm
[BRIEFING.COM] Stocks rallied on Friday, turning what was a disappointing week into a modest success. The Nasdaq Composite led the charge, adding 1.8%, while the S&P 500 and the Dow Jones Industrial Average climbed 1.6% and 1.4%, respectively. For the week, the three major averages finished with gains between 0.4% and 1.4%.
After trending sideways through the first hour of trading, the major averages began building on their opening gains, which were around 0.5% apiece, and nearly doubled them by midday. The rally then paused for about two hours as the S&P 500 wrestled with its 50-day simple moving average (2731), which proved to be an area of resistance on Thursday. The benchmark index eventually jumped above the key technical level and continued climbing--alongside the Dow and the Nasdaq--until the closing bell.
Friday's rally was broad, with 11 of 11 S&P 500 sectors finishing in positive territory.
The rate-sensitive utilities sector was the top-performing group, adding 2.7%, as Treasury yields slipped across the curve; the yield on the 2-yr note declined two basis points to 2.24%, while the yield on the benchmark 10-yr note tumbled five basis points to 2.87%. The top-weighted technology group (+2.2%) and the energy group (+2.2%) also outperformed on Friday.
Within the tech space, Hewlett Packard Enterprise (HPE 18.14, +1.73) and HP (HPQ 22.13, +0.74) rallied 10.5% and 3.5%, respectively, after the companies beat both earnings and revenue estimates, in addition to issuing upbeat profit guidance. HPE shares finished at a fresh all-time high.
As for energy, its outperformance was helped by an increase in the price of crude oil; WTI crude futures jumped 1.3% to $63.56/bbl, hitting a two-week high.
On the downside, the industrial sector (+0.8%) underperformed as Dow components Boeing (BA 356.66, +0.74), General Electric (GE 14.49, -0.01), and 3M (MMM 237.02, +1.02) finished the session little changed. The lightly-weighted telecom services sector (+0.8%) also struggled to keep pace with the broader market.
In corporate news, Nordstrom (JWN 53.56, +3.29) rallied 6.5% following reports that the Nordstrom family hopes to seal a deal to take the high-end retailer private before next Thursday, when the company is due to report its results for the fourth quarter. Meanwhile, General Mills (GIS 52.98, -1.97) declined 3.6% after agreeing to acquire Blue Buffalo (BUFF 40.00, +5.88) for $40 per share in cash.
Investors did not receive any economic data on Friday, but the Fed did release its Monetary Policy Report, which is expected to be a blueprint for new Fed Chair Jerome Powell's testimony before Congress next week. The Fed stayed on message in the report, calling for a path of gradual rate hikes and noting that it expects inflation to creep closer to the 2.0% year-over-year target as economic activity continues to expand at a moderate pace.
On Monday, investors will receive just one economic report, New Home Sales for January (Briefing.com consensus 645K), which will be released at 8:30 AM ET.
Nasdaq Composite: +6.3% YTD
S&P 500: +2.8% YTD
Dow Jones Industrial Average: +2.4% YTD
Russell 2000: +0.9% YTD
Week In Review: Eking Out a Last-Minute Win
Equities advanced this week thanks to a last-minute rally on Friday that reclaimed losses registered on Tuesday and Wednesday. The S&P 500 and the Dow Jones Industrial Average added around 0.5% apiece, while the tech-heavy Nasdaq Composite outperformed, jumping 1.4%. Markets were closed on Monday (February 19) in celebration of Presidents' Day.
The Wednesday release of the minutes from the January FOMC meeting was perhaps the most notable event of an otherwise relatively quiet week. The minutes were somewhat outdated considering the last FOMC meeting took place before a host of events that may have altered the Fed's perspective a bit, including the release of the CPI and PPI reports for January, the passing of a two-year budget deal in Congress that will increase spending by approximately $420 billion, and a sharp sell off on Wall Street.
Nonetheless, the minutes did reveal that almost all FOMC members expect inflation to increase in 2018 and that a majority of members believe a stronger outlook for economic growth raises the "likelihood that further gradual policy firming would be appropriate."
The yield on the benchmark 10-yr Treasury note ticked up to a four-year high on Wednesday following the minutes, closing at 2.94%, but slipped back to 2.87% by Friday's close--finishing flat for the week. Meanwhile, the 2-yr yield jumped to 2.26% following the minutes, its highest level since September 2008, but finished Friday at 2.24%--locking in a weekly gain of five basis points. In addition to the minutes, the 2-yr yield was also bolstered by a relatively weak 2-yr note auction on Tuesday.
In corporate news, shares of Wal-Mart (WMT) tumbled 10.2% on Tuesday after the world's largest retailer reported lower-than-expected earnings for the fourth quarter and issued disappointing profit guidance for fiscal year 2019. Conversely, Hewlett Packard Enterprise (HPE) rallied 10.5% to a new all-time high on Friday after reporting better-than-expected earnings and revenues and issuing upbeat profit guidance. HPE also announced a plan to return $7 billion to shareholders via share repurchases and a dividend increase.
As for the sector standings, seven of eleven S&P 500 groups finished the week in positive territory. The technology (+1.9%), materials (+1.3%), and energy (+1.0%) groups finished at the top of the leaderboard, while the consumer staples (-2.3%) and utilities (-2.4%) sectors finished at the bottom.
The S&P 500's 50-day simple moving average (2731) proved to be an area of resistance for the benchmark index on several occasions this week, the most notable of which was on Thursday when the S&P 500 retraced the entirety of a 1.2% intraday gain after hitting the key technical level. However, the S&P 500 finally managed to climb above its 50-day simple moving average on Friday, which helped fuel further buying to bring the index into positive territory for the week.
Following this week's trading, the S&P 500 is down 4.4% from the record high it hit on January 26.
Wall Street Ends Jumpy Day Little Changed
22-Feb-18 16:25 ET
Dow +164.70 at 24962.48, Nasdaq -8.14 at 7210.09, S&P +2.63 at 2703.96
https://www.briefing.com/investor/markets/stock-market-update/2018/2/22/wall-street-ends-jumpy-day-little-changed.htm
[BRIEFING.COM] The S&P 500 (+0.1%) and the Nasdaq (-0.1%) ended Thursday's session little changed, keeping their weekly losses intact. The Dow, meanwhile, rallied 0.7% to end a two-session losing streak and trim its weekly decline to 1.0%. The S&P 500 also ended a two-session skid on Thursday, while the Nasdaq extended its losing streak to four sessions.
Stocks opened in positive territory and crept higher through the first two hours of trading. However, sentiment started to shift as the S&P 500 approached its 50-day simple moving average (2729). The key technical level proved to be an area of resistance for the benchmark index, which quickly started retracing its gain after topping out at 2731 (+1.1%).
Trading was choppy from there, but the S&P 500 was able to stabilize a bit after finding support at its Wednesday close (2701).
In the end, nine of eleven S&P 500 sectors finished in positive territory, with gains ranging from 0.1% (technology) to 1.1% (real estate and energy).
The energy sector (+1.1%) was among the top-performing groups, helped by an increase in the price of crude oil. WTI crude futures climbed 1.8% to $62.77 per barrel after the Department of Energy reported a draw of 1.6 million barrels for the week ended February 16. The consensus estimate called for a build of 1.8 million barrels.
Chesapeake Energy (CHK 3.20, +0.57) also helped underpin a positive bias within the energy group, rallying 21.7% on better-than-expected Q4 results.
Conversely, the heavily-weighted financial sector (-0.8%) was the weakest group as Treasury yields slipped from multi-year highs; the 10-yr yield settled at 2.92% after closing Wednesday at 2.94%--its highest level in four years. On a related note, a $29 billion 7-yr Treasury note auction drew a high yield of 2.84% on a bid-to-cover of 2.49.
Overseas, equity indices in the Asia-Pacific region finished Thursday mostly lower, although China's Shanghai Composite climbed 2.2% after a week-long closure for the Lunar New Year. Meanwhile, the major European bourses finished roughly flat, with France's CAC (+0.2%) exhibiting relative strength.
In currencies, the U.S. Dollar Index dropped 0.4% to 89.70, marking its first loss in a week. The greenback tumbled 0.4% against the euro (1.2327) and 1.0% against the yen (106.69).
Thursday's batch of economic data was pretty light, with investors receiving just two reports--weekly Initial Claims and Leading Indicators for January:
The latest weekly initial jobless claims count totaled 222,000, while the Briefing.com consensus expected a reading of 233,000. Today's tally was below the revised prior week count of 229,000 (from 230,000). As for continuing claims, they declined to 1.875 million from a revised count of 1.948 million (from 1.942 million).
The key takeaway from this report is that it covers the period in which the survey for the February employment report was completed. The low level of initial claims will most likely drive economists to estimate another decent-sized gain (200K+) for nonfarm payrolls.
The Conference Board Leading Economic Index increased 1.0% in January (Briefing.com consensus 0.8%). The prior month's reading was left unrevised at +0.6%.
The key takeaway from the report is that the uptick was widespread; in fact, there wasn't a negative contribution from any of the ten components.
Investors will not receive any economic data on Friday.
Nasdaq Composite: +4.4% YTD
S&P 500: +1.1% YTD
Dow Jones Industrial Average: +1.0% YTD
Russell 2000: -0.4% YTD
Late Sell Off Leaves Wall Street Lower for Second Consecutive Day
21-Feb-18 16:30 ET
Dow -166.97 at 24797.78, Nasdaq -16.08 at 7218.23, S&P -14.93 at 2701.33
https://www.briefing.com/investor/markets/stock-market-update/2018/2/21/late-sell-off-leaves-wall-street-lower-for-second-consecutive-day.htm
[BRIEFING.COM] Stocks got off to a good start on Wednesday, but gave back all of their gains, and then some, following the release of the minutes from the January FOMC meeting. The S&P 500 was up as much as 1.2%, but eventually settled with a loss of 0.6%. Similarly, the Dow and the Nasdaq lost 0.7% and 0.2%, respectively, after being up more than 1.0% apiece.
The value of the aforementioned minutes was diminished by the fact that a lot has happened since the January 30-31 FOMC meeting: the CPI and PPI reports for January were released, Congress passed a two-year budget agreement that will increase spending by approximately $420 billion, the stock market endured a sharp sell off, losing around 8.0% in just a week, and Jerome Powell replaced Janet Yellen as the head of the Federal Reserve. In other words, the minutes are somewhat out of date.
Nonetheless, the minutes weren't without some value; most notably, they revealed that almost all FOMC members expect inflation to increase in 2018 and that a majority of members believe a stronger outlook for economic growth raises the "likelihood that further gradual policy firming would be appropriate."
U.S. Treasuries extended earlier losses following the release of the minutes, pushing yields higher across the curve. The yield on the 10-yr note finished at 2.94%, up from 2.91% ahead of the minutes and up from 2.89% at Tuesday's close. However, the 2-yr yield had a relatively muted reaction to the minutes, finishing four basis points higher at 2.26%.
As for equities, 11 of 11 S&P 500 sectors finished in negative territory, with the energy (-1.7%), consumer staples (-1.2%), utilities (-1.3%), telecom services (-1.6%), and real estate (-1.8%) sectors leading the retreat. Conversely, the financials (-0.1%), consumer discretionary (-0.1%), and industrials (unch) groups exhibited relative strength.
In corporate news, United Tech (UTX 129.26, +2.80) outperformed on Wednesday, adding 2.2%, after its Pratt & Whitney unit announced that it's solved issues that have caused delays in supplying engines to European planemaker Airbus. Meanwhile, Advance Auto (AAP 114.00, +8.65) spiked 8.2% after beating top and bottom line estimates for the fourth quarter.
Reviewing Wednesday's economic data, which was limited to Existing Home Sales for January and the weekly MBA Mortgage Applications Index:
Existing home sales decreased 3.2% in January to an annualized rate of 5.38 million units (Briefing.com consensus 5.62 million). The December reading was revised to 5.56 million from 5.57 million.
The key takeaway from the report is that 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 now from rising mortgage rates.
The weekly MBA Mortgage Applications Index decrease 6.6% to follow last week's 4.1% decline.
On Thursday, investors will receive the weekly Initial Claims report (Briefing.com consensus 233K) and the Leading Indicators report for January (Briefing.com consensus +0.8%) at 8:30 AM ET and 10:00 AM ET, respectively.
Nasdaq Composite: +4.6% YTD
S&P 500: +1.0% YTD
Dow Jones Industrial Average: +0.3% YTD
Russell 2000: -0.2% YTD
Winning Streak Comes To An End
20-Feb-18 16:25 ET
Dow -254.63 at 24964.75, Nasdaq -5.16 at 7234.31, S&P -15.96 at 2716.26
https://www.briefing.com/investor/markets/stock-market-update/2018/2/20/winning-streak-comes-to-an-end.htm
[BRIEFING.COM] U.S. equities opened the abbreviated week on a lower note, with the S&P 500 and the Dow Jones Industrial Average breaking their six-session winning streaks. The two indices lost 0.6% and 1.0%, respectively, while the tech-heavy Nasdaq Composite managed to escape with a relatively modest loss of 0.1%. The Russell 2000 declined 0.9%.
Trading was choppy for much of the day as the S&P 500 wrestled with its 50-day simple moving average (2726.82). The benchmark index opened with a loss of 0.3% before rallying to a gain of 0.2% around midday, but selling in the late afternoon took the index back into the red; at its lowest mark of the day, the S&P 500 was down 0.9%.
Several factors contributed to Tuesday's decline:
A sharp drop in shares of Dow component Wal-Mart (WMT 94.11, -10.67, -10.2%), which disappointed investors with weaker-than-expected fourth quarter results and an FY19 earnings per share outlook that trailed analysts' average expectation
A relatively weak 2-yr note auction, which fostered concerns about increased supply and the specter of rising rates accompanying the added supply
The 2-yr note yield climbed three basis points to 2.22%; the 10-yr note yield ticked up one basis point to 2.89%
A general sense that the stock market was vulnerable to some renewed selling interest after rallying in an unabashed manner last week on the heels of its biggest decline in two years
A breaching of the S&P 500's 50-day simple moving average, which provided the index with support on Thursday and Friday
10 of 11 S&P 500 sectors finished Tuesday in the red, with the consumer staples sector (-2.3%) leading the retreat following Wal-Mart's disappointing earnings. The utilities (-1.3%), telecom services (-1.7%), health care (-1.1%), industrials (-1.0%), and real estate (-1.0%) sectors also finished with losses of at least 1.0%.
On the flip side, the top-weighted technology sector (+0.3%) was the strongest group, with chipmakers exhibiting particular strength; the PHLX Semiconductor Index advanced 1.8%. Within the tech sector, Qualcomm (QCOM 63.99, -0.86, -1.3%) decided to increase its bid for NXP Semiconductors (NXPI 125.56, +7.06, +6.0%) to $127.50 per share from $110.00 per share in an attempt to fend off a competing offer from rival Broadcom (AVGO 249.62, +0.73, +0.3%).
In other corporate news, Dow component Home Depot (HD 186.71, -0.26, -0.1%) reported better-than-expected earnings for the fourth quarter, and privately-held Albertsons announced it will be purchasing the remaining portion of Rite Aid (RAD 2.20, +0.07, +3.3%)--the portion that isn't already being acquired by Walgreens Boots Alliance (WBA 70.91, -0.01, 0.0%)--to form a new publicly traded company.
Elsewhere, Japan's Nikkei (-1.0%) paced a broad retreat in Asia on Tuesday, while Germany's DAX (+0.8%) led most equity markets higher in Europe--although the UK's FTSE (unch) underperformed. Markets in China remained closed for the Lunar New Year.
Investors didn't receive any economic data on Tuesday. However, on Wednesday, they will receive several reports, including the weekly MBA Mortgage Applications Index at 7:00 AM ET, Existing Home Sales for January (Briefing.com consensus 5.62 million) at 10:00 AM ET, and the minutes from the January FOMC meeting at 2:00 PM ET.
Nasdaq Composite: +4.8% YTD
S&P 500: +1.6% YTD
Dow Jones Industrial Average: +1.0% YTD
Russell 2000: -0.4% YTD
InvestmentHouse - Gold is Up on Excess Spending (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
- Market moves from low to high, but then back to low.
- Indices show tombstone doji at key levels, many leading stocks do the
same.
- Still some leadership groups look very good, but have to be aware of the
levels being tested and the history of these kind of moves.
- Gold is up on excess spending, and the ideas for raising more revenue are
stupid.
- Being ready for all scenarios gives you the confidence to make your plays.
Was it just expiration and the 3-day weekend (Washington's Birthday; I am
old school in the holiday names)? Or was it 6 days straight up off of and
including the prior Friday reversal? How about the indices bumping what we
considered resistance for this relief bounce? All of the above?
Friday produced another back and forth session. Futures were higher with
DJ30 100+ to the upside, but by the open the gains turned to losses. But at
the open, stocks turned and surged right back up into midday, posting really
nice gains: SP500 +23, NASDAQ +46, DJ +232. That was it. The bids ended,
sellers took over and the gains were given back lock, stock, and barrel by
the afternoon session. Stocks spent the balance of the day trading back and
forth, the indices ending mixed, reflecting that lack of drive.
SP500 1.02, 0.04%
NASDAQ -16.96, -0.23%
DJ30 19.01, 0.08%
SP400 0.22%
RUTX 0.41%
SOX -0.35%
NASDAQ 100 -0.36%
VOLUME: NYSE +9%, NASDAQ -4%. Modestly above average volume on NYSE showing
some churn given the doji. NASDAQ average trade shows no kick up in the
selling. If it had surged, then that would have been bad.
ADVANCE/DECLINE: NYSE 1.4:1, NASDAQ 1.4:1.
Relatively innocuous closes on the day, but the details are very telling,
suggesting the relief move could have topped out.
CHARTS
All of the indices rallied higher and touched or came very close to the
levels we see as very likely peaks for the relief move that then turns back
to test the recent low. A bit too fast getting there, and they may bump at
these levels a bit more before giving up, but it is what it is. They all
showed tombstone doji on the session, and after a furious reversal the prior
Friday and a 6 session surge, that strongly suggests the relief move is
capping out. At the very minimum is suggests a pause. Given the market
circumstances, I would not assume a pause.
SP500: We pegged 2740 to 2750 (61% Fibonacci retracement at 2743) as
resistance with 7262 (upper gap point from early February) as the outside
high. SP500 moved past the midpoint in that gap zone Friday, also moving
past the 61% retracement (2754.42 intraday high). It then reversed to a
tombstone doji. As noted, after such a surge and in this kind of market
with that huge selloff, this suggests a reflex move is at or near its end.
NASDAQ: The same action, just different levels. NASDAQ filled the second
gap lower from early February (the big gap) and moved to 7303, the point of
a small price consolidation in mid-January. Didn't make 7317 (78% Fibonacci
retracement), but it made a game shot at it. After that rise, however,
NASDAQ tossed it back, closing with a tight tombstone doji. After a furious
670 points in 6 sessions recovering from a huge selloff, NASDAQ retraced 70%
of the move and indicates the relief rally is on the edge of the knife.
DJ30: The Dow rallied up to and through the 61% Fibonacci retracement,
hitting 25,432 at the high. That moved DJ30 into the gap down zone from
early February, but it was unable to make it to the upper gap. BTW, the gap
was filled the day after the gap as DJ30 moved higher to test that selloff
only to roll over and sell massively that session. Thus, the gap is filled
and with DJ30 showing a tombstone along with every other index on Friday, it
looks as if the Dow has hit our targets for the relief move and that move
now risks falling back to test that prior low.
SP400: The midcaps moved up to tap at the 50 day MA and the 61% Fibonacci
retracement, the levels we pegged for it, and backed off half the move. Not
the tight doji of the large cap indices, but the midcaps have followed the
lead of the large caps all the way.
RUTX: Moved through the 50 day MA's the coincident 61% Fibonacci
retracement, and the November peak. It then turned back with the other
indices. As with SP400, not a tight doji, just hitting the resistance we
cited for it and then fading the move to a still solid session gain. Bigger
picture, however, it has rallied off a massive selloff, retracing over 60%
of the move, but running into key resistance with a pattern that suggests a
turn back down.
SOX: SOX continued its relief move, moving through the 61% Fibonacci
retracement with some authority, but before it got to the November peak at
1342, it pulled up short (1334) and reversed to a loss and a tight tombstone
doji. That is close enough to be concerned that the relief move is ending,
especially given the action in the other indices. With the patterns in many
chips, the relief move does appear in jeopardy.
LEADERSHIP
If you look at the big names that led the relief move as well as many of the
stocks that rallied from fractured patterns, you see action very similar to
the indices. Many big names are very close to pre-selloff highs; sure they
can always pause and continue, but you have to look at the probabilities
taking into consideration not only this recovery, but the bigger picture of
how the market moves. That suggests the nice rally is peaking and a test of
the prior lows is coming.
Still, you cannot discount good moves such as WMT and retail in general that
still shows good setups and strength. Or biotech with stocks such as IMGN,
BLUE still surging from good setups with more in the sector in great
position. Industrial metals are strong.
FAANG: FB jumped midweek with a strong move but could not follow through.
AAPL was a tiger upside into Thursday, but hit the prior trading range and
showed a doji. AMZN rallied to just below the prior highs and tossed a
doji. NFLX surged through Thursday, then showed a tight doji Friday just
below the late January peak. GOOG moved through the 50 day MA's, then faded
off the high. Not bad, but GOOG has lagged all of FAANG and look at the
putrid volume on the way up. At least AMZN and NFLX put in some above
average volume on the advance.
Semiconductors: A few well-positioned (ENPH, MU, QRVO), but most bounced
and look to be running out of bounce road. You have those bouncing for
ruptured patterns (LRCX, KLAC) or sporting head and shoulders or other
topping patterns, e.g. LSI, SLAB, MLNX (yes, we did not have the guts to
hold it). Even NDVA could put in a near term top and test back with the
double top it is showing.
Industrial/Machinery: MMM bounced on low volume the past 1.5 weeks. CAT
looked good on its bounce, but Friday it gapped higher and then sold on the
strongest trade in a week. DE still trying to break higher on good
earnings, but it reversed from a new high. If it fails at the January high,
it has a double top and can fall hard as good news did not hold a good
break.
Software: With an exception or two, definitely soft. RHT posted a super
week. BLKB was up. FFIV looks as if it is topping out with a double top.
VMW is struggling below the 50 day. TTWO ditto. Just lost a lot of pop.
China: Since fading 3 weeks back this group has done nothing. Only BZUN and
perhaps HTHT look decent. BABA struggling, BIDU bounced but has to show
more. Ditto SINA. NTES, SOHU in the toilet.
Drugs/Biotech: Still solid. Lots of good patterns. ARRY is great. IMGN
surging. BLUE moving higher. MNKD, IPXL, CERS quite solid.
Metals: Strong. SCHN, STLD, CENX, AKS. SID still looks interesting.
Retail: WMT had a great Friday. Most other retailers took Friday off after
a solid week. TGT, BBY, DDS, TLRD.
MARKET STATS
DJ30
Stats: +19.01 points (+0.08%) to close at 25219.38
Nasdaq
Stats: -16.96 points (-0.23%) to close at 7239.47
Volume: 2.03B (-4.25%)
Up Volume: 925.39M (-644.61M)
Down Volume: 1.06B (+536.34M)
A/D and Hi/Lo: Advancers led 1.34 to 1
Previous Session: Advancers led 2.25 to 1
New Highs: 86 (+6)
New Lows: 30 (-22)
S&P
Stats: +1.02 points (+0.04%) to close at 2732.22
NYSE Volume: 900M (+9.25%)
A/D and Hi/Lo: Advancers led 1.43 to 1
Previous Session: Advancers led 2.24 to 1
New Highs: 78 (+9)
New Lows: 28 (-20)
SENTIMENT INDICATORS
VIX: 19.46; +0.33
VXN: 20.46; -0.39
VXO: 17.38; +0.12
Put/Call Ratio (CBOE): 0.93; +0.01. Elevated all week as the market
rallied. What will be funny is how they all closed downside positions just
as the rebound move peaks.
Bulls and Bears: Not as dramatic a bull drop but significant. 12 points
the prior week, 2.5 the past week. Bears bumped higher off 30 year lows two
weeks back, faded just a bit the week after.
Bulls: 51.9 versus 54.4
Bears: 14.4 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: 51.9 versus 54.4
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: 14.4 versus 15.5
15.5 versus 12.6 versus 12.8 versus 12.7 versus 13.5 versus 15.2 versus 15.1
versus 15.2 versus 15.1 versus 15.1 versus 15.4 versus 15.4 versus 14.4
versus 14.4 versus 15.1 versus 15.2 versus 15.1 versus 17.0 versus 17.1
versus 19.0 versus 20.2
OTHER MARKETS
Bonds: 2.873% versus 2.904%. Bonds bounced modestly Thursday and Friday,
making it back to kiss the 10 day MA. If they fail here, the downtrend that
has set up is showing a lot of strength.
Historical: the last sub-2% rate was in November 2016 (1.867%). 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: 1.2411 versus 1.25083. After breaking to a higher rally high
Thursday, the euro dropped hard to the 10 day EMA Friday. Will have to see
if that lasts as a reversal from the high.
Historical: 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: 106.294 versus 106.153. Rebounded off the rip lower Tuesday to
Thursday. Entering a range of prices from August to October 2016.
Historical: 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: 61.55, +0.38. Rebounded Wednesday to Friday, moving just past the 50
day MA's. Rebounded, but it was a sharp break lower. Key is whether it can
hold the move, rest, then continue higher.
Gold: 1356.20, +0.90. Big surge Wednesday, then flat and lateral into the
weekend. Strong break higher as inflation fears are up given the continued
and accelerated profligate US spending, spending they are thinking saddling
on the average US citizen with a $0.25/gallon gasoline tax.
It is telling that supposedly conservative Fox Business commentators are
calling the idea 'intriguing' instead of saying 'hell no!' We have taxes
that are supposed to pay for infrastructure improvement and maintenance.
Why do we then have 'decaying' infrastructure and need to dramatically hike
taxes to pay for what we were supposedly already taxed for?
I don't have a problem with user fees such as on toll roads (and thus avoid
those 'bridges to nowhere' that everyone pays for but hardly anyone uses),
but a gasoline tax, given the reality of our transportation system that is
individual vehicle based, it is a very cruel tax. Several groups have put
the pencil to paper regarding the impact of such a tax, and the average
impact seen would negate 60% of the tax reform cuts for individuals. But
that is okay for the likes of Senator Corker who didn't want to do anything
at all to individual tax rates, happy to see the Obama tax hikes remain a
yoke around the average citizen's necks. He doesn't have to pay the
Obamacare increased costs; he has his Senate care and will have it until he
dies. How can they say they represent us, understand our problems, when
they are above them and don't have to experience them? Colossal asses.
Here is an idea, we just passed a pro-growth tax reform plan that will,
despite what the democrats, economics ignorant republicans, no longer free
press, and other big government backers say, generate more revenue than
expended. Why not let that work?
TUESDAY
Market is closed Monday for Washington's Birthday, and that could be bad for
US investors and traders. The rest of the world will be open, and it could
be that they get the jump on the US in selling and that could have US stocks
opening lower Tuesday. That is speculation, but it is a possibility.
While the relief move, or whatever you want to call it, still remains intact
as of Friday, the indications are and the history suggests it is ending and
a test of the prior low is coming in the near future.
Therefore we took some gain Friday on several positions, let positions still
working well continue, and if the market hesitates Tuesday, we are going to
close the upside outside of those strong areas such as biotech, and have
downside plays ready to go. Indeed, it may be that even the biotechs,
metals, retail have issues if the rally has run its course and starts the
test of the prior low.
As a refresher, historically when a market peaks and then reverses as
violently as stocks did three weeks back, they rebound over the course of a
few weeks, then fall back down to test the prior low. Often that test
undercuts the prior low and really shakes out the weaker hands that got in
late, bought too high, and don't have the stomach for getting burned again
(as is usually the case because they always come in late). Once they are
gone, the people left are the stronger holders and they use the violent
shakeout to start buying. Then a new rally begins.
That seems so pat, so easy, but even so, the fear and greed combination
works time and time again in history. Many people are talking about it now
as well, jumping on the 'test' bandwagon. Of course late last week many
changed to the 'this new rally is here' chant just in time likely for this
leg to end.
That shows why this works: in the heat of the battle most players, even the
veterans, lose sight of the big picture, what they know to be the likely
scenario. When stocks are getting slaughtered in a sea of red, redemption
requests are surging, and margin calls are peppering the accounts, even the
seasoned traders and managers succumb to their emotions. Their algos read
the headlines and sell, then the managers take over after the initial
selling, but then someone panics again and the downside resumes. The run to
the sea is on.
So, as pat and hackneyed as it appears, these patterns play out again and
again, regardless of our great technology and the confidence we are smarter
this time. I know; you have to fight your emotions all the time and hold to
what the facts show. I am always amazed at some of the bipolar blowhards
that show up on the financial stations. You know who they are. On days
when the market is strong, they are gushing that you should buy everything,
talking about their dogs or anything that pops in between the ears, chiding
those who actually have a plan. On down days, and I have seen it the day
after one of those up days and the talk that the sky is the limit, they are
almost morose, saying the market is just fickle right now, that selling will
come so get your buy list ready. But what? Didn't they just say the day
before to buy everything, that you were a fool for not owning them? This is
what you are up against and you have to see through it. Don't ignore it;
use it to illustrate the kind of emotion that plays in the market and makes
people make emotional decisions.
You will still slip up and make a bonk move from time to time (e.g. closing
the MLNX downside), but that is okay. I allow myself one bonk move as
something of a test case on a potential direction change. I don't mean it
to be a bonk move, it just goes that way. A position starts to break the
wrong way, it is not the end of the session but it is showing some
persistence, so I make the move. Then I see if the move holds and how I
will handle the rest of the positions. If it shook me out, I shake it off.
Bonk move. Flush it. You played your plan without emotion and you can't
let that emotion slip back in if the market then shows you acted too soon.
That happens. Remember when I said patience more often than not rewards
you? It helps to remind yourself of that, particularly in this volatile
market, and that gives you control over your emotions as well.
In any event, the setup in the indices and many stocks warrants prepping for
the possibility the relief move is topping out. Part of containing your
emotions is being prepared mentally and have a plan and plays in hand
tailored to the possible scenarios the market throws at you. See it, act,
play the plan. You will have enough work sticking to the plan, and there is
something empowering about a plan that makes you money and does a solid job
avoiding losing money. It reinforces good behavior and it keeps you from
missing out or worrying about missing out as that is a surefire way to make
emotional blunders that kill your returns.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 7239.47
Resistance:
7240, the upper gap point from early February 2018
7506 is the January 2018 all-time high
7300 from a modest mid-January consolidation
7317 is the 78% Fibonacci retracement
Support:
The 50 day EMA at 7090
6918 - 6980 are price points from November/December 2017
6914 is the late November all-time high
6796 is the early November 2017
6641 is the October high
6630 is the February 2018 selloff intraday low
The 200 day SMA at 6583
6477 is the September intraday high
6461 is the July 2017 prior all-time high
6450 is the early September high
6341.70 is the all-time high from early June.
6300 is the mid-June interim high
6205 is the late May all-time high
5996 is the recent May 2017 low
5937 is the all-time high from April
5915 is the tops of the March to April 2017 range
5910 is the lower gap point from mid-April
5800 from the February consolidation lows
S&P 500: Closed at 2732.22
Resistance:
2744 is the 61% Fibonacci retracement of the selloff
2751 from early January 2018
2762 is the upper gap point from early February
2808 from the mid-January consolidation. Some support, not that strong.
2850 from a January 2018 gap point
2873 is the January all-time high
Support:
The 50 day EMA at 2710
2694 is the mid-December peak
2597 is the November 2017 high
2584 is the upper channel line from the March 2009 uptrend channel
The 200 day SMA at 2547
2532 is the February 2018 intraday selloff low
2491 is the August all-time high
2480 the late August and early August highs
2453.46 is the June prior all-time closing high
2409 is the July 2017 closing low
2406 is the all-time high from May 2017
2401 is the March 2017 all-time high
2352 is the May 2017 low
Dow: Closed at 25,219.38
Resistance:
The 61% Fibonacci retracement at 25391
The lower gap point from February at 25,521
26,000 from mid-January consolidation
26,439 is a gap point from the January high
January 2018 all-time high 26,617
Support:
The 50 day EMA at 24,989
24,835 is the mid-December consolidation range
23,608 is the early November high
23,602 is the early November 2017 high
23,360 is the intraday low form the February selloff
The 200 day SMA at 22,893
22,420 is the September high
22,179 is the August 2017 all-time high
22,086 is the mid-August lower high
21,681is the July prior all-time high
21,638 is the July 2017 closing high
21,529 is the June 2017 high
End part 1 of 3
Flat on Friday
16-Feb-18 16:30 ET
Dow +19.01 at 25219.38, Nasdaq -16.96 at 7239.47, S&P +1.02 at 2732.22
https://www.briefing.com/investor/markets/stock-market-update/2018/2/16/flat-on-friday.htm
[BRIEFING.COM] Stocks kept their weekly gains intact ahead of the extended Presidents' day weekend, finishing Friday's session little changed.
The S&P 500 (unch) and the Dow Jones Industrial Average (+0.1%) eked out their sixth consecutive victories, while the Nasdaq Composite underperformed, finishing lower by 0.2%. For the week, the three major stock indices settled with gains between 4.3% and 5.3%.
Equities rose steadily throughout the morning, but reversed course in the early afternoon following news that a federal grand jury has indicted 13 Russian nationals and three Russian entities on accusations of interference in the 2016 presidential election. Some of those defendants allegedly communicated with unwitting individuals associated with the Trump campaign.
Trading was choppy following the headline, which, more than anything, gave investors a convenient excuse to pull back following five straight days of gains.
Six of eleven S&P 500 sectors finished Friday in the green, with the heavily-weighted health care group (+0.7%) being among the top performers. In general, countercyclical sectors outperformed their cyclical peers on Friday after trailing them throughout the week. The consumer discretionary (-0.4%), energy (-0.3%), and technology (-0.2%) sectors were among the worst-performing groups.
Steel and aluminum names rallied after the U.S. Department of Commerce recommended imposing tariffs on steel and aluminum imports. U.S. Steel (X 44.75, +5.76) and AK Steel (AKS 5.96, +0.72) spiked 14.8% and 13.7%, respectively, while Nucor (NUE 68.54, +2.96) and Steel Dynamics (STLD 49.40, +2.26) added around 4.5% apiece.
In earnings news, Coca-Cola (KO 44.98, +0.20) and Deere (DE 169.44, +2.63) added 0.5% and 1.6%, respectively, after reporting their fourth quarter results. Both companies beat earnings estimates, but revenues were mixed; Coca-Cola reported better-than-expected revenues, while Deere's revenues came in below consensus.
Conversely, Kraft Heinz (KHC 70.80, -1.91) lost 2.6% after missing Q4 profit estimates.
In the bond market, U.S. Treasuries ended the week on a flat note. The yield on the benchmark 10-yr Treasury note slipped one basis point to 2.88%, while the 2-yr yield ticked up one basis point to 2.19%. For the week, the 10-yr yield added two basis points, and the 2-yr yield jumped 12 basis points.
Reviewing Friday's batch of economic data, which included Housing Starts and Building Permits for January, Import and Export Prices for January, and the preliminary reading of the University of Michigan Consumer Sentiment Index for February:
Housing starts increased to a seasonally adjusted annualized rate of 1.326 million units in January (Briefing.com consensus 1.240 million), up from a revised 1.209 million units in December (from 1.192 million). Building permits increased to a seasonally adjusted 1.396 million in January (Briefing.com consensus 1.300 million) from a revised 1.300 million in December (from 1.302 million).
The key takeaway from the report is that it points to more supply coming to a housing market that is in desperate need of single-family supply. At the same time, this report provides a positive input for Q1 GDP as the number of units under construction in January (1.120 million) was 1.5% above the fourth quarter average.
Import prices excluding oil rose 0.4% in January after decreasing an unrevised 0.1% in December. Export prices excluding agriculture increased 0.9% in January after rising a revised 0.1% in December from (0.0%).
The key takeaway from the report is that it will continue to feed into the market's budding inflation expectations.
The preliminary reading of the University of Michigan Consumer Sentiment Index for February rose to 99.9 (Briefing.com consensus 95.5) from 95.7 in January.
The key takeaway from the report is that consumer sentiment wasn't dented by the stock market volatility. Rather, the improved sentiment reading was attributed to optimism over government policies, improved financial conditions, and expectations for larger income gains in the year ahead.
Markets will be closed on Monday in observance of Presidents' Day.
Nasdaq Composite: +4.9% YTD
S&P 500: +2.2% YTD
Dow Jones Industrial Average: +2.0% YTD
Russell 2000: +0.5% YTD
Week In Review: Bouncing Back
The equity market rallied this week, reclaiming about half of the losses it registered over the previous two weeks. The tech-heavy Nasdaq Composite climbed 5.3% as technology shares outperformed, while the S&P 500 and the Dow Jones Industrial Average added 4.3% apiece. The S&P 500 and the Dow ended Friday on a six-session winning streak.
This week's gains put the S&P 500, the Nasdaq, and the Dow back into the green for the year and back above their respective 50-day simple moving averages. They're still a ways below record territory, however, settling Friday about 5.0% beneath the record highs they posted on January 26.
11 of 11 S&P 500 sectors finished the week in positive territory, with gains ranging between 1.8% and 5.8%. The top-weighted technology group (+5.8%) was the strongest sector, while the energy (+1.9%), utilities (+2.9%), telecom services (+2.4%), and real estate (+1.8%) groups were the weakest.
In general, cyclical sectors, which tend to do well when the economic outlook is favorable, outperformed their countercyclical peers.
Within the tech group, Apple (AAPL), surged 10.2% this week, reclaiming most of the 13.5% it lost between January 18 and February 8, and Cisco Systems (CSCO) rallied 4.7% on Thursday--hitting its best level in nearly 20 years--after reporting better-than-expected profits for the quarter ending in January and raising its earnings and revenue guidance.
Investors received a big batch of economic data this week, highlighted by a hotter-than-expected CPI reading: the Consumer Price Index increased 0.5% month over month in January (Briefing.com consensus +0.4%) and the core CPI, which excludes food and energy, rose by 0.3% (Briefing.com consensus +0.2%). The headline month-over-month figures sparked a knee-jerk reaction from the market, which has been fighting fears of inflation--and, in turn, fears of a more hawkish Fed--in recent weeks.
However, the year-over-year figures helped restore order and keep the week's upward trajectory intact, showing that both the CPI and the core CPI are still within a range they've held to for some time; the total CPI is up 2.1% year over year and has been between 2.0% and 2.2% for five months, while the core CPI is up 1.8% year over year and has been between 1.7% and 1.9% for ten months.
The yield on the benchmark 10-yr Treasury note climbed to a four-year high on Wednesday following the CPI release, closing at 2.91%, but gave up some ground on Thursday and Friday to finish the week little changed at 2.88%. Meanwhile, the 2-yr yield climbed 12 basis points this week, closing at 2.19%--its highest level in nearly a decade.
Meanwhile, in the currency market, the U.S. Dollar Index returned to a three-year low on Thursday (88.50), but bounced back a bit on Friday to finish the week with a loss of 1.4%. The greenback showed particular weakness against the Japanese yen, dropping 2.4% to 106.22, which is its lowest level since November 2016.
In Washington, the White House released its infrastructure plan on Monday, which is designed to stimulate $1.5 trillion in spending over a decade.
U.S. markets will be closed on Monday in observance of Presidents' Day.
S&P 500 Crosses 50-Day MA as Stocks Climb for Fifth Consecutive Session
15-Feb-18 16:30 ET
Dow +306.88 at 25200.37, Nasdaq +112.81 at 7256.42, S&P +32.57 at 2731.20
https://www.briefing.com/investor/markets/stock-market-update/2018/2/15/s-and-p-500-crosses-50day-ma-as-stocks-climb-for-fifth-consecutive-session.htm
[BRIEFING.COM] Stocks cruised to their fifth consecutive victory on Thursday, pushing the S&P 500 above its 50-day simple moving average (2722.93) for the first time since last week's big sell off. The S&P 500 finished with a gain of 1.2%, while the Nasdaq Composite and the Dow Jones Industrial Average climbed 1.6% and 1.2%, respectively.
After a failed attempt to crack its 50-day simple moving average at the opening bell, the S&P 500 finally managed to break through in the early afternoon and continued climbing from there. The benchmark index approached the key technical level from the other side shortly before the closing bell, but, this time, it proved to be a level of support.
The major averages finished Thursday at their best marks of the day. At their lows, the S&P 500, the Nasdaq, and the Dow were down around 0.3% apiece.
Investors received a large batch of economic data on Thursday, highlighted by the Producer Price Index for January. The PPI reading came in as expected, showing a month-over-month increase of 0.4%, while the core PPI reading, which excludes food and energy, rose more than expected, jumping 0.4% (Briefing.com consensus +0.2%). The key takeaway from the report is that producer prices are rising, which will feed the Treasury market's concerns about a pass through to consumers.
U.S. Treasuries settled Thursday mostly higher, pulling the yield on the benchmark 10-yr Treasury note down from a four-year high; the 10-yr yield slipped two basis points to 2.89%. The 10-yr yield traded at around 2.94% in pre-market action, but began losing ground even before the release of the aforementioned economic data. Meanwhile, the 2-yr yield finished higher by one basis point at 2.18%, which is its highest level in nearly a decade.
On Wall Street, 10 of 11 S&P 500 sectors finished in positive territory with technology (+1.9%), industrials (+1.5%), consumer staples (+1.6%), utilities (+2.1%), and telecom services (+1.4%) leading the charge. The energy sector (-0.4%) was the lone laggard, even though WTI crude futures climbed 1.3% to $61.39 per barrel.
Within the tech space, Cisco Systems (CSCO 44.08, +1.99) rallied 4.7% to its best level in nearly 20 years after reporting better-than-expected profits for the previous quarter and raising its earnings and revenue guidance for the current quarter. Meanwhile, Apple (AAPL 172.99, +5.62) climbed 3.4%, crossing its 50-day simple moving average for the first time in three weeks.
Elsewhere, the U.S. Dollar Index, which measures the dollar against a basket of other currencies, returned to the three-year low it hit earlier this month, dropping 0.5% to 88.51. The greenback lost 0.4% against the euro (1.2497), 0.7% against the British pound (1.4091), and 0.8% against the Japanese yen (106.16).
Reviewing Thursday's big batch of economic data, which included the Producer Price Index for January, Industrial Production and Capacity Utilization for January, weekly Initial Claims, the Empire Manufacturing Survey for February, the Philadelphia Fed Survey for February, and the NAHB Housing Market Index for February:
Producer prices rose 0.4% in January (Briefing.com consensus +0.4%) and core producer prices increased 0.4% (Briefing.com consensus +0.2%). Year-over-year, producer prices are up 2.7% and core producer prices have risen 2.2%.
The key takeaway from the report is that producer prices are rising, which will feed the Treasury market's concerns about a pass through to consumers.
Industrial Production decreased 0.1% in January (Briefing.com consensus +0.2%), while the December reading was revised to +0.4% (from +0.9%). Capacity Utilization ticked down to 77.5% (Briefing.com consensus 78.0%) from a revised reading of 77.7% in December (from 77.9%).
The key takeaway from the report is that the downturn was driven entirely by mining output (-1.0%), although it is notable that manufacturing output was unchanged for the second consecutive month.
The latest weekly initial jobless claims count totaled 230,000, while the Briefing.com consensus expected a reading of 227,000. Today's tally was above the revised prior week count of 223,000 (from 221,000). As for continuing claims, they rose to 1.942 million from a revised count of 1.927 million (from 1.923 million).
The key takeaway from the report is that the low level of initial claims is a reflection of a tight labor market and a period of increased demand when employers are reluctant to cut staff.
The Empire Manufacturing Survey for February declined to 13.1 (Briefing.com consensus 19.0) from the prior month's unrevised reading of 17.7.
Manufacturing activity in the New York Fed region is still in expansion mode, but the key takeaway is that the prices paid index is at its highest level in nearly six years.
The Philadelphia Fed Survey for February increased to 25.8 (Briefing.com consensus 22.0) from an unrevised 22.2 in January.
The key takeaway from the report is that manufacturing activity in the Philadelphia Fed region has accelerated, with cost pressures being reported as more widespread.
The NAHB Housing Market Index for February came in at 72 (Briefing.com consensus 73), unchanged from January.
On Friday, investors will receive another big batch of data, including Housing Starts (Briefing.com consensus 1240K) and Building Permits (Briefing.com consensus 1300K) for January, Import and Export Prices for January, and the preliminary reading of the University of Michigan Consumer Sentiment Index for February (Briefing.com consensus 95.5). The first four pieces of data will be released at 8:30 AM ET, while the Michigan Consumer Sentiment Index will cross the wires at 10:00 AM ET.
Nasdaq Composite: +5.1% YTD
S&P 500: +2.2% YTD
Dow Jones Industrial Average: +2.0% YTD
Russell 2000: +0.1% YTD
Wall Street Takes Inflation Data In Stride; Advances for Fourth Session in a Row
14-Feb-18 16:25 ET
Dow +253.04 at 24893.49, Nasdaq +130.10 at 7143.61, S&P +35.69 at 2698.63
https://www.briefing.com/investor/markets/stock-market-update/2018/2/14/wall-street-takes-inflation-data-in-stride-advances-for-fourth-session-in-a-row.htm
[BRIEFING.COM] U.S. equities advanced for a fourth consecutive session on Wednesday, overcoming a hotter-than-expected January CPI reading. The Nasdaq Composite led the rally, adding 1.9%, followed by the S&P 500 (+1.3%) and the Dow Jones Industrial Average (+1.0%), both of which returned to positive territory for the year. The Russell 2000 added 1.8%.
The S&P 500 futures were up modestly in overnight trading, but dove more than 1.0% below fair value following the release of the Consumer Price Index for January, which prompted fears that inflation is picking up: total CPI increased 0.5% month over month (Briefing.com consensus +0.4%), while core CPI, which excludes food and energy, rose 0.3% (Briefing.com consensus +0.2%).
However, the market bounced back after investors had time to further digest the report, which, on a year-over-year basis, wasn't all that alarming: total CPI and core CPI are up 2.1% and 1.8% year over year, respectively, which is in line with where they've been for months.
The major stock indices opened with losses between 0.2% and 0.6%, but quickly bounced into positive territory. Stocks really started taking off at around noon ET and never looked back, with the Nasdaq, the S&P 500, and the Dow each closing near their best marks of the day.
Cyclical sectors like financials (+2.3%), technology (+2.0%), consumer discretionary (+1.6%), industrials (+1.2%), energy (+1.4%), and materials (+1.3%) led the charge, indicating that investors grew more comfortable with the inflation data, which is ultimately consistent with a growing economy and increased corporate earnings.
The countercyclical health care space (+1.1%) also outperformed, but the consumer staples (-0.1%), utilities (-1.2%), telecom services (-0.7%), and real estate (-0.6%) groups lagged.
In the bond market, U.S. Treasuries were weak ahead of the release of Wednesday's economic data--which also included a disappointing Retail Sales report for January (-0.3% actual vs +0.2% Briefing.com consensus)--and extended their losses in the aftermath, pushing yields higher across the curve. The benchmark 10-yr yield climbed eight basis points to 2.91%, which marks its highest level in more than four years.
Meanwhile, the U.S. Dollar Index declined 0.8% to 88.88 as the greenback gave up ground against the euro (1.2459), the British pound (1.4007), and the Japanese yen (106.97). The dollar/yen pair fell 0.8%, hitting its lowest level since November 2016.
Dollar weakness helped commodities, including crude oil; West Texas Intermediate crude futures climbed 2.3% to $60.57 per barrel. On a related note, the Department of Energy reported that U.S. crude inventories rose by 1.8 million barrels last week, which was roughly in line with estimates.
Looking ahead, investors will receive a big batch of economic data on Thursday. The Producer Price Index for January (Briefing.com consensus +0.4%), Industrial Production for January (Briefing.com consensus +0.2%), and Capacity Utilization for January (Briefing.com consensus 78.0%) are the most notable reports on the docket, but see Briefing.com's Economic Calendar for a full list.
Nasdaq Composite: +3.5% YTD
S&P 500: +0.9% YTD
Dow Jones Industrial Average: +0.7% YTD
Russell 2000: -0.9% YTD
Winning Streak Continues Ahead of CPI Release
13-Feb-18 16:10 ET
Dow +39.18 at 24640.45, Nasdaq +31.55 at 7013.51, S&P +6.94 at 2662.94
https://www.briefing.com/investor/markets/stock-market-update/2018/2/13/winning-streak-continues-ahead-of-cpi-release.htm
[BRIEFING.COM] U.S. equities overcame early weakness on Tuesday to push the major indices higher for the third session in a row.
The Nasdaq Composite climbed 0.5%, the S&P 500 rose 0.3%, and the Dow Jones Industrial Average added 0.2%, settling near their session highs. The three indices held losses of around 0.7% apiece at the opening bell, but slowly began moving back towards their flat lines, hitting positive territory in the early afternoon.
Nine of eleven S&P 500 sectors settled in positive territory, with financials (+0.5%), consumer discretionary (+0.5%), and real estate (+0.6%) being the top performers. Energy (-0.5%) and materials (-0.3%) were the two declining sectors, and health care (+0.1%) also showed relative weakness.
Within the consumer discretionary space, Under Armour (UAA 16.70, +2.47) rallied 17.4%, hitting its best level since late October, after reporting better-than-expected sales for the fourth quarter. Internet retail giant Amazon (AMZN 1414.51, +28.28) also helped the consumer discretionary sector, climbing 2.0%.
Meanwhile, in the health care space, AmerisourceBergen (ABC 97.77, +8.32) spiked 9.3% following a Wall Street Journal report that Walgreens Boot Alliance (WBA 68.29, -0.17) has reached out to the drug distributor about a potential takeover.
In the bond market, Treasuries finished Tuesday mostly higher, although the 2-yr note declined. The benchmark 10-yr yield slipped three basis points to 2.83% after settling Monday at a four-year high, while the 2-yr yield rose two basis points to 2.09%. Yields move inversely to prices.
Elsewhere, West Texas Intermediate crude futures slipped 0.2% to $59.19 per barrel, the CBOE Volatility Index (VIX) declined around one point, or 2.3%, to 25.02, and the U.S. dollar tumbled 0.5% against the euro (1.2357) and 0.8% against the Japanese yen (107.82).
Tuesday's lone economic report--the NFIB Small Business Optimism Index for January--rose to 106.9 from 104.9 in December.
On Wednesday, investors will receive the weekly MBA Mortgage Applications Index at 7:00 AM ET, the Consumer Price Index (Briefing.com consensus +0.4%), the core Consumer Price Index (Briefing.com consensus +0.2%), and Retail Sales (Briefing.com consensus +0.2%) for January at 8:30 AM ET, and Business Inventories for December (Briefing.com consensus +0.3%) at 10:00 AM ET.
Emphasis will be placed on the core Consumer Price Index as a hotter-than-expected reading could prompt inflation/rate hike concerns.
Nasdaq Composite: +1.6% YTD
Dow Jones Industrial Average: -0.3% YTD
S&P 500: -0.4% YTD
Russell 2000: -2.7% YTD
Trimming Last Week's Losses
12-Feb-18 16:20 ET
Dow +410.37 at 24601.27, Nasdaq +107.47 at 6981.96, S&P +36.45 at 2656.00
https://www.briefing.com/investor/markets/stock-market-update/2018/2/12/trimming-last-weeks-losses.htm
[BRIEFING.COM] Equities quietly reclaimed a nice chunk of last week's losses on Monday, with the Dow climbing 1.7%, the Nasdaq rising 1.6%, and the S&P 500 adding 1.4%.
There was some of last week's volatility at the opening bell, but stocks spent the majority of the day in a steady ascension. A modest sell off in the late afternoon left the major stock indices a step below their session highs. At its best mark of the day, the S&P 500 was up 2.0%.
Each of the S&P 500's 11 sectors advanced on Monday, with 8 adding at least 1.0%.
The materials (+2.1%) and technology (+1.8%) sectors were the strongest groups, while the telecom services (+0.8%), utilities (+0.8%), and real estate (+0.3%) sectors were the weakest.
Within the tech space, Apple (AAPL 162.71, +6.30) showed particular strength, jumping 4.0%, and CSRA (CSRA 40.39, +9.57) spiked 31.1% after agreeing to be acquired by General Dynamics (GD 209.53, -2.57) for approximately $9.6 billion, or $40.75 per share, in cash--which is a 32.2% premium over Friday's closing price.
It's also worth mentioning that Qualcomm (QCOM 65.66, +1.67) and Broadcom (AVGO 244.40, +8.90) are scheduled to meet on Wednesday to discuss a possible merger, which Broadcom says it has committed financing for. The two companies climbed 2.6% and 3.8% on Monday, respectively.
The energy sector (+1.7%) led for much of the day, but weakened in the afternoon as the price of crude oil came down from its session high. West Texas Intermediate crude futures were up around 2.5% at their best mark of the day, but finished higher by just 0.2% at $59.30 per barrel. Still, the modest gain broke a six-session losing streak for the commodity.
In the bond market, U.S. Treasuries were under pressure on Monday, pushing yields higher across the curve. The yield on the benchmark 10-yr Treasury note climbed three basis points to 2.86%, closing at a fresh four-year high, while the 2-yr yield ticked up one basis point to 2.07%.
In Washington, the White House released its infrastructure spending plan and its 2019 budget proposal on Monday morning.
The infrastructure plan calls for $200 billion in federal spending, which will be used as seed money to spur additional spending by state and local governments. The White House projects the plan would generate at least $1.5 trillion in total spending over the next 10 years.
Meanwhile, the budget proposal calls for $4.4 trillion of spending, but it's highly unlikely to make it through Congress, which passed a bipartisan deal last week.
Monday's lone economic report--the Treasury Budget for January--showed a surplus of $49.2 billion (Briefing.com consensus $51.0 billion) versus a surplus of $51.3 billion for January 2017. The Treasury Budget data is not seasonally adjusted, so the January surplus cannot be compared to the $23.2 billion deficit registered in December.
Nasdaq Composite: +1.1% YTD
Dow Jones Industrial Average: -0.5% YTD
S&P 500: -0.7% YTD
Russell 2000: -2.9% YTD
InvestmentHouse - Dive Lower Provides Shakeout to End First Leg (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
- A dive lower after a positive open may have provided the shakeout to end
the first leg lower.
- Fed letting the market find some pricing closer to reality?
- Looking to play the relief move with some familiar names and some very
good patterns that held up during all the selling.
Another day, another 1022 point swing on DJ30. 286 on NASDAQ. 106 on
SP500. Huge swings. Thursday it was high to low. Friday it was high to
way low to way high. As the market finished upside, many were saying that
Friday was THE day the market showed a change. Oversold, reached lower then
surged. Big volume on the rebound.
Yeah, sure. Heard that Tuesday and look what happened. But there were
differences Tuesday was not the ideal reversal day: it never had that real
selloff. It was down pre-market but was recovering and did so from the
opening bell. There was not that purge. Friday was better: an upside start
after an ugly selloff gave hope. Then it was dashed when the gains were
replaced by big losses. On top of that, the indices were just lower,
undercutting the prior lows and reversed on massive volume. THE reversal?
Very well could be . . . for this leg of the selloff.
JPM came out with an afternoon note stating the selling was just about done.
That helped act as the trigger and stocks surged into the close. Gains that
were turned to losses turned to gains once more. Maybe the day marked the
end of the volatility, but it was certainly a volatile day. And again, if
it did mark the end, it is the end for THIS leg, likely not the ultimate
bottom in this selling event.
SP500 38.55, 1.49%
NASDAQ 97.33, 1.44%
DJ30 330.44, 1.38%
SP400 1.09%
RUTX 0.96%
SOX 3.05%
NASDAQ 100 1.69%
NEWS/ECONOMY
Not a lot of news. The government shut down at midnight but an early
morning deal opened it right back up. AMZN announced its own shipping
service to take on FDX and UPS.
Earnings continued with mostly beats, but even stocks beating expectations
did not have an easy go of it. It would appear the market volatility has
overtaken every other story other than perhaps the Fed agreeing to lay down
regarding rate hikes. Even that, however, would not be a market positive.
The Fed: Where does it stand?
Since Bernanke and through Yellen, the Federal Reserve has stood behind a
rallying stock market. Every serious dip was met with the Fed backtracking
on vows to remove stimulus or indeed actual new stimulus.
That has changed, at least on the surface. As Yellen walked out the door,
seat still warm, she threw out for discussion that yes, equities and real
estate values were 'high.' A week ago, at the start of the selling, Kaplan
said that 3 rate hikes were the base case and likely more could come if
economics were strong. Kaplan reiterated his position Thursday.
Also Thursday, Mr. Dudley referred to the stock market selloff as 'small
potatoes' and opined the economy would continue to grow above pace. With
that, Dudley believes the Fed "is going to have to continue to remove
monetary policy accommodation."
Thus it appears the Fed is bound to continue hiking rates, and if the
economic data is right, it should. It has been behind the curve as always.
The fear of markets, of course, is the Fed panics, overreacts, and again
affects a market breakdown the presages an economic fall from expansion and
prosperity to more stagnation. Heck, we just got out of 10 years of that.
Don't send us back, please.
Nonetheless, the Fed, for now, is sticking to its path of 3 or more rate
hikes in 2018. It must. Can you imagine if the Fed came out otherwise? At
first the market pops upside but then panic sets in as to why the Fed
panicked.
Given that, the market drop as Yellen walks out and as Powell takes over is
perfect for Powell. If the market continues falling he can cite changed
circumstances. For now he sticks to the plan already in place, and if the
market does bottom as it should, then everyone concludes he is wise and
restrained. Confidence follows, and then good things, good things. Nothing
can go wrong, right?
The point: The market actually has a chance to go to real price discovery
versus Fed put pricing. In other words, there is no guarantee of a Fed step
in. That means looking for typical market moves as outlined the past week
for this correction.
THE MARKET
CHARTS
On the lows some important levels were touched. SP500 sold to tap the 200
day SMA, passing the 78% Fibonacci retracement along the way. Then a sharp
rebound to the 61% retracement. DJ30 did not get that far, undercutting the
61% Fibonacci retracement then rebounding to close much higher. NASDAQ
touched close to its 200 day and it held right at the 78% retracement and
shot back upside. All show doij with long tail, a reversal indication.
RUTX and SP400 undercut their 200 day MA's and then snapped back to show
nice doji with tail over that level on the close. That kept RUTX over the
200 day and the November low. SP400 ditto.
SOX gapped higher sold to undercut the Thursday low, also undercutting the
December low. Then a surge back up to close well above both. Hmm. Looks
as if the neckline to a head and shoulders is set, and now you watch SOX'
rebound to see if it stalls at 1350ish and rolls back over. That, however,
is the move after the next, not the next move that is a rebound back up to
test that 1350 level.
It is a pretty decent bet to surmise the Friday low is the low of the first
leg. It is not a proven fact, but it is a good support level with good
extreme internals that suggest a high probability of a rebound that lasts
more than a day and a half. It is not THE bottom, but one that supports a
relief bounce that sets up THE bottom or at least a try at THE bottom after
the coming relief move stalls and falls to test the Friday low.
That said, we didn't buy the rebound. Really thought about it, but opted to
wait and see if stocks can hold Monday. A soft open met with buying is a
great entry point for the relief rally back up to test somewhere below the
highs from late January. That is the tradable move we are looking at this
weekend with plays. We get in, ride it, take the gains when the move starts
to sputter after a good week or so, then look to play the test downside to
or below the Friday low. Same play book as before, just starting from a
lower level after a deeper test.
LEADERSHIP
One of the only groups that used the selling it its benefit is the
drug/biotech areas, and even in that group the large cap stocks were
murdered while the mid and smaller versions are using the selling to set up
new patterns and entries.
FAANG is not bad either in some instances, plus the fact that people such as
Cramer and others are touting the group to buy on this dip. Whatever, if it
works for us.
Everything else is something of a wildcard. Heavy selling broke many
patterns and frankly if the market is going to bounce then sell off again,
you want to focus on a handful of stocks that can make you money. For us
that means good patterns and decent patterns in stocks people love to buy
when they are sold off.
MARKET STATS
DJ30
Stats: +330.44 points (+1.38%) to close at 24190.90
Nasdaq
Stats: +97.33 points (+1.44%) to close at 6874.49
Volume: 3.16B (+16.18%)
Up Volume: 2.04B (+1.677B)
Down Volume: 1.09B (-1.25B)
A/D and Hi/Lo: Advancers led 1.36 to 1
Previous Session: Decliners led 5.58 to 1
New Highs: 20 (-12)
New Lows: 264 (+114)
S&P
Stats: +38.55 points (+1.49%) to close at 2619.55
NYSE Volume: 1.3B (+8.33%)
A/D and Hi/Lo: Advancers led 1.45 to 1
Previous Session: Decliners led 7.84 to 1
New Highs: 9 (-7)
New Lows: 356 (+149)
SENTIMENT INDICATORS
VIX: 33.46; +5.73. Up, but not soaring and did not take out the prior
high from Tuesday, not even close. Indeed, it is lower than Monday.
Something strange there.
VXN: 33.89; +9.16
VXO: 32.36; +11.36
Put/Call Ratio (CBOE): 1.14; +0.23. First spike over 1.0 in a long time.
Finally shaking the tree of those upside buyers.
Bulls and Bears: From highs and lows greater than the prior 30+ years,
bulls tumbled over 10 points and bears jumped 3 points -- major moves.
Okay, so the damage has been done.
Bulls: 54.4 versus 66.00
Bears: 15.5 versus 12.6
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 54.4 versus 66.00
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
versus 56.7 versus 53.4 versus 57.7 versus 63.1 versus 61.2 versus 61.8
versus 62.7 versus 61.8 versus 58.2 versus 60.6 versus 58.6 versus 60.2
versus 59.8 versus 59.8 versus 59.6 versus 58.8 versus 56.3 versus 55.6
versus 51.0 versus 42.9 versus 41.7 versus 47.1 versus 42.9
Bears: 15.5 versus 12.6
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 versus 19.1 versus 19.1 versus 18.3 versus 18.1 versus 17.0
versus 16.2 versus 16.5 versus 16.7 versus 18.6 versus 18.8 versus 18.6
versus 18.3 versus 19.2 versus 18.3 versus 17.1 versus 17.3 versus 17.9
versus 17.9 versus 18.3 versus 17.5 versus 18.3 versus 18.1 versus 17.3
versus 13.75 versus 17.3 versus 16.5 versus 17.5 versus 17.6 versus 16.7
versus 17.6 versus 17.5 versus 17.3 versus 18.3 versus 18.4 versus 19.6
versus 19.6 versus 19.2 versus 19.6 versus 22.3 versus 21.6 versus 23.5
versus 25.7 versus 24.3 versus 23.1 versus 23.8 versus 23.1 versus 22.8
versus 23.1 versus 24.3
OTHER MARKETS
Bonds: 2.8577% versus 2.844%. Bond selloff below the 10 day EMA continues.
Looks like a downtrend that will test the late 2016, early 2017 double
bottom near 116.
Historical: the last sub-2% rate was in November 2016 (1.867%). 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: 1.22524 versus 1.2273. Dollar rallied and pushed EUR to the 50
day MA but showing a pair of doji and ready to rebound against the dollar.
Historical: 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 versus 1.17652
versus 1.1764 versus 1.17754 versus 1.17990 versus 1.18276 versus 1.18727
versus 1.18983 versus 1.18976 versus 1.18529 versus 1.18489 versus 1.1899
versus 1.19329 versus 1.18148 versus 1.17402 versus 1.1791 versus 1.1787
versus 1.1786 versus 1.1799 versus 1.16443 versus 1.16646 versus 1.16439
versus 1.15871
USD/JPY: 108.797 versus 108.88. Dollar trying to set up a short double
bottom to bounce.
Historical: 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 versus 110.834 versus 111.036 versus 111.290 versus 110.357 versus
111.024 versus 111.204 versus 111.534 versus 112.706 versus 113.15 versus
113.58 versus 112.749 versus 112.677 versus 112.27 versus 112.690 versus
112.758 versus 113.216 versus 113.208 versus 113.304 versus 113.363 versus
113.334 versus 112.870 versus 112.625 versus 112.619 versus 112.298 versus
112.639 versus 113.555 versus 113.476 versus 113.48 versus 113.473 versus
112.473 versus 112.554 versus 112.442 versus 112.190 versus 112.55 versus
112.102 versus 111.583 versus 111.244
Oil: 59.20, -1.95. Oil gaps below the 50 day MA as the selloff continues
after hitting that recovery high to end January.
Gold: 1315.70, -3.30. Still holding the 50 day EMA after dropping to that
level Wednesday. Important test for this upside move in gold.
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6874.49
Resistance:
6914 is the late November all-time high
6918 - 6980 are price points from November/December 2017
The 50 day EMA at 7081
7240, the upper gap point from early February 2018
7506 is the January 2018 all-time high
7300 from a modest mid-January consolidation
Support:
6796 is the early November 2017
6641 is the October high
The 200 day SMA at 6557
6477 is the September intraday high
6461 is the July 2017 prior all-time high
6450 is the early September high
6341.70 is the all-time high from early June.
6300 is the mid-June interim high
6205 is the late May all-time high
5996 is the recent May 2017 low
5937 is the all-time high from April
5915 is the tops of the March to April 2017 range
5910 is the lower gap point from mid-April
5800 from the February consolidation lows
S&P 500: Closed at 2619.55
Resistance:
2694 is the mid-December peak
The 50 day EMA at 2713
2751 from early January 2018
2808 from the mid-January consolidation. Some support, not that strong.
2850 from a January 2018 gap point
2873 is the January all-time high
Support:
2597 is the November 2017 high
2569 is the upper channel line from the March 2009 uptrend channel
The 200 day SMA at 2539
2491 is the August all-time high
2480 the late August and early August highs
2453.46 is the June prior all-time closing high
2409 is the July 2017 closing low
2406 is the all-time high from May 2017
2401 is the March 2017 all-time high
2352 is the May 2017 low
Dow: Closed at 24,190.90
Resistance:
24,835 is the mid-December consolidation range
The 50 day EMA at 25,003
26,000 from mid-January consolidation
26,439 is a gap point from the January high
January 2018 all-time high 26,617
Support:
23,602 is the early November 2017 high
23,608 is the early November high
The 200 day SMA at 22,794
22,420 is the September high
22,179 is the August 2017 all-time high
22,086 is the mid-August lower high
21,681is the July prior all-time high
21,638 is the July 2017 closing high
21,529 is the June 2017 high
End part 1 of 3
Ending On a Positive Note
09-Feb-18 16:35 ET
Dow +330.44 at 24190.90, Nasdaq +97.33 at 6874.49, S&P +38.55 at 2619.55
https://www.briefing.com/investor/markets/stock-market-update/2018/2/9/ending-on-a-positive-note.htm
[BRIEFING.COM] U.S. equities reclaimed a nice chunk of their losses for the week on Friday in another volatile trading session. The S&P 500 gained 1.5%, while the Dow Jones Industrial Average and the Nasdaq Composite advanced 1.4% apiece. The small-cap Russell 2000 also rallied, climbing 1.0%.
The S&P 500 covered a wide range of about 105 points--up 2.2% at its high and down 1.9% at its low.
Stocks opened in positive territory, but began moving lower shortly thereafter. The market hit negative territory in the late morning, but the retreat came to a halt as the S&P 500 approached its 200-day simple moving average (2539), which it had not tested since right before the 2016 presidential election.
The S&P 500 dipped slightly below that key technical level, which served as a springboard for renewed buying efforts which culminated in a late rally that left equities at their session highs.
The defense of the 200-day simple moving average proved to be a silver lining for investors, who endured an otherwise terrible week. The S&P 500, the Dow, and the Nasdaq lost a little more than 5.0% apiece this week and now trade roughly 9% below the record highs they hit on January 26.
10 of 11 sectors finished Friday in the green as advancing issues outnumbered declining issues 1.4 to 1 at the New York Stock Exchange.
The top-weighted technology (+2.5%) and financials (+1.9%) sectors were relatively strong throughout the session, settling near the top of the sector standings.
Within the tech space, NVIDIA (NVDA 232.08, +14.56) jumped 6.7% after blowing past Q4 earnings and revenue estimates and raising its guidance for the first quarter.
On the downside, the energy sector (-0.4%) finished at the bottom of the sector standings as the price of crude oil declined for the sixth session in a row. West Texas Intermediate crude futures tumbled 3.1% to $59.23 per barrel--their lowest level since the end of December.
In Washington, Congress passed a budget deal early Friday morning, but not before shutting down the government for a few hours--the previous spending deal ran out at midnight. The deal will increase spending caps and raise defense and non-defense spending by approximately $160 billion and $130 billion, respectively.
The bill will also provide an additional $90 billion for disaster aid and extend the debt ceiling until 2019.
In the bond market, U.S. Treasuries ended the week on a higher note, with shorter-dated issues showing relative strength. The yield on the 2-yr Treasury note declined seven basis points to 2.06%, while the benchmark 10-yr yield slipped two basis points to 2.83%. Yields move inversely to prices.
Friday's economic data was limited to December Wholesale Inventories, which increased 0.4% month-over-month (Briefing.com consensus +0.2%). The key takeaway from the report was that the sales increase outpaced the inventory increase by a sizable margin. That is a step in the right direction for wholesalers trying to regain some pricing power.
On Monday, investors will receive just one piece of data--the January Treasury Budget--which will be released at 2:00 PM ET.
Nasdaq Composite: -0.4% YTD
S&P 500: -2.0% YTD
Dow Jones Industrial Average: -2.1% YTD
Russell 2000: -3.8% YTD
Week In Review: A Wild Ride
The equity market dropped sharply this week, with the S&P 500, the Dow Jones Industrial Average, and the Nasdaq Composite losing around 5.0% apiece in volatile trading. Sizable gains on Tuesday and Friday helped keep losses somewhat in check, but they couldn't keep the major indices positive for the year. The three averages are down between 0.4% and 2.1% year to date.
This week's selling was related to fears about rising interest rates, and the realization that stocks have gone too far, too fast, but it was a collective de-risking effort following the implosion of short volatility ETFs that acted as the expedient for broad-based and indiscriminate selling activity. The S&P 500 soared 7.5% in the first four weeks of 2018 on top of last year's 19.4% rally.
Technical, mechanical, and psychological forces all came together to knock back the market in an abrupt fashion.
The S&P 500 breached its 50-day simple moving average for the first time in five months. Weak-handed investors were consistently shaken out of "buy-the-dip" trades this week, sending stocks, and investor sentiment, even lower.
Congress missed a midnight spending deadline on Thursday--forcing a partial government shutdown--but passed a two-year budget deal a few hours later. The bill will boost spending by approximately $300 billion over the next two years, provide an additional $90 billion for disaster aid, and extend the debt ceiling until 2019.
The increase in spending prompted concerns about fiscal discipline, especially considering debt issuance was already expected to rise due to changes to the U.S. tax code. These concerns kept Treasuries in check and yields at multi-year highs.
However, outflows from the stock market ultimately edged out fiscal concerns, leaving Treasuries modestly higher--and thereby Treasury yields modestly lower--for the week. The benchmark 10-yr yield finished one basis point below the four-year high it touched last Friday at 2.83%.
Meanwhile, the CBOE Volatility Index (VIX), often referred to as the "investor fear gauge," ended the week higher by 66.7% at 28.86.
All 11 S&P 500 sectors finished the week in the red, with losses ranging between 2.8% (utilities) and 8.5% (energy). In general, cyclical sectors--including the heavily-weighted financial sector (-5.8%)--underperformed their countercyclical peers.
The energy sector struggled as West Texas Intermediate crude futures dropped 9.5% to $59.23 per barrel--their lowest level since the end of December.
Overseas, equity markets in Asia and Europe finished the week solidly lower, following Wall Street's lead. China's Shanghai Composite and Hong Kong's Hang Seng led the retreat in Asia, dropping 9.5% apiece, while Germany's DAX and France's CAC set the pace in Europe with losses of 5.3% apiece.
The market still anticipates that the next rate hike will occur at the March FOMC meeting as Fed officials minimized this week's sell off, continuing to emphasize a path of gradual rate increases. The CME FedWatch Tool places the chances of a March rate hike at 71.9%, virtually unchanged from last week's 76.1%.
Wall Street Tumbles For Fifth Time In Six Sessions
08-Feb-18 16:35 ET
Dow -1032.89 at 23860.46, Nasdaq -274.82 at 6777.16, S&P -100.66 at 2581.00
https://www.briefing.com/investor/markets/stock-market-update/2018/2/8/wall-street-tumbles-for-fifth-time-in-six-sessions.htm
[BRIEFING.COM] Stocks closed sharply lower on Thursday, losing ground for the fifth time in six sessions. The selling was broad-based and indiscriminate as all 11 S&P 500 sectors finished deep in red figures. The losses for the sectors ranged from 1.2% (utilities) to 4.5% (financials).
The Dow Jones Industrial Average dropped 4.2%, the Nasdaq Composite tumbled 3.9%, and the S&P 500 declined 3.8%.
The S&P 500 closed the day below Monday's intraday low, which technicians are apt to view as an adverse development that could invite further selling. All three major indices settled at their session lows following another steep sell off in the final minutes.
Several factors precipitated Thursday's sell-off:
Budding angst surrounding the reported two-year budget agreement in the Senate, which fueled concerns about the level of the budget deficit and national debt. The 10-yr yield hit 2.88% today but settled up just one basis point at 2.85% for the session as the deficit concerns stood in the way of safe-haven flows related to the stock market losses.
The lack of key sector leadership. The financial (-4.5%), information technology (-4.2%), and consumer discretionary (-4.0%) sectors were today's biggest laggards.
Comments from Fed heads, who continue to emphasize a likely path of gradual rate hikes and who have minimized recent market volatility. That understanding provoked concerns about a possible policy mistake by the Fed, which was registered in the underperformance of the cyclical sectors today; and
Following the trend of the tape, which has been biased downward at a time when many participants have been hoping for a rebound. The continued downward bias shook out "weak-handed longs" who have been aiming to profit from a buy-the-dip trade. Their selling presumably exacerbated today's losses.
Trading was volatile, as it has been in each session this week, with the S&P 500 covering 105 points from its high (+0.1%) to its low (-3.8%).
Investors also kept an eye on Washington, where Congressional leaders are trying to pass a budget deal before tonight's spending deadline. The bill up for debate calls for an increase in spending caps and would raise defense and non-defense spending by approximately $160 billion and $130 billion, respectively, over the next two years.
The bill is expected to pass in the Senate as both Senate Majority Leader Mitch McConnell (R-KY) and Senate Minority Leader Chuck Schumer (D-NY) have voiced their support for the measure, but it's fate in the House is less certain. Still, House Speaker Paul Ryan (R-WI) said in a morning interview that he believes the measure will pass.
The latest batch of Q4 earnings didn't have much impact on the broader market on Thursday, but it did prompt some interesting moves in individual stocks.
Most notably, Twitter (TWTR 30.18, +3.27) spiked 12.2% to its best level since mid-2015 after reporting better-than-expected earnings and revenues and achieving GAAP profitability for the first time ever. Meanwhile, Tesla (TSLA 315.23, -29.77) dropped 8.6% despite reporting above-consensus earnings and saying that it's on track to meet its goal of producing 5,000 Model 3 cars per week by the end of June.
Overseas, the major European bourses finished Thursday solidly lower. Germany's DAX dropped 2.6%, while France's CAC and the UK's FTSE lost 2.0% and 1.5%, respectively. The Bank of England unanimously voted to keep its key rate at 0.5% and its asset purchase program at GBP435 billion, as expected, while also laying the groundwork for future rate hikes.
In the Asia-Pacific region, equity indices ended Thursday on a mixed note, with Japan's Nikkei (+1.1%) and Hong Kong's Hang Seng (+0.4%) advancing while China's Shanghai Composite (-1.4%) declined. China reported a much smaller-than-expected trade surplus due to a spike in imports. However, demand associated with the upcoming Lunar New Year may have distorted the figures.
Reviewing Thursday's economic data, which was limited to the weekly Initial Claims report:
The latest weekly initial jobless claims count totaled 221,000, while the Briefing.com consensus expected a reading of 234,000. Today's tally was below the unrevised prior week count of 230,000. As for continuing claims, they declined to 1.923 million from a revised count of 1.956 million (from 1.953 million).
The key takeaway from the initial claims report is that it provides a basis to keep the Treasury market on edge about future rate hikes.
On Friday, investors will receive just one economic report--December Wholesale Inventories (Briefing.com consensus 0.2%)--which will be released at 10:00 AM ET.
Wall Street Lower Following Another Choppy Session
07-Feb-18 16:30 ET
Dow -19.42 at 24893.35, Nasdaq -63.90 at 7051.98, S&P -13.48 at 2681.66
https://www.briefing.com/investor/markets/stock-market-update/2018/2/7/wall-street-lower-following-another-choppy-session.htm
[BRIEFING.COM] Stocks endured another choppy trading session on Wednesday, settling in negative territory at their worst marks of the day.
The Dow Jones Industrial Average slipped 0.1%, but settled ahead of the other major indices as the price-weighted average's most influential component--Boeing (BA 348.12, +7.21)--jumped 2.1%.
The aerospace giant was helped by news from Washington, where Senate Majority Leader Mitch McConnell (R-KY) and Senate Minority Leader Chuck Schumer (D-NY) have agreed to a budget deal that would lift spending caps and raise defense and non-defense spending by approximately $160 billion and $130 billion, respectively, over the next two years.
However, it's unclear if the bill has enough support to pass in the House, where the House Freedom Caucus might protest the spending increase, forcing Republicans to lean on Democratic support. House Minority Leader Nancy Pelosi (D-CA) has vowed to oppose a spending deal unless she is guaranteed a vote on immigration.
The S&P 500 lost 0.5% on Wednesday, with just three of its eleven sectors settling in the green--industrials (+0.3%), financials (+0.2%), and telecom services (+0.3%). The consumer discretionary sector (-0.3%) finished in the red, but outpaced the the broader market, with Hasbro (HAS 102.22, +8.29) setting the pace; the toymaker spiked 8.8% to a six-month high after reporting better-than-expected earnings for the fourth quarter.
In other earnings news, Snap (SNAP 20.75, +6.69) surged 47.6%, hitting an eight-month high, after reporting better-than-expected earnings, revenues, and daily active users (DAUs). Conversely, Walt Disney (DIS 104.76, -1.41) dropped 1.3% despite beating profit estimates, and Chipotle Mexican Grill (CMG 272.21, -32.12) tumbled 10.6% after its quarterly results showed a decline in customers--likely due to multiple instances of food poisoning over the last couple of years.
In other corporate news, Wynn Resorts (WYNN 177.32, +14.10) rallied 8.6% after Steve Wynn resigned from his position as CEO following reports of sexual misconduct.
At the opposite end of the sector standings, the top-weighted technology sector (-1.4%) struggled on Wednesday, with heavyweights like Apple (AAPL 159.54, -3.49), Microsoft (MSFT 89.61, -1.72), Facebook (FB 180.18, -5.13), and Alphabet (GOOGL 1055.41, -29.02) losing between 1.9% and 2.8%. Chipmakers also weighed on the tech sector, sending the Philadelphia Semiconductor Index lower by 2.2%.
Unsurprisingly, the tech-heavy Nasdaq was the weakest of the three major indices, settling with a loss of 0.9%.
The only sector to finish behind technology was the energy group, which lost 1.7% as crude oil tumbled for the fourth session in a row; West Texas Intermediate crude futures dropped 2.5% to $61.80 per barrel, hitting a one-month low. The commodity suffered amid a strengthening U.S. dollar--the U.S. Dollar Index increased 0.8% to 90.23--and following the government's weekly crude inventory report, which showed that U.S. crude stockpiles increased 1.9 million barrels last week.
In the bond market, U.S. Treasuries were under heavy pressure, pushing the benchmark 10-yr yield highePublic Replyr by seven basis to 2.84%; the 10-yr yield now trades just one basis point below the three-year high it hit last Friday. Meanwhile, the 2-yr yield also climbed on Wednesday, jumping four basis points to 2.13%.
Trading was volatile once again today, with the S&P 500 fluctuating between 2681.66 (-0.5%) and 2727.67 (+1.2%)--a 46-point range.
Reviewing Wednesday's economic data, which was limited to December Consumer Credit and the weekly MBA Mortgage Applications Index:
The Consumer Credit report for December showed an increase of $18.4 billion (Briefing.com consensus $20.0 billion). November credit growth was revised to $31.0 billion from $28.0 billion.
The weekly MBA Mortgage Applications Index increased 0.7% to follow last week's 2.6% decline.
On Thursday, investors will receive the weekly Initial Claims report (Briefing.com consensus 234K) at 8:30 AM ET.
Nasdaq Composite: +2.2% YTD
Dow Jones Industrial Average: +0.7% YTD
S&P 500: +0.3% YTD
Russell 2000: -1.8% YTD
Another Roller Coaster Ride, But Different Result
06-Feb-18 16:30 ET
Dow +567.02 at 24912.77, Nasdaq +148.36 at 7115.88, S&P +46.20 at 2695.14
https://www.briefing.com/investor/markets/stock-market-update/2018/2/6/another-roller-coaster-ride-but-different-result.htm
[BRIEFING.COM] Stocks went on another roller coaster ride on Tuesday, but, unlike Monday, this ride left the major indices solidly higher.
The Dow Jones Industrial Average jumped 2.3%, the Nasdaq Composite climbed 2.1%, and the S&P 500 advanced 1.7%, ending near the top of their trading ranges, which were quite large; at its worst mark of the day, the S&P 500 was down 2.1% and, at its best, held a gain of 2.0%. The market was very volatile, weathering several sharp reversals.
Tuesday's advance put a sizable dent in Monday's decline, but the major averages are still solidly lower for the week, showing losses between 1.7% and 2.4%.
Nine of eleven sectors finished in positive territory, with cyclical groups setting the pace--a possible sign that investors are shifting their focus back to the fundamentals, including an upbeat economic growth outlook that is expected to translate into impressive earnings growth.
The top-weighted technology space (+2.8%) showed particular strength. Within the group, chipmakers were strong, evidenced by the 3.7% increase in the Philadelphia Semiconductor Index, after Micron (MU 43.88, +4.48) raised its profit and sales guidance for the current quarter; MU shares jumped 11.4%. Heavyweights like Apple (AAPL 163.03, +6.54), Microsoft (MSFT 91.33, +3.33), Facebook (FB 185.31, +4.05), and Alphabet (GOOGL 1084.43, +22.04) also had solid showings, adding between 2.1% and 4.2%.
General Motors (GM 41.86, +2.32) led the consumer discretionary sector (+2.5%) higher, climbing 5.9%, after reporting better-than-expected earnings for the fourth quarter and reaffirming its guidance for fiscal year 2018. The group's largest component by market cap--Amazon (AMZN 1442.84, +52.84)--also outperformed, adding 3.8%.
The materials sector (+2.8%) also had a solid day, with DowDuPont (DWDP 71.89, +4.05) rallying 6.0%.
On the downside, the rate-sensitive utilities (-1.5%) and real estate (-0.2%) sectors declined on Tuesday as Treasury yields bounced back from their overnight lows. Yields still settled mostly lower though, with the benchmark 10-yr yield slipping two basis points to 2.77%. The 10-yr yield was down as much as 14 basis points overnight.
Meanwhile, the CBOE Volatility Index (VIX 30.14, -7.18), often referred to as the "investor fear gauge," dropped 19.2% after surging more than 100% on Monday.
Elsewhere, equity indices in the Asia-Pacific region finished Tuesday lower, with Japan's Nikkei, Hong Kong's Hang Seng, and China's Shanghai Composite losing between 3.4% and 5.1%, as did the major European bourses; Germany's DAX, the UK's FTSE, and France's CAC lost between 2.2% and 2.8%.
In Washington, Politico reported that the Senate is nearing an agreement on a two-year spending deal that would increase spending levels for both domestic and defense programs. Congressional leaders are expected to stick said budget deal into a funding bill that the House plans to vote on tonight and get lawmakers to pass the combined measure before funding runs out at midnight on Thursday.
It's worth noting that these bills don't address immigration. Lawmakers expect to begin working on immigration after getting past the upcoming spending deadline.
Reviewing Tuesday's economic data, which included the December Trade Balance and the December Job Openings and Labor Turnover Survey:
The December trade balance showed a deficit of $53.1 billion (Briefing.com consensus -$52.3 billion). The November deficit was revised to $50.4 billion from $50.5 billion.
The December trade deficit was the largest since October 2008 and it revealed increased trade deficits with the European Union and China. The key takeaway from the report, then, is that it is apt to feed concerns about protectionist trade policies being adopted in an attempt to narrow those trade deficits.
The December Job Openings and Labor Turnover Survey showed that job openings decreased to 5.811 million from a revised 5.978 million (from 5.879 million) in November.
On Wednesday, the weekly MBA Mortgage Applications Index and December Consumer Credit (Briefing.com consensus $20.0 billion) will be released at 7:00 AM ET and 3:00 PM ET, respectively.
Nasdaq Composite: +3.1% YTD
S&P 500: +0.8% YTD
Dow Jones Industrial Average: +0.8% YTD
Russell 2000: -1.9% YTD
Stock Market Tanks; S&P 500 Negative for the Year
05-Feb-18 16:25 ET
Dow -1175.21 at 24345.75, Nasdaq -273.42 at 6967.52, S&P -113.19 at 2648.94
https://www.briefing.com/investor/markets/stock-market-update/2018/2/5/stock-market-tanks-s-and-p-500-negative-for-the-year.htm
[BRIEFING.COM] It was a frenetic day of trading action on Wall Street. At one point, the price-weighted Dow Jones Industrial Average plunged 1,597 points, or 6.3%, which was its largest intraday point loss in history. The selling wasn't as pronounced in the S&P 500 and Nasdaq Composite , but it was significant nonetheless as those two major averages dropped as much as 4.5% and 3.7%, respectively, at their worst levels of the day.
There was a closing rebound try that made things look better on a closing basis, but that's not saying things looked good at the close. The Dow Jones Industrial Average ended the day down 4.6%, while the S&P 500 lost 4.1%, and the Nasdaq Composite fell 3.8%.
The reasonable question on everyone's mind is: why?
It is a question that won't have a truly satisfying answer, because there wasn't a clear-cut fundamental reason that was responsible for the scope of today's selling interest.
The concern that the stock market is overvalued has some application to Monday's selling effort, yet the thrust of the sell-off was mostly technical, mechanical, and psychological in nature.
The price action got things going.
There were some decent-sized losses at the start of trading on follow-through selling from Friday's broad-based retreat, yet the major indices all snapped back quickly.
The Nasdaq Composite, for instance, rallied 111 points off its opening low. That rebound effort, however, lost steam and when the Nasdaq's opening low was challenged later in the session, and failed to hold, sellers stepped up their activity. The same dynamic played out for the other major indices.
The selling efforts then intensified when the S&P 500 broke through technical support at its 50-day simple moving average (2717). The Dow Jones Industrial violated its 50-day simple moving average as well, which led to additional selling interest that got compounded as stop-loss orders got triggered and investor fear spiked on the rapidity of the selling activity.
The CBOE Volatility Index soared more than 100% today (38.80, +21.64, +126.1%). The spike in the VIX Index, which is euphemistically referred to as the market's fear gauge, reflected a rush to protect portfolios against further losses in the near term.
There was a related flight-to-safety into the Treasury market, which had been little changed for a good part of the day before catching a healthy bid that saw the yield on the 10-year note drop 12 basis points to 2.73%.
The S&P 500, which had been up 7.5% for the year as recently as January 26, has now surrendered the entirety of that gain, losing most of that ground over the last two trading sessions.
Every sector finished deep in red figures. The scope of the losses was reflected in the fact that the utilities sector (-1.7%) was today's relative strength leader.
The financial sector (-5.0%) suffered the largest pullback, feeling the added weight of losses in Wells Fargo (WFC 58.16, -5.91, -9.2%), which received a supervisory order from the Federal Reserve saying the bank cannot grow any larger than its total asset size as of the end of 2017 until the Federal Reserve has concluded Wells Fargo has sufficiently improved its governance and controls.
The range of losses for the remaining sectors was 2.7% to 4.6%.
As one might expect on a day like today, down volume swamped up volume at the NYSE by a roughly 12-to-1 margin. Declining issues, meanwhile, swamped advancing issues by a nearly 9-to-1 margin; and trading volume overall was very heavy with 1.32 billion shares changing hands.
The lone economic release today was the ISM Non-Manufacturing PMI Report for January. It was stronger than expected, checking in at 59.9 (Briefing.com consensus 56.7) versus an upwardly revised reading of 56.0 (from 55.9) for December. The January reading was the highest reading for the index since August 2005.
The Trade Balance Report for December (Briefing.com consensus -$52.3 bln) highlights the economic calendar on Tuesday.
Nasdaq Composite: +0.9% YTD
S&P 500: -0.9% YTD
Dow Jones Industrial Average: -1.4% YTD
S&P Midcap 400 Index: -2.7% YTD
Russell 2000: -2.9% YTD
InvestmentHouse - A Further Selloff Would be Best (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
- Dow posts a devilish 666 point drop as sellers hit the market like demons.
- Dow's 600+ loss is only the sixth in history over 600.
- Jobs report takes a back seat to the current market mood.
- Wells Fargo gets an afterhours rebuke and a lid on new assets gratis the
Fed
- Market is dealing with Yellen gone: barely out the door and Kaplin is
talking tough. Market is not used to that.
- A further selloff would be best before a rebound attempt.
- The various scenarios from here.
- Don't get too eager to move back in for more than short term plays. If
they turn into long term plays, that is okay. Unlikely, but okay.
The upside typically comes slow and steady. The downside starts quietly and
can disguise itself as just part of the same trend higher. The trend
remains solid, albeit quite extended. Distribution sessions start popping
up, but the trend holds. Sentiment hits extremes; this time it was record
bullishness and bearishness at 30 year lows. Then stocks start giving up
breakouts. Airlines, big biotechs broke out then reversed hard. AAPL broke
out in mid-January but then fizzled. But the big names still soldiered on.
Indeed, Thursday I noted that NASDAQ and SOX still held very well in good
patterns and if the market wanted again to shake off the issues it could do
so. It didn't.
Stocks started lower as futures gapped downside, dropped at the open, failed
a 45 minute bounce attempt after a half hour of trade. Then it was a steady
downtrend all session, exacerbated by the Fed's Kaplan who devilishly kicked
the market while it was down, saying if the Fed waits for inflation it will
be too late, that the tax cuts could cause an over-leveraged condition, and
that 3 hikes in 2018 was the base case, that there could be more. That set
the market into an afternoon panic that ended with the Dow down 666. Could
get worse on Monday; afterhours as Yellen's last official move, the Fed
placed Wells Fargo on restriction, saying WFC cannot add assets until it
replaces four board members and puts in place the protocols necessary to
preclude further malfeasance. Slap on the wrist, really; some people should
go to jail. Anyway, I am not sure if that will help the market in the
current climate where any reason is a good one to sell.
SP500 -59.85, -2.12%
NASDAQ -144.91, -1.96%
DJ30 -665.75, -2.54%
SP400 -2.02%
RUTX -2.06
SOX -2.74%
NASDAQ 100 -2.05%
VOLUME: Volume bounced on NYSE (12%) to farther above average, but it was
lower than Wednesday trade. NASDAQ volume (+13%) spiked to the highest
since mid-December. Lots of downside volume.
ADVANCE/DECLINE: NYSE -8.5:1, NASDAQ -5.2:1. That is extreme breadth. On
the NYSE open it was -10:1. Yes, extreme, and extremes indicate levels that
can cause things to head the other way. It will take more than just this,
however.
Ominous? Closes such as Friday can lead to really hellish Mondays and
Tuesdays. If that is the case, that probably sets a near term relief move,
but likely not the end of the selling. A lot depends upon how much damage
is done to leadership patterns, i.e. if they are in position to recover or
were just broken up. Well, actually, a reflex or relief bounce doesn't
care. It can jump up stocks in patterns as well as stocks that were broken.
It is the sustainability of the relief move that the patterns impact. If
there are no real leadership patterns, the move will fail. You can play a
reflex move of broken patterns upside and make some money, but as soon as it
looks to be stalling it is best to take the profits and see what happens
next. Without good leadership patterns, the relief rally will typically
fail.
In the big picture this is kind of what you had to expect, though the
reality is always rather harsh. This is something like only the sixth time
in history the Dow has dropped more than 600 points on a close. Elite
company. But then again, the move upside was an elite move.
The overall question everyone is asking is when do you buy in. That depends
on when this selling round lets off enough pressure. It also depends upon
what type of buying you want. If you are looking to buy positions with the
intent of holding for steady gains as seen of late, you have to have the
good patterns to lead the market higher again and hold up on the test of the
rebound. If you don't have those patterns, likely you won't be happy unless
you morph your plan of action into playing the surges and selling out when
they start to slow. Indeed, until the market shows it can hold a rebound
after a test and continue higher, it is wise to treat all rallies as simple
relief moves that will surge, rather violently at times. Once the market
has the leadership and holds a test, that is a different story. That is
also potentially a long way off.
So, this weekend you sift through the selloff, find what stocks held the
line and look decent. Then you see if they hold up during further selling
Monday and Tuesday. If there is further selling and they hold up, you have
some great candidates to play upside -- along with the usual favorites that
people pile into when they think the buying light is on when it really is
not.
You then play a bounce, take what you can until the bounce starts to
stumble, then get out. Then you look to play downside with stocks that
rebounded but ran into resistance such as the 50 day MA, prior lows, etc.
Also some of the index plays and ETF's are not bad, e.g. SDS, QID. The next
drop is likely rather violent as well.
After that drop, you see the relief move again and then note where the
rebound stalls. If at the 10 day EMA, that is the making of a strong
downtrend. If that occurs you start shifting your mindset from buying for
long term holds to selling the rallies back up to near resistance, playing
the drops lower as that becomes the trend.
Just look at SDS as an example. It trended lower and lower below the 10 and
20 day EMA. The play would be to sell it (or buy puts against it) each time
it touched the 10/20 day EMA and threw a doji. It is the reverse of playing
a strong trend upside such as the DJ30.
If there is no more selling come Monday, the move is really suspect and
certainly any bounce would be treated as relief. There will be, however,
good patterns because as of Friday, even after the trip-sixes, there are
good normal pullbacks. You always fear the head fake if stocks start higher
versus sell more then reverse. That is a tough place to play for sure. You
can do some sample buys with some quality patterns and stocks, but this is
considered even more of reflex type bounce. May not be, but it is very
difficult to ascertain in its early stages.
Either way, i.e. more early week selling or none, the big test for the
indices comes at the 50 day MA's and certain retracement levels. They will
try to find support there. They can be the bounce points for the relief
moves. HOW the indices and stocks react upside off of these, and then how
that move holds tells a big part of the tale as outlined above.
So for now it is a matter of watching for potential bounce points, watching
stocks and indices as they approach those and see what looks as if it is in
position to make a good bounce. Then play the bounce and see how it plays
out so to speak. Strong volume, good breadth or weaker trade and narrow
breadth? The former is upside positive, the latter more bearish and
suggests the move fails once the pressure is released. Once you gauge the
rebound, then you set up for the next move whether upside or downside. That
is something no one knows for now, though my experience would suggest the
relief bounce off this selling fails and the market goes down more. When
the relief move fails, that is when you start loading up on the downside for
the first time as outlined above.
NEWS/ECONOMY
Most of the news was what you would expect in an improving economy.
Jobs Report, January
Jobs were better than expected at 200K. Wages improved 0.3% month/month and
2.9% year/year. Interestingly, the workweek dropped a lot, down to 34.3
from 34.5. Ah the 'bomb cyclone' or whatever it was in January did serious
damage to the number of hours worked across the entire nation. I can attest
to that; it was hard to get anyone to go anywhere.
Factory Orders, December: 1.7% versus 1.3% expected versus 1.7% prior (from
1.3%)
Good news with final December durable goods orders at 2.8%.
But . . . business investment missed big: -0.6% versus -0.3% in November.
This was the fastest drop since September 2016. Business investment should
start ramping up, and with the promised investment post-tax reform it will.
At some point. At some amount.
THE MARKET
CHARTS
What do you say about these? Breaks of support for certain, and now you
start looking at potential bounce points. It is a game of patience on this
first selloff to see where it bottoms, being ready at each point with plays
to participate in the move.
NASDAQ: Was in a decent test along the 20 day EMA but broke down through
the 20 day on the close. Of course volume ballooned to the highest since
the December expiration. Logical support at 7100 to 7068, then the December
peak at 6995. Bare minimums for the selloff I would think, but for now
those are just levels to watch for a hold and bounce. A rip below the 20
day EMA Friday and want to go ahead and get the trip to the 50 day MA or
December peak out of the way on this move. That will be a good scare-off
selloff.
SOX: Gapped below the 20 day EMA and fell close to the 50 day EMA BY THE
CLOSE. Below the November high, and the first January high. From a pretty
decent consolidation to back to the drawing board to try to set up a new
upside pattern.
DJ30: Definitive break lower, only the sixth ever 600+ point loss on the
Dow. Heading to the 50 day MA (25,000) to the December consolidation at
24,860 as a logical first stopping point.
SP500: Similar to DJ30, SP500 crashed the 20 day EMA in a big way. Higher
volume; oh, sellers were in the majority. Surprise. The 50 day MA looks
logical at 2725 on the high end, 2685 from the December lateral
consolidation.
RUTX: Small caps were down harder than the large cap indices before Friday,
and Friday they were actually better than DJ30, SP500 in terms of percentage
losses. As if that matters; over 2% and that is big regardless. Already
breaking below the 50 day MA's, now right at the late November high and
December consolidation. Below that, 1515. Closed at 1547.
SP400: Cracked below the 50 day MA and closing in on the November high and
December consolidation -- just as the other indices. Those look like
logical support points.
LEADERSHIP
Somewhat of an oxymoron in this market, but there are stocks that are
holding well. The question is if they can continue doing so if there is a
sharp early week plunge.
BA: Of course it is strong, just a modest test to the 10 day EMA.
FAANG: AMZN of course, NFLX holding the 10 day EMA in a nice test. FB also
solid.
Chips: NVDA testing the 20 day EMA on high volume. Nice breakout and
initial rally, good initial test. One to watch for certain. MSCC holding
up well in a test. A lot of other chips are problematic.
Machinery/Manufacturing: CAT testing the 50 day MA. DE looks like it goes
lower but a downside play may be kind of tight. TEX already doing so. UTX
looks ready to roll lower. HON almost at the 50 day MA already after its
breakout and reversal. MMM testing still.
Oil: Some major bombs. CVX, XOM. CRZO to the 200 day SMA. Others not bad,
e.g. APC. MRO testing the 50 day EMA. HAL cracking the 20 day toward the
50 day.
Financial: Tough session with C off 2.75% and heading to the 50 day. BAC
is not bad. GS is selling hard to the 50 day MA.
Biotech/Drugs: BIIB, AMGN, GILD down hard on the week, but they are also
already showing signs they want to possibly hold. This could be a fertile
area this week if the market hits bottom at the targets indicated earlier.
Retail: Starting to break lower in some cases (TLRD; AAP). BBY not in bad
shape. TGT breaking the 20 day EMA, but WMT holding it nicely in its
pullback.
Metals: Sold but some are in good tests. STLD at the 50 day. SCHN at the
50 day MA. FCX dropped to the 50 day EMA in one move.
MARKET STATS
DJ30
Stats: -665.75 points (-2.54%) to close at 25520.96
Nasdaq
Stats: -144.92 points (-1.96%) to close at 7240.95
Volume: 2.6B (+13.04%)
Up Volume: 550.38M (-459.62M)
Down Volume: 1.99B (+760M)
A/D and Hi/Lo: Decliners led 5.16 to 1
Previous Session: Advancers led 1.01 to 1
New Highs: 65 (-24)
New Lows: 161 (+73)
S&P
Stats: -59.85 points (-2.12%) to close at 2762.13
NYSE Volume: 1B (+12.55%)
A/D and Hi/Lo: Decliners led 8.47 to 1
Previous Session: Decliners led 1.26 to 1
New Highs: 46 (-42)
New Lows: 338 (+207)
SENTIMENT INDICATORS
VIX: 17.31; +3.84. Exploding higher 28.5%. As it should. It did not
surge during the upside so this is not indicating a major top.
VXN: 20.66; +1.51
VXO: 16.82; +3.38
Put/Call Ratio (CBOE): 0.90; -0.01
Bulls and Bears: Bulls bounced right back upside, just below the cycle high
67.0. Bears fell to cycle lows at 12.6, still hanging around 30 year lows.
Bulls: 66.00 versus 64.7
Bears: 12.6 versus 12.8
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: 66.00 versus 64.7
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 versus 56.7
versus 53.4 versus 57.7 versus 63.1 versus 61.2 versus 61.8 versus 62.7
versus 61.8 versus 58.2 versus 60.6 versus 58.6 versus 60.2 versus 59.8
versus 59.8 versus 59.6 versus 58.8 versus 56.3 versus 55.6 versus 51.0
versus 42.9 versus 41.7 versus 47.1 versus 42.9
Bears: 12.6 versus 12.8
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
versus 19.1 versus 19.1 versus 18.3 versus 18.1 versus 17.0 versus 16.2
versus 16.5 versus 16.7 versus 18.6 versus 18.8 versus 18.6 versus 18.3
versus 19.2 versus 18.3 versus 17.1 versus 17.3 versus 17.9 versus 17.9
versus 18.3 versus 17.5 versus 18.3 versus 18.1 versus 17.3 versus 13.75
versus 17.3 versus 16.5 versus 17.5 versus 17.6 versus 16.7 versus 17.6
versus 17.5 versus 17.3 versus 18.3 versus 18.4 versus 19.6 versus 19.6
versus 19.2 versus 19.6 versus 22.3 versus 21.6 versus 23.5 versus 25.7
versus 24.3 versus 23.1 versus 23.8 versus 23.1 versus 22.8 versus 23.1
versus 24.3
OTHER MARKETS
Bonds: 2.841% versus 2.792%. Impressive dive lower by bonds and spike
higher in yields. Kaplan says 3 rate hikes are the starting point in 2018,
not a max. Higher yields are not a bad thing in a growing economy.
Historical: the last sub-2% rate was in November 2016 (1.867%). 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: 1.24573 versus 1.2502. Dollar a bit stronger Friday, but the euro
is still in a trend up the 10 day EMA.
Historical: 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 versus 1.17652 versus 1.1764 versus 1.17754 versus 1.17990
versus 1.18276 versus 1.18727 versus 1.18983 versus 1.18976 versus 1.18529
versus 1.18489 versus 1.1899 versus 1.19329 versus 1.18148 versus 1.17402
versus 1.1791 versus 1.1787 versus 1.1786 versus 1.1799 versus 1.16443
versus 1.16646 versus 1.16439 versus 1.15871
USD/JPY: 110.174 versus 109.46. Continues the rally this week. Moved the
dollar off the bottom of the 10 month range.
Historical: 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
versus 110.834 versus 111.036 versus 111.290 versus 110.357 versus 111.024
versus 111.204 versus 111.534 versus 112.706 versus 113.15 versus 113.58
versus 112.749 versus 112.677 versus 112.27 versus 112.690 versus 112.758
versus 113.216 versus 113.208 versus 113.304 versus 113.363 versus 113.334
versus 112.870 versus 112.625 versus 112.619 versus 112.298 versus 112.639
versus 113.555 versus 113.476 versus 113.48 versus 113.473 versus 112.473
versus 112.554 versus 112.442 versus 112.190 versus 112.55 versus 112.102
versus 111.583 versus 111.244
Oil: 65.45, -0.35. Oil holding the gains but not going anywhere the past
week as the dollar firmed -- just a bit.
Gold: 1337.30, -10.60. Gold dropped to the 20 day EMA after gapping
upside. Still trending higher since December, but found the going tougher
last week.
SUPPORT AND RESISTANCE
NASDAQ: Closed at 7420.95
Resistance:
The 10 day EMA in 7363
7506 is the January 2018 all-time high
7300 from a modest mid-January consolidation
Support:
The 20 day EMA at 7301
The 50 day EMA at 7108
7,000 from mid-December
6914 is the late November all-time high
6796 is the early November 2017
The 2016 trendline at 6737
6641 is the October high
The 200 day SMA at 6533
6477 is the September intraday high
6461 is the July 2017 prior all-time high
6450 is the early September high
6341.70 is the all-time high from early June.
6300 is the mid-June interim high
6205 is the late May all-time high
5996 is the recent May 2017 low
5937 is the all-time high from April
5915 is the tops of the March to April 2017 range
5910 is the lower gap point from mid-April
5800 from the February consolidation lows
S&P 500: Closed at 2762.13
Resistance:
2808 from the mid-January consolidation. Some support, not that strong.
The 20 day EMA at 2782
2850 from a January 2018 gap point
2873 is the January all-time high
Support:
2751 from early January 2018
The 50 day EMA at 2728
2694 is the mid-December peak
2597 is the November 2017 high
2569 is the upper channel line from the March 2009 uptrend channel
The 200 day SMA at 2532
2491 is the August all-time high
2480 the late August and early August highs
2453.46 is the June prior all-time closing high
2409 is the July 2017 closing low
2406 is the all-time high from May 2017
2401 is the March 2017 all-time high
2352 is the May 2017 low
Dow: Closed at 25,520.96
Resistance:
The 20 day EMA at 25,858
26,439 is a gap point from the January high
January 2018 all-time high 26,617
Support:
26,000 from mid-January consolidation
The 20 day EMA at 25,740
The 50 day EMA at 25,130
24,835 is the mid-December consolidation range
24,312
23,602 is the early November 2017 high
23,608 is the early November high
The 200 day SMA at 22,703
22,420 is the September high
22,179 is the August 2017 all-time high
22,086 is the mid-August lower high
21,681is the July prior all-time high
21,638 is the July 2017 closing high
21,529 is the June 2017 high
End part 1 of 3
Wall Street Gives Back Good Chunk of Yearly Advance
02-Feb-18 16:30 ET
Dow -665.75 at 25520.96, Nasdaq -144.92 at 7240.94, S&P -59.85 at 2762.13
https://www.briefing.com/investor/markets/stock-market-update/2018/2/2/wall-street-gives-back-good-chunk-of-yearly-advance.htm
[BRIEFING.COM] The sky fell on Friday. Just kidding. The stock market just had a bad day--which has kind of felt as impossible as the prospect of a falling sky since the start of the year.
The Dow Jones Industrial Average tumbled 2.5%, and the S&P 500 and the Nasdaq Composite lost 2.1% and 2.0%, respectively, but the three major indices still hold year-to-date gains between 3.2% and 4.9%. Equities opened Friday with sizable losses and extended those losses throughout the session, finishing at session lows.
Declining issues outnumbered advancing issues 9 to 1 at the New York Stock Exchange. In terms of S&P 500 sectors, 11 of 11 finished in negative territory, with the energy space (-4.1%) pacing the retreat following fourth quarter earnings from Chevron (CVX 118.58, -6.99) and Exxon Mobil (XOM 84.53, -4.54). Both companies missed revenues estimates; Exxon missed profit estimates as well. In addition, a decline in the price of crude oil also weighed on the sector; West Texas Intermediate crude futures slid 0.8% to $65.30 per barrel.
The top-weighted technology sector (-3.0%) also had a rough outing, with Apple (AAPL 160.37, -7.41), Alphabet (GOOGL 1119.20, -62.39), and Visa (V 120.91, -4.81) losing between 3.8% and 5.3% after releasing their Q4 results. Apple and Visa beat earnings estimates, but Alphabet came up short despite reporting better-than-expected revenues. Apple's iPhone sales were disappointing, and the company lowered its sales forecast for the first quarter.
Dow component Merck (MRK 58.56, -1.30) also reported Q4 results, beating bottom-line estimates, but slid 2.2% nonetheless.
On a positive note, Amazon (AMZN 1429.95, +39.95) jumped 2.9%, touching a new intraday record, after soundly beating earnings estimates for the fourth quarter, thanks in large part to changes in the U.S. tax code. The consumer discretionary sector (-0.9%), which houses Amazon, was among the top-performing groups.
Investors received the Employment Situation report for January on Friday morning. Job growth was solid again with the addition of 220,000 nonfarm payrolls (Briefing.com consensus +180,000), but the focal point was the 0.3% jump in average hourly earnings. That was in-line with the Briefing.com consensus estimate, but after taking revisions into account, it left average hourly earnings up 2.9% year over year--the highest growth rate since May 2009.
There has been a burgeoning assumption that the strengthening economy and the tight labor market are going to invite higher wages and wage-based inflation pressures that have been dormant for years. The key takeaway, then, is that the January report has given some data-based life to that assumption and has offered a reasonable basis for the Federal Reserve to move ahead with a rate hike at its March meeting.
U.S. Treasuries were weak ahead of the jobs report release, but selling accelerated in the aftermath, pushing yields to multi-year highs; the benchmark 10-yr yield climbed another eight basis points--extending its weekly gain to 19 basis points--to finish at 2.85%, which is its highest level since January 2014. Shorter-dated issues showed relative strength, however, with the 2-yr yield slipping two basis points to 2.14%. Yields move inversely to prices.
In Washington, President Trump authorized the release of a House Intelligence Committee memo that alleges there was an anti-Trump bias at both the FBI and the Justice Department in investigative matters pertaining to Russia's meddling in the 2016 presidential election. The release received some credit for accelerating Friday's sell off given that it creates some political uncertainty in front of next week's spending deadline; Congress will have to pass a new spending resolution by February 8 to avoid another government shutdown.
It's also worth pointing out that the CBOE Volatility Index, often referred to as the "investor fear gauge," spiked about four points, or 29.0%, on Friday to 17.40--its highest level since the U.S. presidential election on November 8, 2016.
Reviewing Friday's batch of economic data, which included the Employment Situation report for January, the final reading of the University of Michigan Consumer Sentiment Index for January, and Factory Orders for December:
Employment Situation
January nonfarm payrolls increased by 200,000 while the Briefing.com consensus expected an increase of 180,000. The prior month's increase was revised to 160,000 from 148,000. Nonfarm private payrolls rose by 196,000 while the Briefing.com consensus expected an increase of 175,000. The previous month's increase was revised to 166,000 from 146,000.
The unemployment rate stayed at 4.1%, as expected.
Average hourly earnings increased by 0.3% (Briefing.com consensus +0.3%), while the previous month's increase was revised to 0.4% from 0.3%.
The average workweek was reported at 34.3 (Briefing.com consensus 34.5). The previous month's reading was left unrevised at 34.5.
Michigan Consumer Sentiment
The final reading of the University of Michigan Consumer Sentiment Index for January rose to 95.7 (Briefing.com consensus 95.0) from 94.4 in the preliminary reading.
Factory Orders
The Factory Orders Report for December showed an increase of 1.7% (Briefing.com consensus 1.3%), while the November reading was revised to +1.7% from +1.3%.
On Monday, investors will receive the ISM Services Index for January at 10:00 AM ET.
Nasdaq Composite: +4.9% YTD
S&P 500: +3.3% YTD
Dow Jones Industrial Average: +3.2% YTD
Russell 2000: +0.8% YTD
Week In Review: Pulling Back
Stocks tumbled this week, denting their impressive 2018 gains; the Dow Jones Industrial Average dropped 4.1%, the S&P 500 slid 3.9%, and the Nasdaq lost 3.5%.
While investors had a lot of news to digest, including President Trump's first State of the Union address, a tech-heavy batch of fourth quarter earnings, and the Employment Situation report for January, the selling was more so a natural response to a market that's moved too far too fast--although, a spike in Treasury yields did help strengthen a case for the bears.
Technology names dominated this week's batch of earnings, with Apple (AAPL), Microsoft (MSFT), Facebook (FB), and Alphabet (GOOGL) reporting their fourth quarter results, which were mostly better-than-expected. However, the companies' shares settled the week mostly lower; MSFT, GOOGL, and AAPL shares lost 2.4%, 5.8%, and 6.4% for the week, respectively, while FB shares advanced 0.2%, touching a new all-time high.
Apple reported above-consensus earnings on in-line revenues, but iPhone sales for the holiday season came in weaker than expected, and the company lowered its sales forecast for the first three months of 2018. Meanwhile, Facebook beat earnings and revenue estimates and reassured investors that its ad business would remain highly profitable despite changes to its news feed, which have prompted users to spend less time on the site--about 50 million hours less per day (in aggregate).
As for the others, Microsoft reported above-consensus earnings and revenues on the back of its rapidly-growing cloud computing business, while Alphabet, the parent company of Google, missed earnings estimates--despite beating revenue forecasts--largely due to rising costs.
Outside the technology space, Amazon (AMZN) and Boeing (BA) also reported their quarterly results this week. Amazon ended with a weekly gain of 2.0% after blowing past earnings estimates--thanks in part to changes in the U.S. tax code--while Boeing jumped 1.7% after also soundly beating earnings estimates, beating revenue estimates, and issuing much better-than-expected guidance for fiscal year 2018.
In other corporate news, the health care sector struggled this week, losing 5.1%, after Amazon (AMZN), Berkshire Hathaway (BRK.A), and JPMorgan Chase (JPM) announced on Tuesday that they will be partnering to form a company focused on reducing health care costs for hundreds of thousands of their U.S. employees.
In Washington, President Trump delivered his first State of the Union address on Tuesday evening. The president stayed on script, calling for a $1.5 trillion infrastructure plan and a compromise on immigration that would allow a path to citizenship for "Dreamers" in exchange for his promised barrier along the Mexico border and added border security. Mr. Trump also noted that lowering prescription drug prices is a top priority of his administration and took a firm, but relatively calm, stance against North Korea.
Meanwhile, Fed Chair Janet Yellen wrapped up her time at the Federal Reserve on a rather uneventful note as the Federal Open Market Committee unanimously voted on Wednesday to leave the fed funds target range unchanged at 1.25%-1.50%, as expected. In its statement, the central bank said near-term risks to the economic outlook appear roughly balanced, but added that officials are keeping an eye on inflation, which has been slow to pick up despite a tightening of the labor market.
The policy directive did little to change the market's rate-hike expectations; the CME FedWatch Tool still points to the March FOMC meeting as the most likely time for the next rate-hike announcement, with an implied probability of 77.5% (up from 74.7% last week), and calls for an additional two hikes before the end of the year.
On the data front, investors received the Employment Situation report for January on Friday: Nonfarm payrolls came in better-than-expected (+200,000 actual vs +180,000 Briefing.com consensus), average hourly earnings hit estimates (+0.3% MoM), and the unemployment rate stayed at 4.1% as expected. U.S. Treasuries were lower for the week ahead of the report's release, but extend their losses in the aftermath, sending yields to multi-year highs.
The yield on the benchmark 10-yr Treasury note spiked 19 basis points to 2.85% this week, its best level since January 2014, while the 2-yr yield climbed two basis points to 2.14%, its best level in nearly a decade--dating back to the financial crisis. The recent rise in Treasury yields--the 10-yr yield has climbed 50 basis points in seven weeks--is seen by some as a positive sign for economic growth, but it could also be a headwind for equities, which are trading at very high valuations.
Wall Street Settles Mixed As Yields Rise
01-Feb-18 16:30 ET
Dow +37.32 at 26186.71, Nasdaq -25.62 at 7385.86, S&P -1.83 at 2821.98
https://www.briefing.com/investor/markets/stock-market-update/2018/2/1/wall-street-settles-mixed-as-yields-rise.htm
[BRIEFING.COM] U.S. equities had a mixed outing on Thursday as investors watched yields rise to multi-year highs, digested a tech-heavy batch of fourth quarter earnings, and looked ahead to Friday's release of the Employment Situation report for January. After opening lower, the market struggled for direction, rotating between modest gains and losses.
At its best mark of the day, the S&P 500 was up 0.4% and, at its worst, was down 0.4%. The benchmark index ended just a tick lower, losing 0.1%, while the Dow Jones Industrial Average advanced 0.1% and the Nasdaq Composite shed 0.4%. Small caps outperformed, pushing the Russell 2000 higher by 0.3%.
Equities soared through the first four weeks of 2018, hitting record after record, but investors have decided to pull back this week. The major averages hold week-to-date losses between 1.6% and 1.8% going into Friday's session, but still hold year-to-date gains between 5.6% and 7.0%.
The most recent batch of Q4 earnings included technology heavyweights Microsoft (MSFT 94.26, -0.75) and Facebook (FB 193.09, +6.20), less influential tech names like PayPal (PYPL 78.40, -6.92) and eBay (EBAY 46.19, +5.61), wireless giant AT&T (T 39.16, +1.71), chemical mammoth DowDuPont (DWDP 73.50, -2.08), and package deliverer UPS (UPS 119.51, -7.81). Six of the seven companies beat both earnings and revenue estimates (eBay's results were in line with estimates), but only three advanced on Thursday.
Facebook climbed 3.3% to a new all-time high after reassuring investors that its ad business would remain highly profitable despite changes to its news feed, which have prompted users to spend less time on the site--about 50 million hours less per day in aggregate. Meanwhile, eBay spiked 13.8% to a new record after announcing plans to take over crucial payment processing duties from PayPal, which tumbled 8.1% in reaction.
As for the others, AT&T soared 4.6% after raising its profit guidance for fiscal year 2018, while DowDuPont and UPS dropped 2.8% and 6.1%, respectively. UPS fell after announcing plans to upgrade its delivery network, which struggled to fulfill a high volume of orders during the holiday season.
Declining issues outnumbered advancers 1.2 to 1 at the New York Stock Exchange on Thursday. Energy shares showed relative strength, pushing the S&P 500's energy sector higher by 1.1%, as the price of crude oil climbed for the second day in a row; West Texas Intermediate crude futures advanced 1.6% to $65.76 per barrel. Financial stocks also outperformed, thanks in large part to an increase in Treasury yields, which touched new multi-year highs.
The yield on the benchmark 10-yr Treasury note jumped five basis points to 2.77%, its highest level since April 2014, and the 2-yr yield advanced two basis points to 2.16%, its highest mark in over a decade--dating back to the financial crisis. The recent rise in Treasury yields--the 10-yr yield has climbed 42 basis points in seven weeks--is seen by some as a positive sign for economic growth, but it could also be a headwind for equities, which are trading at high valuations.
Elsewhere, equity indices in the Asia-Pacific region finished Thursday on a mixed note; Japan's Nikkei added 1.6%, breaking a six-session losing streak, while Hong Kong's Hang Seng and China's Shanghai Composite lost 0.8% and 1.0%, respectively.
In Europe, Germany's DAX (-1.4%), the UK's FTSE (-0.6%), and France's CAC (-0.5%) tumbled as the euro climbed 0.8% against the U.S. dollar to 1.2517--a three-year high. The pound also advanced against the greenback, jumping 0.6% to 1.4274, while the Japanese yen finished roughly flat (109.27).
Reviewing Thursday's batch of economic data, which included the ISM Manufacturing Index for January, the preliminary readings for fourth quarter Productivity and Unit Labor Costs, weekly Initial Claims, and Construction Spending for December:
The ISM Index for January declined to 59.1 from a revised reading of 59.3 in December (from 59.7), while the Briefing.com consensus expected a reading of 58.5.
The key takeaway from the report is that the manufacturing sector is still expanding at a solid clip, driven by an ongoing expansion in new order and production activity.
The preliminary unit labor costs rose 2.0% during the fourth quarter, while the Briefing.com consensus expected an increase of 1.0%. The preliminary productivity reading showed a decrease of 0.1%, while the Briefing.com consensus expected an increase of 1.0%.
The key takeaway from this report is that it will feed into the market's burgeoning concerns about rising inflation and it will trigger some added concerns about economic growth not living up to the market's high expectations.
The latest weekly initial jobless claims count totaled 230,000, while the Briefing.com consensus expected a reading of 238,000. Today's tally was below the revised prior week count of 231,000 (from 233,000). As for continuing claims, they rose to 1.953 million from a revised count of 1.940 million (from 1.937 million).
The latest week marked the 152nd week that initial claims have been below 300,000
The Construction Spending report for December increased 0.7% (Briefing.com consensus +0.3%). The prior month's increase was lowered to 0.6% from 0.8%.
The key takeaway from the report is that construction spending growth continues to run at a relatively slow pace.
On Friday, investors will receive the Employment Situation report for January at 8:30 AM ET. The Briefing.com consensus expects the report will show the addition of 180,000 nonfarm payrolls (prior 148,000), a 0.3% increase in average hourly earnings (prior +0.3%), and an unemployment rate of 4.1% (prior 4.1%).
In addition, the final reading of the University of Michigan Consumer Sentiment Index for January (Briefing.com consensus 95.0) and Factory Orders for December (Briefing.com consensus +1.3%) will both cross the wires at 10:00 AM ET.
Nasdaq Composite: +7.0% YTD
Dow Jones Industrial Average: +5.9% YTD
S&P 500: +5.6% YTD
Russell 2000: +2.9% YTD
Wall Street Ends Losing Streak With Slim Gains
31-Jan-18 16:30 ET
Dow +72.50 at 26149.39, Nasdaq +9.00 at 7411.48, S&P +1.38 at 2823.81
https://www.briefing.com/investor/markets/stock-market-update/2018/1/31/wall-street-ends-losing-streak-with-slim-gains.htm
[BRIEFING.COM] Stocks broke a two-session losing streak on Wednesday, but just barely, finishing a tick above their unchanged marks.
The S&P 500 opened with a gain of 0.5%, but settled higher by just 0.1%. The Nasdaq Composite and the Dow Jones Industrial Average had similar outings; the Nasdaq opened higher by 0.7%, but finished with a gain of just 0.1%, while the Dow retained 0.3% of its opening gain of 0.9%. All three indices spent some time in negative territory, but a late uptick brought them back into the green. Small caps were relatively weak throughout the session, with the Russell 2000 ending lower by 0.5%.
As expected, the Federal Open Market Committee unanimously voted to keep the fed funds target range at 1.25%-1.50%, allowing Fed Chair Janet Yellen to step down in the most hospitable way. Jerome Powell, President Trump's chosen replacement for Ms. Yellen, will officially become the next Fed Chair on February 3.
In the Fed's official statement, policymakers said near-term risks to the economic outlook appear roughly balanced, but added that officials are keeping an eye on inflation, which has been slow to pick up despite a tightening of the labor market. Fed officials expect that, with further gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market conditions will remain strong.
The market dialed up its expectations for a rate hike in March following the FOMC release, with the CME FedWatch Tool now placing the chances at 83.5%, up from 74.7% on Tuesday. Investors are still calling for a total of three rate hikes in 2018.
Eight of eleven sectors finished Wednesday in the green. The lightly-weighted real estate (+2.1%) and utilities (+1.1%) sectors were the top-performing groups, but the technology (+0.7%) and industrials (+0.4%) sectors also had relatively positive outings. Boeing (BA 354.37, +16.66) set the pace in the industrial space, jumping 4.9% to a new all-time high, after reporting above-consensus earnings and revenues for the fourth quarter and issuing much better-than-expected guidance for fiscal year 2018.
Within the tech space, Advanced Micro (AMD 13.74, +0.87) climbed 6.8% after reporting upbeat earnings and revenues for the fourth quarter and raising its sales guidance for Q1, and Electronic Arts (EA 126.96, +8.26) jumped 7.0% after reporting better-than-expected revenue guidance for the current quarter.
On the downside, the heavily-weighted health care sector (-1.5%) was the weakest group, tumbling for the second day in a row. Investors were still concerned about Tuesday's news that Amazon (AMZN 1450.89, +13.07), Berkshire Hathaway (BRK.A 323375, +375), and JPMorgan Chase (JPM 115.67, +0.56) are partnering to form a company to reduce health care cost for their employees, but a renewed promise from President Trump to reduce prescription drug prices also weighed on the sector.
President Trump made that promise during his State of the Union address on Tuesday evening. The president stayed on script throughout the speech, calling for a $1.5 trillion infrastructure plan and a compromise on immigration that would allow a path to citizenship for "Dreamers" in exchange for his promised barrier along the Mexico border and added border security.
In the bond market, U.S. Treasuries finished Wednesday mixed; the 10-yr yield slipped one basis point to 2.72%, while the 2-yr yield climbed two basis points to 2.14%.
Reviewing Wednesday's economic data, which included the ADP Employment Change report for January, the Chicago PMI for January, the Employment Cost Index for the fourth quarter, Pending Home Sales for December, and the weekly MBA Mortgage Applications Index:
The ADP National Employment Report showed an increase of 234,000 in January (Briefing.com consensus 190,000). The December reading was revised to 242,000 from 250,000.
The Chicago PMI for January hit 65.7 (Briefing.com consensus 61.0), down from 67.6 in December.
The key takeaway from the report is that manufacturing activity in the Chicago Fed region is still humming along near multi-year high levels. The January 2018 reading was the best January reading in seven years.
The fourth quarter Employment Cost Index rose 0.6%, while the Briefing.com consensus expected an increase of 0.5%.
The key takeaway is that compensation costs, led by wages and salaries, are rising slowly, but steadily, which will keep market participants focused on the prospect of inflation picking up with wage and salary growth.
Pending Home Sales increased 0.5% in December (Briefing.com consensus +0.6%). Today's reading follows a revised 0.3% increase in November (from 0.2%).
The weekly MBA Mortgage Applications Index decreased 2.6% to follow last week's 4.5% rise.
On Thursday, investors will receive a number of economic reports, including weekly Initial Claims (Briefing.com consensus 238K), the preliminary readings for fourth quarter Productivity (Briefing.com consensus +1.0%) and Unit Labor Costs (Briefing.com consensus +1.0%), the ISM Manufacturing Index for January (Briefing.com consensus 58.5), and Construction Spending for December (Briefing.com consensus +0.3%).
In addition, auto and truck sales for January will be released throughout the day.
Nasdaq Composite: +7.4% YTD
Dow Jones Industrial Average: +5.8% YTD
S&P 500: +5.6% YTD
Russell 2000: +2.6% YTD
Busy Week Starts on a Lower Note
29-Jan-18 16:20 ET
Dow -177.23 at 26439.48, Nasdaq -39.27 at 7466.50, S&P -19.34 at 2853.53
https://www.briefing.com/investor/markets/stock-market-update/2018/1/29/busy-week-starts-on-a-lower-note.htm
[BRIEFING.COM] Stocks retreated from record highs on Monday as investors took some profits following four weeks of nearly nonstop gains and ahead of a busy week that will feature President Trump's first State of the Union address (Tuesday), the Fed's latest policy directive (Wednesday), the Employment Situation Report for January (Friday), and a host of tech earnings.
The S&P 500 dropped 0.7% to 2853.53, the Dow Jones Industrial Average tumbled 0.7% to 26439.48, and the Nasdaq Composite declined 0.5% to 7466.51. All three major indices opened the session modestly lower and kept within a pretty narrow range for much of the day. However, a wave of selling in the final hour of action pushed the averages to new lows, approximately doubling their earlier losses. All three indices finished near their worst marks of the day.
11 of 11 sectors declined on Monday, with the top-weighted technology group (-0.9%) showing relative weakness. Apple (AAPL 167.96, -3.55) lost 2.1% after the Nikkei Asian Review reported over the weekend that the tech giant plans to slash its iPhone X production for the first quarter by 50% following a disappointing holiday season. Conversely, Twitter (TWTR 25.18, +0.91) jumped 3.8% after Fox Business reporter Charlie Gasparino tweeted that the company is trying to sell itself.
The telecom services space (-1.3%) struggled early following reports that the Trump administration wants a federal takeover of the nation's 5G wireless network, but trimmed losses later in the day after the White House clarified that such a plan is not currently in place. Verizon (VZ 54.13, -0.59) and AT&T (T 37.26, -0.56) lost 1.1% and 1.5%, respectively.
The rate-sensitive utilities (-1.3%) and real estate (-1.2%) sectors finished with telecom services at the bottom of the sector standings as selling in the Treasury market pushed yields to multi-year highs; the yield on the benchmark 10-yr Treasury note climbed three basis points to 2.70%--its highest level since April 2014.
On a positive note, Amazon (AMZN 1417.68, +15.63) jumped 1.1% to a new all-time high after Citigroup raised its target price of AMZN shares to $1600 from $1400. The consumer discretionary sector, which houses Amazon, was among the top-performing groups, but still lost 0.3%.
In earnings news, Lockheed Martin (LMT 351.42, +6.52) and Seagate Tech (STX 55.11, +0.17) climbed 1.9% and 0.3%, respectively, after reporting better-than-expected earnings and revenues. Lockheed Martin also raised its profit guidance for fiscal year 2018.
On the M&A front, Dr Pepper Snapple (DPS 117.07, +21.42) spiked 22.4% after agreeing to merge with Keurig Green Mountain. Under the agreement, DPS shareholders will receive $103.75 per share in a special cash dividend and will retain 13% of the combined company. Meanwhile, VMware (VMW 125.05, -24.95), which Dell acquired a large stake in through its acquisition of EMC Corp., dropped 16.6% after CNBC reported that VMware could buy Dell in a reverse merger, potentially allowing Dell to be publicly traded without going through a formal listing.
As a reminder, VMW shares rallied 9.0% on Friday following a Wall Street Journal report that Dell was exploring options regarding VMware.
Elsewhere, equity indices in the Asia-Pacific region opened the week on a mostly lower note, with China's Shanghai Composite (-1.0%) leading the retreat, while the Euro Stoxx 50 slipped 0.2%. The U.S. dollar climbed 0.4% against the euro (1.2380), 0.6% against the pound (1.4073), and 0.4% against the yen (108.98).
Reviewing Monday's economic data, which included Personal Income, Personal Spending, and the PCE Price Index for December:
Personal income climbed 0.4% in December (Briefing.com consensus +0.4%) following an unrevised increase of 0.3% in November.
Personal spending rose 0.4% in December (Briefing.com consensus +0.5%), down from a revised increase of 0.8% in November (from 0.6%).
The PCE Price Index increased 0.1% in December (Briefing.com consensus +0.2%), while the core PCE Price Index, which excludes food and energy, increased 0.2% (Briefing.com consensus +0.2%). Year-over-year, the core PCE Price Index is up 1.5%, which is still a ways below the Fed's target of 2.0%.
The inflation data isn't going to alter the market's expectation that the Federal Reserve is likely to raise the fed funds rate again at its March meeting. That's one key takeaway from the report. The other key takeaway is that the personal savings rate dropped from 2.5% to 2.4%, which is its lowest level since 2005, underscoring the notion that consumers might be saving less because they are feeling better about their job/income prospects.
On Tuesday, the S&P Case-Shiller Home Price Index (Briefing.com consensus 6.4%) and the Consumer Confidence Index for January (Briefing.com consensus 124.0) will be released at 9:00 AM ET and 10:00 AM ET, respectively.
Nasdaq Composite: +8.2% YTD
Dow Jones Industrial Average: +7.0% YTD
S&P 500: +6.7% YTD
Russell 2000: +4.1% YTD
(Editor's note: The summary originally stated that Dell had previously acquired VMWare, but the comment has been corrected to read that Dell acquired a large stake in VMWare through its acquisition of EMC Corp.)
InvestmentHouse - It Can All End Monday (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
- Another surge higher generates even more calls re a market top.
- January is impressive as money pours into the market, ramping up the angle
of rise. Will the money continue?
- So, you think you know a top when you see one?
- It can all end Monday, but the leadership has yet to show that kind of
movement.
- A truly impressive run makes you wonder about more upside, but we see more
stocks ready to move upside.
Another week upside, another solid finish to a week, this one more than
solid in the melt higher. After indecision Thursday, futures started
higher, stocks started higher, and stocks continued higher through the close
with a classic last 2 hour melt higher. New highs on all the large cap
indices, while RUTX, SP400, and SOX put in respectable showings after tests,
particularly SOX after its sharp Thursday drop.
SP500 33.62, 1.18%
NASDAQ 95.61, 1.28%
DJ30 223.92, 0.85%
SP400 0.40%
RUTX 0.40%
SOX 3.26%
NASDAQ 100 1.54%
VOLUME: NYSE -8%, NASDAQ flat. NYSE trade dropped below average after
moving back above average Wednesday and Thursday. NASDAQ trade was flat,
holding at above average levels. Some distribution on the week on both
indices, but they avoided adding another one Friday. Two distribution
sessions in the past 9 is watch-worthy but not enough in themselves to stall
the rally.
ADVANCE/DECLINE: NYSE 1.2:1, NASDAQ 1.5:1. Ah, another large cap session.
NASDAQ 100 +1.54% led by AMZN, NVDA with emphasis from INTC (+10.55%).
Looking at the brokerage accounts, this is getting rather insane. From our
actively traded: +32%, +68%, +73% -- and this is year to date, not quarter
over quarter (from Q4). From Q4 those numbers are 208%, 405%, 215%. Year
over year is where it gets shocking, with gains over 1000% showing up. That
begs the question, why do I still prepare these newsletters, videos, trades,
alerts, etc.?
Because I love it. I love helping people make their dreams reality, to gain
what I call the true measure of success: doing what you want to do when you
want to do it. If you can do that, you have it all. Yes, sometimes I get
pulled away for the kids' track meets, a basketball game, football playoffs,
or have to attend a church meeting, or am in another time zone and could not
lay off visiting just one more winery. I still have my computer with me,
still logging alerts, still making the trades because I live by this and I
owe it to those who want to get to that point of doing what they want when
they want.
As an aside, I receive many requests to manage other people's money. I
cannot do it. Not because I could not, but because I could not do it and
generate the returns I do now. I take smaller amounts of money from my
overall hoard and start new accounts. I then work those accounts
aggressively, racking up the gains discussed above. At a certain point, I
'retire' that money to different investment vehicles, start another smaller
account and do it again. That way I can buy 10, 20, 30, 50 contracts of
options without much trouble.
If I am trying to do that with $100M, there would be no way to move in and
out quickly without moving the market. That is the problem with funds: they
don't use my tactic because they cannot because they are not a complete
management service for client money. They are not set up that way. In the
1980's and 1990's, many a great fund quickly grew into a bloated behemoth
and ceased performing.
Therefore, I feel the highest and best use in helping people reach that 'do
what you want' goal is to educate you and let you know the trades we are
moving into here. I have help of course, but most all decisions are mine.
The praise and the blame fall on me. I sometimes stay in a trade too long
up and down, thinking I know what is going to happen. That is a constant
fight any trader has. You can mostly get away with it if the trend is in
your favor, but the key of course is recognizing when the trend is starting
to turn.
And that leads to the next area. The question, however, is not brokerage
accounts. They are up insanely for years now, particularly 2016 through
present. SP500 +44% since the election, and as you can see, that is just
'sitting doing nothing' money, i.e. just plunking it in an index fund. The
real question is what is next.
Why? Because recognizing and positioning for major market turns is one of
the foundations to making, holding what you made, and then making more. In
other words, recognizing major market shifts is an integral key to wealth
building. It does no good to amass big returns upside or downside and then
have a sizeable portion given back -- that defeats getting to your goal of
doing what you want when you want.
That is why buy and hold is of course dead, but that is EXACTLY what you
hear advocated on the financial stations, for the most part, daily. You
cannot time the market, etc. Sure you will mistime moves; every trader does
so. I used to be way too early on trades. I would see it setting up, for
instance a trend reversal. I would jump in on the first move and then get
chopped up in the subsequent battle of the buyers and sellers as they fought
it out until one side cried uncle. Of course the preferred way is to let
the big break happen, then counterpunch after the test. Then the trend gets
more or less set, or at least you have a really high probability of making
good money on the trade even if it is not a new trend.
Calling tops and bottoms is hard and that is often why we take partial
profits after great gains. Typically you get a pullback; you can see it in
your brokerage accounts: they surge higher to a higher high and then they
fade in a normal test. We look at capturing a rally or selling leg, taking
some gains, and letting part of the position work if the trend is strong.
Then we can augment or add to that position when it sets up again and we are
back at it. That way you have locked in some gain in the event the move
DOES NOT come back, and if it does, you are back in and taking advantage of
the full move. Make sense? You are not calling a top or bottom, you are
ready to move in when stocks show the 'buy me' or 'sell me' signal, and then
you MANAGE your position and your MONEY around those signals. That way we
have 3 plays on AMZN for instance, but we have also banked great money on
AMZN already during the move and STILL make excellent to superb returns as
it continues working.
This is incredibly relevant now because EVERYWHERE you look and hear there
are warnings about a market that is set to crash, end of run melt ups, blow
off tops, etc. This weekend Bank of America stated that one of its
indicators, one it says has a 100% accuracy rating, has triggered and calls
for a 12% stock decline with the following three months. BA says it is
fully back tested as well. Bully. A 12% decline would certainly not be out
of line with the kind of gains logged.
At the same time you have all-time record highs in bullishness (though bulls
did back off to 64.7 from 66.7 and bears 'surged' to 12.8 from a 30 year low
12.7). You have the sky falling and the tap never runs dry at the same
time. Sure sounds like the bulls and bears doing their usual dancing,
climbing a wall of worry. As many are scared of a top as are excited about
a continuing run.
In all of that misdirection, what is the right direction? Well, as I said,
calling tops is above my paygrade, and I have a very high market paygrade.
That said, there ARE a few more than the usual reasons to be wary. The
bullishness is very high. The runs seem to defy gravity and usual technical
indications, and that is a symptom of markets in some stage of a final
push -- nothing is ever truly different 'this time.' The length and lack of
interruption of the 2016 to present run is almost unprecedented. There are
'outside' factors, such as the dollar's decline, bond yields jumping (and
you have heard all of those theories of doom), impeachment, etc.
I fully anticipate a 10+% correction at some point. In all my years in the
market, however, despite having a pretty good sense of knowing a top was
about to happen, knowing the exact when is a loser's guess. Either you miss
out on a lot more upside or you fail to recognize when all leadership is
reversing as the money runs dry.
In the final analysis it is how much money is being pushed into the market.
Money has to continue believing the market will go higher and come into the
market to push it higher. That shows up in the stock charts, in the
continued ability to set up good patterns, to break higher, to hold the
breaks, test, and resume the moves. For now, that is exactly what stocks
are doing. There are few of the kind of reversals that red flag a major
market issue. That does not mean they don't show up next week, even Monday,
after such as finish to the week on Friday.
It is a matter, however, of having to accept the market that is presented
not the market that experts see lurking in the shadows, whether that is a
market set to crash or one set to surge another 10%. Bank of America,
again, says investor cash allocation is at 10%, a record low (according to
BofA) with equity exposure rising the fastest in 10 years, claiming everyone
is going 'all in.' Well, the question is how much MORE money is out there
being dragged in from all of those who pulled out of the market in the late
summer? That would seem to be important, just as the sun's heating and
cooling cycles are important to the earth's climate -- but are left out of
the climate models.
Again, it is looking at the market presented. I have my concerns about when
a correction that I feel is coming actually starts, but I cannot let those
fears keep me out of a market that keeps rising. I am not making a moral or
philosophical judgment about the market as it appears so many in the 'doom'
circles have done for years. I am looking at the market to play the
predominant trend to make as much as I can while that trend is in place and
is strong. Oh, I can philosophize with the best of them, but that has
virtually no -- no, it actually has zero -- bearing on making money in the
market. Watching the market, its leaders, up and coming stocks, and whether
there are breakdowns tells me more than any expert's bloviation.
THE MARKET
CHARTS
Some volatility crept into the indices the past 2.5 weeks with a couple of
higher volume selling sessions, but thus far that has not stopped the
advance. RUTX, SP400, and SOX did slow and failed to reach new highs to end
the week, but overall the indices are still trending higher, just showing
more of that volatility that is a key to watch this coming week.
NASDAQ: Starting with a weekly NASDAQ chart to emphasize the 2016 to
present run. 2013/2014 was similar, but this is different. Note the
acceleration over the past four weeks as money is forced at high rate into
stocks. That kind of move cannot last. Of course it cannot. It can,
however, continue on into the big earnings this coming week or beyond.
After a 2-day sidestep, NASDAQ broke higher again Friday. Big names that
tested during the week broke higher. NVDA for example. GOOG is testing
right now, FB as well. They can make a new break and add to the push. They
can. We will see if they continue their recent paths.
SOX: A pretty good barometer of the market as it often leads the overall
market. SOX gapped lower Wednesday, sold off Thursday but held the November
high. Friday it gapped back upside thanks to INTC's 10+% earnings gain. A
new high early week was coughed up on the midweek selling prompted by AAPL's
woes (and impact on its chip suppliers) and then TXN's earnings drag. Still
trending upside, however. The key is how it responds after Friday's
INTC-impacted move is absorbed.
DJ30: New high after new high, climbing up and indeed now off the 10 day
EMA. When it gets a bit out over its skis like this, it tends to edge back
toward the 10 day to continue the run after a pause. That is if the current
trend holds. Extended off the 50 day MA over the past 5 months, and now an
impressive 17.9% above the 200 day SMA. That is extreme for any index,
particularly the Dow.
RUTX: New high Monday, Tuesday and Wednesday, then reversed intraday
Wednesday. Well, it stalled is more appropriate. Held over the 10 day EMA
with a Thursday doji, bounced Friday, but the money was not flowing to
enough small caps to push to another high. Still a very good trend up the
10 day EMA after a new breakout in December from a 2 month consolidation.
SP400: Similar to RUTX, ran to new highs but also ran into a near term top
Wednesday at the open. Faded but held the 10 day EMA on each low to end the
week, putting in a pretty darn good test. Nice trend up the 10 day EMA
continues after that mid-November tap at the 50 day EMA.
SP500: Started strong Monday, flattened out somewhat then surged Friday.
It too has quite the upward ramp since the start of 2018 as tons of money
has poured in.
LEADERSHIP
Chips: After TXN, LRCX, SWKS, STM struggled mightily on the week, INTC rode
in, crushed earnings even with those chip flaws, and gapped over the
November and December highs in its 3 month trading range, breaking out with
a breakaway gap. Others still show promise, e.g. MRVL, of course NVDA, then
CCMP, AMD, AMAT, MXL.
FAANG: AAPL continues its struggle but is holding the bottom of its range.
FB jumped back up Friday and looks promising this week. New position
perhaps. AMZN continues its runaway train imitation. NFLX gapped higher on
earnings and continued upside into Friday. GOOG stalled Wednesday and
slipped laterally into the weekend. Perhaps enough time for a pre-earnings
play on a new upside break.
Software: RHT screaming higher Friday after a steady rise on the week. VMW
exploded higher, giving us a big gain, on word DELL may buy it all. BLKB
looks interesting. FFIV surged and purged on earnings. CRM may be ready to
break higher again after its breakout and second test of the 10 day EMA.
Financial: Solid to excellent week. C hitting a higher rally high all
week. JPM ditto. BAC as well. GS strong move off the 50 day MA.
Manufacturing/Machinery: CAT tested after earnings while CMI broke higher
Friday from a consolidation. HON jumping on earnings.
China: Some excellent recoveries. BABA started higher Tuesday, we moved in
midweek, it rallied to a new high into the Friday close. BIDU struggled
through the week but held the 10 day EMA and Friday was at a higher closing
high in this rally on some solid trade. BZUN broke sharply higher. HTHT
struggled early week but held the 20 day and is trying to recover. SINA
tested on the week to the 10 day EMA, dojied, then gapped higher and rallied
to a higher high Friday.
Oil: Tested back some on the week with the big names faring a bit better.
HAL finally testing after that gap higher Monday. APC showed a bit Monday
and then crept up the 10 day the rest of the week. Some smaller names
struggled, e.g. CRZO. PTEN, DNR not spectacular but they did move higher on
the week.
Transports: Airlines down hard on their earnings, e.g. DAL, AAL, LUV.
Truckers solid either testing (JBHT) or still rallying (WERN).
THE MARKET
MARKET STATS
DJ30
Stats: +223.92 points (+0.85%) to close at 26616.71
Nasdaq
Stats: +94.61 points (+1.28%) to close at 7505.77
Volume: 2.07B (0%)
Up Volume: 1.44B (+504.59M)
Down Volume: 600.8M (-509.2M)
A/D and Hi/Lo: Advancers led 1.54 to 1
Previous Session: Decliners led 1.06 to 1
New Highs: 305 (+93)
New Lows: 30 (+1)
S&P
Stats: +33.62 points (+1.18%) to close at 2872.87
NYSE Volume: 805.1M (-8.19%)
Up Volume: 2.32B (+790M)
Down Volume: 1.05B (-1.15B)
New Highs: 292 (+27)
New Lows: 82 (+18)
SENTIMENT INDICATORS
VIX: 11.08; -0.50
VXN: 17.52; -0.73
VXO: 11.47; -0.04
Put/Call Ratio (CBOE): 0.79; -0.01
Bulls and Bears: Bulls backed off the cycle high but still very strong.
Bears ticked higher, but still at 30 year lows.
Bulls: 64.7 versus 66.7
Bears: 12.8 versus 12.7
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: 64.7 versus 66.7
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 versus 56.7 versus 53.4
versus 57.7 versus 63.1 versus 61.2 versus 61.8 versus 62.7 versus 61.8
versus 58.2 versus 60.6 versus 58.6 versus 60.2 versus 59.8 versus 59.8
versus 59.6 versus 58.8 versus 56.3 versus 55.6 versus 51.0 versus 42.9
versus 41.7 versus 47.1 versus 42.9
Bears: 12.8 versus 12.7
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 versus 19.1 versus 19.1
versus 18.3 versus 18.1 versus 17.0 versus 16.2 versus 16.5 versus 16.7
versus 18.6 versus 18.8 versus 18.6 versus 18.3 versus 19.2 versus 18.3
versus 17.1 versus 17.3 versus 17.9 versus 17.9 versus 18.3 versus 17.5
versus 18.3 versus 18.1 versus 17.3 versus 13.75 versus 17.3 versus 16.5
versus 17.5 versus 17.6 versus 16.7 versus 17.6 versus 17.5 versus 17.3
versus 18.3 versus 18.4 versus 19.6 versus 19.6 versus 19.2 versus 19.6
versus 22.3 versus 21.6 versus 23.5 versus 25.7 versus 24.3 versus 23.1
versus 23.8 versus 23.1 versus 22.8 versus 23.1 versus 24.3
OTHER MARKETS
Bonds: 2.66% versus 2.627. Traded at the bottom of the 6 month range on the
week, did manage to rebound some.
Historical: the last sub-2% rate was in November 2016 (1.867%). 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: 1.24308 versus 1.24159. Euro surged on the week but then threw a
couple of tombstone doji to end it. A pause.
Historical: 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 versus 1.17652 versus 1.1764 versus 1.17754 versus
1.17990 versus 1.18276 versus 1.18727 versus 1.18983 versus 1.18976 versus
1.18529 versus 1.18489 versus 1.1899 versus 1.19329 versus 1.18148 versus
1.17402 versus 1.1791 versus 1.1787 versus 1.1786 versus 1.1799 versus
1.16443 versus 1.16646 versus 1.16439 versus 1.15871
USD/JPY: 108.601 versus 109.411. Dollar melted on the week, failing at the
10 day EMA and tumbling. It is ripe to rebound to test the 10 day EMA, but
it is in a downtrend now and will hit the early September low. Then it
tries to rebound some.
Historical: 109.411 versus 109.033 versus 110.159 versus 110.159 versus
110.70 versus 110.834 versus 111.036 versus 111.290 versus 110.357 versus
111.024 versus 111.204 versus 111.534 versus 112.706 versus 113.15 versus
113.58 versus 112.749 versus 112.677 versus 112.27 versus 112.690 versus
112.758 versus 113.216 versus 113.208 versus 113.304 versus 113.363 versus
113.334 versus 112.870 versus 112.625 versus 112.619 versus 112.298 versus
112.639 versus 113.555 versus 113.476 versus 113.48 versus 113.473 versus
112.473 versus 112.554 versus 112.442 versus 112.190 versus 112.55 versus
112.102 versus 111.583 versus 111.244
Oil: 66.14, +0.63. After testing back to the 10 day EMA for a week, oil
broke higher once more, closing at a new rally closing high.
Gold: 1352.10, -10.80. Big surge on the week to a higher high past the
September peak, but gave it up with a Friday gap lower to test the 10 day.
MONDAY
It is either a certainty the market will at least correct or it will keep
going for some time without correcting. Ah, when is, as usual, the key.
Many are afraid of flying because they have seen the crashes before. You
have to respect the downside to keep what you made on the upside. You also
want to play the upside while it is making you great money as it has. You
just want to avoid, to borrow a trite but descriptive expression, picking up
nickels in front of the steam roller.
As noted earlier, the move could end Monday. The new money getting pushed
into the market could have seen its end Friday. Perhaps. The charts are
extended, but nothing Friday showed they were done. A couple of volatile
sessions with higher selling volume is something to note and watch for more
occurrences, but they don't end the rally themselves. There are still very
good stocks in good position, and if they can make the moves, then they make
the moves.
Therefore we will look at some more upside positions this coming week and
see if the money still comes into the market. Important earnings reports
from AMD, FB, MSFT, AAPL, AMZN, BABA, GOOG, stocks that initiated the
October break higher into the current run, are all due. Given the runs,
will there be enough good news to push them not just higher for that day,
but into new runs? The more they rally into the numbers, often the less
likelihood of a sustained move afterward. NFLX, of course, excepted.
So, we are concerned about when the top comes, but even so we are looking at
upside plays because the leaders are still setting up and rallying. As long
as they set up, rally, and don't reverse those rallies the upside remains in
charge and we want to play there.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 7505.77
Resistance:
Support:
7300 from a modest mid-January consolidation
The 20 day EMA at 7254
The 50 day EMA at 7049
7,000 from mid-December
6914 is the late November all-time high
6796 is the early November 2017
The 2016 trendline at 6720
6641 is the October high
The 200 day SMA at 6494
6477 is the September intraday high
6461 is the July 2017 prior all-time high
6450 is the early September high
6341.70 is the all-time high from early June.
6300 is the mid-June interim high
6205 is the late May all-time high
5996 is the recent May 2017 low
5937 is the all-time high from April
5915 is the tops of the March to April 2017 range
5910 is the lower gap point from mid-April
5800 from the February consolidation lows
S&P 500: Closed at 2872.87
Resistance:
Support:
2808 from the mid-January consolidation. Some support, not that strong.
The 20 day EMA at 2782
2751 from early January 2018
The 50 day EMA at 2710
2694 is the mid-December peak
2597 is the November 2017 high
2569 is the upper channel line from the March 2009 uptrend channel
The 200 day SMA at 2523
2491 is the August all-time high
2480 the late August and early August highs
2453.46 is the June prior all-time closing high
2409 is the July 2017 closing low
2406 is the all-time high from May 2017
2401 is the March 2017 all-time high
2352 is the May 2017 low
Dow: Closed at 26,616.71
Resistance:
Support:
26,000 from mid-January consolidation
The 20 day EMA at 25,740
24,835 is the mid-December consolidation range
The 50 day EMA at 24,923
24,312
23,602 is the early November 2017 high
23,608 is the early November high
The 200 day SMA at 22,564
22,420 is the September high
22,179 is the August 2017 all-time high
22,086 is the mid-August lower high
21,681is the July prior all-time high
21,638 is the July 2017 closing high
21,529 is the June 2017 high
End part 1 of 3
Health Care, Technology Shares Lead Friday Rally
26-Jan-18 16:20 ET
Dow +223.92 at 26616.71, Nasdaq +94.61 at 7505.77, S&P +33.62 at 2872.87
https://www.briefing.com/investor/markets/stock-market-update/2018/1/26/health-care-technology-shares-lead-friday-rally.htm
[BRIEFING.COM] The equity market soared to new records on Friday, locking in its fourth consecutive week of gains.
The Nasdaq Composite jumped 1.3% to 7505.77 (a new record), the S&P 500 climbed 1.2% to 2872.87 (a new record), and the Dow Jones Industrial Average advanced 0.9% to 26616.71 (a new record). For the week, the major indices added between 2.1% and 2.3% and now hold year-to-date gains between 7.5% and 8.7%.
Stocks opened Friday modestly higher and steadily extended their gains throughout the session, finishing at their best marks of the day.
11 of 11 sectors advanced on Friday, with the heavily-weighted health care group (+2.2%) setting the pace. Biotech giant AbbVie (ABBV 123.21, +14.91) spiked 13.8% to a new all-time high after reporting better-than-expected earnings and revenues for the fourth quarter and issuing upbeat profit guidance for fiscal year 2018.
Meanwhile, the top-weighted technology sector (+1.6%) also had a positive showing, thanks in large part to Dow component Intel (INTC 50.08, +4.78), which jumped 10.6% to its best level in nearly two decades after reporting above-consensus earnings and revenues for the fourth quarter. The chipmaker also noted that it doesn't expect any material impact from the Meltdown and Spectre security concerns that were reported earlier this month.
On the downside, Starbucks (SBUX 57.99, -2.56) and Colgate-Palmolive (CL 73.56, -3.75) tumbled 4.2% and 4.9%, respectively, after missing Q4 sales estimates. The companies' respective sectors--consumer discretionary (+1.0%) and consumer staples (+0.6%)--finished behind the broader market. However, the rate-sensitive utilities sector was the weakest group, adding just 0.1%, as a sell off in the Treasury market pushed yields to multi-year highs.
The yield on the benchmark 10-yr Treasury note jumped four basis points to 2.66%--its best level since mid-2014--while the 2-yr yield also climbed four basis points, settling at 2.12%--its best level since 2008. For the week, the 2yr-10yr spread decreased to 54 basis points from 59 basis points.
In other corporate news, Twitter (TWTR 24.27, +2.11) had a solid showing, adding 9.5%, amid renewed takeover chatter, while Wynn Resorts (WYNN 180.29, -20.31) dropped 10.1% following a Wall Street Journal story filled with sexual misconduct allegations against founder and CEO Steve Wynn.
Elsewhere, President Trump spoke at the World Economic Forum in Davos, Switzerland on Friday morning, pitching the U.S. as a great place for international companies to invest. The president also reiterated that the U.S. supports free trade, but it must be "fair and reciprocal."
On a related note, reports indicate that President Trump is seeking $716 billion for defense spending in 2019, a 13% increase from the 2017 budget of $637 billion.
Reviewing Friday's batch of economic data, which included the advance estimate of fourth quarter GDP, Durable Orders for December, and advance International Trade in Goods and Wholesale Inventories for December:
Advance fourth quarter GDP pointed to an expansion of 2.6%, while the Briefing.com consensus expected a reading of 2.9%.
The key takeaway from the report is that consumer spending, which accounts for roughly 70% of GDP, was alive and well in the fourth quarter, increasing 3.8%--the fastest growth rate since the first quarter of 2015. Moreover, business spending also increased, with spending on equipment increasing 11.4%--the strongest since the third quarter of 2014.
December durable goods orders rose 2.9%, which is more than the 0.9% increase expected by the Briefing.com consensus. The prior month's reading was revised to +1.7% (from +1.3%). Excluding transportation, durable orders increased 0.6% (Briefing.com consensus +0.7%) to follow the prior month's revised uptick of 0.3% (from -0.1%).
The key takeaway from the report is that the pickup in durable goods orders is a reflection of an improving economy.
The advance report for International Trade in Goods for December showed a deficit of $71.6 billion (Briefing.com consensus -$68.5 billion), up from a revised deficit of $70.0 billion in November (from -$69.7 billion). The advance report for Wholesale Inventories for December showed an increase of 0.2% (Briefing.com consensus +0.3%). The prior month's reading was left unrevised at +0.7%.
On Monday, investors will receive the PCE Price Index for December, the core PCE Price Index for December, Personal Income for December, and Personal Spending for December. All data is set to be released at 8:30 AM ET.
Nasdaq Composite: +8.7% YTD
Dow Jones Industrial Average: +7.7% YTD
S&P 500: +7.5% YTD
Russell 2000: +4.7% YTD
Week In Review: Politics, Earnings, and New Records
Wall Street continued its strong start to 2018, posting gains for the fourth consecutive week. The Nasdaq jumped 2.3% this week, while the S&P 500 climbed 2.2%, and the Dow Jones Industrial Average advanced 2.1%. The three major indices finished Friday at new all-time highs and now hold year-to-date gains between 7.5% and 8.7%.
The first government shutdown since 2013 lasted just three days, coming to an end on Monday evening when Congress passed a short-term funding bill that will keep the government running until February 8. Republicans, who control the Senate 51 to 49, needed help from Democrats to pass the funding measure, as it requires 60 votes. Democrats resisted at first, forcing the shutdown, but eventually gave in after Republicans promised to soon address the fate of the so-called "Dreamers"--undocumented immigrants who were brought to the U.S. as children.
Meanwhile, President Trump made his way to Davos, Switzerland for the World Economic Forum, where he pitched to international companies and investors in a speech on Friday, saying "America is open for business." He also did an interview with CNBC in Davos, during which he clarified his administration's stance on the U.S. dollar, saying that he ultimately wants to see a stronger dollar. Earlier in the week, Treasury Secretary Steven Mnuchin said he welcomes a weakening of the dollar as it's "good for trade."
The U.S. Dollar Index made sharp moves in reaction to the aforementioned comments, ultimately ending the week lower by 1.6% at 88.92--its lowest level in three years.
Currency traders also chewed on the latest policy decisions from the Bank of Japan and the European Central Bank, which crossed the wires on Tuesday and Thursday, respectively. The two central banks voted to leave their policy rates unchanged, as expected, and the ECB reiterated that it intends to leave net asset purchases at the new pace of EUR30 billion per month until the end of September, or beyond, if necessary.
In U.S. corporate news, the fourth quarter earnings season continued this week with around 80 S&P 500 companies delivering their results. Netflix (NFLX) spiked 10.0% on Tuesday after wowing investors with its subscriber growth and first quarter guidance, while Intel (INTC) jumped 10.6% on Friday after reporting better-than-expected earnings and revenues and saying it believes there will be no material impact from the Meltdown and Spectre security concerns first reported at the beginning of the month.
On the downside, Texas Instruments (TXN) tumbled 8.5% on Wednesday after its latest earnings report came in as expected, but didn't impress investors enough to justify the chipmaker's 25.0% gain over the prior seven weeks. Airlines also struggled--evidenced the U.S. Global Jets ETF (JETS), which lost 4.7% for the week--following mixed results from Southwest Air (LUV), American Airlines (AAL), United Continental (UAL), Alaska Air (ALK), and JetBlue Airways (JBLU).
The advance estimate of fourth quarter GDP crossed the wires on Friday, showing a lower-than-expected expansion of 2.6% (Briefing.com consensus +2.9%). The key takeaway from the report is that consumer spending, which accounts for roughly 70.0% of GDP, was alive and well in the fourth quarter, increasing 3.8%--the fastest growth rate since the first quarter of 2015. Moreover, business spending also increased, with spending on equipment increasing 11.4%--the strongest since the third quarter of 2014.
The Federal Open Market Committee is set to release its latest policy decision this upcoming Wednesday, but the market doesn't expect the FOMC to make any changes; the CME FedWatch Tool places the chances of a rate hike at 3.6%. The market projects the next hike will occur at the March FOMC meeting with an implied probability of 79.7%.
Struggling For Direction
25-Jan-18 16:30 ET
Dow +140.67 at 26392.79, Nasdaq -3.89 at 7411.16, S&P +1.71 at 2839.25
https://www.briefing.com/investor/markets/stock-market-update/2018/1/25/struggling-for-direction.htm
[BRIEFING.COM] Stocks struggled for direction on Thursday as investors cautiously tried to extend the new year rally. The S&P 500 (+0.1%) and the Nasdaq Composite (-0.1%) drifted near their flat lines for much of the session, while the Dow Jones Industrial Average (+0.5%) outperformed, closing at a new record high. The S&P 500 also finished at a new record.
The latest batch of fourth quarter earnings featured a couple of Dow components--Caterpillar (CAT 169.37, +1.03) and 3M (MMM 252.36, +4.67)--and a host of airlines--Southwest Air (LUV 60.19, -2.02), American Airlines (AAL 53.05, -1.74), Alaska Air (ALK 62.07, -2.62), and JetBlue Airways (JBLU 20.69, -1.36).
Caterpillar and 3M advanced 0.6% and 1.9%, respectively, after both industrial giants beat earnings and revenue estimates and issued upbeat profit guidance for fiscal year 2018. Meanwhile, the airlines lost between 3.2% and 6.2% after reporting mixed results: American and Alaska beat profit estimates, JetBlue missed, and Southwest's results were in-line.
Ford Motor (F 11.57, -0.48) also reported quarterly results, hitting earnings estimates on better-than-expected revenues, but tumbled 4.0% nonetheless.
In general, countercyclical sectors outperformed the cyclical groups on Thursday, although the cyclical materials space (+0.7%) bucked that trend. The health care (+0.9%), utilities (+1.5%), and telecom services (+0.7%) sectors finished at the top of the sector standings, while the energy (-0.8%) sector was by far the weakest group.
Energy shares declined with the price of crude oil, which tumbled 0.7% to $65.18 per barrel in electronic trading. A sharp upward move in the U.S. dollar hurt crude oil, which is priced in U.S. dollars, as it made the commodity more expensive to holders of foreign currencies.
The U.S. Dollar Index, which measures the dollar's value relative to a basket of other currencies, was down as much as 0.8% following the release of the European Central Bank's latest policy directive, which kept rates unchanged and reiterated the desire to leave net asset purchases at the new pace of EUR30 billion per month until the end of September, or beyond, if necessary.
However, the greenback strengthened after CNBC released a clip of an interview with President Trump, during which he said Wednesday's comments from Treasury Secretary Steven Mnuchin--who said he welcomes a weakening of the dollar--were taken out of context. Mr. Trump clarified that his administration ultimately wants to see a stronger dollar.
The U.S. Dollar Index rallied following the release of the video clip, and was up 0.1% at 89.06 at the closing bell.
In the bond market, U.S. Treasuries ended Thursday on a mostly higher note. The yield on the benchmark 10-yr Treasury note dropped three basis points to 2.62%, while the 2-yr yield finished flat at 2.08%. Yields move inversely to prices.
Reviewing Thursday's economic data, which included New Home Sales for December, Leading Indicators for December, and weekly Initial Claims:
New Home Sales in December hit an annualized rate of 625,000, which is below the revised November rate of 689,000 (from 733,000), and lower than the Briefing.com consensus of 679,000.
The key takeaway from the report is that new home sales were still up 14.1% year-over-year in December, underscoring the improved demand; however, with mortgage rates moving up and the mortgage interest deduction cap kicking in for mortgages over $750,000, the monthly decline is apt to trigger some investor concerns about 2018 earnings prospects for homebuilders.
The Conference Board Leading Economic Index increased 0.6% in December, while economists polled by Briefing.com expected an increase of 0.5%. The prior month's reading was revised to +0.5% from +0.4%.
The key takeaway from the report is that the strength among the leading indicators remained very widespread. The index increased 3.1% in the second half of 2017, versus 2.6% for the first half of the year.
The latest weekly initial jobless claims count totaled 233,000, while the Briefing.com consensus expected a reading of 240,000. Today's tally was above the revised prior week count of 216,000 (from 220,000). As for continuing claims, they declined to 1.937 million from a revised count of 1.965 million (from 1.952 million).
Weekly initial claims were below 300,000 for the 151st consecutive week
On Friday, investors will receive the advance estimate of fourth quarter GDP (Briefing.com consensus +2.9%), Durable Orders for December (Briefing.com consensus +0.9%), Advance International Trade in Goods for December (Briefing.com consensus -$68.5 billion), and Advance Wholesale Inventories for December (Briefing.com consensus +0.3%).
All four pieces of data will be released at 8:30 AM ET.
Nasdaq Composite: +7.4% YTD
Dow Jones Industrial Average: +6.8% YTD
S&P 500: +6.2% YTD
Russell 2000: +4.3% YTD
Roller Coaster Ride Ends on a Mixed Note
24-Jan-18 16:30 ET
Dow +41.31 at 26252.12, Nasdaq -45.23 at 7415.05, S&P -1.59 at 2837.54
https://www.briefing.com/investor/markets/stock-market-update/2018/1/24/roller-coaster-ride-ends-on-a-mixed-note.htm
[BRIEFING.COM] Wall Street went on a roller coaster ride on Wednesday as investors tried to extend the new year rally, but struggled to justify further gains.
Stocks got off to a good start with the Dow, the S&P 500, and the Nasdaq up between 0.4% and 0.7% shortly after the opening bell. However, the bears took control about an hour into the session and pushed the major averages into negative territory; at their worst marks the day, the Dow, the S&P 500, and the Nasdaq held respective losses of 0.4%, 0.5%, and 1.1%.
In the end, the Dow finished higher by 0.2%, closing at a new all-time high, while the S&P 500 and the tech-heavy Nasdaq lost 0.1% and 0.6%, respectively. Today's loss breaks a three-session winning streak for the S&P 500, but the index still remains solidly higher for the week (+1.0% WTD) and for the year (+6.1% YTD).
Heavily-weighted sectors like financials (+0.7%), health care (+0.3%), and consumer discretionary (+0.4%) did relatively well on Wednesday, but the underperformance of the top-weighted technology space (-0.9%) kept the S&P 500 in check.
Texas Instruments (TXN 109.70, -10.19) was the weakest tech component in the S&P 500, tumbling 8.5%, after its latest earnings report came in as expected, but didn't impress investors enough to justify the chipmaker's 25.0% gain over the last seven weeks. Apple (AAPL 174.22, -2.82) was also weak, losing 1.6%, after Bernstein analyst Toni Sacconaghi said iPhone sales for the current quarter may be disappointing.
In other corporate news, United Continental (UAL 69.05, -8.92) plunged 11.4% after announcing a plan to boost capacity growth 4-6% in 2018 and likely in 2019 and 2020 as well. The concern is, if demand starts to slow, the airline might have to slash its prices to fill the extra seats, which in turn could fuel a price war within the industry. The U.S. Global Jets ETF (JETS 33.00, -1.44) moved in tandem with United, losing 4.2%.
General Electric (GE 16.44, -0.45) dropped 2.7% after reporting below-consensus earnings and revenues for the fourth quarter. However, GE did reaffirm its profit guidance for 2018, prompting a sigh of relief from investors, who have suffered major losses as of late; GE shares dropped 13.3% last week and 44.8% over the course of 2017. Meanwhile, fellow industrial giant United Tech (UTX 135.68, -0.35) slipped 0.3% on Wednesday despite beating earnings and revenue estimates for Q4.
In the health care space, Abbott Labs (ABT 61.72, +2.49) had a positive showing, jumping 4.2% to a new all-time high, after reporting above-consensus earnings and revenues for the fourth quarter and issuing positive guidance for Q1.
The U.S. Dollar Index fell 0.9% to 89.05, hitting a fresh three-year low, after U.S. Treasury Secretary Steven Mnuchin said he welcomed a weakening of the greenback. However, Mr. Mnuchin later clarified that he wasn't "advocating" for a weaker dollar. The U.S. dollar lost 0.8% against the euro (1.2401), 1.5% against the British pound (1.4210), and 1.1% against the Japanese yen (109.13).
In the bond market, U.S. Treasuries fell on Wednesday, pushing yields higher across the curve. The yield on the benchmark 10-yr Treasury note climbed three basis points to 2.65%, while the 2-yr yield also tacked on three basis points, closing at 2.08%.
Elsewhere, the major stock indices in Europe ended on a lower note, closing at their worst marks of the day; Germany's DAX and the UK's FTSE dropped 1.1% apiece, while France's CAC declined 0.7%. The European Central Bank will meet on Thursday, but it's expected to leave rates unchanged. Investors will be interested in ECB President Mario Draghi's press conference, however, as he could attempt to talk down the strengthening euro.
In the Asia-Pacific region, equity indices had a mixed outing with Japan's Nikkei (-0.8%) showing relative weakness. China's Shanghai Composite was the top performer, adding 0.4%.
Reviewing Wednesday's batch of economic data, which included Existing Home Sales for December, the FHFA Housing Price Index for November, and the weekly MBA Mortgage Applications Index:
Existing home sales decreased 3.6% in December to an annualized rate of 5.57 million units (Briefing.com consensus 5.70 million). The November reading was revised to 5.78 million from 5.81 million.
The key takeaway from the report is that notable supply constraints remain, which will continue to act as a drag on overall sales due to the limited inventory and the high prices on available inventory that is crimping affordability, particularly for first-time buyers.
The FHFA Housing Price Index rose 0.4% in November (Briefing.com consensus +0.4%), while the October increase was revised to 0.6% from 0.5%.
The weekly MBA Mortgage Applications Index increased 4.5% to follow last week's 4.1% rise.
On Thursday, investors will receive several pieces of economic data, including weekly Initial Claims (Briefing.com consensus 240K), New Home Sales for December (Briefing.com consensus 679K), Advance International Trade in Goods for December (Briefing.com consensus -$68.5 billion), Advance Wholesale Inventories for December (Briefing.com consensus +0.3%), and Leading Indicators for December (Briefing.com consensus +0.5%). Leading Indicators will be released at 10:00 AM ET, while the rest will cross the wires at 8:30 AM ET.
Nasdaq Composite: +7.4% YTD
Dow Jones Industrial Average: +6.2% YTD
S&P 500: +6.1% YTD
Russell 2000: +4.2% YTD
Gov Reopening, Netflix Fuel Another Record Day
23-Jan-18 16:25 ET
Dow -3.79 at 26210.81, Nasdaq +52.26 at 7460.28, S&P +6.16 at 2839.13
https://www.briefing.com/investor/markets/stock-market-update/2018/1/23/gov-reopening-netflix-fuel-another-record-day.htm
[BRIEFING.COM] Stocks climbed to new records for the third session in a row on Tuesday, as investors took in the latest batch of fourth quarter earnings and celebrated the reopening of the federal government.
The Nasdaq Composite jumped 0.7% to 7460.29 (a new record), helped by Netflix (NFLX 250.29, +22.71), which spiked 10.0% after wowing investors with its subscriber growth and first quarter guidance. The S&P 500 rose 0.2% to 2839.13 (a new record), while the Dow Jones Industrial Average finished a tick below its flat line at 26210.81.
In other earnings news, Johnson & Johnson (JNJ 141.83, -6.31) and Procter & Gamble (PG 89.05, -2.84) lost 4.3% and 3.1%, respectively, despite beating earnings estimates and issuing positive guidance, and Verizon (VZ 53.23, -0.23) shed 0.4% after reporting worse-than-expected profits.
Conversely, Travelers (TRV 146.26, +6.91) jumped 5.0% after reporting better-than-expected earnings and revenues.
The federal government reopened its doors following a three-day closure after Congress passed a funding bill on Monday evening. The bill, which President Trump quickly signed into law, will keep the government running through February 8 and was agreed to by Democrats in exchange for Republicans' promise that immigration will be addressed in the near future.
On a separate note, President Trump signed an order to impose tariffs on imported washing machines and solar cells on Tuesday and noted that he is considering additional tariffs on steel and aluminum. The president also said that the sixth round of NAFTA talks, which kicked off on Tuesday, "were going well."
Back on Wall Street, the utilities (+1.0%) and real estate (+1.5%) sectors were the strongest groups on Tuesday, trimming their yearly losses to 4.0% and 2.2%, respectively. The technology (+0.6%) and consumer discretionary (+0.9%) sectors also had strong showings.
Within the consumer discretionary space, Amazon (AMZN 1362.54, +35.23) rallied another 2.7% to finish at a new record for the second day in a row.
On the flip side, the telecom services (-1.2%), health care (-0.5%), and consumer staples (-0.3%) sectors were the weakest performers. Their disappointing showings were fueled by post-earnings losses from Verizon, Johnson & Johnson, and Procter & Gamble (as mentioned above).
In the bond market, U.S. Treasuries rallied on Tuesday, sending yields lower across the curve. The yield on the benchmark 10-yr Treasury note tumbled four basis points to 2.62%, while the 2-yr yield slipped two basis points to 2.05%.
Elsewhere, the major European bourses settled mixed; Germany's DAX was strong, jumping 0.7% to a new record high, while the UK's FTSE added 0.2% and France's CAC shed 0.1%. All eyes were on Davos, Switzerland, where global leaders kicked off the World Economic Forum. President Trump is expected to speak in Davos on Friday.
In Asia, equity indices posted solid gains on Tuesday, with Hong Kong's Hang Seng (+1.5%) and India's Sensex (+1.0%) touching new records. The Bank of Japan voted 8-1 to leave its policy rate at -0.1% and to continue its yield curve control policy so that long-term rates remain around 0.0%.
As for economic data, investors did not receive any on Tuesday, but they will receive several reports on Wednesday, including the weekly MBA Mortgage Applications Index at 7:00 AM ET, the FHFA Housing Price Index for November (Briefing.com consensus +0.4%) at 9:00 AM ET, and Existing Home Sales for December (Briefing.com consensus 5.70 million) at 10:00 AM ET.
Nasdaq Composite: +8.1% YTD
S&P 500: +6.2% YTD
Dow Jones Industrial Average: +6.0% YTD
Russell 2000: +4.9% YTD
New Records as Government Shutdown Comes to an End
22-Jan-18 16:30 ET
Dow +142.88 at 26214.60, Nasdaq +71.65 at 7408.02, S&P +22.67 at 2832.97
https://www.briefing.com/investor/markets/stock-market-update/2018/1/22/new-records-as-government-shutdown-comes-to-an-end.htm
[BRIEFING.COM] Stocks shot to new records on Monday, helped by a Senate vote to reopen the government and provide funding through February 8.
The Nasdaq Composite jumped 1.0% to 7408.03, the S&P 500 climbed 0.8% to 2832.97, the Dow Jones Industrial Average rose 0.3% to 26140.97, and the Russell 2000 advanced 0.5% to 1605.17. All four stock indices closed at fresh records and finished at their best marks of the day.
The federal government closed nonessential operations at midnight on Friday after the Senate failed to reach an agreement on a short-term funding measure, mainly due to differences over immigration. Although Republicans hold a slim majority in the Senate (51 to 49), they needed some Democratic support to reach the required 60-vote threshold.
Republican leadership managed to secure Democratic support on Monday, passing a short-term funding measure 81-18, by promising to consider immigration legislation in early February. More specifically, Democrats are looking for Republicans to address the fate of the so-called "Dreamers"--immigrants who were illegally brought to the U.S. as children.
The funding bill is expected to pass in the House of Representatives on Monday evening. President Trump is then expected to sign the bill into law, which would officially bring the shutdown to an end.
On Wall Street, advancing stocks outnumbered declining stocks 1.8 to 1 with nine of eleven sectors finishing in the green. The energy and telecom services sectors were the top performers, adding 2.1% and 2.3%, respectively, while the consumer discretionary (+1.1%) and real estate (+1.0%) groups also had a relatively strong showing.
Within the energy space, Halliburton (HAL 56.40, +3.39) jumped 6.4% after reporting better-than-expected earnings and revenues for the fourth quarter. News that OPEC and other producers would continue to cooperate on production beyond 2018 helped energy shares, as did updated economic growth projections from the International Monetary Fund; the IMF projects that the U.S. economy will grow 2.7% in 2018 (up from 2.1%) and that the world economy will grow 3.9% (up from 3.7%).
In the consumer discretionary sector, Amazon (AMZN 1327.31, +32.73) climbed 2.5% to a new all-time high while Wynn Resorts (WYNN 195.23, +15.59) spiked 8.7% after reporting better-than-expected revenues for the fourth quarter. WYNN shares finished Monday at their best level in more than three years.
Biotechnology shares also had a positive showing, sending the iShares Nasdaq Biotechnology ETF (IBB 115.52, +3.52) higher by 3.1%, but the broader health care sector (+0.7%) finished roughly in line with the S&P 500. Celgene (CELG 102.91, +0.26) added 0.3% after announcing it plans to acquire Juno Therapeutics (JUNO 86.00, +18.19) for $9 billion, and French drugmaker Sanofi (SNY 43.20, -1.40) lost 3.1% after announcing it plans to acquire Bioverativ (BIVV 103.79, +39.68) for $11.6 billion. Juno Therapeutics and Bioverativ surged 26.8% and 61.9%, respectively.
The materials (-0.2%) and industrials (unch) sectors were the only groups to finish in negative territory. Within the industrial space, General Electric (GE 16.17, -0.09) dropped 0.6%, extending its three-month loss to 32.2%, after Bank of America/Merrill Lynch downgraded GE shares to 'Neutral' from 'Buy.'
In the bond market, U.S. Treasuries finished Monday mostly flat, with the benchmark 10-yr yield unchanged at 2.66%.
Elsewhere, equities had a good day in Europe, evidenced by the Euro Stoxx 50, which climbed 0.4%. Germany's Social Democrats (SPD) agreed to pursue formal coalition talks with German Chancellor Angela Merkel's CDU/CSU conservative bloc, a positive sign for a country that's faced political uncertainty for months.
In Asia, the major stock indices finished modestly higher, with India's Sensex (+0.8%) climbing to a new all-time high.
Investors did not receive any economic data on Monday. Tuesday's economic calendar is also blank.
InvestmentHouse - Market Rally Shows Volatility But Keeps Marching Higher (WeekendNewsletter)
http://www.investmenthouse.com/frblog.php
- On again, off again market. Kind of.
- Market rally shows more volatility on the week but keeps marching higher
across the board.
- Small caps, midcaps lead Friday. Showing flashes of brilliance. Flashes.
- Market continues producing leaders from all areas.
- The issues: extended near term, earnings ahead after a strong run higher,
some volatility entering, sentiment extremes.
- Bullish sentiment having its own sort of blow off top, breaking out from
high to a new cycle high.
- Have to play the market at hand, but very mindful of the indications,
technical and sentiment, lining up.
Friday the stock market was back 'on' in a week that saw stocks up one day,
down the next, then back up. Tuesday gapped higher just to reverse.
Wednesday rallied as if Tuesday never happened. Thursday was modestly off,
then Friday was back up.
More than just back and forth, however, the mix of the moves changed day to
day as well. The prior Friday was up for all indices, but it was up big for
RUTX and SP400. Then the large cap indices took over. Friday it was back
to the small and midcaps leading as they put in 1+% moves to the 'ehh' moves
of the other indices.
SP500 12.27, 0.44%
NASDAQ 40.33, 0.55%
DJ30 53.91, 0.21%
SP400 1.07%
RUTX 1.33%
SOX 0.11%
NASDAQ 100 0.34%
VOLUME: NYSE +16%, NASDAQ -1.5%.
ADVANCE/DECLINE: NYSE 2.6:1, NASDAQ 2.5:1. Hey, somewhat good breadth,
thanks to the small and midcaps.
What are the takeaways from this?
First, the volatility that showed up Tuesday is still there though the late
week moves tend to mitigate that Tuesday upside gap and sharp reversal.
Second, the uptrends remain despite the volatility. Not a guarantee the
upside continues, but the trend keeps finding buyers on the selling
attempts.
Third, leadership continues showing up, and it shows up from different
areas. Large caps have dominated as evidenced by the DJ30, SP500, NASDAQ
moves. For January, the time of the 'January Effect,' the large caps show a
lot of upside. The small and midcaps have continued trending higher,
however, and the past two Fridays they took the market lead with outsized
moves.
The bottom line?
For now the market continues generating new leadership and somewhat day to
day or every other day it is rotating to different areas. All the while,
the market continues to trend higher, and that indicates money is mostly
remaining in the market. Violent reversal sessions such as last Tuesday
indicate that some money is being taken to the sidelines, selling as the
later money pushes into the market, but thus far just one of those sessions
has showed itself.
The market continues finding leaders and new stocks to move higher. At the
same time the large cap indices, particularly DJ30 and SP500 are extended in
their current runs both in terms of the number of rallies after last leaving
the 50 day MA in September, as well as the percentage above the 200 day SMA
(DJ30 16.7% at the high; SP500 12%). Those technical characteristics
typically lead to a correction below the 10 and 20 day EMA, more like the 50
day MA.
Thus far, however, this melt upside has not allowed a correction. It will
come, and the volatile reversal from Tuesday, the one day up, one day down
action the rest of the week are a caution flag that the sellers are testing
the waters right now. It does not mean they will succeed right now, but
they are trying.
With that scenario, while you can sell out and wait for a correction, we are
going to continue playing the upside with good new plays while letting
current positions run if they are, taking gain along the way. Then when the
inevitable correction starts, you already have gain in the bank and can take
positions off the table with in many cases even more gain, and you can close
the newer positions that struggle with near support.
As we have all seen in the past, it can look as if the market is starting
what would be an expected correction, only to right itself and continue
higher. As discussed last weekend, the indicia of a blow off top are not
present, though I do note that volatility jumped last week starting with the
Tuesday reversal, and continued higher into Thursday before a Friday fade.
Keep an eye on volatility as rising volatility in an uptrending market is a
sign of a more important top. VIX is still well contained inside its range
for now, however, so that is not flashing any warnings in this regard.
Extra-market events to cause trouble?
What about other events? Everyone likes to play the 'what drives the
market' game, and this weekend it is the government shutdown. There is so
much gnashing of the teeth over a shutdown, driven by those who want you to
believe you have to have the government tending to your every need every
minute of the day. Truth is, the essentials people rely on, even though
they are not really constitutionally areas the government was ever supposed
to enter, will be met.
That said, the top story on CNBC.com today is about Nicolas Cage spending
$150M on mansions, and island, etc. I guess things are not THAT bad as a
result of a shutdown. Surprise.
The democrats are going all in on their amnesty card while the republicans
once again struggle to even articulate a message. Ironically, the GOP
Congress complains about Trump tweeting his thoughts as they ping pong
around in his head but cannot put together a meaningful one line statement
about their position. The classic example is in the healthcare hashtags of
the democrats versus the republicans over the tax cuts. The democrats were
simple and direct, i.e. effective: #taxcutsfortherich. Did the republicans
initiate #TaxCutstoGiveYou$4500, or #TaxCutsIncreaseYourPaycheck? No, their
great minds incubated #keepYoMoney and #TaxCutsandJobsAct. Brilliant
marketing!
But, I digress. A lot is being made about the shutdown but it has little
actual effect. Oh yes, some are arguing that it will impact GDP. Why?
Because they believe the government is the main driver in our economy. They
are wrong; if that was correct, then the 10 years we did not have a year
averaging 3% GDP growth would not have occurred. Government spending
exploded in those years yet the economy staggered and stumbled around.
Clearly, government spending does NOT have a major impact on growth, and
indeed I would posit that a shutdown might help spur more growth as long as
the regulations are being reduced, and we know they are.
Earnings anyone?
Ah, the REAL near term impact. After a great response to the Q3 earnings
starting late October, the market rally continued to present day. Now the
Q4 season has started and the initial reaction to the stocks announcing is
not great (e.g. AXP, IBM) though there are company specific issues at play.
Still, after such strong runs that were kicked off by earnings, it takes a
really strong quarter and outlook to propel further gains. To us, earnings
could very well be the trigger that gives traders and investors the 'well,
why not take some profits?' mindset and thus a correction of this impressive
run.
Therefore, while we still see a lot of stocks we like, we also know that
earnings are here and many positions sport excellent runs from the last
round of results. Therefore, with options particularly, it is wise to bank
at least some more gain ahead of results if not all of it. Now there are
ALWAYS special circumstances where you don't mind holding a position through
earnings -- some plays are turning the corner after a long decline and
earnings tend to help that move. After big runs ahead of results, however,
the probabilities are a near term decline even if they do bump higher on the
results. Many times they open higher then reverse as the good news is now
all in and there is simply no more money to be pulled in.
Accordingly, a bit of common sense is warranted, i.e. not trying to squeeze
every nickel out of a play. The reward potential suffers high diminishing
returns in that situation. In other words, do you want to risk making
another buck while risking 5 bucks? The probabilities start turning against
you, and success in the market is all about getting the probabilities in
your favor from the pattern, to the stage in the lifecycle of a move, to the
percentage of money allocated to a particular trade. Right now there are
still a lot of good patterns, but for many stocks that have rallied well,
they are a bit aged in terms of the lifecycle. Also, there is the market's
lifecycle on top of that. We can play stocks in good positions that are not
extended, but on those that have enjoyed great runs, entering ahead of
earnings (with the intent of riding them through results) is not the best
plan in most cases.
Bulls on a rampage, bears in deep hibernation.
Bullish sentiment broke out to 66.7 last week, screaming to a new cycle high
and indeed the highest reading in the past 30+ years. At the same time
bears fell to 12.7, the lowest since 1987. They held in the range for
almost a year but now are breaking out. These are extreme bookends to the
market, showing sentiment is extreme.
Extremes are the only things important in sentiment. They are now at
extremes for certain, and are thus another indicator that a market pullback,
correction, etc. is going to come.
This week.
So, yes we have some new plays that look great and have time before
earnings. A couple we don't have a problem with holding through earnings if
they start to make the move we want ahead of time. And still other current,
longer term positions, we will look to bank some more gain ahead of results
if they have put in good moves.
THE MARKET
CHARTS
RUTX: It was the day for the small and midcaps as the bids flipped back
their way. RUTX surged to a new closing high though still below the
intraday high from Tuesday. Volatile as the other indices, but not nearly
the extended position. The upside is coming in big chunks when it comes,
holding out promise for a belated and more sustained January Effect.
SP400: A nice, market-leading move here as well as the midcaps jumped off
the 10 day EMA to a new all-time high. A bit volatile as well of course,
but holding tight on the trend up the 10 day EMA. As with the small caps,
this is more their time, and thus the rally should have more staying power.
Near term they are just a bit extended on this last leg given the 4 to 5
week run. As far as the 50 day MA, however, they last toughed it in
November, so not overly extended.
SOX: So important to the market, and an important move this past week,
breaking to a new all-time high past the 2000 peak. No one said a thing
about it but us. Eye not on the ball I think. Anyway, a nice new breakout
from the 8 week base, slowing a bit at the end of week. Many chips are
looking much improved in good patterns after the 2 month hiatus and that is
still good news for the market overall though they may be extended just a
bit near term after a rally into the breakout move.
NASDAQ: This current rally leg is almost 3 weeks old and pretty much
straight up outside of the Tuesday volatility. Friday saw NASDAQ to another
new high, so after that kind of move near term NASDAQ is extended. What
does that mean? Well, it can still move higher, it is just that after this
kind of rally it likely has less upside left in it before a test comes. We
do have some new plays on AMZN and NFLX after they put in short
consolidations, but even they remain overall extended despite the recent
test; we are looking at them more for a short play around earnings.
DJ30: Trended higher last week but did show volatility Tuesday and
Thursday, and then struggled some Friday thanks to AXP, IBM. Would have
performed better but for those, or as they say here in the office, it would
have performed better if it did. Anyway, really extended off the 50 day MA
and over the 200 day MA but thus far not testing.
SP500: Similar to DJ30, but SP500 punched out a new high Friday. Some
volatility, quite extended in terms of the 50 day and 200 day MA, but thus
far still finding bids. Not a blow off top as noted last week, but as with
DJ30, up 3 weeks on this leg alone AFTER it was already extended.
LEADERSHIP
The market continues producing new stocks moving higher.
Clearly manufacturing (HON, EMR, UTX), machinery (CAT, CMI), transports
(AAL, JBHT, BA) continue strong runs, not really in buy points given the
length of the moves.
Then there are others that broke out later that are not that extended in the
bigger picture, e.g. FAANG stocks. Software such as CRM, VMW, FFIV.
There are newer areas in oil (MRO, CVX, PTEN), Drugs/Biotechs (AMGN, IMGN,
SRPT), financial (C, BAC).
There are sectors and stocks that rallied but then needed to test and have
done so. Semiconductors are the classic example as many break higher (MCHP,
XLNX, LRCX) though many are right at earnings making it harder to play.
AVGO certainly looks interesting. Not all are great, e.g. SWKS, breaking
lower from the 200 day SMA.
Chinese stocks are another example similar to chips. BIDU looks great to
continue higher. YY is a bit extended on this move but solid. BITA looks
very good. HTHT looks great.
Retail is a broad mix that covers many stages. BBBY and CAKE are examples
that look ready to break higher. WMT is renewing its upside. DDS, JWN and
other department stores are rallying. Makes sense given the economy.
Individual stocks include SQ, TSLA, DIS. GRPN put in a strong move Friday
after a drop and four week lateral consolidation.
MARKET STATS
DJ30
Stats: +53.91 points (+0.21%) to close at 26071.72
Nasdaq
Stats: +40.33 points (+0.55%) to close at 7336.38
Volume: 2B (-1.48%)
Up Volume: 1.32B (+300M)
Down Volume: 627.91M (-347.37M)
A/D and Hi/Lo: Advancers led 2.5 to 1
Previous Session: Decliners led 1.74 to 1
New Highs: 294 (+126)
New Lows: 41 (-3)
S&P
Stats: +12.27 points (+0.44%) to close at 2810.30
NYSE Volume: 1B (+15.87%)
A/D and Hi/Lo: Advancers led 1.98 to 1
Previous Session: Decliners led 2.61 to 1
New Highs: 244 (+63)
New Lows: 86 (-8)
SENTIMENT INDICATORS
VIX: 11.27; -0.95
VXN: 16.15; -0.80
VXO: 10.41; -0.63
Put/Call Ratio (CBOE): 0.86; +0.03
Bulls and Bears: Cycle highs and cycle lows for bulls and bears,
respectively. This is starting to flash brightly as a warning. Bulls are
having their own blow off top of sorts.
Bulls: 66.7 versus 64.4
Bears: 12.7 versus 13.5
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: 66.7 versus 64.4
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 versus 56.7 versus 53.4 versus 57.7
versus 63.1 versus 61.2 versus 61.8 versus 62.7 versus 61.8 versus 58.2
versus 60.6 versus 58.6 versus 60.2 versus 59.8 versus 59.8 versus 59.6
versus 58.8 versus 56.3 versus 55.6 versus 51.0 versus 42.9 versus 41.7
versus 47.1 versus 42.9
Bears: 12.7 versus 13.5
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 versus 19.1 versus 19.1
versus 18.3 versus 18.1 versus 17.0 versus 16.2 versus 16.5 versus 16.7
versus 18.6 versus 18.8 versus 18.6 versus 18.3 versus 19.2 versus 18.3
versus 17.1 versus 17.3 versus 17.9 versus 17.9 versus 18.3 versus 17.5
versus 18.3 versus 18.1 versus 17.3 versus 13.75 versus 17.3 versus 16.5
versus 17.5 versus 17.6 versus 16.7 versus 17.6 versus 17.5 versus 17.3
versus 18.3 versus 18.4 versus 19.6 versus 19.6 versus 19.2 versus 19.6
versus 22.3 versus 21.6 versus 23.5 versus 25.7 versus 24.3 versus 23.1
versus 23.8 versus 23.1 versus 22.8 versus 23.1 versus 24.3
OTHER MARKETS
Bonds: 2.661% versus 2.618%. So much for 6.2% as bonds tanked, sending
yields surging.
Historical: the last sub-2% rate was in November 2016 (1.867%). 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: 1.22169 versus 1.2241. Holding the break higher last week,
working laterally.
Historical: 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 versus 1.17652 versus 1.1764 versus 1.17754 versus
1.17990 versus 1.18276 versus 1.18727 versus 1.18983 versus 1.18976 versus
1.18529 versus 1.18489 versus 1.1899 versus 1.19329 versus 1.18148 versus
1.17402 versus 1.1791 versus 1.1787 versus 1.1786 versus 1.1799 versus
1.16443 versus 1.16646 versus 1.16439 versus 1.15871
USD/JPY: 110.834 versus 111.036.
Historical: 111.036 versus 111.290 versus 110.357 versus 111.024 versus
111.204 versus 111.534 versus 112.706 versus 113.15 versus 113.58 versus
112.749 versus 112.677 versus 112.27 versus 112.690 versus 112.758 versus
113.216 versus 113.208 versus 113.304 versus 113.363 versus 113.334 versus
112.870 versus 112.625 versus 112.619 versus 112.298 versus 112.639 versus
113.555 versus 113.476 versus 113.48 versus 113.473 versus 112.473 versus
112.554 versus 112.442 versus 112.190 versus 112.55 versus 112.102 versus
111.583 versus 111.244
Oil: 63.31, -0.58. Still in a weeklong test of the 10 day EMA,
consolidating that good rally.
Gold: 1333.10, +5.90. Tested the 10 day EMA, bouncing modestly Friday. It
too is testing a move and is measuring the prior high at early September.
Why is gold moving up? Inflation?
SUPPORT AND RESISTANCE
NASDAQ: Closed at 7336.38
Resistance:
Support:
7,000 from mid-December
The 50 day EMA at 6962
6914 is the late November all-time high
6796 is the early November 2017
The 2016 trendline at 6694
6641 is the October high
6477 is the September intraday high
6461 is the July 2017 prior all-time high
The 200 day SMA at 6455
6450 is the early September high
6341.70 is the all-time high from early June.
6300 is the mid-June interim high
6205 is the late May all-time high
5996 is the recent May 2017 low
5937 is the all-time high from April
5915 is the tops of the March to April 2017 range
5910 is the lower gap point from mid-April
5800 from the February consolidation lows
S&P 500: Closed at 2810.30
Resistance:
Support:
2751 from early January 2018
The 20 day EMA at 2741
2694 is the mid-December peak
The 50 day EMA at 2680
2597 is the November 2017 high
2569 is the upper channel line from the March 2009 uptrend channel
The 200 day SMA at 2508
2491 is the August all-time high
2480 the late August and early August highs
2453.46 is the June prior all-time closing high
2409 is the July 2017 closing low
2406 is the all-time high from May 2017
2401 is the March 2017 all-time high
2352 is the May 2017 low
Dow: Closed at 26,071.72
Resistance:
Support:
25,697 is the 10 day EMA
The 20 day EMA at 25,340
24,835 is the mid-December consolidation range
The 50 day EMA at 24,609
24,312
23,602 is the early November 2017 high
23,608 is the early November high
22,420 is the September high
The 200 day SMA at 22,422
22,179 is the August 2017 all-time high
22,086 is the mid-August lower high
21,681is the July prior all-time high
21,638 is the July 2017 closing high
21,529 is the June 2017 high
End part 1 of 3
Looming Shutdown No Match For New Year Rally
19-Jan-18 16:30 ET
Dow +53.91 at 26071.72, Nasdaq +40.33 at 7336.37, S&P +12.27 at 2810.30
https://www.briefing.com/investor/markets/stock-market-update/2018/1/19/looming-shutdown-no-match-for-new-year-rally.htm
[BRIEFING.COM] Stocks climbed to new records on Friday as a looming government shutdown proved no match for the new year rally.
The Nasdaq Composite jumped 0.6% to 7336.38, the S&P 500 climbed 0.4% to 2810.30, and the small-cap Russell 2000 rocketed 1.3% to 1597.61. All three indices finished at new all-time highs. The Dow Jones Industrial Average rose 0.2% to 26071.72, but did not post a new record.
Trading ranges were pretty narrow for most of the day, but a late wave of buying left the major averages at their session highs.
Nonessential government operations will halt if Congress fails to pass a new funding measure before midnight. The House of Representatives passed a bill that would extend funding for another month on Thursday evening, but its passage in the Senate--where Republicans need Democratic help to reach the 60-vote threshold--looks unlikely.
Senate Minority Leader Chuck Schumer (D-NY) met with President Trump on Friday afternoon, but said after the meeting that they still have "a good number of disagreements." Nonetheless, Mr. Schumer said discussions will continue.
Back on Wall Street, the political drama did little to dampen the mood, which has been especially bullish since the start of 2018; the major stock indices have added between 5.1% and 6.3% year to date. Nine of eleven sectors advanced on Friday with the consumer staples sector (+1.1%) setting the pace.
Within the consumer staples group, tobacco giant Philip Morris (PM 108.92, +3.85) was the top performer, jumping 3.7%, after Jefferies upgraded PM shares to 'Buy' from 'Hold.'
Meanwhile, in the consumer discretionary sector (+0.9%), Dow component Nike (NKE 67.21, +3.10) climbed 4.8% after Wedbush upgraded NKE shares to 'Outperform' from 'Neutral,' and home improvement retailer Lowe's (LOW 104.95, +3.59) added 3.5% following a Bloomberg report that an activist investor believes the company's stock could triple in value if it makes some changes to better compete with rival Home Depot (HD 201.33, +3.00).
The financial sector (+0.7%) also outperformed despite a poor showing from American Express (AXP 98.03, -1.83), which dropped 1.8% after disappointing guidance for fiscal year 2018 overshadowed better-than-expected earnings and revenues for the fourth quarter.
On the flip side, the energy sector (-0.1%) finished near the bottom of the sector standings, suffering from a decrease in the price of crude oil; West Texas Intermediate crude futures dropped 0.9% to $63.30 per barrel.
The technology sector (+0.2%) was also relatively week with Dow component IBM (IBM 162.37, -6.75) losing 4.0%. IBM reported year-over-year revenue growth for the first time in 23 quarters, but its service margins and earnings outlook were disappointing.
In the bond market, U.S. Treasuries sold off on Friday, sending yields higher across the curve. The benchmark 10-yr yield jumped three basis points to 2.64%, hitting its best level since the middle of 2014, while the 2-yr yield climbed two basis points to 2.05%.
Elsewhere, equity indices in the Asia-Pacific region finished mostly higher, as did the major European bourses. Germany's DAX was the top performer in Europe, advancing 1.2% to a two-month high, while India's Sensex (+0.7%) set the pace in Asia, settling at a new all-time high.
Reviewing Friday's economic data, which was limited to the preliminary reading of the University of Michigan Consumer Sentiment Index for January:
The preliminary reading of the University of Michigan Consumer Sentiment Index for January declined to 94.4 (Briefing.com consensus 97.0) from 95.9 in December.
The key takeaway from the report is that despite the headline drop, consumers reported persistent strength in personal finances and buying plans.
Investors will not receive any economic data on Monday.
Nasdaq Composite: +6.3% YTD
Dow Jones Industrial Average: +5.5% YTD
S&P 500: +5.1% YTD
Russell 2000: +4.0% YTD
Week In Review: Bulls Dominate Another Week
It was another good week on Wall Street; the Dow Jones Industrial Average jumped 1.0%, the Nasdaq Composite climbed 1.0%, and the S&P 500 added 0.9%. However, the bulls looked somewhat fatigued, at least in comparison to the first two weeks of the year; the S&P 500 rose 2.6% in the first week of 2018 and 1.6% in the second. This week, the S&P 500 posted losses in two of four sessions (markets were closed on Monday for Martin Luther King Jr. Day).
Maybe it's the beginning of the end for the new year rally. Maybe not.
What is certain is that 2018 has been a great year for the stock market thus far. The Dow, the Nasdaq, and the S&P 500 have advanced between 5.1% and 6.3% year to date and have notched a handful of new records along the way. And that's to say nothing of the stock market's 2017 campaign, during which the major averages climbed between 19.4% and 28.2%.
Financials dominated the earnings front this week with Citigroup (C), Bank of America (BAC), Goldman Sachs (GS), U.S. Bancorp (USB), Charles Schwab (SCHW), Morgan Stanley (MS), and American Express (AXP) reporting their fourth quarter results. All seven companies beat earnings estimates, but revenues came in mixed; Goldman Sachs, Morgan Stanley, and American Express reported above-consensus revenues, while Bank of America missed estimates. The S&P 500's financial sector (+1.0%) finished roughly in line with the broader market.
Meanwhile, the health care sector (+1.9%) was among the top-performing groups this week. Within the space, UnitedHealth (UNH) rose 6.4% after reporting better-than-expected earnings for the fourth quarter, and Merck (MRK) jumped 4.5% after announcing that its drug Keytruda was successful, in combination with two chemotherapy drugs, as a first line treatment for lung cancer.
The consumer staples (+2.4%) and technology (+1.5%) sectors finished alongside health care at the top of the sector standings. The tech group's largest component by market cap--Apple (AAPL)--announced that it will make a one-time tax payment of $38 billion to repatriate cash holdings overseas and will invest over $30 billion in the U.S. over the next five years, creating 20,000 new jobs. Apple said its decision was the result of recent changes to the U.S. tax law.
Meanwhile, IBM (IBM) slipped 0.5% despite reporting year-over-year revenue growth for the first time in 23 quarters.
The industrial sector (-0.9%) slid this week with General Electric (GE) pacing the retreat. GE shares tumbled 13.3%, hitting a six-year low, after the industrial giant said its legacy reinsurance business will take a larger-than-expected charge of $6.2 billion for the fourth quarter. In addition, the company was reported to be considering a major breakup.
The energy sector (-1.3%) also underperformed as crude oil retreated from a three-year high; West Texas Intermediate crude futures dropped 1.6% to $63.30 per barrel.
In Washington, the House of Representatives passed a one-month spending measure on Thursday evening, but that bill doesn't appear to have enough support to pass in the Senate, where it needs Democratic votes to reach the 60-vote threshold. If an agreement cannot be reached by 12:01 AM ET Saturday morning, the government will start closing nonessential operations.
Investors didn't appear to be shaken though, pushing the S&P 500 and the Nasdaq to new records on Friday.
Tech Shares Pace Rebound Rally to Record Highs
17-Jan-18 16:30 ET
Dow +322.79 at 26115.65, Nasdaq +74.59 at 7298.27, S&P +26.14 at 2802.56
https://www.briefing.com/investor/markets/stock-market-update/2018/1/17/tech-shares-pace-rebound-rally-to-record-highs.htm
[BRIEFING.COM] Stocks rallied to new records on Wednesday with technology shares leading the charge.
The Dow Jones Industrial Average jumped 1.3% to 26115.65, the Nasdaq Composite rose 1.0% to 7298.28, the S&P 500 climbed 0.9% to 2802.56, and the Russell 2000 advanced 0.9% to 1586.66. The Dow, the Nasdaq, and the S&P 500 finished at new record highs, but the Russell 2000 failed to recoup all of its Tuesday decline.
Wednesday's rally was a powerful statement from the bulls, who appeared to be out of gas on Tuesday following a resilient start to the year. Clearly, that wasn't the case. The S&P 500 has advanced in 9 of 11 sessions in 2018, adding 4.8%. The Nasdaq and the Dow have done even better, climbing 5.7% apiece.
Each of the S&P 500's 11 sectors advanced on Wednesday with gains ranging from 0.3% to 1.6%. The technology sector, which is the heaviest group, was the top performer, finishing with a gain of 1.6%. Within the tech group, IBM (IBM 168.65, +4.80) jumped 2.9% after Barclays upgraded IBM shares to 'Overweight,' and Apple (AAPL 179.10, +2.91) climbed 1.7% after announcing that it will make a one-time tax payment of $38 billion to repatriate cash holdings overseas and will invest over $30 billion in the U.S. over the next five years, creating 20,000 new jobs. Apple said its decision was the result of recent changes to the U.S. tax law.
The tech group was also underpinned by chipmakers, which sent the PHLX Semiconductor Index higher by 2.9%. Dow component Intel (INTC 44.39, +1.25) climbed 2.9%.
Right behind technology in the sector standings were the consumer staples and health care groups, which advanced 1.2% and 1.0%, respectively. Meanwhile, the telecom services (+0.3%), consumer discretionary (+0.4%), and industrials (+0.5%) sectors finished at the back of the pack. General Electric (GE 17.35, -0.86) weighed heavily on the industrial group, dropping 4.7%, as investors continued selling in reaction to Tuesday's announcement that GE's reinsurance business will incur a larger-than-expected charge of $6.2 billion.
Meanwhile, the financial sector (+0.8%) finished roughly in line with the broader market following fourth quarter earnings from Bank of America (BAC 31.18, -0.06), Goldman Sachs (GS 253.65,, 4.81), U.S. Bancorp (USB 56.34, -0.83), and Charles Schwab (SCHW 56.09, +0.56). All four companies beat earnings estimates, but Charles Schwab was the only one to advance, adding 1.0%. The three other financial heavyweights lost between 0.2% and 1.9%.
In other corporate news, Ford (F 12.18, -0.92) tumbled 7.0% after announcing that it expects lower operating profits in 2018, and Boeing (BA 351.01, +15.85) jumped 4.7% to a new all-time high after announcing a joint venture with Adient (ADNT 77.08, -4.83) to develop, manufacture, and sell a portfolio of seating products to airlines and aircraft leasing companies. Adient shares finished lower by 5.9%.
In the bond market, U.S. Treasuries sold off in the midweek session, sending yields higher across the curve. The yield on the benchmark 10-yr Treasury note finished at 2.57% after closing Tuesday at 2.54% while the 2-yr yield jumped four basis points to 2.05%.
Elsewhere, the major European bourses finished Wednesday on a lower note, with Germany's DAX (-0.5%) leading the retreat, while equity indices in Asia finished mixed. Japan's Nikkei lost 0.4% while Hong Kong's Hang Seng and China's Shanghai Composite added 0.3% and 0.2%, respectively.
Reviewing Wednesday's economic data, which included Industrial Production and Capacity Utilization for December, the NAHB Housing Market Index for January, the Fed's Beige Book, and the weekly MBA Mortgage Applications Index:
Industrial Production increased 0.9% in December (Briefing.com consensus +0.4%), while the November reading was revised to -0.1% (from +0.2%). Capacity Utilization ticked up to 77.9% (Briefing.com consensus 77.3%) from a revised reading of 77.2% in November (from 77.1%).
The key takeaway from this report is that Industrial Production in 2017 increased at its fastest annual pace since 2010.
The NAHB Housing Market Index for January declined to 72 (Briefing.com consensus 73) from an unrevised reading of 74 in December.
The Fed's Beige Book showed that the economy continued to expand in all 12 Federal Reserve Districts from late November through the end of 2017. Most Districts said that wages increased at a modest pace, and a few Districts observed that firms were raising wages in a broader range of industries and positions since the previous report.
The weekly MBA Mortgage Applications Index increased 4.1% to follow last week's 8.3% rise.
On Thursday, investors will receive several economic reports, including Housing Starts for December (Briefing.com consensus 1280K), Building Permits for December (Briefing.com consensus 1290K), weekly Initial Claims (Briefing.com consensus 251K), and the Philadelphia Fed Index for January (Briefing.com consensus 24.5). All data will be released at 8:30 AM ET.
Nasdaq Composite: +5.7% YTD
Dow Jones Industrial Average: +5.7% YTD
S&P 500: +4.8% YTD
Russell 2000: +3.3% YTD
Stocks Squander Early Gains; Settle in the Red
16-Jan-18 16:25 ET
Dow -10.33 at 25792.86, Nasdaq -37.38 at 7223.68, S&P -9.82 at 2776.42
https://www.briefing.com/investor/markets/stock-market-update/2018/1/16/stocks-squander-early-gains-settle-in-the-red.htm
[BRIEFING.COM] Stocks rocketed to new records early on Tuesday, but ran out of gas soon thereafter as the new year rally showed signs of fatigue. The major stock indices finished lower across the board.
The S&P 500 and the Nasdaq Composite lost 0.4% and 0.5%, respectively, while the small-cap Russell 2000 tumbled 1.2%. The Dow Jones Industrial Average showed relative strength, ending just a tick below its unchanged mark. At their session highs, the major averages held gains between 0.8% and 1.1%.
Eight of eleven sectors finished Tuesday in negative territory with the materials (-1.2%) and energy (-1.2%) groups pacing the retreat. Energy shares sold off amid a decrease in the price of crude oil, which slipped from a three-year high; West Texas Intermediate crude futures declined 0.7% to $63.86 per barrel.
The industrial sector (-0.9%) also showed relative weakness with its second largest component by market cap--General Electric (GE 18.21, -0.55)--losing 2.9%. GE tumbled after announcing that it will take a larger-than-expected charge of $6.2 billion from its legacy reinsurance business. In addition, reports indicate the company is considering a major breakup.
Most other sectors finished with losses between 0.3% and 0.7%, including the heavily-weighted financial sector (-0.3%). However, within the financial space, Citigroup (C 77.11, +0.27) climbed 0.4% after reporting better-than-expected earnings for the fourth quarter.
On the flip side, the heavily-weighted health care sector (+0.5%) finished in the green, thanks in large part to Merck (MRK 62.07, +3.41), which climbed 5.8% after announcing that its drug Keytruda was successful in combination with two chemotherapy drugs as a first line treatment for lung cancer. UnitedHealth (UNH 232.90, +4.26) also advanced, adding 1.9%, after beating earnings estimates and raising its guidance for 2018 due to the tax overhaul.
The consumer staples sector (+0.4%) also finished in the green, as did the lightly-weighted real estate space (+0.5%).
In the bond market, U.S. Treasuries finished mixed in a curve-flattening trade. The yield on the benchmark 10-yr Treasury note slipped one basis point to 2.54% while the 2-yr yield climbed one basis point to 2.01%. Yields move inversely to prices.
Elsewhere, equity indices in the Asia-Pacific region finished Tuesday mostly higher. Japan's Nikkei climbed 1.0%, closing at a fresh 26-year high, while Hong Kong's Hang Seng rallied 1.8%, bouncing back from Monday's decline--which broke a 14-session winning streak.
The major European bourses settled mixed. The UK's FTSE shed 0.2% while France's CAC and Germany's DAX added 0.1% and 0.4%, respectively.
Reviewing Tuesday's economic data, which was limited to the Empire State Manufacturing Index for January:
The Empire Manufacturing Survey for January declined to 17.7 (Briefing.com consensus 19.0) from the prior month's revised reading of 19.6 (from 18.0).
On Wednesday, investors will receive a slew of economic reports, including the weekly MBA Mortgage Applications Index at 7:00 AM ET, Industrial Production (Briefing.com consensus +0.4%) and Capacity Utilization (Briefing.com consensus 77.3%) for December at 9:15 AM ET, the NAHB Housing Market Index (Briefing.com consensus 73) at 10:00 AM ET, the Fed's Beige Book at 2:00 PM ET, and Net Long-Term TIC Flows for January at 4:00 PM ET.
In addition, Bank of America (BAC 31.24, +0.05), Goldman Sachs (GS 258.46, +1.43), U.S. Bancorp (USB 57.17, +0.19), and Charles Schwab (SCHW 55.53, +0.14) will report earnings before the opening bell.
Nasdaq Composite: +4.6% YTD
Dow Jones Industrial Average: +4.3% YTD
S&P 500: +3.9% YTD
Russell 2000: +2.4% YTD