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Wall Street Climbs to New Record Highs Despite Las Vegas Attack
02-Oct-17 16:30 ET
Dow +152.51 at 22557.60, Nasdaq +20.76 at 6516.72, S&P +9.76 at 2529.12
https://www.briefing.com/investor/markets/stock-market-update/2017/10/2/wall-street-climbs-to-new-record-highs-despite-las-vegas-attack.htm
[BRIEFING.COM] The stock market kicked off the week with yet another solid performance that left the Dow (+0.7%), the S&P 500 (+0.4%), the Nasdaq (+0.3%), and the small-cap Russell 2000 (+1.3%) at new record highs. Monday's advance marked the third-consecutive record high close for the S&P 500 and the seventh in a row for the Russell 2000.
Although the market largely shook off Sunday night's massive shooting in Las Vegas, it was the main topic of conversation in the financial media on Monday. From the 32nd floor of the Mandalay Bay Resort, a lone gunman took aim--firing across the Las Vegas Strip--at a country music concert, killing at least 58 people and injuring over 500 others.
Market participants took the devastating attack, which is the deadliest shooting in U.S. history, as an isolated incident given that authorities do not believe the gunman was connected to any militant groups. MGM Resorts (MGM 30.77, -1.82), which owns and operates Mandalay Bay, did sell off sharply, however, settling with a loss of 5.6%.
On Wall Street, financial and health care stocks were in demand on Monday, helping to alleviate relative weakness from mega-cap names like Apple (AAPL 153.81, -0.31), Alphabet (GOOGL 967.47, -6.25), and Amazon (AMZN 959.19, -2.16)--all three of which have paced the stock market's 2017 campaign thus far.
The heavily-weighted financial (+0.9%) and health care (+1.0%) sectors finished just a tick behind the lightly-weighted materials sector (+1.1%) at the top of the day's leaderboard. The financial sector's positive performance was particularly notable as it extended the group's September rally; financials have climbed 9.4% since September 7.
At the opposite end of the leaderboard, the real estate (-0.4%), consumer staples (-0.2%), and telecom services (-0.1%) groups finished with modest losses. The energy space (unch) also settled in the red as the price of crude oil dropped 2.1% to $50.58/bbl following reports of decreased OPEC production-cut compliance.
A strengthening U.S. dollar also worked against the commodity; the U.S. Dollar Index climbed 0.6% to 93.47. The greenback was particularly strong against the euro, jumping 0.7% to 1.1735, following Sunday's contentious independence referendum in Spain.
The people of Catalonia overwhelmingly voted to split from Spain on Sunday, but Prime Minister Mariano Rajoy refused to acknowledge the vote, which was outlawed by the central government in Madrid. Reports indicate that nearly 900 voters were injured by police, who attempted to shut down polling stations in the region.
In the U.S. bond market, Treasuries finished Monday modestly lower, sending yields into the green. The 10-yr yield climbed one basis point to 2.34%.
Reviewing Monday's economic data, which included the September ISM Index and August Construction Spending:
The ISM Index for September rose to 60.8 from an unrevised reading of 58.8 in August while the Briefing.com consensus expected a downtick to 57.8.
The key takeaway from the report, which stands at its highest level since May 2004, is that it was accompanied by the highest reading for the Prices Index (71.5) since May 2011. That understanding will feed a belief that the Federal Reserve is apt to raise the fed funds rate again at its December FOMC meeting.
The Construction Spending report for August rose 0.5% while the Briefing.com consensus expected an increase of 0.2%. The prior month's reading was revised to -1.2% from -0.6%.
The key takeaway from the report is that overall construction spending remains modest and an inhibitor of stronger real GDP growth.
On Tuesday, the economic calendar will be limited to auto and truck sales for the month of September, which will be released throughout the day.
Nasdaq Composite +21.1% YTD
Dow Jones Industrial Average +14.1% YTD
S&P 500 +13.0% YTD
Russell 2000 +11.2% YTD
InvestmentHouse - Stocks Continue to Rally (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
- End of month, end of quarter, and stocks continue the rally through
September.
- SP500 breaks through the trendline as NASDAQ and SOX move to new highs
while RUTX and SP500 continue adding to theirs.
- Stocks rally on even as money flows out of the market.
- Personal spending and income hardly impressive. What is new?
- Inflation is falling as the Fed's plan just doesn't seem to fit the model.
- The battle of the tax plan analysts: of course they reach opposite
conclusions.
- How long can this continue? Stocks still look good, many in good runs,
many set up to make moves.
September is typically the worst month of the year for stocks, falling and
then setting up more selling but a bottom in October. Didn't happen this
year. September was straight up for some indices, e.g. RUTX, while all
indices moved higher. The watched pot never boiled.
Now that September and Q3 are over, all clear right? Well, there certainly
is a lot of relief after the market stepped through September with gains,
but I would posit that is exactly the time to keep checking the leaders to
see if any are breaking. While many FAANG stocks recovered last week, they
are not out of the clear.
At the same time, many stocks continue to look very good. Many are rallying
and there are still great setups to break higher and join or rejoin the
rally. Money continues to chase stocks higher, and was certainly doing so
to end the month and quarter.
Indeed, NASDAQ, SP500, SOX all broke to new highs Friday, SP500 clearing the
2009 channel upper trendline. That is one thing SP500 could not do when it
last tested these levels in July and August, i.e. close above the trendline.
That is a definitely a change in character.
SP500 9.30, 0.37%
NASDAQ 42.51, 0.66%
DJ30 23.89, 0.11%
SP400 0.13%
RUTX 0.14%
SOX 0.87%
VOLUME: NYSE +17%, NASDAQ +5%. Back above average on some breakout moves
though month and quarter end typically see stronger volume sessions.
ADVANCE/DECLINE: NYSE 1.5:1; NASDAQ 1.4:1
The question, again, is whether the change in character is a true change in
the market pattern or will the algorithms use every index hitting a higher
high the clearing another level of resistance as a cue to sell?
Thus far they have not showed at all. September ended, the quarter ended,
and often you get some new money coming to work with the start of a new
month and quarter. After that hits will the algos then strike?
Perhaps, but as noted last weekend, that is fearing shadows that are not
there, or if they are fearing things in the shadows that may not be there.
That said, the weekly and quarterly money flows came out Friday, and for the
week $7.6B flowed out of US equity funds. This as the market rallies
higher. For the quarter $23B left US equity funds. This as the indices
trended higher. Recall, a lot of big name managers said they were selling,
that things were too high and too crazy. Ultimately if enough sell out who
will be there to buy? Oh, I suppose THEY would be there if the market
continues higher and they be forced to knuckle under and buy again. Would
that happen? It sure does not seem as if it would, but this low to no
volatility move higher just won't die. Yet.
All week we let positions work, picked up new positions, and took some nice
gain per our plan as the gain presented itself. Friday we banked gain on
ACAD, BRKS, CONN -- kind of the ABC's of taking gain I suppose. It is
always a good idea to take gain when it presents, particularly when some
good moves are logged.
There are still positions we like and like a lot. We picked up some on
Friday even though we do not typically like buying on Fridays. There are
several plays on the report this weekend that offer a lot of upside
potential in the same groups that have worked so well and continue to set up
and break higher. Obviously if they continue to work we will continue to
work them.
NEWS/ECONOMY
Personal Income: 0.2 vs 0.3 (from 0.4%) July
Spending: 0.1 vs 0.3 July
PCE: 0.2% vs 0.1% prior
Core PCE: 0.1%. 1.29% year/year. Fed's most important inflation gauge down
6 straight months and the lowest year/year since 10/2015.
Let's see here, the Fed has intended to fuel some inflation to avoid
deflation. That seems so fake, does it not? You artificially create price
increases that are not truly the result of scarcity of resources, etc., and
then claim all is well because you avoided deflation.
The Fed chairman admitted she did not understand inflation. It would appear
there are several other things economic she does not understand.
Suffice it to say, incomes remain tepid with spending the lowest since
January 2016. A hearty 'well done!' Of course, the economist apologists
point out how well the Fed has done. The still labor under the delusion
that if nothing was done, if the Fed had not continued for years and years
and years to act, that we would all be dead. Perhaps. The regulations and
taxes the past 10 years killed a lot of business and perhaps there would not
have been enough willingness to invest to make it happen.
The thing is, the Fed and the administration engaged in the same policies
and actions that prolonged the Great Depression and turned the 1970's into
the 'malaise' (a word Carter did not utter in his address that was dubbed
the 'malaise' speech, but the idea was certainly conveyed to the extent that
EVERYONE called it the malaise speech). If you do the same thing and think
the results will be different because you are smarter and will do it right
this time, then you really are not smarter.
The tax proposal does what?
Of course tax reform would help the US out of the current malaise. And yes,
it is a malaise: in breadwinner job creation, in business creation, in
wages. Lots of malaise.
On Friday reports started emerging about the 'cost' of the tax proposal.
First, cost? Is it a 'cost' for Americans to keep more of their earnings?
They should measure the 'expense' to taxpayers, i.e. how much THEY have to
give up of THEIR wages to fund a profligate government, one that is taking
in RECORD tax revenues and STILL is carping about tax cuts and reform
'costing' it money. Until we drop the BS, we are not going to get anywhere.
Okay, back to the 'scoring' of the proposals. One group comes out and says
the lower earners will see their taxes go up, the higher earnings will go
down. You ALWAYS hear that with any tax reduction proposal. At the same
time, another group scored the proposal, as sparse as it is, with the lower
80% seeing a slight decrease in taxes while the top 20% see an increase in
taxes.
Who is right? IT DOESN'T MATTER! The GOAL is getting investment started
once more so we can see small business creation leap higher again with money
pushed into new ideas, innovations, and tech. That creates new products and
services and the QUALITY jobs needed to make and provide those products and
services. It happened in the 1980's and 1990's with crazy ideas such as
personal computers that led to all the support products and services and the
tens upon tens upon tens of millions of jobs that were created.
No one wanted to invest in the 1970's: the reward was much to small for the
risk involved. The Reagan tax cuts and reformation changed the risk/reward
balance to where it was worth taking the risk. Money poured out of tax
shelters and into investments. It launched a 20 year boom.
Right now we have seen YEARS of low investment in the US because the return
is not there. Companies instead pump money into financial markets and stock
buybacks because THAT is where the favorable risk/reward ratio is. The Fed
is backing their play, so go financial.
Again, these 'scores' of the tax plan are first, politically driven and thus
bogus. Second, they have nothing really to score. Third, they do not and
never have, measured the true outcome of tax cuts. There has never been a
time in the history of the US that substantial tax cuts did not produce a
surplus well in excess of what the tax cuts purportedly 'cost.' The ones
that didn't work? The absurd $600.00 'rebates' to people who never paid
taxes in the first place. Wasted Keynesian effort. As President Kennedy
said, the best welfare is a well-paying job. He did not say it was a
giveaway. Who creates the well-paying jobs, the ones that result from the
need for employees for the new technologies, processes and services created?
Not the government; it just takes. It does not create. It is the
businesses that do this. THAT MUST be the focus.
That is why the reduction on the business entity taxes is so huge. It is
absurd the opening bid was 20% for corporations. Even more absurd is the
25% for pass through entities the small businesses use. If the primary
focus is on small businesses, THEIR rate should be 15% or at least as low as
the corporate rate. That is my main beef with the proposal thus far.
Outside of that, it works to do what needs to be done: get more money in the
hands of American entrepreneurs to let them start, grow, and expand their
businesses. The rest follows from that.
THE MARKET
The Leaders
Semiconductors: Impressive week with stocks such as LRCX, AMAT, ON, ACLS,
HIMX, BRKS pushing higher, sharply higher.
Biotechs/Drugs: The large caps perhaps were not as strong, but the small
guys were moving. ARRY, IMGN, IMMU, CLVS all worked very well.
China Stocks: As usual mixed, but good movers and good setups. BIDU broke
higher Friday. YY enjoyed a good week. SOHU started upside Friday. SINA
is in good position to move higher.
Financial: Broke higher midweek with gaps. C, JPM, BAC. GS continued the
surge into Friday.
Retail: Solidly higher again. CONN gapped to target. DLTR trended higher
all week, breaking upside Friday. HD up again.
FAANG: AMZN showed a doji Friday below the 20 day EMA as it rebounded on
the week. Still a weak kind of recovery. AAPL is hanging on below the 10
day EMA after rebounding. FB broke back through the 50 day SMA; not bad.
NFLX bounced off the 50 day MA but worked laterally to Friday. GOOG
continued a nice break higher.
Transports: Trucks continued higher, e.g. ODFL, JBHT and more. DJ-20 broke
higher to a new high, confirming the DJ30's high and a Dow Theory positive.
MARKET STATS
DJ30
Stats: +23.89 points (+0.11%) to close at 22405.09
Nasdaq
Stats: +42.51 points (+0.66%) to close at 6495.96
Volume: 1.97B (+4.79%)
Up Volume: 1.37B (+385.14M)
Down Volume: 551.07M (-261.74M)
A/D and Hi/Lo: Advancers led 1.36 to 1
Previous Session: Advancers led 1.35 to 1
New Highs: 283 (+64)
New Lows: 21 (-5)
S&P
Stats: +9.30 points (+0.37%) to close at 2519.36
NYSE Volume: 900M (+17.32%)
A/D and Hi/Lo: Advancers led 1.54 to 1
Previous Session: Advancers led 1.46 to 1
New Highs: 205 (+50)
New Lows: 12 (-2)
SENTIMENT INDICATORS
VIX: 9.51; -0.04
VXN: 13.85; -1.13
VXO: 7.87; -0.25
Put/Call Ratio (CBOE): 1.05; +0.32
Bulls and Bears: Money may be leaving, but the bulls are still growing, up 7
points in three weeks. Bears fell precipitously.
Bulls: 54.3 versus 50.5
Bears: 17.1 versus 19.0
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: 54.3 versus 50.5
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
versus 46.1 versus 46.7 versus 45.2
Bears: 17.1 versus 19.0
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: 2.339% versus 2.312%. Bonds gapped lower Wednesday on the Yellen
speech, did not recover much ground.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.312%
versus 2.307% versus 2.236% versus 2.222% versus 2.253% versus 2.276% versus
2.273% versus 2.246% versus 2.234% versus 2.201% versus 2.186% versus 2.19%
versus 2.167% versus 2.134% versus 2.042% versus 2.105% versus 2.072% versus
2.166% versus 2.210% versus 2.136% versus 2.129% versus 2.175% versus 2.169%
versus 2.189% versus 2.217% versus 2.183% versus 2.197% versus 2.185% versus
2.225% versus 2.264% versus 2.24% versus 2.191% versus 2.201 versus 2.246%
versus 2.262% versus 2.257% versus 2.264% versus 2.221% versus 2.266% versus
2.253% versus 2.296% versus 2.291% versus 2.303% versus 2.287% versus 2.330%
versus 2.255% versus 2.241% versus 2.270% versus 2.261% versus 2.318% versus
2.331%
EUR/USD: 1.1812 versus 1.17817. Recovered late week after breaking the 50
day MA's early week.
Historical: 1.17817 versus 1.1746 versus 1.17852 versus 1.18540 versus
1.19476 versus 1.19420 versus 1.19420 versus 1.19954 versus 1.19436 versus
1.1918 versus 1.1874 versus 1.19706 versus 1.19551 versus 1.20379 versus
1.2025 versus 1.19258 versus 1.19143 versus 1.18621 versus 1.19131 versus
1.18938 versus 1.19731 versus 1.19678 versus 1.19212 versus 1.18 versus
1.17516 versus 1.1813 versus 1.17595 versus 1.17107 versus 1.17812 versus
1.17445 versus 1.17751 versus 1.18216 versus 1.17652 versus 1.17596 versus
1.17619 versus 1.17975 versus 1.1774 versus 1.18718 versus 1.18457 versus
1.18072 versus 1.18281 versus 1.18293 versus 1.1683 versus 1.17419 versus
1.1646 versus 1.1637 versus 1.16640 versus 1.16271 versus 1.15280 versus
1.15549 versus 1.14735 versus 1.14672 versus 1.13986 versus 1.14335 versus
1.14682 versus 1.13964
USD/JPY: 112.47 versus 112.442. Holding the move higher through the 200
day SMA.
Historical: 112.442 versus 112.86 versus 112.289 versus 111.649 versus
1.12125 versus 111.995 versus 112.454 versus 111.559 versus 111.435 versus
110.846 versus 110.01 versus 110.62 versus 110.216 versus 109.434 versus
107.847 versus 108.444 versus 109.132 versus 108.747 versus 110.254 versus
110.049 versus 110.289 versus 109.652 versus 108.04 versus 109.160 versus
109.573 versus 109.195 versus 109.648 versus 109.173 versus 109.205 versus
109.333 versus 109.842 versus 110.6621 versus 109.927 versus 109.183 versus
109.177 versus 110.03 versus 109.09 versus 110.09 versus 110.757 versus
110.689 versus 109.963 versus 110.717 versus 110.368 versus 110.28 versus
110.704 versus 111.07 versus 111.166 versus 111.897 versus 111.176
Oil: 51.67, +0.11. Broke higher Monday, tested back to the 10 day EMA the
balance of the week. Still a solid breakout.
Gold: 1284.80, -3.90. Broke below the 50 day MA' on the week, did not
recover the ground.
MONDAY
New highs continued through Friday. A new month and quarter could bring
some more buying into the market. After that, then what? Will new highs
become the targets for the algorithms to sell? After all, David Stockman
this weekend says to get out of the 'casino' markets now lest ye be caught
in the 40% to 70% meltdown he predicts. He is so vocal, so wild-eyed in his
statements and comments, I have a hard time taking him seriously. Oh sure,
I believe this is all a stack of cards but calls for collapse have come and
gone. At some point, poof; but what makes Stockman right THIS time when so
many before, including him, have been wrong? Nothing.
No, you look at the market and what the leaders do. Perhaps the hope
regarding the tax reform proposal gets dashed as the 'experts' issue more
and more reports on the 'cost' of the proposal.
The runs have been impressive. Crazily so. It is getting to the second
half 1999 kind of craziness in the continued upside. That, of course,
cannot last and will stall and fall. But again, when? Nobody knows! It
thus behooves us to play the good plays as they set up, play the leaders as
long as they lead. When they run out of gas and turn over, then worry. No,
don't worry. Then play the downside. Indeed, we have a downside play on
ATHM this weekend, a leading stock that suddenly gapped lower, then failed a
recovery attempt. If it breaks down hard and the market then gets more
leaders like ATHM was, it will have less leaders like ATHM was.
The point is, no one knows when the market cracks and rolls over. We will
play the moves the market gives. For now, upside, but watching over the
shoulder. We will do that until the leaders break and roll over. Then we
play the downside and make money from that versus wringing our hands and
retreating to dark spaces.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6495.96
Resistance:
New high Friday.
Support:
64.77 is the September intraday high
6461 is the July 2017 prior all-time high
6450 is the early September high
The 50 day EMA at 6363
6341.70 is the all-time high from early June.
The 2016 trendline at 6315
6300 is the mid-June interim high
6205 is the late May all-time high
The 200 day SMA at 6023
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
5661 is the late January upper gap point
5601 is the January lower gap point
S&P 500: Closed at 2519.36
Resistance:
New high Friday.
Support:
2511 is the upper channel line from the March 2009 uptrend channel
2491 is the August all-time high
2480 the late August and early August highs
The 50 day EMA at 2474
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
The 200 day SMA at 2389
2352 is the recent May 2017 low
2348 is the April 2017 lower gap point
2329 is the March and April twin lows
2322 is the March 2017 low
2301 is the late January 2017 high
2298 is the late January 2017 high
2282 - 2280 from January 2017
2277.53 is the December 2016 high
The November 2016 all-time high at 2213.25
2194 is the August 2016 prior all-time high
2175 is the June 2016 high
Dow: Closed at 22,405.09
Resistance:
22,420 is the September high
Support:
The 10 day EMA at 22,316
22,179 is the August 2017 all-time high
22,086 is the mid-August lower high
The 50 day EMA at 21,9981
21,681is the July prior all-time high
21,638 is the July 2017 closing high
21,529 is the June 2017 high
21,169 is the March 2017 all-time high
The 200 day SMA at 21,027
20,547 is the lower gap point from late April 2017
20,412 is the March 2017 low
20,400 is the mid-April 2017 low.
20,126 is the January 2017 intraday high
20,101 is the late January closing high.
19,994 - 19,999 (early January high, upper gap point from late January
19750 is the lows of the December/January range
19,732 is the January 2017 low
18,669 is the August 2016 all-time high
18,595 is the July 2016 peak
18,351 is the prior all-time high from May 2015
Wall Street Ends Q3 at Record Highs
29-Sep-17 16:30 ET
Dow +23.89 at 22405.09, Nasdaq +42.51 at 6495.96, S&P +9.30 at 2519.36
https://www.briefing.com/investor/markets/stock-market-update/2017/9/29/wall-street-ends-q3-at-record-highs.htm
[BRIEFING.COM] Equities ended the week, and the quarter, on a positive note, sending the S&P 500 (+0.4%) higher for the fourth session in a row. The benchmark index finished at a new record high, as did the Nasdaq (+0.7%) and the Russell 2000 (+0.1%), while the Dow (+0.1%) settled about eight points short of its record mark. For the week, the S&P 500 added 0.7%.
Technology stocks were in demand on Friday, with chipmakers showing particular strength; the PHLX Semiconductor Index climbed 0.9%. Semiconductor giant NVIDIA (NVDA 178.77, +3.09) advanced 1.8% after Citigroup raised its target price to $210 from $185 while Micron Technology (MU 39.33, +1.37) did even better (+3.6%), extending its three-day post earnings gain to 15.1%.
Mega-cap tech names like Facebook (FB 170.81, +2.08) and Alphabet (GOOGL 973.72, +8.91) also outperformed, settling with respective gains of 1.2% and 0.9%.
The S&P 500's technology sector (+0.8%), which is the largest sector by weight, finished at the top of Friday's sector standings, followed closely by the also influential health care space (+0.6%). On the flip side, the energy sector (unch) showed relative weakness, but it did manage to settle at the top of the week's leaderboard with a weekly gain of 1.9%.
In corporate news, KB Home (KBH 24.12, +1.90) jumped 8.6% after reporting better-than-expected earnings and revenues for its fiscal third quarter. Similarly, Tyson Foods (TSN 70.45, +5.00) climbed 7.6% to an 11-month high after raising its guidance for the fiscal year, citing better-than-expected earnings in the beef segment of its business.
The core PCE Price Index--which is the Fed's preferred gauge of inflation--came in below expectations, showing a month-over-month increase of 0.1% in August (Briefing.com consensus +0.2%). On a year-over-year basis, the index is up 1.3%, down from 1.4% in the prior reading, and still a ways below the Fed's target of 2.0%.
Despite the cooler-than-expected PCE reading, investors did not adjust their rate-hike expectations; the fed funds futures market still points to the December FOMC meeting as the most likely time for the next rate-hike announcement with an implied probability of 77.9%, up slightly from Thursday's 77.5%.
U.S. Treasuries sold off on Friday, securing their third-consecutive weekly decline. The yield on the benchmark 10-yr Treasury note climbed two basis points to 2.33%. Meanwhile, the U.S. Dollar Index settled a tick below its flat line at 92.89 to finish the week with a gain of 1.0%.
In Washington, President Trump said he plans to make a decision on who will become the next Fed Chair sometime in the next 2-3 weeks. Reports indicate that current Fed Chair Janet Yellen and former Fed Governor Kevin Warsh are the front runners for the appointment.
Also of note, the Catalan independence referendum remains scheduled for Sunday despite stern opposition from the Spanish central government.
Reviewing Friday's economic data, which included August Personal Income, Personal Spending, and core PCE Prices, September Chicago PMI, and the final reading of the University of Michigan Consumer Sentiment Index for September:
Personal income ticked up 0.2% in August (Briefing.com consensus +0.2%) after a revised reading of 0.3% for July (from 0.4%). Personal spending rose 0.1% (Briefing.com consensus +0.1%), while the prior month's reading was left unrevised at 0.3%. The core PCE Price Index, which excludes food and energy, increased 0.1% (Briefing.com consensus +0.2%). Year-over-year, the core PCE Price Index is up 1.3%.
The key takeaway from the report is that it was more of the same: weak income growth, disappointing spending growth, and continued "lowflation."
Chicago PMI for September hit 65.2 (Briefing.com consensus 58.0), up from 58.9 in August.
The key takeaway from the report is that the Order Backlogs Index hit a 29-year high, suggesting production levels should remain robust barring a marked increase in order cancellation rates.
The final reading of the University of Michigan Consumer Sentiment Index for September remained at 95.1 (Briefing.com consensus 95.4), unchanged from the preliminary reading.
The key takeaway from the report is that consumer sentiment held up despite rising (geo)political uncertainty and the impact of the hurricanes that hit Texas and Florida.
On Monday, investors will receive two pieces of economic data--the September ISM Index (Briefing.com consensus 57.8) and August Construction Spending (Briefing.com consensus 0.2%). Both reports will be released at 10:00 ET.
Nasdaq Composite +20.7% YTD
Dow Jones Industrial Average +13.4% YTD
S&P 500 +12.5% YTD
Russell 2000 +9.9% YTD
Week In Review: Reflation Trade Returns
Enticed by the idea of a tax overhaul, investors pushed equities higher once again this week, sending the S&P 500 (+0.7%), the Nasdaq (+1.1%), and the small-cap Russell 2000 (+2.8%) to new record highs. The Dow lagged this week, but still managed to eke out a modest gain (+0.3%). The S&P 500 finished the third quarter with a gain of 4.0%.
Technology stocks weighed on the broader market on Monday as investors engaged in a sector rotation trade that left the S&P 500's technology sector lower by 1.4%. Technology names were weak from the jump, but selling accelerated following comments from North Korea's foreign minister, who said that President Trump effectively declared war against North Korea in his U.N. speech last week and, therefore, Pyongyang has the right to take countermeasures against the U.S.--including shooting down U.S. strategic bombers, even if they're not in North Korean airspace.
Investors turned their attention to Fed Chair Janet Yellen on Tuesday as she gave a speech entitled "Inflation, Uncertainty, and Monetary Policy" at the NABE's annual meeting. Ms. Yellen defended a gradual path of rate hikes despite continued uncertainty in the area of inflation, but her comments didn't move the financial markets; equities finished the session flat.
Things turned around for the equity market on Wednesday as investors cheered the GOP's tax reform outline, sending equities into positive territory for the week. Some of the most notable highlights of the plan include cutting the corporate tax rate to 20% from 35%, doubling the standard deduction, and reducing the number of tax brackets to three from seven. The plan calls for trimming the highest tax rate to 35.0% from 39.6%, but Congress will have the option to add a fourth bracket for the very top earners.
Details on how the government will make up for the immediate loss in tax revenue were limited. This topic will likely be an area of contention for the GOP going forward as many conservatives are opposed to the idea of driving up the federal deficit, which would probably be necessary to fund the tax overhaul--at least in the short term.
Market-moving headlines were scarce on Thursday, but that didn't prevent the S&P 500 from ticking up and registering a new record close. Roku (ROKU) opened for trading on the Nasdaq exchange on Thursday and had a solid first day, settling 67.9% above its IPO price of $14.00 per share.
Investors pushed stocks higher once again on Friday after the core PCE Price Index--the Fed's preferred gauge for inflation--for August came in below expectations, showing a month-over-month increase of 0.1% (Briefing.com consensus +0.2%). On a year-over-year basis, the core PCE Price Index is up 1.3%, down from 1.4% in the prior reading, and still a ways below the Fed's target of 2.0%.
Still, the fed funds futures market projects that the next rate hike will occur at the December FOMC meeting with an implied probability of 77.9%, up from 72.8% last week.
S&P 500 Ticks Up, Settles at New All-Time High
28-Sep-17 16:25 ET
Dow +40.49 at 22381.20, Nasdaq +0.19 at 6453.45, S&P +3.02 at 2510.06
https://www.briefing.com/investor/markets/stock-market-update/2017/9/28/s-and-p-500-ticks-up-settles-at-new-alltime-high.htm
[BRIEFING.COM] Stocks were restricted to a pretty narrow range on Thursday as investors continued to chew on the GOP's tax reform outline--which was released in the prior session. The Dow (+0.2%), the Nasdaq (unch), and the S&P 500 (+0.1%) all settled with slim gains, but only the S&P 500 managed close at a new all-time high (2,510.06).
The benchmark index was not alone in finishing at a new record high, however, as the Dow Jones Transportation Average (+0.5%), the Russell 2000 (+0.3%), and the S&P MidCap 400 (+0.2%) also rewrote their respective record-high closing marks.
Conviction was weak at the macro level on Thursday, but there were several individual movers of note. For instance, Dow component McDonald's (MCD 157.49, +3.44) climbed 2.2% after Longbow Research upgraded the company's shares to 'Buy' from 'Neutral' on Thursday morning.
Health care giants AbbVie (ABBV 88.96, +4.21) and Abbott Labs (ABT 53.64, +1.49) touched new record highs, ending the day with gains of 5.0% and 2.9%, respectively. AbbVie rallied after reaching a settlement with Amgen (AMGN 185.46, +0.58) regarding the intellectual property rights of AbbVie's blockbuster drug Humira.
Meanwhile, ABT shares climbed after the FDA approved a new Abbott device that is able to monitor blood sugar levels without drawing blood.
On the flip side, Gilead Sciences (GILD 80.91, -2.95) dropped 3.5% after COO Kevin Young announced his plan to retire on Wednesday evening and RBC said that the consensus HCV estimate likely needs to come down. Mr. Young will remain with the company through the first quarter of 2018 and in an advisory capacity thereafter.
Roku (ROKU 23.50, +9.50) had a solid first day trading on the Nasdaq exchange, settling 67.9% above its IPO price of $14.00 per share. The company makes devices that allow its customers to stream media from the internet to their TVs--similar to Apple TV, Amazon Fire Stick, and Google Chromecast.
On the earnings front, BlackBerry (BBRY 10.47, +1.24) surged 13.4% after beating both top and bottom line estimates and issuing above-consensus guidance for fiscal year 2018. Conversely, Rite Aid (RAD 2.03, -0.25) plunged 11.0%, hitting its lowest level in more than four years, after missing revenue estimates.
Out of the S&P 500's 11 sectors, only two finished in negative territory--consumer discretionary (unch) and industrials (-0.1%). As for the rest, seven finished with gains of no more than 0.3% while the lightly-weighted materials (+0.7%) and real estate (+0.6%) groups exhibited relative strength.
In the bond market, shorter-dated issues finished Thursday in the green, overcoming early weakness; the yield on the 2-yr Treasury note slipped two basis points to 1.45%, but traded around 1.48% in the early morning. Meanwhile, the benchmark 10-yr yield settled flat at 2.31% after hovering around 2.33% at the opening bell.
Reviewing Thursday's batch of economic data, which included the third estimate of second quarter GDP, weekly Initial Claims, and Advance International Trade in Goods for August:
The third estimate of second quarter GDP pointed to an expansion of 3.1%, while the Briefing.com consensus expected a reading of 3.0%. The second estimate came in at 3.0% last month.
The key takeaway from the report is that it was driven by a pickup in both consumer and business spending, which is typically a good mix for accelerating economic growth.
The latest weekly initial jobless claims count totaled 272,000 while the Briefing.com consensus expected a reading of 275,000. Today's tally was above the revised prior week count of 260,000 (from 259,000). As for continuing claims, they declined to 1.934 million from the revised count of 1.979 million (from 1.980 million).
The key takeaway from the report is that initial claims held below 300,000 despite the impact of the hurricanes. This points to continued tightness in the labor market and should ultimately translate into lower readings in the coming weeks as the hurricane impact diminishes.
The Advance report for International Trade in Goods for August showed a deficit of $62.9 billion (Briefing.com consensus -$65.1 billion), down from a revised deficit of $63.9 billion for July (from -$65.1 billion).
On Friday, investors will receive several pieces of economic data, including August Personal Income (Briefing.com consensus +0.2), Personal Spending (Briefing.com consensus +0.1%), and core PCE Prices (Briefing.com consensus +0.2%) at 8:30 ET, September Chicago PMI (Briefing.com consensus 58.0) at 9:45 ET, and the final reading of the University of Michigan Consumer Sentiment Index for September (Briefing.com consensus 95.4) at 10:00 ET.
Nasdaq Composite +19.9% YTD
Dow Jones Industrial Average +13.3% YTD
S&P 500 +12.1% YTD
Russell 2000 +9.7% YTD
Investors Cheer Tax Reform Plan
27-Sep-17 16:30 ET
Dow +56.39 at 22340.71, Nasdaq +73.10 at 6453.26, S&P +10.20 at 2507.04
https://www.briefing.com/investor/markets/stock-market-update/2017/9/27/investors-cheer-tax-reform-plan.htm
[BRIEFING.COM] The U.S. equity market moved into positive territory for the week on Wednesday as investors cheered the GOP's latest tax reform outline. Small caps led the rally, sending the Russell 2000 (+1.9%) to a new record high for the fourth session in a row. The Nasdaq (+1.2%) easily outperformed the S&P 500 (+0.4%) while the Dow (+0.3%) finished a tick behind.
Market participants received the tax reform framework on Wednesday morning, but it contained few surprises as many of the details were leaked to the media beforehand. President Trump gave a speech on the plan in the late afternoon, but provided little to no new information.
Some of the most notable highlights of the plan include cutting the corporate tax rate to 20% from 35%, doubling the standard deduction, and reducing the number of tax brackets to three (or possibly four) from seven. The individual tax rates would be set at 12%, 25%, and 35%, with a fourth option for the highest earners.
Details on how the government will make up for the immediate loss in tax revenue were limited. This topic will likely be an area of contention for the GOP going forward as many conservatives are opposed to the idea of driving up the federal deficit, which would probably be necessary to fund the tax overhaul--at least in the short term.
U.S. Treasuries finished broadly lower in a curve-steepening trade that left the 2-yr yield three basis points higher at 1.47% and the 10-yr yield eight basis points higher at 2.31%. The S&P 500's financial sector (+1.3%) outperformed as lenders cheered the steepening of the yield curve, which bodes well for their earnings prospects.
The information technology sector, the only sector more influential than financials, also soundly outpaced the broader market, moving higher by 1.1%. These two sectors exhibited relative strength throughout the session, keeping the broader market afloat during a long stretch of morning weakness.
Equity indices opened Wednesday's session with modest gains, but quickly retreated toward their flat lines. Sentiment picked back up in the early afternoon, sending the major averages to new session highs. At its worst mark of the day, the S&P 500 held a loss of 0.03% and, at its best, held a gain of 0.6%--marking an all-time high (2,511.75).
Three of the eleven sectors finished with notable losses on Wednesday--utilities (-1.4%), real estate (-0.8%), and consumer staples (-0.7%)--while only one, in addition to technology and financials, settled with a notable gain--consumer discretionary (+0.5%).
In earnings news, Micron Technology (MU 37.09, +2.91) jumped 8.5%, hitting its best level since the dot-com bubble, after beating both top and bottom line estimates and issuing upbeat guidance. The bullish sentiment radiated throughout the semiconductor space, sending the PHLX Semiconductor Index higher by 2.4%.
Conversely, Dow component Nike (NKE 52.67, -1.03) dropped 1.9% after the athletic footwear and apparel company topped earnings expectations for its fiscal first quarter on scant revenue growth and issued a disappointing gross margin outlook for the fiscal second quarter.
Reviewing Wednesday's economic data, which included August Durable Goods Orders, August Pending Home Sales, and the weekly MBA Mortgage Applications Index:
August durable goods orders rose 1.7%, which is more than the 0.7% increase expected by the Briefing.com consensus. The prior month's reading was left unrevised at -6.8%. Excluding transportation, durable orders increased 0.2% (Briefing.com consensus +0.2%) to follow the prior month's revised uptick of 0.8% (from 0.5%).
The key takeaway from the report is that it showed a continued pickup in business spending and a favorable translation of that increased activity for Q3 GDP forecasts.
Pending Home Sales for August declined 2.6% (Briefing.com consensus -0.4%). Today's reading follows an unrevised 0.8% decrease in July.
The weekly MBA Mortgage Applications Index decreased 0.5% to follow last week's 9.7% decline.
On Thursday, market participants will receive several pieces of economic data, including the third estimate of second quarter GDP (Briefing.com consensus +3.0%), weekly Initial Claims (Briefing.com consensus 275K), and Advance International Trade in Goods for August (Briefing.com consensus -$65.1 billion). All three reports will be released at 8:30 ET.
The Nasdaq and the S&P 500 will enter Thursday's session with week-to-date gains of 0.4% and 0.2%, respectively, while the Dow will enter flat.
Nasdaq Composite +19.9% YTD
Dow Jones Industrial Average +13.1% YTD
S&P 500 +12.0% YTD
Russell 2000 +9.4% YTD
Technology Bounces Back Modestly; Broader Market Settles Flat
26-Sep-17 16:30 ET
Dow -11.77 at 22284.32, Nasdaq +9.57 at 6380.16, S&P +0.18 at 2496.84
https://www.briefing.com/investor/markets/stock-market-update/2017/9/26/technology-bounces-back-modestly-broader-market-settles-flat.htm
[BRIEFING.COM] Equities finished mixed on Tuesday as the broader market largely ignored a modest bounce-back performance from the technology sector (+0.4%)--which moved sharply lower on Monday. The tech-heavy Nasdaq climbed 0.2%, the S&P 500 finished just a tick above its flat line, and the Dow slipped 0.1%.The Russell 2000 (+0.3%) settled at a fresh record high for the third session in a row.
The technology sector never touched negative territory on Tuesday, but the magnitude of its gain did fluctuate a bit, hovering between 0.01% and 0.84%. However, the sector's top component by market cap--Apple (AAPL 153.14, +2.59)--remained strong throughout the session, determined to end its four-session losing streak. AAPL shares settled higher by 1.7%.
Meanwhile, NVIDIA (NVDA 171.96, +0.96) was strong early following news that it will provide GPU hardware to several Chinese tech giants, but weakened throughout the day. The chipmaker hit a new session low in the late afternoon following a report that Tesla (TSLA 345.25, +0.26) will use Intel (INTC 37.47, +0.31) technology for infotainment instead of NVIDIA.
Still, NVIDIA managed to contribute to the technology rally, settling higher by 0.6%. Red Hat (RHT 110.07, +4.31) also contributed (+4.1%), jumping to its best level in nearly two decades, after beating both top and bottom line estimates and issuing upbeat guidance.
Outside of the tech sector, Darden Restaurants (DRI 77.71, -5.43), the owner of brands like Olive Garden and LongHorn Steakhouse, dropped 6.5% despite reporting in-line earnings and revenues. Conversely, Carnival (CCL 65.32, +1.82) climbed 2.9% after reporting better-than-expected top and bottom lines.
The S&P 500's consumer discretionary sector, which houses both Darden Restaurants and Carnival, finished slightly behind the broader market, ticking down 0.1%. In general, sector movement was pretty modest as eight of the eleven groups settled within 0.2% of their unchanged marks.
Fed Chair Janet Yellen spoke at a NABE meeting in Cleveland on Tuesday, defending a gradual path of rate hikes despite continued uncertainty in the area of inflation. Her comments did not move either the stock market or the Treasury market, which declined modestly, sending yields slightly higher.
The yield on the benchmark 10-yr Treasury note climbed one basis point to 2.23% while the 2-yr yield jumped two basis points to 1.44%.
In Washington, Senator Bill Cassidy (R-LA) confirmed that the Senate will not vote on the Cassidy-Graham health care bill as the piece of legislation failed to gain enough support within the GOP. Lawmakers will table the health care reform effort for now and return their attention to tax reform.
Reviewing Tuesday's economic data, which included August New Home Sales, the Conference Board's Consumer Confidence Index for September, and the Case-Shiller 20-City Composite Home Price Index for July:
New Home Sales in August hit an annualized rate of 560,000, which is below the revised July rate of 580,000 (from 571,000), and lower than the Briefing.com consensus of 577,000.
The key takeaway from the report isn't that sales declined 4.7% in the South, which was partly impacted by Hurricane Harvey, but that sales declined 2.7% in the West, which wasn't impacted by Hurricane Harvey, after declining 15.3% in July. The weakness in the West could be a function of constraints related to high prices, yet it will need to be watched closely as a potential harbinger of a broader slowdown in the housing market related to affordability constraints.
The consumer confidence reading for September declined to 119.8 from the prior month's revised reading of 120.4 (from 122.9). The Briefing.com consensus expected the survey to hit 119.4.
The key takeaway from the report is that the downturn was driven mostly by changing attitudes among consumers in the hurricane-ravaged states of Texas and Florida, which manifested themselves in the Present Situation Index. Overall, consumers remained relatively upbeat about the short-term outlook.
The July Case-Shiller 20-city Index hit 5.8%, which is in line with the Briefing.com consensus. The prior month's reading was revised to 5.6% from 5.7%.
On Wednesday, investors will receive several economic reports, including the weekly MBA Mortgage Applications Index at 7:00 ET, August Durable Goods Orders (Briefing.com consensus +0.7%) at 8:30 ET, and August Pending Home Sales (Briefing.com consensus -0.4%) at 10:00 ET.
Nasdaq Composite +18.5% YTD
Dow Jones Industrial Average +12.8% YTD
S&P 500 +11.5% YTD
Russell 2000 +7.4% YTD
Technology Tumbles
25-Sep-17 16:30 ET
Dow -53.50 at 22296.09, Nasdaq -56.33 at 6370.59, S&P -5.56 at 2496.66
https://www.briefing.com/investor/markets/stock-market-update/2017/9/25/technology-tumbles.htm
[BRIEFING.COM] The U.S. equity market slipped on Monday as investors dialed back their technology holdings with just a few days left in the third quarter. Naturally, the tech-heavy Nasdaq (-0.9%) was the weakest major average, but found support at its 50-day simple moving average (6,362). Meanwhile, the S&P 500 and the Dow lost 0.2% apiece.
Wall Street rotated out of the S&P 500's technology sector, which has led the stock market's 2017 campaign, in favor of some groups that have struggled so far this year, such as energy (+1.5%), consumer staples (+0.7%), telecom services (+0.9%), and real estate (+0.3%).
In addition to a sector rotation, there was a market-cap rotation on Monday, evidenced by the S&P MidCap 400 (+0.2%) and the small-cap Russell 2000 (+0.1%), both of which finished ahead of the broader market. The Russell 2000 also settled at a new all-time high.
Facebook (FB 162.87, -7.67) was one of the weakest technology components, dropping 4.5% to settle below its 50-day simple moving average (169.11) for the first time since July 6. Fellow mega-cap tech names like Apple (AAPL 150.55, -1.34), Microsoft (MSFT 73.26, -1.15), and Alphabet (GOOGL 934.28, -8.98) also struggled, losing between 0.9% and 1.6%.
Chipmakers also tumbled on Monday, sending the PHLX Semiconductor Index lower by 2.0%. NVIDIA (NVDA 171.00, -8.00) and Micron Technology (MU 34.87, -1.20) exhibited particular weakness, losing 4.5% and 3.3%, respectively. Micron will release its latest earnings report on Tuesday afternoon.
Tech stocks were weak from the jump, but the sell off intensified after North Korea's foreign minister said that U.S. President Donald Trump has effectively declared war on his country and, therefore, Pyongyang has the right to take countermeasures against the U.S., including shooting down U.S. strategic bombers even if they're not in North Korean airspace.
The White House responded by saying the allegation is "absurd."
U.S. Treasuries held gains in the early morning and then advanced to new session highs following the North Korea comments. The benchmark 10-yr yield, which moves inversely to the price of the 10-yr Treasury note, slipped four basis points to 2.22%, settling near its session low. The 2-yr yield held up a bit better, finishing just one basis point below its flat line at 1.42%.
In Europe, Angela Merkel won a fourth term as Germany's chancellor on Sunday, but the far-right Alternative for Germany (AfD) party did better than expected, effectively weakening Ms. Merkel's CDU/CSU alliance. The euro dropped 0.9% to 1.1849 against the U.S. dollar on Monday while the German bund yield tumbled five basis points to 0.40%.
Investors did not receive any economic data on Monday.
However, on Tuesday, market participants will receive several economic reports, including the Case-Shiller 20-City Composite Home Price Index for July (Briefing.com consensus +5.8%) at 9:00 ET, the Conference Board's Consumer Confidence Index for September (Briefing.com consensus 119.4) at 10:00 ET, and August New Home Sales (Briefing.com consensus 577K) also at 10:00 ET.
Nasdaq Composite +18.3% YTD
Dow Jones Industrial Average +12.8% YTD
S&P 500 +11.5% YTD
Russell 2000 +7.0% YTD
InvestmentHouse - A Bit Too Much Geopolitical Intrigue for the Market (WeekendNewsletter)
http://www.investmenthouse.com/frblog.php
- Overall flattish session into the weekend but RUTX joins the large caps
with its own new closing high.
- A bit too much geopolitical intrigue and still digesting the Fed's moves
for the market to rally into the weekend.
- SOX is certainly set up to move higher but the other indices appear
extended on this move.
- Why is the yield curve now so flat and suggesting economic trouble ahead?
- Rally is longer in the tooth in terms of the rally cycles, but SOX looks
ready to break higher, SP400 has more room, and DJ30 is testing nicely. If
they show great upside moves then we play the move, but still cautiously.
Stocks were mushy all Friday perhaps outside of the semiconductors. Once
again there is just a bit too much happening in the geopolitical sense to
initiate any major buys ahead of the weekend. Trump, the alleged dotard,
references the serious issues the Rocket Man will face if he continues his
ways. Mr. Pajamas 2 responds that he might just carry out an above ground
H-bomb test in the Pacific. There is also the Germany election Sunday with
Mother Migration Merkel expected to win but not to get the kind of coalition
she has abused, I mean enjoyed, in the past.
At the same time, though stocks may be a bit mushy, they still hold solid
gains as well as their trends, certainly not selling off because of any
weekend worries. And why should they? After all Jeremy Seigel predicts the
market has another 10% gain to year end. Why sell when you have that going
for you?
Well, perhaps, just perhaps, there will be a selloff to end September and
carry into October before that 10% rally kicks in. Would not be surprised
to see that happen as that is the historic market pattern for this time of
year AND there is that algorithm market pattern as well that kicks in after
the indices hit new highs and rally a bit more. Then, after selling back,
the cycle starts over to the upside. Those two patterns dovetail right now,
an appropriate metaphor given it is dove season in many places right now.
Thus, the indices finished the session decently and finished the week quite
decently, showing few signs of melting down or otherwise selling off. Some
stocks struggled into the weekend and we closed those positions that
reflected some of those struggles. We also, however, let the strong
continue to work and will see if next week brings the algorithm down cycle
or a renewed upside move if this rather mild test runs its course.
SP500 1.62, 0.06%
NASDAQ 4.23, 0.07%
DJ30 -9.64, -0.04%
SP400 0.33%
RUTX 0.46%
SOX 0.50%
VOLUME: NYSE flat; NASDAQ -7%. Very noncommittal ahead of the weekend
with trade again just below average on NYSE, below average on NASDAQ.
ADVANCE/DECLINE: NYSE 1.8:1; NASDAQ 1.9:1. Not bad given the modest
action. Obviously related to the better showings in the small and midcaps.
The index action is somewhat split, but none of the indices are in any kind
of trouble at all. More precisely, they are at different stages of their
rallies, some on the upswing still, playing catchup to the large cap indices
at new highs. Those that hit the highs are on the test.
The nagging question is whether the algorithms kick in again given all
indices but SP400 have hit new highs on this move. That, however, is almost
fearing things that may or may not be in the shadows. If you go for a walk
in the woods in the north you may run into a bear. Does that mean you don't
walk in the woods? No, you just take the proper precautions and know what
to do if you see that bear -- or more importantly, if he sees you.
Still, the bear has struck relatively regularly after new highs are hit.
Nothing suggests a change in that pattern, so for now we take advantage of
great patterns if they present themselves for solid moves, don't let any
positions get too errant on us, and try to let the solid trends keep working
through any chop. If stocks such as NFLX, bucking the trend against all the
FAANG, HON, BABA, LRCX start breaking support with sharp, high volume moves
lower, then it is time to clear out. Not there yet.
THE MARKET
CHARTS
SOX: Breakout to a new all-time high Monday, then tested the move into
Friday. Held the 10 day EMA and the prior high from June and managed a
Friday close over that June peak. Not a bad quick test of the breakout,
leaving SOX in good position to continue the breakout. Some good looking
semiconductors are set up well.
RUTX: New all-time closing high, closing just below the July highs..
Impressive second leg of the run from the July/August selloff, recovering
the entire loss. Made the move without another rest. 55 points off the
early September test lows, almost the exact number of points off the August
selloff low. With that kind of move and sitting at the prior high, it makes
sense the small caps test here.
NASDAQ: Hit a new high on the week, then faded into Friday to the 20 day
EMA. Held that level then rebounded modestly to end the week. Bumped
resistance, could not make any real inroads, but if NASDAQ holds the 20 day
EMA and bounces, it has put in a great higher low and is well-positioned to
break higher and move to a real new high. Nothing nefarious, but thus far
unable to put in a solid new high as in prior rallies. Perhaps that is
still in front of it, but at this point we have some good positions, some
good gain built in, and we can afford to let NASDAQ show if it can make that
next break higher.
DJ30: Broke to a new high through Wednesday, faded Thursday and Friday to
test just over the 10 day EMA. Impressive, same move it made in late
July/early August, normal test. That was the case in the last move, then
suddenly the 10 day EMA didn't hold. Thus far, very good looking test.
SP500: Spent the week slow dancing with the upper channel trendline from
way back in 2009, yes the trendline established after the Fed went full
frontal QE. Bumped the TL Monday through Thursday, backing off Thursday and
Friday. Backed off but held the 10 day EMA; not much backing down.
Financial stocks really helped SP500 on the week, but now we have to see how
they perform now they are at the top of their range.
SP400: The midcaps may have put in a good part of their test already.
Working laterally after Monday, waiting on the 10 day EMA to catch up to the
move. Surpassed the 1750 level, now at the next high, the June high at
1771, and trying to consolidate at that level. Another 20 points to the
prior all-time high, trying to consolidate the last move to make that run.
LEADERSHIP
Still plenty of quality stocks leading the way, and indeed, breaking higher
after tests. That shows continuing bids, not indicating a turn back down is
imminent. Still, some that were performing are struggling. Perhaps just
rotation.
Manufacturing: HON the outstanding stock in the group, breaking sharply
higher Thursday and Friday to a higher high. CAT, TEX still strong. ITW
testing a strong 2 week run higher. Strong.
Semiconductors: Volatile week but closed well. LRCX tested its breakout,
held over the 20 day, surged Friday. AMAT tested, managed to hold support.
SLAB looks good. XLNX has made a nice short test. MRVL ditto. They don't
look bad at all. AVGO, QRVO need some work. NVDA gapped lower on the
AMD/TSLA AI chip news but is holding support.
Retail: Tested good moves on the week, some look ready to move higher:
KORS, GPS, HD. DLTR broke higher again.
China stocks: This group rotates amongst itself. YNDX, YY started upside
Friday. BABA, BIDU remain solid. BITA testing its strong break higher.
SINA making a good test.
Financial: BAC, JPM, GS all moved higher on the week with some nice moves
but ended the week bumping the top of the range.
Drugs/biotechs: AMGN, BIIB remain in good 2-week tests of near support.
Smaller issues are struggling just a bit though hanging in at support: BLRX,
IMGN, IMMU holding well. PFE continues to move higher.
Software: Not bad tests setting up the next legs from the look of it: CRM;
VMW. TTWO continues up the 10 day EMA. GLUU sold to the 20 day EMA but
bounced Friday on more good volume.
Oil: APC added some more after that big buyback announcement. DVN still
moving upside. SAM and others are setting up patterns.
MARKET STATS
DJ30
Stats: -9.64 points (-0.04%) to close at 22349.59
Nasdaq
Stats: +4.23 points (+0.07%) to close at 6426.92
Volume: 1.64B (-6.82%)
Up Volume: 881.72M (+303.89M)
Down Volume: 717.87M (-412.13M)
A/D and Hi/Lo: Advancers led 1.91 to 1
Previous Session: Decliners led 1.25 to 1
New Highs: 124 (+5)
New Lows: 24 (-5)
S&P
Stats: +1.62 points (+0.06%) to close at 2502.22
NYSE Volume: 722M (-0.21%)
A/D and Hi/Lo: Advancers led 1.77 to 1
Previous Session: Decliners led 1.32 to 1
New Highs: 149 (+16)
New Lows: 18 (+6)
SENTIMENT INDICATORS
VIX: 9.59; -0.08
VXN: 13.81; +0.10
VXO: 7.89; -0.02
Put/Call Ratio (CBOE): 0.98; +0.14
Bulls and Bears: Bulls make their Pavlovian response. They dropped just as
the rally started, now are jumping up just as the rally may be hitting its
peak.
Bulls: 50.5 versus 47.1
Bears: 19.0 versus 20.2
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 50.5 versus 47.1
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 versus 46.1
versus 46.7 versus 45.2
Bears: 19.0 versus 20.2
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: 2.253% versus 2.276%. 10 year yields fell as the yield curve
flattened again. The curve post-FOMC fell hard towards flat. Oh no, a
Greenspan conundrum is developing. Or is it here? Yellen this week said
she did not understand inflation. Oh THAT is great.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.276%
versus 2.273% versus 2.246% versus 2.234% versus 2.201% versus 2.186% versus
2.19% versus 2.167% versus 2.134% versus 2.042% versus 2.105% versus 2.072%
versus 2.166% versus 2.210% versus 2.136% versus 2.129% versus 2.175% versus
2.169% versus 2.189% versus 2.217% versus 2.183% versus 2.197% versus 2.185%
versus 2.225% versus 2.264% versus 2.24% versus 2.191% versus 2.201 versus
2.246% versus 2.262% versus 2.257% versus 2.264% versus 2.221% versus 2.266%
versus 2.253% versus 2.296% versus 2.291% versus 2.303% versus 2.287% versus
2.330% versus 2.255% versus 2.241% versus 2.270% versus 2.261% versus 2.318%
versus 2.331%
EUR/USD: 1.19476 versus 1.19420. Tested the 50 day MA midweek, held.
Continued the 2.5 week lateral consolidation.
Historical: 1.19420 versus 1.19420 versus 1.19954 versus 1.19436 versus
1.1918 versus 1.1874 versus 1.19706 versus 1.19551 versus 1.20379 versus
1.2025 versus 1.19258 versus 1.19143 versus 1.18621 versus 1.19131 versus
1.18938 versus 1.19731 versus 1.19678 versus 1.19212 versus 1.18 versus
1.17516 versus 1.1813 versus 1.17595 versus 1.17107 versus 1.17812 versus
1.17445 versus 1.17751 versus 1.18216 versus 1.17652 versus 1.17596 versus
1.17619 versus 1.17975 versus 1.1774 versus 1.18718 versus 1.18457 versus
1.18072 versus 1.18281 versus 1.18293 versus 1.1683 versus 1.17419 versus
1.1646 versus 1.1637 versus 1.16640 versus 1.16271 versus 1.15280 versus
1.15549 versus 1.14735 versus 1.14672 versus 1.13986 versus 1.14335 versus
1.14682 versus 1.13964
USD/JPY: 111.995 versus 111.804. Broke through the 200 day MA Wednesday,
tested to end the week.
Historical: 112.454 versus 111.559 versus 111.435 versus 110.846 versus
110.01 versus 110.62 versus 110.216 versus 109.434 versus 107.847 versus
108.444 versus 109.132 versus 108.747 versus 110.254 versus 110.049 versus
110.289 versus 109.652 versus 108.04 versus 109.160 versus 109.573 versus
109.195 versus 109.648 versus 109.173 versus 109.205 versus 109.333 versus
109.842 versus 110.6621 versus 109.927 versus 109.183 versus 109.177 versus
110.03 versus 109.09 versus 110.09 versus 110.757 versus 110.689 versus
109.963 versus 110.717 versus 110.368 versus 110.28 versus 110.704 versus
111.07 versus 111.166 versus 111.897 versus 111.176
Oil: 50.66, +0.11. Held a test of the 200 day SMA early week, edged up the
rest of the week but not a big new surge.
Gold: 1297.50, +2.70. Nasty drop Thursday post-FOMC and not much of a
bounce at all Friday on the worries about the weekend and North Korean
H-bombs. Held the 50 day MA to end the week in the current 2 week pullback.
MONDAY
We will see what the weekend brings and whether that impacts the Monday
trade. Two weeks back it was the lack of any follow through of tensions
between the US and North Korea that sprung a renewed move upside after a
test of the initial move off the August low.
Many are talking about the rally continuing on. It may do so, and if it
does we let our remaining positions run and pick up some new quality
patterns that break higher.
As noted before, however, nothing indicates the market's pattern has
changed, i.e. that after new highs are hit and some more rallying on top of
the new high, the selling kicks in. Indeed, that more fits the season of
the year: September selling leads to an October bottom and a rally to year
end.
That is the move we are anticipating as the most probable but of course the
market will do what it does. We will simply be ready for the route the
market takes. There are still plenty of good entries right now if they make
the moves. Again, be ready for the route the market takes. We believe this
current rally can continue another week or so, but then hits the downside of
the cycle. That will set up the next leg higher, and combined with the
seasonal driver, it could be a good move to the close of the year.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6426.92
Resistance:
6450 is the early September high
6461 is the July 2017 prior all-time high
64.77 is the September intraday high
Support:
The 50 day EMA at 6347
6341.70 is the all-time high from early June.
6300 is the mid-June interim high
The 2016 trendline at 6288
6205 is the late May all-time high
The 200 day SMA at 5998
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
5661 is the late January upper gap point
5601 is the January lower gap point
S&P 500: Closed at 2502.22
Resistance:
2508 is the upper channel line from the March 2009 uptrend channel
Support:
2491 is the August all-time high
2480 the late August and early August highs
The 50 day EMA at 2467
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
The 200 day SMA at 2382
2352 is the recent May 2017 low
2348 is the April 2017 lower gap point
2329 is the March and April twin lows
2322 is the March 2017 low
2301 is the late January 2017 high
2298 is the late January 2017 high
2282 - 2280 from January 2017
2277.53 is the December 2016 high
The November 2016 all-time high at 2213.25
2194 is the August 2016 prior all-time high
2175 is the June 2016 high
Dow: Closed at 22,349.59
Resistance:
Support:
The 10 day EMA at 22,251
22,179 is the August 2017 all-time high
22,086 is the mid-August lower high
The 50 day EMA at 21,901
21,681is the July prior all-time high
21,638 is the July 2017 closing high
21,529 is the June 2017 high
21,169 is the March 2017 all-time high
The 200 day SMA at 20,962
20,547 is the lower gap point from late April 2017
20,412 is the March 2017 low
20,400 is the mid-April 2017 low.
20,126 is the January 2017 intraday high
20,101 is the late January closing high.
19,994 - 19,999 (early January high, upper gap point from late January
19750 is the lows of the December/January range
19,732 is the January 2017 low
18,669 is the August 2016 all-time high
18,595 is the July 2016 peak
18,351 is the prior all-time high from May 2015
Slim Gains on Friday
22-Sep-17 16:30 ET
Dow -9.64 at 22349.59, Nasdaq +4.23 at 6426.92, S&P +1.62 at 2502.22
https://www.briefing.com/investor/markets/stock-market-update/2017/9/22/slim-gains-on-friday.htm
[BRIEFING.COM] Friday was another quiet day on Wall Street as the major U.S. indices hovered near their flat lines from start to finish. The S&P 500 (+0.1%) finished just a tick above its unchanged mark, as did the Nasdaq (+0.1%), thanks to a late-afternoon rally that left the benchmark index at its best level of the day. Meanwhile, the Dow (unch) settled with a slim loss and the Russell 2000 (+0.5%) outperformed, settling at a new all-time high.
The telecom services sector (+1.4%) rallied on Friday following a Reuters report that Sprint (S 8.52, +0.49) and T-Mobile US (TMUS 64.06, +0.67) are nearing a merger deal following months of on-again, off-again talks. The two wireless names jumped 6.1% and 1.1%, respectively, in reaction to the report.
Apple (AAPL 151.89, -1.50) tumbled for the third day in a row, losing 1.0%, amid reports of shorter-than-expected lines for Friday's iPhone 8 launch. However, the top-weighted technology sector (+0.1%) held up relatively well, thanks in part to chipmakers, which pushed the PHLX Semiconductor Index higher by 0.5%.
On the earnings front, Finish Line (FINL 9.73, +0.51) jumped 5.5% after its better-than-expected earnings overshadowed its worse-than-expected revenues. Similarly, CarMax (KMX 74.19, +5.35) climbed 7.8%, hitting its best mark since April 2015, after beating both top and bottom line estimates.
The health care sector (+0.1%) traded behind the broader market for the majority of Friday's session, but moved sharply higher after Senator John McCain (R-AZ) said he cannot support the Graham-Cassidy bill, which is the GOP's latest attempt at replacing the Affordable Care Act.
Mr. McCain's decision puts the bill on the ropes as Republicans can only afford to lose two votes in the Senate and Senator Rand Paul (R-KY) has already voiced his opposition. Senator Susan Collins (R-ME) said she is leaning towards voting against the bill as well.
Elsewhere on the political front, North Korea threatened to test a hydrogen bomb in the Pacific Ocean and released a statement from its Supreme Leader Kim Jong-un, in which he criticizes President Trump's Tuesday speech at the United Nations.
In the bond market, U.S. Treasuries settled Friday's session mixed; the 2-yr yield climbed one basis point to 1.44% while the 10-yr yield dropped two basis points to 2.26%.
Also of note, major oil producers wrapped up a Friday meeting in Vienna without reaching an agreement on whether they should extend, and/or deepen, the current production-cut deal between OPEC and non-OPEC nations. Crude oil held steady following the meeting's conclusion, settling higher by 0.2% at $50.66/bbl.
Investors did not receive any economic data on Friday, nor will they receive any economic data on Monday.
Nasdaq Composite +19.4% YTD
Dow Jones Industrial Average +13.1% YTD
S&P 500 +11.8% YTD
Russell 2000 +6.9% YTD
Week In Review: Holding Steady
Equities held steady this week as investors digested the latest FOMC policy directive, which was released on Wednesday afternoon. The major indices ticked up to new record highs in the first half of the week, but faltered a bit on the back nine. The S&P 500 ticked up 0.1% while the Dow (+0.4%) did a little better and the Nasdaq (-0.3%) did a little worse.
The Fed's latest policy directive came in pretty much as expected. The FOMC unanimously voted to leave the fed funds target range at 1.00%-1.25% and announced that it will start its balance sheet normalization process in October. Meanwhile, the Fed's so-called "dot plot" was unchanged from the one released in June, showing that the median FOMC member still anticipates an additional rate hike in 2017 and three rate hikes in 2018.
Accordingly, investors upwardly adjusted their rate-hike expectations, evidenced by the fed funds futures market, which now places the chances of a December rate hike at 72.8%--up from 57.8% last week and 31.9% the week before that. Bonds sold off for the second week in a row following the FOMC announcement, sending yields higher across the curve. The 2-yr yield climbed six basis points to 1.44%, hitting its highest level in nearly nine years, while the benchmark 10-yr yield also jumped six basis points to 2.26%.
Within the equity market, the heavily-weighted financial sector (+2.7%) finished near the top of the sector standings, benefiting from the prospect of heightened interest rates and some sector rotation. The financial group has trailed the broader market for much of the year, but has been making a come back over the last two weeks; the sector has added 6.9% since September 7.
The telecom services group (+3.8%) also put together a solid performance this week, trimming its year-to-date loss to 8.5%, amid reports that Sprint (S) and T-Mobile US (TMUS) are nearing a merger deal after more than four months of on-and-off talks. The two companies settled the week with gains of 10.8% and 4.7%, respectively.
On the flip side, the top-weighted technology sector (-0.7%) underperformed, thanks in large part to Apple (AAPL), which dropped 5.0%. There were rumors of softer-than-expected demand for the new iPhone 8, which hit stores on Friday, but this week's slide was also likely due to some end-of-quarter profit taking following yet another solid three-month stretch for the company. AAPL shares will enter Monday's session with a quarter-to-date gain of 5.5% and a year-to-date gain of 31.1%.
Countercyclical groups like health care (-1.2%), consumer staples (-2.3%), and utilities (2.8%) also struggled this week while cyclical groups like materials (+1.0%), industrials (+2.0%), and energy (+2.0%) finished with sizable gains. Meanwhile, the growth-sensitive consumer discretionary and real estate groups lost 0.1% and 2.8%, respectively.
In politics, President Trump made his United Nations debut on Tuesday, taking a hard stance against North Korea. The hermit nation later criticized the president for his comments and threatened to test a hydrogen bomb in the Pacific Ocean.
Meanwhile, a new health-care bill written by Senators Lindsey Graham (R-SC) and Bill Cassidy (R-LA) gained support within the GOP this week, but its passage looks unlikely after Senators Rand Paul (R-KY) and John McCain (R-AZ) voiced their opposition and Senator Susan Collins (R-ME) said she is leaning towards voting 'no.' The GOP can only afford to lose two votes in the Senate, assuming Vice President Mike Pence votes in favor of the bill in the event of a tie.
Dow Breaks Streak of Record-High Closes
21-Sep-17 16:30 ET
Dow -53.36 at 22359.23, Nasdaq -33.35 at 6422.69, S&P -7.64 at 2500.60
https://www.briefing.com/investor/markets/stock-market-update/2017/9/21/dow-breaks-streak-of-recordhigh-closes.htm
[BRIEFING.COM] Thursday was a quiet day on Wall Street as investors engaged in some end-of-quarter profit taking. The Dow slipped 0.2%, failing to close at a new record high for the first time in seven sessions, while the S&P 500 and the Nasdaq dropped 0.3% and 0.5%, respectively. Investor participation was below average due to the start of the Rosh Hashanah holiday.
Nine of the eleven sectors settled Thursday's session in negative territory, but losses were modest for the most part. The consumer staples sector was the weakest group (-1.0%), extending its week-to-date loss to 2.1%. The telecom services sector also finished with a sizable decline (-0.8%), but the remaining laggards lost no more than 0.6%.
The top-weighted technology space held a loss of 1.0% shortly after the opening bell, but strengthened a bit as the day wore on; the tech group eventually settled lower by 0.6%. Apple (AAPL 153.39, -2.68) was among the weakest components within the sector (-1.7%), extending its week-to-date loss to 4.1%.
NVIDIA (NVDA 180.76, -5.08) also struggled, dropping 2.7%, following a CNBC report that Tesla (TSLA 366.48, -7.43), which uses NVIDIA hardware for its auto-pilot functionality, is working with AMD (AMD 13.41, -0.33) to develop a self-driving chip. AMD later denied the report.
On the flip side, the financials (+0.2%) and industrials (+0.3%) groups managed to escape Thursday's session with modest victories. General Electric (GE 24.75, +0.43) played a big part in the industrial sector's positive performance, climbing 1.8%. GE shares have added 4.3% since September 11, but still remain lower by 21.7% for the year.
As for the heavily-weighted financial space, today's win marked its ninth in the last ten sessions--a run that's boosted the sector 6.9% since September 7.
In the bond market, U.S. Treasuries moved higher at the start of Thursday's session, but gave back most of their gains by the close. The yield on the benchmark 10-yr Treasury note finished unchanged at 2.28%, while the 2-yr yield slipped one basis point to 2.28%.
Meanwhile, gold tumbled 1.2% to $1,294.70/ozt, the U.S. Dollar Index slipped 0.2% to 92.03, and WTI crude dropped 0.3% to $50.55/bbl.
On the political front, President Trump signed an executive order aimed at targeting individuals and companies involved in business with North Korea and said that China has ordered its banks to stop working with Pyongyang.
Reviewing Thursday's economic data, which included the weekly Initial Claims Report, the September Philadelphia Fed Index, and the July FHFA Housing Price Index:
The latest weekly initial jobless claims count totaled 259,000 while the Briefing.com consensus expected a reading of 310,000. Today's tally was below the revised prior week count of 282,000 (from 284,000). As for continuing claims, they rose to 1.980 million from the revised count of 1.936 million (from 1.944 million).
The key takeaway, then, is that employers appear to be reluctant to cut their payrolls in a tight labor market.
The Philadelphia Fed Survey for September rose to 23.8 from an unrevised 18.9 in August while economists polled by Briefing.com had expected a reading of 17.1.
The key takeaway from the report is that most firms expect increased production for the rest of the year.
The FHFA Housing Price Index for July rose 0.2%. The prior month's reading was left unrevised at +0.1%.
Investors will not receive any economic data on Friday.
Nasdaq Composite +19.3% YTD
S&P 500 +11.7% YTD
Dow Jones Industrial Average +13.1% YTD
Russell 2000 +6.4% YTD
Wall Street Takes FOMC Announcement in Stride
20-Sep-17 16:30 ET
Dow +41.79 at 22412.59, Nasdaq -5.28 at 6456.04, S&P +1.59 at 2508.24
https://www.briefing.com/investor/markets/stock-market-update/2017/9/20/wall-street-takes-fomc-announcement-in-stride.htm
[BRIEFING.COM] The stock market settled at a new record high once again on Wednesday, but the victory was far from convincing and looked improbable after the latest FOMC policy directive prompted a mild sell off. Both the Dow and the S&P 500 finished at new all-time highs, adding 0.2% and 0.1%, respectively. However, the tech-heavy Nasdaq slipped 0.1% as technology stocks struggled.
As expected, the FOMC unanimously voted to keep the fed funds target range at 1.00%-1.25% and announced that it will begin unwinding its balance sheet in October. Meanwhile, the Fed's so-called "dot plot" was unchanged from the one released in June, showing that the median FOMC member anticipates an additional rate hike in 2017 and three rate hikes in 2018.
The feds funds futures market now places the chances of a December rate hike at 67.8%, up from 57.7% on Tuesday and from 48.7% last week.
U.S. Treasuries were trading flat ahead of the FOMC announcement, but then moved lower in a curve-flattening trade. The 2-yr yield, which is more sensitive to changes in monetary policy, jumped five basis points to 1.44%, finishing at a nine-year high. Meanwhile, the benchmark 10-yr yield climbed four basis points to 2.28%.
The U.S. Dollar Index (92.25, +0.63) settled with a gain of 0.7% after holding a loss of 0.2% prior to the FOMC release.
In the equity market, the two heaviest sectors--technology (-0.5%) and financials (+0.6%)--finished at opposite ends of the leaderboard. Apple (AAPL 156.07, -2.66) weighed on the tech space, dropping 1.7%, following rumors of softer-than-expected demand for the new iPhone 8, which was unveiled last week.
Elsewhere within the tech space, chipmakers underperformed, sending the PHLX Semiconductor Index (-1.4%) lower for the first time in eight sessions. Adobe Systems (ADBE 149.96, -6.64) also exhibited notable weakness (-4.2%), despite reporting above-consensus earnings and revenues.
As for financials, the space got off to a mild start, but moved sharply higher following the FOMC policy announcement. Financials' win--which marks the eighth in the last nine sessions--was a team effort as nearly all of the sector's components finished in positive territory.
The energy sector (+0.7%) also outperformed, thanks in part to an increase in the price of crude oil; WTI crude jumped 1.5% to $50.70/bbl. The EIA's weekly crude inventory report was disappointing, showing a bigger-than-expected build of 4.6 million barrels (+3.5 million consensus).
However, the Iraqi oil minister said OPEC and non-OPEC producers are considering extending, or even deepening, last year's supply-cut agreement, which is currently set to expire in March 2018. That news helped the commodity overcome the EIA inventory report and climb to its highest level in four months.
It's also worth noting that transports outperformed on Wednesday, pushing the Dow Jones Transportation Average higher by 1.6%. FedEx (FDX 220.50, +4.50) was one of the DJTA's strongest components (+2.1%), despite issuing below-consensus guidance on Tuesday evening.
In politics, reports indicate that Senate Majority Leader Mitch McConnell (R-KY) intends to put a new health care bill on the floor next week. In order to avoid an overlap with the vote, reports indicate that Congress may delay releasing a tax reform outline until the first week of October.
Reviewing Wednesday's economic data, which included August Existing Home Sales and the weekly MBA Mortgage Applications Index:
Existing home sales for August decreased 1.7% from July to an annualized rate of 5.35 million units while the Briefing.com consensus expected a reading of 5.42 million. The prior month's reading was left unrevised at 5.44 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.
The weekly MBA Mortgage Applications Index decreased 9.7% to follow last week's 9.9% rise.
On Thursday, investors will receive several economic reports, including the weekly Initial Claims Report (Briefing.com consensus 310K) at 8:30 ET, the September Philadelphia Fed Index (Briefing.com consensus 17.1) also at 8:30 ET, and the July FHFA Housing Price Index at 9:00 ET.
Nasdaq Composite +19.9% YTD
S&P 500 +12.0% YTD
Dow Jones Industrial Average +13.4% YTD
Russell 2000 +6.5% YTD
Wall Street Ticks Up Ahead of FOMC Policy Statement
19-Sep-17 16:30 ET
Dow +39.45 at 22370.80, Nasdaq +6.68 at 6461.32, S&P +2.78 at 2506.65
https://www.briefing.com/investor/markets/stock-market-update/2017/9/19/wall-street-ticks-up-ahead-of-fomc-policy-statement.htm
[BRIEFING.COM] Equities moved higher once again on Tuesday, but conviction was weak ahead of the latest FOMC policy statement, which will be released on Wednesday afternoon. The S&P 500 (+0.1%), the Nasdaq (+0.1%), and the Dow (+0.2%) closed at new record highs, but the small-cap Russell 2000 (-0.1%) lagged a bit, settling just below its unchanged mark.
Wireless names were in focus on Tuesday following reports of renewed merger talks between Sprint (S 8.20, +0.52) and T-Mobile US (TMUS 65.42, +3.62). The two companies spiked 6.8% and 5.9%, respectively, and helped the S&P 500's telecom services sector (+2.3%) finish at the top of the day's sector standings--by a comfortable margin.
Financials also outperformed, sending the influential financial sector (+0.8%) to its seventh win in eight sessions, thanks in part to a slight steepening of the yield curve--which bodes well for lenders. The yield on the 2-yr Treasury note finished flat at 1.39% while the benchmark 10-yr yield climbed one basis point to 2.24%.
Conversely, health care stocks sold off on Tuesday with providers like UnitedHealth (UNH 194.65, -3.54) and Aetna (AET 156.04, -4.96) getting hit the hardest; the two companies dropped 1.8% and 3.1%, respectively. The health care sector (-0.8%) finished near the bottom of the sector standings, surpassed only by the real estate group (-1.0%).
On the earnings front, AutoZone (AZO 535.19, -28.21) plunged 5.0% after its better-than-expected bottom-line results failed to justify its recent four-week rally; AZO shares advanced over 10.0% from August 18 to yesterday's close. The S&P 500's consumer discretionary sector (-0.1%), which houses automotive retailers, finished lower for the fourth session in a row.
Also of note, firearm stocks spiked in late-afternoon action following a Daily Mail report that President Trump is looking to ease industry export restrictions. Names like Sturm Ruger (RGR 54.35, +6.55), American Outdoor Brands (AOBC 15.70, +1.44), and Vista Outdoor (VSTO 23.00, +0.70) settled higher by 13.7%, 10.1%, and 3.1%, respectively.
In politics, President Trump made his U.N. debut on Tuesday, taking a hard stance against North Korea and the Iran nuclear deal. Also, reports indicate that Senate Majority Leader Mitch McConnell (R-KY) is seriously considering a Senate vote on a new health-care reform bill.
Reviewing Tuesday's batch of economic data, which included August Housing Starts, August Import/Export Prices, and the Current Account Balance for the second quarter:
Housing starts decreased to a seasonally adjusted annualized rate of 1.180 million units in August (Briefing.com consensus 1.170 million), down from a revised 1.190 million units in July (from 1.155 million). Building permits increased to a seasonally adjusted 1.300 million in August (Briefing.com consensus 1.212 million) from a revised 1.230 million in July (from 1.223 million).
The key takeaway from the report is that the pace of single-family starts isn't quick enough to alleviate the supply pressures in the housing market that are crimping affordability for prospective homeowners. That isn't expected to improve next month either when the force of the impact from Hurricanes Harvey and Irma weighs on housing starts activity.
Import prices excluding oil rose 0.3% in August after declining 0.1% in July. Export prices excluding agriculture increased 0.7% in August after rising 0.3% in July.
The key takeaway from the Import-Export Price Index report for August is that it will keep the possibility of a December rate hike on the table.
The current account deficit for the second quarter totaled $123.1 billion (Briefing.com consensus -$115.1 billion). The first quarter deficit was revised to $113.5 billion from $116.6 billion.
On Wednesday, investors will receive just two economic reports--the weekly MBA Mortgage Applications Index and the August Existing Home Sales Report (Briefing.com consensus 5.42 million)--at 7:00 ET and 10:00 ET, respectively. In addition, the FOMC will release its latest policy directive at 14:00 ET.
Nasdaq Composite +20.0% YTD
Dow Jones Industrial Average +13.2% YTD
S&P 500 +12.0% YTD
Russell 2000 +6.1% YTD
Another Day, Another Record High
18-Sep-17 16:30 ET
Dow +63.01 at 22332.65, Nasdaq +6.17 at 6454.61, S&P +3.64 at 2505.32
https://www.briefing.com/investor/markets/stock-market-update/2017/9/18/another-day-another-record-high.htm
[BRIEFING.COM] The U.S. equity market opened the week on a positive note, sending both the S&P 500 (+0.2%) and the Dow (+0.3%) to new all-time highs. The tech-heavy Nasdaq (+0.1%) touched a new intraday high on Monday, but failed to carve out a new record close following a technology sell off in the late afternoon. Small caps outperformed, pushing the Russell 2000 higher by 0.7%.
After climbing to a new record high at the start of Monday's session, the stock market began trending sideways, protecting its modest opening gain. The heavily-weighted financial sector (+1.0%) underpinned the broader market during this time and continued to exert a positive influence through the closing bell.
However, the top-weighted technology sector (unch) took control of the broader market in the afternoon following the sector's sharp drop into negative territory.
Without a catalyst, the tech sector exchanged a gain of 0.3% for a loss of 0.3% in less than an hour with mega-cap names like Apple (AAPL 158.67, -1.21), Facebook (FB 170.01, -1.63), Alphabet (GOOGL 929.75, -5.54), and Microsoft (MSFT 75.16, -0.15) leading the retreat. Likewise, the S&P 500 slipped to its lowest mark of the day, fully retracing its gain of 0.3%.
However, the tech group managed to bounce back a bit in the late afternoon to finish just a tick below its unchanged mark. Chipmakers helped keep the sector's loss in check, putting together yet another positive performance. The PHLX Semiconductor Index climbed 1.2% to settle in the green for the sixth-consecutive session.
NVIDIA (NVDA 187.55, +7.44) led the semiconductor rally--climbing 4.1% to a new all-time high--after Bank of America/Merrill Lynch raised its target price to $210 from $185 on Monday morning.
In total, six sectors finished Monday's session in the green--financials (+1.0%), industrials (+0.6%), materials (+0.6%), telecom services (+0.5%), energy (+0.4%), and consumer staples (unch)--while five settled in the red--technology (unch), health care (-0.1%), consumer discretionary (-0.4%), real estate (-0.5%), and utilities (-1.0%).
The industrial sector benefited from the positive performances of several influential Dow components, including Boeing (BA 253.08, +4.08) and Caterpillar (CAT 123.83, +2.46), which climbed 1.6% and 2.0%, respectively. UBS upgraded CAT shares to 'Buy' from 'Neutral' on Monday morning.
As for Boeing, it rallied alongside aerospace and defense peer Northrop Grumman (NOC 275.97, +8.94), which climbed 3.4% after announcing its intent to acquire Orbital ATK (OA 132.25, +22.21) for $7.8 billion, or $134.50 per share, in cash. Including the assumption of debt, the total cost will be $9.2 billion.
In the bond market, Treasuries sold off in a curve-steepening trade. The yield on the benchmark 10-yr Treasury note climbed three basis points to 2.23% while the 2-yr yield advanced just one basis point to 1.39%. Meanwhile, the U.S. Dollar Index (91.81, +0.16) climbed 0.2%.
Reviewing Monday's economic data, which was limited to the September NAHB Housing Market Index:
The NAHB Housing Market Index for September declined to 64 (Briefing.com consensus 67) from a revised reading of 67 (from 68) in August.
On Tuesday, investors will receive three economic reports--August Housing Starts (Briefing.com consensus 1.17 million), August Import/Export Prices, and the Current Account Balance for the second quarter (Briefing.com consensus -$115.1 billion). All three pieces of economic data will be released at 8:30 ET.
Also of note, the Federal Open Market Committee (FOMC) will kick off a two-day meeting on Tuesday morning. It's latest policy directive will cross the wires on Wednesday afternoon.
InvestmentHouse - Rally Continues Despite North Korean Missile Launch (WeekendNewsletter)
http://www.investmenthouse.com/frblog.php
- Upside rally continues through Friday with another low to high move
despite a best yet NKorean missile launch.
- SOX surges to a new post-2008 closing high, playing catchup to the other
indices.
- New highs logged by most of the indices, and the move post-highs is quite
similar to the prior rallies.
- Economic data remains weak as retail sales miss, revised lower, in need of
tax and healthcare reform.
- SOX move to leadership is important for the post-new highs rally health.
The market move according to its pattern or MO if you prefer is right on
target with its prior rallies in this upside trend. In this pattern, often
after the new high is made the indices continue upside with incremental, not
necessarily strong gains. That is very much what the indices showed to end
the week after a sudden start upside Monday and Tuesday: the rest of the
week was rather slow go upside, particularly for SP500 and NASDAQ. Yes SOX
was strong, but it is playing catchup to the other indices. Doing a good
job of it.
The Friday session was a third straight with a lower open followed by a
recovery to flat or better. Obviously the bids are returning at this level
versus converting to sell orders. That keeps the rally going, and with SOX
stepping up its game, perhaps the post-new high rally can improve on past
performance.
SP500 4.61, 0.18%
NASDAQ 19.39, 0.30%
DJ30 64.86, 0.29%
SP400 0.41%
RUTX 0.47%
SOX 1.71%
VOLUME: NYSE +157%; NASDAQ +54%. Expiration, so cannot write too much into
this showing.
ADVANCE/DECLINE: NYSE 1.7:1, NASDAQ 1.5:1. Outside of SOX and a few
others, not a lot of movement.
DJ30 has taken the lead in the new high department, hitting a high Wednesday
and extending to a new all-time high Thursday and Friday. SP500 was the
first to garner a new high on this last leg this week, clearing to a new
closing high Monday and adding to it through Friday, scoring its own
all-time high as well. NASDAQ put in some new all-time closing highs though
it gave up the early week highs Friday. Even SOX came to life and with two
solid back to back moves to end the week it put in a new post-2008 closing
high. SOX is very important for this market, and if SOX continues to show
such strength, the rally may have more to it than just one of the more
'typical' post-new high moves.
SP400 and RUTX look solid to continue their moves, but SP400 is at important
resistance and both are still quite a way from a new high. Working on it.
Given the timing of the moves, the large cap indices are at new highs and
indeed have traded at them for at least a few days now. In the prior new
high move in July to August and even before that, the indices put in
anywhere from 5 to 10 to 12 sessions after the new high before they started
topping out and set up for the next move lower.
Thus, if you look at the past action as a guide to the market's, and more
specifically the algorithm's, pattern they are working on the last stages of
this particular leg with anywhere from 2 to 10 days left.
Now, of course, this is all rather loose in terms of days. The important
point is the indices are putting in new highs, and if the algorithms hold
their trading patterns then the top will be put in sooner than later. We
have taken gain along the way, and will take more as the move progresses.
At the same time it is possible the market just continues to run higher. It
is showing good action in several groups and the semiconductors came to life
to end the week, though not all -- NVDA made a huge move and it is a
heavyweight in the group. Nonetheless, it is an important group and its
reassertion as a leadership group could lead to a more sustained run this
particular leg. Thus, we did pick up some good stocks and positions as the
market rally continued, and quite frankly there are STILL some good-looking
buys heading into next week; if they continue higher these leaders we are
looking at will help lead the current rally higher. We plan to take gain as
noted, but we also plan to keep participating if great stocks show great
entry points.
NEWS/ECONOMY
The economic data? At best uninspired. Retail sales Friday disappointed
big time as did Industrial Production. At least New York PMI beat
expectations. The week before, jobs were terrible overall though showed
some positives in the jobs mix. All in all, however, the results are, as
noted, uninspiring.
Retail Sales, August: -0.2% versus 0.1% expected versus 0.3% July (from
0.6%)
Ex-autos: 0.2% versus 0.5% expected versus 0.4% prior (from 0.5%)
Control Group: -0.2% versus +0.2% expected
Building materials: -0.5% but that will change after the storms.
Food: 0.3%
Gas stations: 2.5%
Apparel: -1.0%
**Online sales -1.1%, the worst showing since 4/2014.
What does it mean? Just another in a string of continued mediocre economic
data that the US has suffered through for years. It underscores the need
for meaningful tax reform that includes healthcare reform. I can tell you
firsthand stories of the crisis the ACA is bringing to workers wanting
healthcare. The will is there for business to make new investments and move
the economy forward. The problem is the structure that blocks growth by
bleeding off funds for inflated insurance costs.
Just a quick example: we used to be able to purchase for employees a family
healthcare plan for $321/month with 100% coverage after a $5,000 deductible.
They combined that with an HSA account where they contributed tax free
dollars to build up the account to pay for day to day medical expenses plus
the deductible. We matched contributions up to $150/month to help new
employees build up their accounts although they could contribute more. It
worked beautifully.
Today a similar, though not as good coverage plan, costs $1440/month with a
$12,000 deductible. You can contribute to an HSA, but under the ACA the
Health Savings Accounts were gutted and vastly limited as cannot be used for
nonprescription items. The result? People have doctors write prescriptions
for over the counter items, thus jacking up the costs all around.
Incredibly stupid, but not really because the goal was to make a 'fix' that
was unworkable as a stepping stone to total government healthcare.
That is why I am so encouraged by the Graham/Santorum/and others healthcare
bill being introduced in Congress, the one I wrote about before. It puts
the decision-making as to what kind of program the state wants to offer with
the state itself. If they want the ACA, they can have it. If not, they can
try their own ideas.
There is also hope in tax reform with democrats such as Munchin a democrat
from West Virginia saying the negotiations are "very promising." One can
only hope.
THE MARKET
CHARTS
SOX: With NVDA waking up out of a 9-week lateral range Friday and blasting
to a 6+% gain, SOX was finally able to play some much-needed catchup. Not a
new post-2008 high, but at least a post-2008 closing high as SOX moves
through the June peak. INTC threw in with NVDA along with SWKS and even
AVGO showed some life Friday. With the big names and smaller names moving,
SOX gets the first billing this week. Very important group that bodes well
for perhaps this market move extending beyond what has been the 'typical'
moves post new highs in this market.
DJ30: Gapped to yet another new all-time high, making it 2 straight as well
as 3 straight new closing highs. Very much what prior new high moves have
shown, i.e. a break higher and then a more or less steady, albeit
unspectacular, move higher.
SP500: Creeping along to higher highs Tuesday to Friday, putting in a new
one Friday, closing just over the 2500 level. Still has not taken it out
with any authority. This is also quite typical of the post-new high moves
in this market rally: new high, then less than spectacular moves. Higher
yes, but less than spectacular.
NASDAQ: New closing highs on the week but after that move a fade to test
the 10 day EMA. Friday a test and rebound upside. No new high Friday, but
a solid test of the move, holding at near support. Now we see if NASDAQ can
resume the leadership role after a quick test of the new high. It has shown
better post-new high moves, e.g. in July, so it is capable of using this
good setup for a new break higher.
SP400: Not a bad week at all. SP400 lagged the move higher, but it started
making up ground with a pair of gap and runs Monday and Tuesday. A move
over the 50 day SMA, then a test through Thursday. Friday a break higher
with a new rally high. SP400 looks quite good to continue the move higher
as it is handline 1750 well with the next resistance at 17170ish.
RUTX: Small caps posted a solid week, up 4 of 5 sessions and moving through
resistance from March, April, and indeed past the June high as well.
Obviously a bit more than just a relief bounce off the July to August
selling, doing its best to break up any notion of a head and shoulders top
formation over the past 5 months.
LEADERSHIP
Semiconductors: Chips got the first billing Thursday with their work, and
Friday they were at it again. NVDA blasted higher and had the bald-headed
guy on CNBC was all lathered up; surely if flies to the moon -- taking our
existing position nicely deep into the money. AVGO didn't break out but it
did finally contribute upside, helping SOX. INTC cleared the August high.
XLNX, SLAB, SWKS, AMAT and others enjoyed great weeks. The others? BRKS,
ON. Very important group for the market and performing well as more and
more of these stocks start breaking higher.
China stocks: A good week for many though the end of the week was
anti-climactic. SINA a great week. BITA as well. WUBA walking up the 10
day EMA to a new high. BABA surged midweek then tested the rest of the
week. JD looks ready to make a break higher. HTHT in a 20 day EMA test.
Others are setting up for a move, e.g. YNDX, YY,
Financial: A good recovery week. C touched the top of its range, backed
off some, good position. JPM bounced off the 200 day SMA but still very
much range bound. BAC solid upside but still in the range. Lots of moves up
but not saying this is a group I want to get into right now.
Machinery: TEX broke out on the week and shot straight up. CAT continues
working higher up the 10 day EMA. HOLI a bit wild Friday, but holding a
nice trend higher.
Retail: AMZN broke higher Wednesday but could not keep that move going.
Nice test, however. KSS still running higher on its breakout. COST broke
higher, testing its move late week. Same action with ROST, GPS: Good
breaks higher, testing to end the week.
Drugs/biotechs: PFE put in a nice breakout move on the week. Big biotechs
testing the move, e.g. BIIB, CELG. AMGN still moved well. SRPT had a good
week. BLUE broke higher Thursday but could not hold the move. Smaller
stocks are not bad. IDRA starting to move back up. Setting up well, ARRY,
IMGN, IMMU.
Software: VMW put in another good week and we took some big gain on part of
the position. TTWO tested laterally, still solid. MSFT moving decently
enough. CRM testing the 20 day EMA, not a bad test at all, setting up a new
entry.
FAANG: AAPL just over the 50 day MA with a 2 week pullback to the prior
high from May and June. AMZN broke higher Wednesday, tested to the weekend,
still solid; has some possible tax fraud issues. FB holding the 20 day EMA
on a test. NFLX surged through Tuesday, tested into Friday, setting up
another potential entry. GOOG tried to hold the handle and set up the move
but it could not do it, breaking lower Thursday and Friday.
MARKET STATS
DJ30
Stats: +64.86 points (+0.29%) to close at 22268.34
Nasdaq
Stats: +19.39 points (+0.3%) to close at 6448.47
Volume: 2.744B (+53.53%)
Up Volume: 1.834B (+1.113B)
Down Volume: 861.049M (-97.13M)
A/D and Hi/Lo: Advancers led 1.47 to 1
Previous Session: Decliners led 1.21 to 1
New Highs: 148 (+23)
New Lows: 34 (+13)
S&P
Stats: +4.61 points (+0.18%) to close at 2500.32
NYSE Volume: 2.2B (+157.73%)
A/D and Hi/Lo: Advancers led 1.74 to 1
Previous Session: Advancers led 1.11 to 1
New Highs: 114 (+15)
New Lows: 8 (-1)
SENTIMENT INDICATORS
VIX: 10.17; -0.27
VXN: 12.51; -0.89
VXO: 7.8; -0.49
Put/Call Ratio (CBOE): 1.08; +0.29
Bulls and Bears: Of course, sentiment drops just before the market breaks
higher.
Bulls: 47.1 versus 49.5
Bears: 20.2 versus 19.1
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 47.1 versus 49.5
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 versus 46.1 versus 46.7
versus 45.2
Bears: 20.2 versus 19.1
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: 2.201% versus 2.186%. Bonds started the week gapping lower and sold
back hard to the 50 day EMA. Tried a modest bounce Friday.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.186%
versus 2.19% versus 2.167% versus 2.134% versus 2.042% versus 2.105% versus
2.072% versus 2.166% versus 2.210% versus 2.136% versus 2.129% versus 2.175%
versus 2.169% versus 2.189% versus 2.217% versus 2.183% versus 2.197% versus
2.185% versus 2.225% versus 2.264% versus 2.24% versus 2.191% versus 2.201
versus 2.246% versus 2.262% versus 2.257% versus 2.264% versus 2.221% versus
2.266% versus 2.253% versus 2.296% versus 2.291% versus 2.303% versus 2.287%
versus 2.330% versus 2.255% versus 2.241% versus 2.270% versus 2.261% versus
2.318% versus 2.331%
EUR/USD: 1.19436 versus 1.1918. Tested back to the 50 day MA, started to
bounce off that level Thursday and Friday, but not that strong a move.
Historical: 1.1918 versus 1.1874 versus 1.19706 versus 1.19551 versus
1.20379 versus 1.2025 versus 1.19258 versus 1.19143 versus 1.18621 versus
1.19131 versus 1.18938 versus 1.19731 versus 1.19678 versus 1.19212 versus
1.18 versus 1.17516 versus 1.1813 versus 1.17595 versus 1.17107 versus
1.17812 versus 1.17445 versus 1.17751 versus 1.18216 versus 1.17652 versus
1.17596 versus 1.17619 versus 1.17975 versus 1.1774 versus 1.18718 versus
1.18457 versus 1.18072 versus 1.18281 versus 1.18293 versus 1.1683 versus
1.17419 versus 1.1646 versus 1.1637 versus 1.16640 versus 1.16271 versus
1.15280 versus 1.15549 versus 1.14735 versus 1.14672 versus 1.13986 versus
1.14335 versus 1.14682 versus 1.13964
USD/JPY: 110.846 versus 110.01. Dollar continued its bounced off the lows
that started the prior Friday. Closed in on the 200 day SMA on the Friday
high, backed off to close. Good bounce, 200 day is logical resistance, but
the top of the range is near 114.50.
Historical: 110.01 versus 110.62 versus 110.216 versus 109.434 versus
107.847 versus 108.444 versus 109.132 versus 108.747 versus 110.254 versus
110.049 versus 110.289 versus 109.652 versus 108.04 versus 109.160 versus
109.573 versus 109.195 versus 109.648 versus 109.173 versus 109.205 versus
109.333 versus 109.842 versus 110.6621 versus 109.927 versus 109.183 versus
109.177 versus 110.03 versus 109.09 versus 110.09 versus 110.757 versus
110.689 versus 109.963 versus 110.717 versus 110.368 versus 110.28 versus
110.704 versus 111.07 versus 111.166 versus 111.897 versus 111.176
Oil: 49.89, 0.00. Broke through the 200 day SMA Thursday, held flat
Friday. Failed here in early August, so obviously an important test for
this rebound in oil.
Gold: 1325.20, -4.10. Spent the week testing back to the 20 day EMA.
Strong rally, new high, and a normal test to near support.
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6448.47
Resistance:
6450 is the early September high
6461 is the July 2017 prior all-time high
Support:
6341.70 is the all-time high from early June.
6300 is the mid-June interim high
The 50 day EMA at 6326
The 2016 trendline at 6267
6205 is the late May all-time high
5996 is the recent May 2017 low
The 200 day SMA at 5969
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
5661 is the late January upper gap point
5601 is the January lower gap point
S&P 500: Closed at 2500.23
Resistance:
2504 is the upper channel line from the March 2009 uptrend channel
Support:
2491 is the August all-time high
2480 the late August and early August highs
The 50 day EMA at 2458
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
The 200 day SMA at 2375
2352 is the recent May 2017 low
2348 is the April 2017 lower gap point
2329 is the March and April twin lows
2322 is the March 2017 low
2301 is the late January 2017 high
2298 is the late January 2017 high
2282 - 2280 from January 2017
2277.53 is the December 2016 high
The November 2016 all-time high at 2213.25
2194 is the August 2016 prior all-time high
2175 is the June 2016 high
Dow: Closed at 22,268.34
Resistance:
Support:
22,179 is the August 2017 all-time high
22,086 is the mid-August lower high
The 10 day EMA at 22,053
The 50 day EMA at 21,798
21,681is the July prior all-time high
21,638 is the July 2017 closing high
21,529 is the June 2017 high
21,169 is the March 2017 all-time high
The 200 day SMA at 20,882
20,547 is the lower gap point from late April 2017
20,412 is the March 2017 low
20,400 is the mid-April 2017 low.
20,126 is the January 2017 intraday high
20,101 is the late January closing high.
19,994 - 19,999 (early January high, upper gap point from late January
19750 is the lows of the December/January range
19,732 is the January 2017 low
18,669 is the August 2016 all-time high
18,595 is the July 2016 peak
18,351 is the prior all-time high from May 2015
S&P 500 Advances to New All-Time High; Hits 2,500
15-Sep-17 16:30 ET
Dow +64.86 at 22269.64, Nasdaq +19.38 at 6448.44, S&P +4.61 at 2501.68
https://www.briefing.com/investor/markets/stock-market-update/2017/9/15/s-and-p-500-advances-to-new-alltime-high-hits-2500.htm
[BRIEFING.COM] Equities ticked up on Friday, capping off this week's run to record highs on a positive note. The Dow (+0.3%) advanced to a new-all time high once again, as did the S&P 500 (+0.2%), which settled right at the round mark of 2,500. The Nasdaq (+0.3%) also finished modestly higher, but didn't gain enough to erase its Thursday decline, leaving the index about 12 points below its record-high close. For the week, the S&P 500 added 1.6%.
On one hand, Friday's uptick was surprising considering that it came on the heels of yet another North Korean missile launch, which crossed over the northern Japanese island of Hokkaido. However, on the other hand, the market's response was entirely consistent with the recent past as investors have generally taken Pyongyang's missile tests in stride.
Eight of the eleven sectors advanced on Friday, with the lightly-weighted telecom services group (+1.8%) leading the charge by a wide margin, securing its spot at the top of the week's leaderboard (+3.9%). The financials (+0.5%) and energy (+0.2%) sectors also outperformed on Friday, finishing the week on telecom's heels with weekly gains of 3.3% and 3.5%, respectively.
The top-weighted technology sector (+0.3%) broke its two-day losing streak, thanks in large part to chipmakers, which sent the PHLX Semiconductor Index (+1.7%) higher for the fifth day in a row. NVIDIA (NVDA 180.11 +10.71) led the semiconductor rally, climbing 6.3% to a new all-time high, after its target price was raised to $250 from $180 at Evercore ISI on Friday morning.
Apple (AAPL 159.88, +1.60) also played a major role in the tech sector's positive Friday performance, snapping out of its recent funk, which started immediately following the company's annual product event on Tuesday. The tech titan climbed 1.0% to settle with a weekly gain of 0.8%.
On the flip side, Oracle (ORCL 48.74, -4.05) dropped 7.7%, giving back all of its September gain, after issuing cautious guidance that overshadowed its better-than-expected earnings and revenues.
The health care (-0.3%) and consumer discretionary (-0.2%) spaces were the weakest sectors on Friday, trimming their weekly gains to 0.4% and 0.9%, respectively. Meanwhile, the rate-sensitive utilities group (+0.1%) eked out a narrow victory, but its Friday performance was far from enough to prevent a last place finish in the weekly sector standings (-0.4%).
In the bond market, U.S. Treasuries didn't do much to relieve the huge weekly losses they carried into Friday's session. The yield on the benchmark 10-yr Treasury note finished flat at 2.20%, locking in a 14 basis point gain for the week. Meanwhile, the 2-yr yield climbed two basis points to 1.38%, extending its weekly gain to 13 basis points.
Reviewing Friday's big batch of economic data, which included August Retail Sales, August Industrial Production & Capacity Utilization, the preliminary reading of the University of Michigan Consumer Sentiment Index for September, the September Empire State Manufacturing Index, and July Business Inventories:
August retail sales decreased 0.2%, missing the Briefing.com consensus estimate, which called for an increase of 0.1%. The prior month's reading was revised to +0.3% from +0.6%. Excluding autos, retail sales increased 0.2% while the Briefing.com consensus expected an increase of 0.5%. The prior month's reading was revised to +0.4% from +0.5%.
The key takeaway from the report is that it will temper forecasts for Q3 consumer spending as core retail sales, which exclude auto, gasoline station, building equipment and materials, and food services and drinking places sales, declined 0.2%.
Industrial Production decreased 0.9% in August (Briefing.com consensus +0.2%) while Capacity Utilization declined to 76.1% (Briefing.com consensus 76.8%) from a revised reading of 76.9% in July (from 76.7%).
The key takeaway from the report is that industrial production, excluding the hurricane impact, was still weak in August.
The preliminary reading of the University of Michigan Consumer Sentiment Index for September declined to 95.3 (Briefing.com consensus 95.5) from 96.8 in August.
The key takeaway from the report is that consumers' assessment of their financial situation is the best it has been in more than a decade.
The Empire Manufacturing Survey for September declined to 24.4 from the prior month's reading of 25.2. The Briefing.com consensus estimate was pegged at 20.0.
Business Inventories rose 0.2% in July, which is in line with the Briefing.com consensus. The prior month's reading was left unrevised at +0.5%.
The key takeaway from the report is that pricing power will still be hard to come by given the elevated inventory-to-sales ratio, which held steady at 1.38 (down from 1.40 a year ago).
On Monday, investors will receive just one notable piece of economic data--the NAHB Housing Market Index for September--which will cross the wires at 10:00 ET.
Nasdaq Composite +19.8% YTD
Dow Jones Industrial Average +12.7% YTD
S&P 500 +11.7% YTD
Russell 2000 +5.5% YTD
Week In Review: Movin' On Up
Stocks rallied to new record highs this week--more than making up for last week's decline--following Hurricane Irma's weaker-than-expected Florida landfall and ahead of next week's FOMC meeting. The Dow led this week's advance, climbing 2.2%, followed by the S&P 500 (+1.6%), and then the Nasdaq (+1.4%). For the year, the S&P 500 now holds a gain of 11.7%.
The bulk of this week's gain came right off the bat as investors happily dialed back their estimates on Monday for damages related to Hurricane Irma, which quickly petered out after hitting the Florida Keys on Sunday. Insurers like Travelers (TRV) led the Monday rally, underpinned by the prospect of fewer-than-expected hurricane related claims, but much of their gains were unwound by the end of the week.
Equities followed up their stellar Monday performance with another win on Tuesday, but conviction was much more modest. Apple (AAPL) held its annual product event, in which the company unveiled a trio of iPhones, including the iPhone 8, the iPhone 8 Plus, and the high-end iPhone X--which CEO Tim Cook called "the biggest leap forward since the original iPhone."
On the whole, Tuesday's product event provided little new information as many of the details had been leaked beforehand. Apple sold off immediately following the event, with some investors citing concerns related to the iPhone X's later-than-expected release date (November 3). However, the tech giant bounced back on Friday, extending its massive year-to-date gain to 38.0%.
Following Tuesday's modest victory--which sent all three major U.S. indices to new record highs--the stock market took a breather, ending the week in a sideways trend. The Nasdaq ticked lower in the latter half of the week, settling just a step below its record high, while the S&P 500 and the Dow ticked up, further extending their record marks.
Investors largely ignored North Korea's latest missile launch, which flew over northern Japan on Friday morning, continuing the week's safe-haven sell off. After hitting a 10-month low last week, the yield on the benchmark 10-yr Treasury note climbed 14 basis points this week, settling at 2.20%. Meanwhile, the 2-yr yield climbed 13 basis points to finish at 1.38%.
A hotter-than-expected August CPI reading (+0.4% actual vs +0.3% Briefing.com consensus), which showed a year-over-year increase of 1.9%, prompted an adjustment in rate-hike expectations. According to the CME FedWatch Tool, investors currently place the chances of a December rate hike at 57.8%, up from last week's 31.0%.
However, the Fed's massive balance sheet will be the focus of next week's FOMC meeting as it is widely expected that Fed Chair Janet Yellen will announce the start of a gradual reduction of assets bought in response to the 2008 financial crisis. The two-day FOMC meeting will kick off on Tuesday.
Reining in the Bulls
14-Sep-17 16:25 ET
Dow +45.30 at 22204.78, Nasdaq -31.10 at 6429.06, S&P -2.75 at 2497.07
https://www.briefing.com/investor/markets/stock-market-update/2017/9/14/reining-in-the-bulls.htm
[BRIEFING.COM] Investors reined in the stock market on Thursday following three straight days of gains, which culminated in new record highs for all three major U.S. indices in the prior session. The S&P 500 and the Nasdaq dropped 0.1% and 0.5%, respectively, but the price-weighted Dow (+0.2%) leaned on some of its most influential components to finish at a new all-time high for the third session in a row.
While the market's current record-high level is in itself a reason for investors to take some money off the table, Thursday's downtick could also be attributed to increased rate-hike expectations following a hotter-than-expected CPI reading (+0.4% actual vs +0.3% Briefing.com consensus) and continued concerns surrounding North Korea's insistent prodding.
On a year-over-year basis, Thursday's CPI reading for the month of August showed an increase of 1.9%, which is just a tick below the Fed's target of 2.0%. Accordingly, the fed funds futures market adjusted the implied probability of a December rate hike to 52.9% from 41.3% on Wednesday, showing that the Fed's forecast of three rate hikes in 2017 is still believed to be feasible.
Meanwhile, North Korea appears ready to tighten geopolitical tensions once again after issuing some provocative remarks towards the U.S. and Japan. In addition, reports indicate that Pyongyang might be preparing yet another missile launch, its first since the August 29th launch over northern Japan.
However, U.S. Treasuries had a muted response to the aforementioned headlines, showing that investors were not all that concerned--at least for the time being. The yield on the benchmark 10-yr Treasury note ended Thursday unchanged at 2.20%, breaking its three-session winning streak. The 2-yr yield also finished flat, closing at 1.36%.
As for the equity market, six of the eleven sectors settled the day in positive territory. The lightly-weighted utilities space (+0.9%) showed particular strength, bouncing back from two straight days of losses, but the remaining advancers finished with gains of no more than 0.6%.
On the flip side, the consumer discretionary sector (-0.5%) settle at the bottom of the leaderboard amid broad weakness. The top-weighted technology group (-0.4%) also struggled, even though chipmakers put together a relatively positive performance, evidenced by the PHLX Semiconductor Index, which climbed 0.5%.
The influential financial sector also underperformed on Thursday, breaking its four-session winning streak. However, the group still holds a solid week-to-date gain of 2.8%, which places it in second place--right behind energy (+3.2% WTD)--on the weekly leaderboard.
In Europe, the Bank of England left its key policy rate at 0.25% and its asset purchase program at £435 billion, as expected, but noted that it could potentially raise rates more aggressively than the market expects if the economy keeps evolving as expected. The British pound spiked 1.4% against the U.S. dollar to 1.3399, hitting a 52-week high, following the BoE's comments.
Reviewing Thursday's economic data, which included the Consumer Price Index for August and the Weekly Initial Claims Report:
Total CPI increased 0.4% (Briefing.com consensus 0.3%) in August while core CPI, which excludes food and energy, rose 0.2% (Briefing.com consensus 0.2%). On a year-over-year basis, total CPI and core CPI are up 1.9% and 1.7%, respectively.
The key takeaway from the report is that the year-over-year bump in headline inflation toward the Fed's 2.0% target will prompt the market to consider more carefully the prospect of another rate hike before the end of the year.
The latest weekly initial jobless claims count totaled 284,000 while the Briefing.com consensus expected a reading of 310,000. Today's tally was below the unrevised prior week count of 298,000. As for continuing claims, they declined to 1.944 million from the revised count of 1.951 million (from 1.940 million).
The key takeaway from the report is that the underlying trend in initial claims remains solid and on point with a tight labor market, evidenced by the unadjusted claims figure, which fell by 36,500 to 214,121.
On Friday, investors will receive a slew of economic reports, including August Retail Sales (Briefing.com consensus 0.1%) at 8:30 ET, the September Empire State Manufacturing Index (Briefing.com consensus 20) also at 8:30 ET, Industrial Production (Briefing.com consensus 0.2%) and Capacity Utilization (Briefing.com consensus 76.8%) at 9:15 ET, the preliminary reading of the University of Michigan Consumer Sentiment Index for September (Briefing.com consensus 95.5) at 10:00 ET, and July Business Inventories (Briefing.com consensus 0.2%) also at 10:00 ET.
Nasdaq Composite +19.4% YTD
Dow Jones Industrial Average +12.4% YTD
S&P 500 +11.5% YTD
Russell 2000 +5.0% YTD
Bulls Peter Out, But Still Get the Win
13-Sep-17 16:30 ET
Dow +39.32 at 22159.48, Nasdaq +5.91 at 6460.16, S&P +1.89 at 2499.82
https://www.briefing.com/investor/markets/stock-market-update/2017/9/13/bulls-peter-out-but-still-get-the-win.htm
[BRIEFING.COM] The week's bullish momentum petered out on Wednesday, but, thanks to a late-afternoon rally, the S&P 500 (+0.1%), the Nasdaq (+0.1%), and the Dow (+0.2%) still managed to register new record-high closes. The major averages hovered near their flat lines throughout Wednesday's session as investors lacked conviction amid a shortage of market-moving catalysts.
Traders kept an eye on Apple (AAPL 159.65, -1.21) throughout the midweek session, looking to see how the tech giant would respond to yesterday's product event--in which the company unveiled a trio of iPhones, including the much-anticipated iPhone X. AAPL shares were weak throughout the session and eventually ended the day with a sizable loss of 0.8%.
The company's Wednesday decline, which was preceded by a 0.4% drop on Tuesday, was attributed by some to the iPhone X's later-than-expected release date (November 3), but profit taking on the heels of a major event was also a likely contributing factor considering Apple has made a massive run this year (+37.8% YTD).
Nonetheless, the broader market held up relatively well as investors rotated into some of the sectors that have struggled so far this year--including the energy sector, which settled at the top of the day's leaderboard (+1.2%). The energy space benefited from a rally within the crude oil futures market that sent the price of WTI crude to $49.30/bbl, a one-day increase of 2.2%.
The commodity was underpinned by the International Energy Agency's prediction that global oil demand is set to accelerate at its fastest pace in two years and the weekly EIA inventory report, which showed a much greater-than-expected decline in gasoline inventories (8.4 million actual vs 2.1 million consensus)--a positive sign for future crude demand.
However, it's important to note that hurricane-related factors were at play in this week's EIA inventory report, which also showed a larger-than-expected build of crude stockpiles (5.9 million barrels actual vs 3.2 million consensus).
Like energy, the telecom services sector bucked its bearish year-to-date trend, climbing higher by 0.8%, to finish roughly in line with the consumer discretionary space (+0.7%) near the top of the leaderboard. Retailers helped underpin the consumer discretionary group's positive performance, evidenced by the SPDR S&P Retail ETF (XRT 41.38, +0.43), which advanced 1.1%.
Within the retail space, Nordstrom (JWN 47.74, +2.69) showed notable strength, jumping 6.0%, following reports that the company is nearing a deal with private equity firm Leonard Green that would help the high-end retailer go private. Target (TGT 59.51, +1.62) also outperformed, adding 2.8%, after announcing plans to hire around 100,000 employees for the upcoming holiday season.
The heavily-weighted financial sector (+0.2%) also finished in the green, marking its third-straight victory, as did the consumer staples group (+0.1%). On the flip side, six groups finished in the red--industrials (-0.1%), materials (unch), technology (-0.2%), health care (-0.4%), utilities (-0.5%), and real estate (-0.4%)--but losses were modest for the most part.
In the bond market, Treasuries slipped once again, sending yields higher for the third session in a row. The benchmark 10-yr yield climbed three basis points to 2.20%, which marks its best level of the month. Meanwhile, the U.S. Dollar Index (92.42, +0.53) jumped 0.6% to register its third-consecutive advance.
Reviewing Wednesday's economic data, which was limited to the Producer Price Index for August, the Treasury Budget for August, and the weekly MBA Mortgage Applications Index:
Producer prices rose 0.2% in August, while the Briefing.com consensus expected an increase of 0.3%. Meanwhile, core producer prices rose 0.1%, which is below the 0.2% increase that the Briefing.com consensus expected. Year-over-year, core producer prices are up 2.0%.
The key takeaway from the report is that producer prices picked up in August without any full-scale impact from Hurricane Harvey, which will presumably help drive up producer prices in September along with Hurricane Irma. The question, though, is what kind of pass-through effect might there be on consumer prices?
The Treasury Budget for August showed a deficit of $107.7 billion versus a deficit of $107.1 billion for August 2016.
The Treasury Budget data is not seasonally adjusted, so the August deficit cannot be compared to the $42.9 billion deficit registered in July.
The weekly MBA Mortgage Applications Index increased 9.9% to follow last week's 3.3% rise.
On Thursday, investors will receive two pieces of economic data--the Consumer Price Index for August (Briefing.com consensus +0.3%) and the Weekly Initial Claims Report (Briefing.com consensus 310K). Both reports will be released at 8:30 ET.
Nasdaq Composite +20.0% YTD
Dow Jones Industrial Average +12.1% YTD
S&P 500 +11.6% YTD
Russell 2000 +5.1% YTD
Notching New Record Highs
12-Sep-17 16:20 ET
Dow +61.49 at 22120.16, Nasdaq +22.02 at 6454.25, S&P +8.37 at 2497.93
https://www.briefing.com/investor/markets/stock-market-update/2017/9/12/notching-new-record-highs.htm
[BRIEFING.COM] Stocks moved higher for the second day in a row on Tuesday, but conviction was much more subdued than it was on Monday when the major averages rose over 1.0% apiece. The S&P 500 climbed 0.3% to notch its second record-high close of the week, while the Nasdaq (+0.3%) and the Dow (+0.3%) each managed to notch their first. Small caps outperformed, sending the Russell 2000 higher by 0.6%.
The biggest event of the day was Apple's (AAPL 160.82, -0.68) annual product unveiling, in which the tech giant showed off three new iPhones, including the iPhone 8, the iPhone 8 Plus, and the high-end iPhone X--which CEO Tim Cook called "the biggest leap forward since the original iPhone." Apple also introduced a new 4K Apple TV and its Apple Watch Series 3, which is the first series to include LTE-capability, allowing users to make phone calls and stream music without hauling a phone.
On the whole, the product event provided little new information as many of the details had been leaked to the public beforehand. Nonetheless, Apple shares were volatile following the event's afternoon kick off, first surging from their flat line to a new session high ($163.96/share, +1.5%) and then dropping sharply to a new session low ($158.77/share, -1.7%). In the end, AAPL shares finished lower by 0.4%.
Unsurprisingly, the top-weighted technology sector--and the broader market to some degree--mimicked Apple's volatility as the company is the largest component by market cap within the sector (and the S&P 500 in general). The tech group ended Tuesday's session a tick above its flat line (+0.1%), but held a gain of 0.4% at its best mark of the day and a loss of 0.4% at its worst.
Conversely, the influential financial space (+1.2%) proved to be pillar of strength on Tuesday, settling comfortably above the broader market for the second time this week. The sector benefited from a curve-steepening trade within the Treasury market, which sold off once again as investors dialed up their appetite for more risky assets--like equities. The yield on the benchmark 10-yr Treasury note climbed five basis points to 2.17%, hitting its best level in over a week, while the 2-yr yield ticked up just two basis points to 1.33%.
Like financials, the lightly-weighted telecom services space (+1.4%) comfortably outperformed the broader market, but the remaining advancers finished with more modest gains, raging from 0.1% to 0.8%. The consumer discretionary sector settled in the middle of said range (+0.4%), overcoming a disappointing performance from McDonald's (MCD 156.33, -5.20), which tumbled 3.2% on the heels of some cautious commentary from market research firm M Science.
At the opposite end of the sector standings, the rate-sensitive utilities and real estate sectors struggled amid the increase in interest rates. The two groups were the only sectors to finish Tuesday in the red, registering sizable losses of 1.8% and 1.2%, respectively.
Reviewing Tuesday's economic data, which was limited to the Job Openings and Labor Turnover Survey (JOLTS) for July:
The July Job Openings and Labor Turnover Survey showed that job openings increased to 6.170 million from a revised 6.116 million (from 6.163 million) in June.
On Wednesday, investors will receive several economic reports, including the weekly MBA Mortgage Applications Index at 7:00 ET, the August Producer Price Index (Briefing.com consensus +0.3%) at 8:30 ET, and the August Treasury Budget at 14:00 ET.
Nasdaq Composite +19.9% YTD
Dow Jones Industrial Average +11.9% YTD
S&P 500 +11.5% YTD
Russell 2000 +4.9% YTD
Rolling to New Record Highs
11-Sep-17 16:30 ET
Dow +259.58 at 22058.67, Nasdaq +72.07 at 6432.23, S&P +26.68 at 2489.56
https://www.briefing.com/investor/markets/stock-market-update/2017/9/11/rolling-to-new-record-highs.htm
[BRIEFING.COM] The U.S. equity market kicked off the week with a solid bounce-back performance that reclaimed all of last week's decline and sent the S&P 500 (+1.1%) to a new all-time high. Investors happily dialed back their estimates for damages related to Hurricane Irma--which was downgraded to a tropical storm on Monday morning--and cheered a show of restraint from North Korea. The Nasdaq (+1.1%), the Dow (+1.2%), and the small-cap Russell 2000 (+1.1%) settled roughly in line with the benchmark index.
Irma made landfall in the Florida Keys on Sunday morning as a Category 4 hurricane, but the once historically powerful storm quickly petered out, falling to a Category 2 storm by the mid-afternoon. Millions of Florida residents are still without power and Jacksonville--Florida's most populous city--is experiencing substantial flooding, but the storm ultimately did far less damage than forecasts were predicting.
The prospect of fewer-than-expected hurricane related claims underpinned insurers like Travelers (TRV 122.56, +2.80) on Monday, helping the heavily-weighted financial sector (+1.7%) finish at the top of the sector standings. Meanwhile, home-improvement retailers like Home Depot (HD 158.37, -1.29) struggled, leaving the consumer discretionary sector (+0.5%) near the bottom of the sector standings, as investors curtailed their expectations for home-repair demand.
A tempering of geopolitical concerns related to North Korea also fed into Monday's bullish bias after the hermit nation proved analysts wrong over the weekend, deciding to celebrate the 69th anniversary of its founding without another long-range missile launch. The tranquility may prove to be short-lived, however, as the U.N. is expected to vote on further sanctions against Pyongyang on Monday evening.
Each of the eleven sectors settled Monday's session in the green, but gains varied pretty widely. In addition to financials, the technology (+1.5%) and materials (+1.4%) sectors outperformed. Within the tech group, Apple (AAPL 161.50, +2.87) showed relative strength, climbing 1.8%, ahead of Tuesday's product event, in which the company is expected to unveil its latest iPhone lineup, including the high-end iPhone X--which is reportedly the much-anticipated tenth anniversary edition that's been generating buzz for months.
Chipmakers also had a solid showing on Monday, sending the PHLX Semiconductor Index higher by 2.0% and into positive territory for the month (+0.1%).
Most other sectors finished with gains between 0.7% and 1.0%, but the lightly-weighted telecom services space underperformed, climbing higher by just 0.4%. Following today's relatively disappointing performance, the telecom services space now holds a month-to-date loss of 4.1% and trades at the very bottom of the 2017 sector standings with a year-to-date loss of 14.9%. The energy sector is the only other space trading in the red for the year (-14.1%).
Biotechnology stocks also struggled on Monday, evidenced by the iShares Nasdaq Biotechnology ETF (IBB 334.41, +0.31), which settled just a tick above its flat line. However, the influential health care sector, which houses biotech names, held up relatively well (+0.8%), extending its month-to-date gain to 2.3%.
In the bond market, U.S. Treasuries sold off across the curve, pushing yields above the multi-month lows that they hit last week. The benchmark 10-yr climbed six basis points to 2.12% after falling to its lowest level since November on Thursday.
Meanwhile, U.S. dollar climbed 1.5% against the Japanese yen (109.47), which is considered a safe-haven asset, and the CBOE Volatility Index (VIX 10.81, -1.31) tumbled 10.8%.
Investors didn't receive any economic data on Monday. Tuesday's lone economic report--the Job Openings and Labor Turnover Survey (JOLTS) for July--will be released at 10:00 ET.
Nasdaq Composite +19.5% YTD
S&P 500 +11.1% YTD
Dow Jones Industrial Average +11.6% YTD
Russell 2000 +4.3% YTD
InvestmentHouse - Stocks Wait on Storms, North Korea, Next Week (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
- Stocks opt to sit out Friday, wait on storms, North Korea, next week.
- North Korea supposedly set for another missile test, EFX drops a bomb of
its own admitting to a massive, all-encompassing data breach.
- Stock indices almost unanimous in showing good setups for the upside.
- Still leadership to push stock indices to new highs.
- Last week's lateral test gives us some more opportunities to play more
stocks on the next break higher.
The stock market sputtered to end the week, not selling off, but continuing
the weeklong post-holiday test of the upside move the prior week. Not a
feel-good end to the week, and with Irma ready to wreak havoc on Florida,
other storms in the wings, North Korea ready to launch another missile and
claiming to possess an EMP with America's name on it, and the dollar in a
complete freefall, no one wanted to step in front of the weekend with a lot
of bids.
Accordingly, the indices slid, but not in a major selloff. Indeed, DJ30,
SP400, and RUTX managed an upside close. SP500 was flat while NASDAQ
dropped 0.59% but held over the 20 day EMA on below average trade. SOX was
the albatross, but it held around the 20 day EMA as well.
SP500 -3.67, -0.15%
NASDAQ -37.68, -0.59%
DJ30 13.01, 0.06%
SP400 0.32%
RUTX 0.05%
SOX -1.25%
VOLUME: NYSE +2%, NASD -11%. NYSE traded moved back above average, NASDAQ
trade slipped below average for the first time on the week.
ADVANCE/DECLINE: NYSE -1.2:1, NASDAQ just positive.
Not a great finish to the week, not a flourish at the end, but perhaps that
is the better result. A lot of unknowns heading into the weekend, and a
rally might be the fodder for selling to start the following week. As it
is, stocks faded modestly all week, testing the prior week's nice break
upside. Indeed, even down to RUTX, they left themselves in good position to
continue the upside as the prior week's rally was consolidated, still
holding onto a good part of that move higher.
Of course, the indices will still have to break higher off this test and
prove they have something more than good looks, but they left themselves in
good position to do so. SOX was the albatross as noted, and some big name
chips struggled, e.g. AVGO, QRVO, AMD, XLNX, but as many others look quite
solid, both big names and smaller names. Did you see MVIS continue its
spike higher?
Outside of the chips, the China stocks held up well enough. Did you see the
truckers? Some solid moves from JBHT, WERN, ODFL. The rest of the
transports were at best wall flowers, but the truckers made up for them.
More on the leaders later. Suffice it to say they were not ripping higher
Friday, but they did not damage their position to continue higher this
coming week after this past week's pause.
NEWS/ECONOMY
Wholesale Inventories
Inventories: 0.6%
Sales: -0.1% versus +0.5% expected and +0.6% prior. Now down 4 of 5
months.
Inventory to sales ratio: 1.30, highest since 11/2016
Inventories were up, but with sales lower that is what happens. Not the
best case scenario. Down 4 of 5 months, sales are not burning up the
inventory. Okay, this looks somewhat recessionary, along with many other
indicators. But, we are told the economy is climbing higher and higher, so
who are we to stand in the way of that logic?
Equifax demonstrates the fragility of critical US systems.
One of the 'big 3' credit gods, Equifax was hacked in late July with the
records of 143M Americans stolen. Social security numbers, birth dates,
drivers license information -- basically a one-stop shopping spree for
credit thieves.
To make matters worse, two days after the breach three executives sold
millions of dollars worth of stock. Of course the company explains they knew
nothing of the breach when they sold, just unloading some shares.
Interestingly, the stock gapped lower on 7/27 inexplicably. It held the 50
day MA and recovered over the next few sessions. I was taught long ago that
this kind of inexplicable gap on no news indicates insider selling,
ostensibly when the insiders get some bad news on preliminary earnings, a
court or agency ruling, or say, a hack of the system. Then the news comes
out and you get the 14% loss as seen Friday.
The sad, tragic irony is that this is one of the companies given the golden
keys to all of our economic health, dispensing ratings as to whether we are
worthy of a so-called reasonable rate for borrowing versus the high-risk
pool or no loans at all. The repository of all our financial data and the
arbiter of our financial integrity gets its ass hacked. Then the weasels
running the place try to save their fortunes by selling the stock before
anyone learns of their ineptitude. If, like the banks, no one goes to jail
over this, this would actually be something worth taking to the streets
over.
If one of the 'Fort Knox' of our data is so badly hacked, it shows how
vulnerable ALL our systems are whether our financial and personal data or
the power grid, nuclear plants, military installations, the food supply, the
water supply, government systems, banking records, etc. It would appear the
ONLY reason we are not all individually hacked by now is that the hackers
feel that many of us are just not worth the effort to individually hack.
But, if the payoff is the entire working population of the US, well then
that is worth the effort. I hope the executives at EFX go to jail and are
forced to pay out all their salaries, bonuses, stock options, etc. in civil
actions as payment to all those whose data they failed to secure. But they
won't. Heck, even the 'conservative' AG Jeff Sessions has decided not to
pursue the IRS cads that were directly involved in the IRS being used as a
weapon against select groups. Justice in the US, if not already, has become
a sad farce.
You have to ask, after this, how can ANY credit rating agency honestly and
accurately assess ANYONE's credit when all working people in America had
their data stolen and can be the victim of identity theft at any point in
time? Colossal asses.
A new development today is a ransom demand for 600 bitcoin ($2.6M) was
received by EFX. The senders claimed to be just two guys trying to take
care of their families. They don't want to harm anyone they say, just need
to monetize the data they stole, data that turned out to have much more
information than they thought they would obtain. Aw, hackers with heart.
Just a couple of family men hustling to do right for their families. Aw
shucks.
THE MARKET
CHARTS
The prior week was a rally week. The past week was a decent test of that
rally. No pre-weekend, thumb in the eye of North Korea and Irma rally;
investors and traders apparently had enough adventure and would just wait
for the weekend and the storm to hit. That leaves the stock indices for the
most part still in good shape to continue the rally on this leg to a new
high, then we see what happens.
NASDAQ: Fell to the 10 day EMA Tuesday and spent the week working laterally
there. That keeps NASDAQ over the early June prior high and just off the
late July all-time high. Good rally, nice fade to test, now NASDAQ shows if
it can make the next break higher.
SOX: Similar action to NASDAQ, falling Tuesday, riding laterally along the
20 day EMA the rest of the week. Friday a tap near the 50 day MA's. SOX
broke higher from its June/August triangle the prior week, tested the
breakout this week. As with NASDAQ, now it shows if it can make the break
higher off the breakout test.
RUTX: A weeklong test of the two week rally off the August low. Sold on
Tuesday with the other indices, spent the balance of the week showing doji
over the 10 day EMA. Nice sharp rally, easy test, in good position to move
higher.
DJ30: DJ30 was on the way higher when Tuesday hit and it gapped lower and
sold to the 50 day MA. It spent the week there, but managed to stretch out
the pattern decently to keep it in the trend and thus in the game for a move
higher.
SP500: Same story, i.e. the selloff Tuesday after the rally the prior week
up through the 50 day MA. Holds the 50 day MA all week, working in a tight
range Wednesday to Friday. Higher low possibility still in the 2017
uptrend.
SP400: Ugliest of the group with a harder Tuesday drop that it never really
contained. Closed below the 200 day SMA Thursday, gapped lower Friday but
did manage a recovery back over the 200 day. Problematic in itself and
really so in comparison to the other indices.
LEADERSHIP
Biotech/Drugs: From the big names to the smaller names this group enjoyed a
good week. CELG, AMGN, BIIB all put in good moves on the week. Smaller
issues did fine, e.g. VCEL, ARRY. Others look good as IMGN has set up again
as has IMMU, CERS.
China Stocks: Solid week. SINA up nicely. YY broke higher once more.
WUBA, SOHU, BIDU look good.
Semiconductors/Electronics: Mixed Friday with some big names in some
trouble, e.g. AVGO. QRVO surged Thursday but could not hold the move, then
Friday dropped to the 20 day. NVDA is still sluggish. ON, MLNX still in
good shape to move. MCHP is solid but MRVL, after a good move, struggled to
end the week. Important group needs to hold and make its move.
FAANG: Decent on the week, not so much on Friday. FB faded back to the 10
day EMA. AAPL broke below the 20 day EMA after a week of testing and volume
moved up above average. AMZN still working laterally below the 50 day MA.
NFLX showed a solid move Wednesday, faded modestly Friday. GOOG sent the
week testing along the 50 day MA.
Software: Not a bad week with a recovery off some sluggish action. TTWO
broke to a higher high though was flattish Friday. GLUU tested but held the
10 day EMA. VMW putting in a nice test at the 10 day EMA after a new high.
Retail: Came to life Wednesday and then coasted to the weekend. GPS, KSS
showed good moves. DLTR enjoyed a solid upside week.
Transports: Great week for truckers continued Friday on top of the Thursday
gains: JBHT, ODFL, WERN. Rails not all that exciting and airlines are not
even taxiing to the runway.
MARKET STATS
DJ30
Stats: +13.01 points (+0.06%) to close at 21797.79
Nasdaq
Stats: -37.68 points (-0.59%) to close at 6360.19
Volume: 1.78B (-10.77%)
Up Volume: 654.41M (-392.625M)
Down Volume: 1.09B (+170.023M)
A/D and Hi/Lo: Advancers led 1.02 to 1
Previous Session: Decliners led 1.05 to 1
New Highs: 145 (-5)
New Lows: 42 (-13)
S&P
Stats: -3.67 points (-0.15%) to close at 2461.43
NYSE Volume: 801.2M (+1.84%)
A/D and Hi/Lo: Decliners led 1.19 to 1
Previous Session: Advancers led 1.05 to 1
New Highs: 123 (0)
New Lows: 53 (+15)
SENTIMENT INDICATORS
VIX: 12.12; +0.57
VXN: 16.07; +0.67
VXO: 10.76; +0.92
Put/Call Ratio (CBOE): 1.09; -0.04
Bulls and Bears: After the sharp decline in bulls the past month, they held
steady. Bears as well. A standoff, at least for now. A bounce then a
pause. The sides are confused, and that is not bad.
Bulls: 49.5 versus 49.5
Bears: 19.1 versus 19.1
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 49.5 versus 49.5
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 versus 46.1 versus 46.7 versus 45.2
Bears: 19.1 versus 19.1
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: 2.042% versus 2.105%. Debt ceiling lifted, talk of doing away with
the debt ceiling. All of that elevates bonds. Also, with Harvey, Irma and
who knows what other storms to follow, the notion of a Fed rate hike this
year is pretty much out the window. Thus bonds higher, yields lower.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.105%
versus 2.072% versus 2.166% versus 2.210% versus 2.136% versus 2.129% versus
2.175% versus 2.169% versus 2.189% versus 2.217% versus 2.183% versus 2.197%
versus 2.185% versus 2.225% versus 2.264% versus 2.24% versus 2.191% versus
2.201 versus 2.246% versus 2.262% versus 2.257% versus 2.264% versus 2.221%
versus 2.266% versus 2.253% versus 2.296% versus 2.291% versus 2.303% versus
2.287% versus 2.330% versus 2.255% versus 2.241% versus 2.270% versus 2.261%
versus 2.318% versus 2.331% versus 2.346% versus 2.316% versus 2.361% versus
2.375% versus 2.375% versus 2.368% versus 2.34% versus 2.304% versus 2.268%
versus 2.20% versus 2.140% versus 2.140% versus 2.148%
EUR/USD: 1.20225 versus 1.19258. ECB holds rates, keeps QE at least
through year end, Draghi notes the currency needs watching so it does not
impinge growth. Yet, still, the euro rises.
Historical: 1.19258 versus 1.19143 versus 1.18621 versus 1.19131 versus
1.18938 versus 1.19731 versus 1.19678 versus 1.19212 versus 1.18 versus
1.17516 versus 1.1813 versus 1.17595 versus 1.17107 versus 1.17812 versus
1.17445 versus 1.17751 versus 1.18216 versus 1.17652 versus 1.17596 versus
1.17619 versus 1.17975 versus 1.1774 versus 1.18718 versus 1.18457 versus
1.18072 versus 1.18281 versus 1.18293 versus 1.1683 versus 1.17419 versus
1.1646 versus 1.1637 versus 1.16640 versus 1.16271 versus 1.15280 versus
1.15549 versus 1.14735 versus 1.14672 versus 1.13986 versus 1.14335 versus
1.14682 versus 1.13964
USD/JPY: 108.444 versus 109.132. Dollar sells back to the lows in the
range.
Historical: 109.132 versus 108.747 versus 110.254 versus 110.049 versus
110.289 versus 109.652 versus 108.04 versus 109.160 versus 109.573 versus
109.195 versus 109.648 versus 109.173 versus 109.205 versus 109.333 versus
109.842 versus 110.6621 versus 109.927 versus 109.183 versus 109.177 versus
110.03 versus 109.09 versus 110.09 versus 110.757 versus 110.689 versus
109.963 versus 110.717 versus 110.368 versus 110.28 versus 110.704 versus
111.07 versus 111.166 versus 111.897 versus 111.176
Oil: 49.11, -0.05
Gold: 1354.00, +15.00
MONDAY
Lots of data on the week (PPI, CPI, Retail Sales, Empire Manufacturing) for
a market where most of the indices spent last week testing the prior week's
move. Further, IRMA will have made landfall and be working its way up the
east coast so there will be an idea of the damage. Thus far no North Korea
launch, but it is early.
The indices are set up to continue the move and make some new highs on
NASDAQ, SP500 as it did on the last rally before the test. They have
certainly put in the work and are in position, and there are good leadership
groups ready to go as well.
This is pretty technical as far as we are concerned. Good initial move off
the selling, a pause below prior highs, then a move to new highs and a bit
more, then the selloff comes again. Thus, looking for that continued move
off of this test.
New positions? We did pick up some more last week as the indices prolonged
the test and more stocks set up. If the move had continued upside of course
we would have bought some but not as many. Now that the test extended to a
week, there are stocks that are set up still that can make good sprints for
us upside in a run off this test, to new highs, and a bit beyond. Again,
viewing this as a technical move, taking advantage of the continued lateral
setup.
Have a great and safe weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6360.19
Resistance:
6450 is the early September high
6461 is the July 2017 prior all-time high
Support:
6341.70 is the all-time high from early June.
6300 is the mid-June interim high
The 50 day EMA at 6300
The 2016 trendline at 6244
6205 is the late May all-time high
5996 is the recent May 2017 low
The 200 day SMA at 5943
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
5661 is the late January upper gap point
5601 is the January lower gap point
S&P 500: Closed at 2461.43
Resistance:
2491 is the August all-time high
2498 is the upper channel line from the March 2009 uptrend channel
Support:
2453.46 is the June prior all-time closing high
The 50 day EMA at 2450
2409 is the July 2017 closing low
2406 is the all-time high from May 2017
2401 is the March 2017 all-time high
The 200 day SMA at 2368
2352 is the recent May 2017 low
2348 is the April 2017 lower gap point
2329 is the March and April twin lows
2322 is the March 2017 low
2301 is the late January 2017 high
2298 is the late January 2017 high
2282 - 2280 from January 2017
2277.53 is the December 2016 high
The November 2016 all-time high at 2213.25
2194 is the August 2016 prior all-time high
2175 is the June 2016 high
Dow: Closed at 21,797.79
Resistance:
22,086 is the mid-August lower high
22,179 is the August 2017 all-time high
Support:
The 50 day EMA at 21,717
21,681is the July prior all-time high
21,638 is the July 2017 closing high
21,529 is the June 2017 high
21,169 is the March 2017 all-time high
The 200 day SMA at 20,805
20,547 is the lower gap point from late April 2017
20,412 is the March 2017 low
20,400 is the mid-April 2017 low.
20,126 is the January 2017 intraday high
20,101 is the late January closing high.
19,994 - 19,999 (early January high, upper gap point from late January
19750 is the lows of the December/January range
19,732 is the January 2017 low
18,669 is the August 2016 all-time high
18,595 is the July 2016 peak
18,351 is the prior all-time high from May 2015
Another Mixed Finish Ahead of Hurricane Irma's Arrival
08-Sep-17 16:30 ET
Dow +13.01 at 21799.09, Nasdaq -37.68 at 6360.16, S&P -3.67 at 2462.88
https://www.briefing.com/investor/markets/stock-market-update/2017/9/8/another-mixed-finish-ahead-of-hurricane-irmas-arrival.htm
[BRIEFING.COM] The major U.S. indices closed out the abbreviated week on a mixed note as investors looked ahead to the weekend, which could see Hurricane Irma's arrival in Florida and another North Korean missile test in celebration of the country's 69th anniversary. The Dow ticked up 0.1% while the S&P 500 and the Nasdaq settled with losses of 0.2% and 0.6%, respectively. For the week, the S&P 500 lost 0.6%.
Property and casualty insurers bounced back on Friday after spending recent weeks on the decline in response to hurricane-related concerns. Travelers (TRV 119.76, +4.58) was the strongest component within the Dow and among the strongest names within the heavily-weighted financial sector, which settled at the top of the sector standings. TRV shares climbed 4.0%.
In total, four sectors finished Friday's session in the green--financials (+0.8%), industrials (+0.3%), health care (+0.4%), and utilities (+0.4%)--while seven groups ended the day in the red--consumer discretionary (-0.4%), energy (-1.1%), materials (unch), technology (-0.9%), consumer staples (-0.7%), telecom services (-0.1%), and real estate (unch).
Chipmakers weighed heavily on the technology sector, evidenced by the PHLX Semiconductor Index, which dropped 1.3%. Qualcomm (QCOM 49.64, -0.74) lost 1.5% after a federal judged denied the company's bid to dismiss a patent-royalty lawsuit, allowing Apple (AAPL 158.63, -2.63) manufacturers to continue withholding royalty payments as the case continues.
Elsewhere, retailers struggled after Target (TGT 57.27, -1.15) announced that it is cutting prices on thousands of items and Kroger (KR 21.06, -1.71) said that it will stop providing long-term earnings guidance due to the "dynamic operating environment." The companies' shares moved lower by 2.0% and 7.5%, respectively.
Equifax (EFX 123.23, -19.49) plunged 13.7% after announcing that around 143 million of its U.S. customers had their personal information stolen in a data hack. Reports indicate that the company first discovered the compromise in late July and three senior executives sold about $1.7 million in stock soon thereafter.
In Washington, the House passed President Trump's Wednesday agreement with Democratic lawmakers, which packages Hurricane Harvey relief funding with a three-month extension of both government funding and the debt ceiling. The bill, which passed the Senate on Thursday, now just needs President Trump's signature.
U.S. Treasuries settled Friday mostly flat with the benchmark 10-yr yield closing at its unchanged mark (2.06%). Meanwhile, the 2-yr yield moved two basis points lower, finishing at 1.25%.
Reviewing Friday's economic data, which included July Wholesale Inventories and July Consumer Credit:
July Wholesale Inventories increased 0.6% (Briefing.com consensus +0.4%). The prior month's reading was revised to +0.6% from +0.7%.
The Consumer Credit report for July showed an increase of $18.5 billion while the Briefing.com consensus expected growth of $15.0 billion. The prior month's credit growth was revised to $11.9 billion from $12.4 billion.
Provided consumers weren't making greater use of revolving credit lines to cover basic needs due to a shortfall in income, this report can ostensibly be looked upon as a good sign for the economy since the expansion of credit is an integral contributor to economic growth. It is hard to say, though, because there isn't enough detail in the report and it is often subject to large revisions, which is why the market rarely shows much reaction to it.
Investors will not receive any economic data on Monday.
Nasdaq Composite +18.2% YTD
Dow Jones Industrial Average +10.3% YTD
S&P 500 +9.9% YTD
Russell 2000 +3.1% YTD
Week In Review: Still Within Striking Distance
The major U.S. indices all moved lower this week as geopolitical tensions with North Korea, declining confidence in the feasibility of tax reform, and Hurricane Irma--which is expected to hit Florida this weekend--weighed on investor sentiment. The Nasdaq led the retreat, dropping 1.2%, while the Dow and the S&P 500 finished with respective losses of 0.9% and 0.6%.
Even though the equity market settled lower for the week, it remains within striking distance of its all-time high; the S&P 500 finished Friday's session just 0.8% below its record-high close of 2,480.91. Treasuries rallied this week, sending yields to new lows for the year. The benchmark 10-yr yield dropped 11 basis points to 2.06%, hitting its lowest level since early November.
Similarly, other safe-haven assets--like gold and the Japanese yen--moved higher, jumping 1.6% and 2.3%, respectively. The yellow metal settled at a 13-month high ($1,351.10/ozt) while the dollar/yen pair finished at a ten-month low (107.78). In addition, the CBOE Volatility Index (VIX) spiked 20.2% to 12.18. The financial sector (-2.8%) was pressured by the decline in Treasury yields, but most of the remaining groups finished with losses of no more than 1.1%.
Relative strength in heavyweight names like Home Depot (HD), Exxon Mobil (XOM), and Pfizer (PFE) prevented the stock market from a significant decline, but there were some soft spots in small-cap and high-beta pockets of the market. The small-cap Russell 2000--which is seen as a leading indicator given that small-cap companies largely rely on domestic consumers--underperformed, dropping 1.0%. After pacing the stock market's post-election rally, the small-cap index now holds a year-to-date gain of just 3.1%, far below the S&P 500's year-to-date advance of 9.9%.
High-beta chipmakers also struggled, sending the PHLX Semiconductor Index lower by 2.3%. Large-cap names like Qualcomm (QCOM) and NVIDIA (NVDA) showed particular weakness, settling with losses of 4.6% and 4.0%, respectively. Still, for the year, the PHLX Semiconductor Index is higher by 20.6%.
Following this week's events, the fed funds futures market places the chances of a December rate hike at 31.9%, down from last week's 43.7%.
Traders Hold Their Ground Despite Risk-Off Tone
07-Sep-17 16:30 ET
Dow -22.86 at 21786.08, Nasdaq +4.55 at 6397.84, S&P -0.44 at 2466.55
https://www.briefing.com/investor/markets/stock-market-update/2017/9/7/traders-hold-their-ground-despite-riskoff-tone.htm
[BRIEFING.COM] The major U.S. indices had a mixed outing on Thursday, settling near their unchanged marks despite another disappointing performance from the heavily-weighted financial sector (-1.7%) and risk-off signals from other financial markets. The Nasdaq (+0.1%) eked out a narrow victory while the Dow (-0.1%) and the S&P 500 (unch) each finished a tick below their flat lines.
Prior to Thursday's opening bell, the European Central Bank announced its decision to leave interest rates unchanged. ECB President Mario Draghi added that the central bank will make a decision on its quantitative easing program later this year and risks to the outlook remain balanced. He also noted that the ECB is not targeting an exchange rate, but the level will factor into policy decisions.
The euro climbed 0.9% against the U.S. dollar to 1.2025 following Mr. Draghi's remarks, helping to send the U.S. Dollar Index (91.48, -0.73, -0.8%) to its lowest level since January 2015. The Japanese yen also weighed on the greenback, climbing 0.7% to 108.45. The yen is considered a safe-haven asset and typically does well when investors are feeling risk averse.
Other safe-haven assets, like U.S. Treasuries and gold, also did well on Thursday. Gold climbed 0.9% to $1,350.40/ozt, settling at a new high for the year, while the Treasury market rallied in a curve-flattening trade that sent the 2-yr yield (1.27%) and the 10-yr yield (2.06%) lower by two basis points and five basis points, respectively.
The flattening of the yield curve fueled concerns about net interest margins for lenders and contributed to another poor performance for the heavily-weighted financial sector, which dropped 1.7% to finish below its 200 day simple moving average (397.68). Property and casualty insurers also weighed on the financial group as Hurricane Irma creeped closer to the populous state of Florida.
Like financials, the consumer discretionary and telecom services spaces finished solidly lower, dropping 0.9% and 2.1%, respectively, but the eight remaining sectors finished in positive territory with gains ranging from 0.1% to 1.1%. The influential health care and information technology sectors finished comfortably ahead of the broader market, adding 1.1% and 0.5%, respectively.
On the corporate front, Walt Disney (DIS 97.06, -4.44) dropped 4.4% after CEO Bob Iger announced that the company's earnings per share for fiscal year 2017 will be roughly in line with the 2016 figure. In addition, the company said that its Marvel and Star Wars titles will go exclusively to its planned streaming service, which is set to launch in late 2019.
General Electric (GE 24.02, -0.90) also finished solidly lower, losing 3.6%, after JP Morgan reaffirmed its underweight rating on GE shares. However, on a positive note, Restoration Hardware (RH 71.54, +22.12) surged 44.8% after beating both top and bottom line estimates and issuing upbeat guidance.
In Washington, the Senate easily passed President Trump's Wednesday agreement with Democratic lawmakers, which packages Hurricane Harvey relief funding with a three-month extension of both government funding and the debt ceiling. The measure will now be taken up in the House, where it is also expected to pass.
Reviewing Thursday's economic data, which included the weekly Initial Claims Report and revised readings for second quarter Productivity and Unit Labor Costs:
The latest weekly initial jobless claims count totaled 298,000 while the Briefing.com consensus expected a reading of 239,000. Today's tally was above the unrevised prior week count of 236,000. As for continuing claims, they declined to 1.940 million from the revised count of 1.945 million (from 1.942 million).
The key takeaway from the report is that the spike in initial claims was impacted by Hurricane Harvey, which is to say it is an aberrant reading in relation to an otherwise encouraging trend for initial claims.
Second quarter unit labor costs were revised downward to +0.2% (Briefing.com consensus +0.3%) from +0.6% in the preliminary reading. Meanwhile, second quarter productivity was revised upward to +1.5% (Briefing.com consensus +1.2%) from +0.9% in the preliminary reading.
The key takeaway from the report is that the subdued growth in unit labor costs will contribute to the market's thinking that the Fed has scope to hold off on another rate hike this year.
On Friday, investors will receive just two pieces of economic data--July Wholesale Inventories (Briefing.com consensus 0.4%) and July Consumer Credit (Briefing.com consensus $15.0 billion). The two reports will be released at 10:00 ET and 15:00 ET, respectively.
Nasdaq Composite +18.9% YTD
Dow Jones Industrial Average +10.2% YTD
S&P 500 +10.1% YTD
Russell 2000 +3.0% YTD
Wall Street Trims Yesterday's Decline
06-Sep-17 16:30 ET
Dow +54.33 at 21808.94, Nasdaq +17.74 at 6393.29, S&P +7.69 at 2466.99
https://www.briefing.com/investor/markets/stock-market-update/2017/9/6/wall-street-trims-yesterdays-decline.htm
[BRIEFING.COM] U.S. equities reclaimed a chunk of Tuesday's swoon on Wednesday as each of the three major indices--the S&P 500, the Dow, and the Nasdaq--settled with modest gains of 0.3% apiece. Small caps finished roughly in line with the broader market, evidenced by the Russell 2000, which climbed 0.2%. For the week, the S&P 500 is now lower by 0.4%.
In Washington, President Trump and Democratic leaders agreed to a package deal that includes $7.85 billion for Hurricane Harvey relief efforts and a three-month extension of both the debt ceiling and government funding. It's unclear if the proposal will have the support to make it through Congress however; House Speaker Paul Ryan (R-WI) said that the aforementioned deal was "unworkable" while Senate Majority Leader Mitch McConnell (R-KY) said that he is willing to add the three-month extension to the $7.85 billion flood relief bill--which the House passed as a stand-alone bill on Wednesday.
It's worth noting that, if passed, the proposal would put an end-of-the-year showdown on the table, something that may negatively impact Republicans' goal of getting tax reform done by the year's end. Nonetheless, the stock market took the news in stride today, strengthening into the afternoon, and the Treasury market weakened, sending the benchmark 10-yr yield four basis points higher to 2.11%.
The energy sector (+1.6%) finished comfortably ahead of its peers as crude oil moved higher, climbing 1.0% to a price of $49.14/bbl. The commodity has rallied both days this week as oil refineries along the Texas coast have started coming back online following Hurricane Harvey. On a related note, Hurricane Irma hit the Caribbean on Wednesday morning, moving towards Puerto Rico.
In total, nine of the eleven sectors finished in the green with the consumer discretionary space (+0.6%) settling behind the energy group at the top of the leaderboard. As for the laggards, the lightly-weighted utilities and telecom services groups finished with losses of 0.5% and 1.2%, respectively.
On the corporate front, toy makers like Mattel (MAT 15.69, -0.52) and Hasbro (HAS 93.66, -1.86) dropped 3.2% and 2.0%, respectively, following news that Toys "R" Us is considering a possible bankruptcy filing. Dave & Buster's (PLAY 51.41, -6.73) also finished solidly lower, dropping 11.6%, after lowering its comparable same-store sales guidance for fiscal year 2018.
Also of note, Fed Vice Chair Stanley Fischer offered President Trump his resignation on Wednesday morning, citing personal reasons. Mr. Fischer plans to step down in mid-October.
Reviewing Wednesday's economic data, which included the August ISM Services Index, the July Trade Balance, and the weekly MBA Mortgage Applications Index:
The ISM Services Index for August rose to 55.3 from an unrevised reading of 53.9 in July. The Briefing.com consensus expected a reading of 55.2.
The key takeaway from the report -- other than the important services sector remains in an expansion mode -- is that the uptick in July was paced by an increase in new orders and employment.
The July trade balance showed a deficit of $43.7 billion while the Briefing.com consensus expected the deficit to hit $44.6 billion. The previous month's deficit was revised to $43.5 billion from $43.6 billion.
The key takeaway from the report is that it should compute favorably for Q3 GDP forecasts considering the real trade deficit for July ($61.6 billion) was 1.3% below the second quarter average.
The weekly MBA Mortgage Applications Index increased 3.3% to follow last week's 2.3% decrease.
In addition, the Fed's Beige Book for September showed that economic activity expanded at a modest to moderate pace across all 12 Federal Reserve Districts in July and August. A special note was added for Hurricane Harvey, saying the storm created broad disruptions to economic activity in the Dallas and Atlanta districts, but it's still too soon to gauge the full extent of the impact.
On Thursday, investors will receive the revised readings for second quarter Productivity (Briefing.com consensus 1.2%) and Unit Labor Costs (Briefing.com consensus 0.3%) at 8:30 ET, the weekly Initial Claims Report (Briefing.com consensus 239K) also at 8:30 ET, and July Consumer Credit (Briefing.com consensus $15.0 billion) at 15:00 ET.
Nasdaq Composite +18.8% YTD
S&P 500 +10.1% YTD
Dow Jones Industrial Average +10.4% YTD
Russell 2000 +3.3% YTD
Market Flails as North Korea and Hurricane Wail
05-Sep-17 16:20 ET
Dow -234.25 at 21754.61, Nasdaq -59.76 at 6375.55, S&P -18.70 at 2459.30
https://www.briefing.com/investor/markets/stock-market-update/2017/9/5/market-flails-as-north-korea-and-hurricane-wail.htm
[BRIEFING.COM] The major indices closed off their lows of the session, yet it is fair to say they struggled all day to overcome a panoply of issues that kept buyers mostly sidelined. The losses were broad based as the major indices closed the day down between 0.8% and 1.1%.
The ostensible trigger for Tuesday's bearish bias was North Korea's nuclear test over the weekend, yet it quickly morphed into more than that as the media intensified its coverage of Hurricane Irma, which was upgraded to a category 5 storm that is tracking toward the Caribbean and could very well hit the continental U.S., namely Florida, by the weekend or early next week.
The governors of Florida and Puerto Rico have already declared a state of emergency and the Florida Keys have a mandatory evacuation order.
Fittingly, investors were evacuating themselves from the insurance, reinsurance, and cruise line stocks on Tuesday as their businesses are expected to be adversely impacted in the near term by the hurricane. Conversely, home improvement retailers Home Depot (HD 152.93, +2.20, +1.5%) and Lowe's (LOW 75.68, +1.07, +1.4%), as well as companies like Generac Holdings (GNRC 42.05, +1.39, +3.4%), a manufacturer of power generators, outperformed as potential beneficiaries of the looming natural disaster.
Still, there was a political cloud hanging over the market all day, too, that rained down on investor sentiment.
North Korea's provocative act got things rolling, yet there was also a domestically-rooted concern that a budget resolution and debt limit increase won't be achieved as readily, or as agreeably, as last week's market participants thought they would in the wake of Hurricane Harvey.
Those concerns festered on the back of reports that the Republican Freedom Caucus is opposed to attaching a funding request for Hurricane Harvey aid to a debt limit increase and on the news that President Trump ended the Deferred Action for Childhood Arrivals (DACA) program.
The confluence of concerns related to North Korea, Hurricane Irma, and domestic politics came together in a Treasury market rally that saw the 10-yr note jump nearly a point and its yield drop nine basis points to 2.07%. That move was billed as a safe-haven bid, which was also evident in rising gold prices ($1347.10, +16.70, +1.3%) and a huge move in the CBOE Volatility Index (12.52, +2.39, +23.6%). Separately, the U.S. Dollar Index declined 0.4% to 92.24.
Today's corporate news mostly took a backseat to the macro concerns, yet it wasn't overshadowed altogether as a driver of things.
United Technologies (UTX 111.19, -6.73, -5.7%) paced the Dow's decline after announcing a deal to acquire Rockwell Collins (COL 130.87, +0.26, +0.2%) for $30 billion, or $140.00 per share, in cash and stock. Rumors had been circulating for several weeks that such a deal could come to fruition, helping to drive up shares of COL, so their was little movement today in the acquisition target following the actual news.
Travelers (TRV 115.47, -4.43, -3.7%) was the next weakest component in the Dow, as it tracked lower with other insurers. That group weighed heavily on the financial sector (-2.2%), which was the worst-performing sector on Tuesday. Notable weakness in the bank stocks, which got clipped on concerns about net interest margin pressures related to the flattening yield curve, also factored significantly into the sector's weakness.
Another weak spot of note was the airlines, as they got grounded following third quarter passenger unit revenue warnings from Delta Air Lines (DAL 45.84, -1.67, -3.5%) and Spirit Airlines (SAVE 32.51, -1.52, -4.5%)
Those sectors that bucked the broader trend included the defensive-oriented utilities (+0.3%) and consumer staples (+0.2%) sectors, as well as the energy sector (+0.6%), which followed crude prices ($48.64, +1.34, +2.8%) higher. The latter move was based on an outlook of improved demand for oil as refineries in Texas come back online.
The lone economic release today was the Factory Orders report for July. It showed orders fell 3.3% in July (Briefing.com consensus -3.2%) on the back of weakness in transportation equipment orders. The report was quickly glossed over by traders, though, since it was largely in-line with expectations.
Wednesday's economic calendar features the MBA Mortgage Applications Index for the week of September 2, the Trade Balance report for July (Briefing.com consensus -$44.6 bln), the ISM Services report for August (Briefing.com consensus 55.2), and the Fed's Beige Book report.
Nasdaq Composite +18.4% YTD
Dow Jones Industrial Average +10.2%
S&P 500 +9.7% YTD
S&P Midcap 400 Index +3.5%
Russell 2000 +3.3%
Jobs Report is Very Mediocre, Indeed Bad (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
- Stocks slow on the first day of September, but it was Friday ahead of
Labor Day.
- Jobs report is very mediocre, indeed bad. Hmm, no change in ACA, no change
in tax policy, some regulatory rollbacks. Okay, that is worth just 'some'
economic improvement, and we have seen that already.
- Thus far stocks tracking higher as per the market's MO.
- NASDAQ at a new closing high. Should have more upside before the move is
sold to once again reset the cycle.
September entered on a Friday ahead of a 3-day weekend and a Friday after a
week upside on the large cap indices and 2 weeks straight up for the RUTX
small caps. A bit of indifference on the indices is understandable,
particularly after the run and what was, all said and done, a weak jobs
report.
Even so, RUTX posted another solid session as it has, despite its distance
from the prior high, clearly led the market higher. NASDAQ was flat Friday,
but it too has taken the lead, if not so much in terms of percentage gain
compared to RUTX, but it is closing in on the July all-time high.
Given those nice moves leading into Friday, the session was rather
anticlimactic to end the week.
SP500 4.90 0.20%
NASDAQ 6.67, 0.10%
DJ30 39.46, 0.8%
SP400 0.40%
RUTX 0.59%
SOX 0.45%
VOLUME: NYSE -28%, NASDAQ -21%. After a rally in volume Thursday on the
last day of August, there definitely was not a lot of accumulation Friday as
trade plummeted back below average.
ADVANCE/DECLINE: NYSE 2.3:1, NASDAQ 1.9:1. Not bad given the light gains,
and with RUTX and SP400 leading on the session, you would expect breadth to
remain solid.
A solid week with NASDAQ and even SP500 approaching the prior highs. RUTX
flying up in its rebound off the sharp selloff, showing an equally sharp
recovery. The news has not been great, underscored Friday by a weak August
jobs report. Yet the market rallies, trying the old highs. Okay, just what
is the market theory now, i.e. is bad news good news or is good news good
news? Given the moves, all news is, relatively, good news.
Friday the news was jobs and construction. Hard to spin either one as not
bad.
Construction: -0.6% vs +0.5% expected vs -1.4% June (from -1.3%).
Bad news on top of bad news as year/year growth slipped to 1.8%. The last
two times construction hit this level (2001, 2007), the economy was heading
into recession.
Jobs Report: It wasn't just the jobs numbers miss, it was the way it got
there.
Non-farm payrolls, August: 156K vs 183K vs 189K (from 209K)
Unemployment rate: 4.4% vs 4.3% vs 4.3%
Earnings: 0.1% vs 0.2% expected vs 0.3% July. 2.5% year/year versus 2.6%
year/year July.
Average Workweek: 34.4 vs 34.5 expected vs 34.5 July. Not improving, and
once you do get a month that clicks up a tenth, it goes right back down.
Participation: 62.9% versus 62.9% prior. But out of workforce did grow by
128K. Same old problems.
The good points:
Manufacturing hiring jumped 36K. Nice improvement in an area we heard the
prior administration say would never see jobs return.
Construction 26K, healthcare 20k.
Mining +7K
Losers: government (-9K) and information tech (-8K). At least government
jobs are heading in the right direction.
Also, it is said that the August seasonal adjustments ALWAYS result in an
underreported month that is revised higher.
The bad points:
A miss on the top line was not the only bad news. Revisions of -20K on each
of the prior two months. More of the same with 185K jobs per month the past
3 months.
Stagnant workweek -- no surprise given the ACA is still in place. Won't
change until the incentive to work workers less is removed. Wages continue
their stagnation.
August understated? Even if it was understated, the prior two months were
overstated and revised lower. To remove any issues, look at the UNADJUSTED
data year/year to get rid of the month to month adjustment noise. If you do
so, you see a 16% drop in jobs added. Moreover, August year/year showed the
largest annual percentage drop in new jobs since the financial crisis. This
is of course heading the WRONG direction. If people were looking at the
REAL numbers they would be discounting a lot more than no hikes into
December. They would be looking for the Fed to come out with QE4.
In sum, the jobs mix improved with higher paying jobs in manufacturing,
construction, and mining picking up jobs. On the other hand, the same
structural changes remain: low overall hours worked, DECLINING jobs creation
versus net positives on a year/year basis. We are creating FEWER new jobs
when you look at the real numbers and not the ones adjusted to make them
more palatable to markets and the public.
An interesting side bar to the report are rumors of layoffs coming at FB and
GOOG. The theme is that the fake ads and results from purchasing programs
and campaigns on their platforms have caused a significant decline in
advertiser dollars. You have already heard about one large corporation
dropping its Facebook ad program.
MARKET
CHARTS
RUTX led the gains while NASDAQ put in a new closing high. New highs are a
time to start watching closely as they have been reversed in prior upside
runs. The pattern is not an immediate reversal, but a continued move
higher, then a sharp reversal.
RUTX: Small caps continued their impressive rally, rising 8 of 9 sessions
and accelerating Wednesday to Friday. From heavily oversold they have
staged a 5% recovery move in two weeks. Impressive as noted, but now RUTX
is at some resistance, hitting the February peak and bumping at April and
June. Last week I discussed the potential of a right shoulder forming to a
potential head and shoulders at those levels. Something to watch as RUTX
trades into early September, a month known for its downside pitfalls. The
interesting thing is the economic data has not been great though the
sentiment indications are good. Small caps perform well in anticipation of
a rising economy and you wonder if this is a comment on a turn in economics.
RUTX is very range-bound right now and thus for now this is just an oversold
recovery, but it shows a lot more power than you would anticipate.
NASDAQ: New closing highs for NASDAQ Thursday and Friday though it is still
below the late July intraday peak. NASDAQ is the closest to a new high with
its impressive Tuesday to Thursday rally off its trendline. New highs have
meant trouble for the upside moves, but as noted earlier in the week, the
pattern is not an immediate collapse once a new is hit, but a week to two
weeks of continued upside THEN the sharp reversal. Thus we look for some
more upside this coming week.
SP500: Solid Tuesday to Thursday rebound as well, doji Friday 15 points
below the early August high. That gives SP500 some additional room to move
higher, and given it recovered its 2017 trend on this last move, typically
it would test back near the top of the range. That suggests a bit more
upside on this move.
DJ30: Not as impressive a move as some of the more oversold indices. DJ30
did test its 50 day MA's the past three weeks, but it was nowhere near the
selling of the other indices. Thus as they rebounded from oversold
conditions, DJ30 rested. Still in a very well defined uptrend over the 50
day MA.
SP400: A solid rally from its oversold condition though not as impressive
as RUTX. Moved up through the 200 day SMA Wednesday and continued on
through the 50 day EMA Friday. A good rebound but it is now in the teeth of
the resistance in the range from February into July.
SOX: Broke out from its three month triangle Wednesday and continued upside
into Friday though Friday showed a doji closing off the high. Nice setup and
a move through the late July peak on the breakout. Good initial move and it
can test or continue from the Friday close. Nice, but not explosive move.
LEADERSHIP
FAANG: These stocks threw in on the upside starting Tuesday in that gap
lower and reversal. Friday was somewhat a dud for them (NASDAQ 100 was
negative) but a good surge by GOOG, NFLX, FB, AAPL on the week. These
stocks paused on Friday, and it will be key for the market if they continue
the move upside off that Friday rest.
China stocks: A mixed week for these stocks though overall it was more of a
struggle for recent leaders. BIDU did a good job of reversing a Tuesday
break from its range, surging upside to a breakout on Friday. BABA bounced
off a 20 day EMA test but slowed to a crawl Thursday and Friday. YY bounced
nicely in an ABCD pattern. HTHT bounced from a 20 day EMA test and scored a
new high. SINA was on the ropes but recovered and Friday surged to a new
high.
Semiconductors: Coming back around nicely. NVDA came off its 50 day MA's
last week with a good move though Friday it showed a doji at the prior
highs. LRCX rallied to the top of its triangle and showed a pair of doji,
not quite ready for the breakout. AMAT posted a solid bounce into
Wednesday, then it too was flat to end the week -- a good setup inside its
pattern. MLNX broke through the 200 day SMA then paused Wednesday to
Friday; forming a handle. MCHP rallied to a higher closing high for us.
Software: Still a solid group. VMW rallied to a new high through Thursday.
TTWO was down Friday, but was up on the week. GLUU posted a new high,
hitting our initial targets. RHT put in a higher high.
Financial: Hanging in but appear confused by the data and what it means for
Fed rate hikes. C held the 50 day EMA and bounced off the lows in its
range. BAC held the 200 day SMA early week and rebounded, still mired in
its range. GS is very much range-bound. Need to see breakouts from these
stocks to have any confidence in them.
Machinery: CAT continued its trend higher. Not surging but steadily higher.
CMI posted a nice bounce from the 200 day -- after its ugly August collapse
to that level. TEX is still working laterally along the 50 day MA after
peaking in early August.
Materials: Surged on the assessment of Harvey. LPX jumped the back half of
the week as did USCR, VMC.
Biotechs/Drugs: Struggled some Friday after a very good week. IMGN surged
into Wednesday. AMGN found solid bids as did CELG. SPPI posted a nice
breakout.
MARKET STATS
DJ30
Stats: +93.46 points (+0.18%) to close at 21987.56
Nasdaq
Stats: +6.67 points (+0.1%) to close at 6435.33
Volume: 1.479B (-20.43%)
Up Volume: 868.221M (-491.702M)
Down Volume: 556.364M (+81.778M)
A/D and Hi/Lo: Advancers led 1.92 to 1
Previous Session: Advancers led 2.16 to 1
New Highs: 194 (+28)
New Lows: 24 (-3)
S&P
Stats: +4.9 points (+0.2%) to close at 2476.55
NYSE Volume: 651.5M (-27.61%)
A/D and Hi/Lo: Advancers led 2.31 to 1
Previous Session: Advancers led 2.8 to 1
New Highs: 168 (+35)
New Lows: 17 (-2)
SENTIMENT INDICATORS
VIX: 10.13; -0.46
VXN: 14.1; -0.23
VXO: 8.94; -0.32
Put/Call Ratio (CBOE): 0.83; -0.23
Bulls and Bears: Bulls are off 8 points in four weeks after rallying back to
60 for two weeks. Was the recent selloff the response to those high
readings? If that was it, that is a break from history.
Bulls: 49.5 versus 48.1 versus 50.5
Bears: 19.1 versus 18.3 versus 18.1
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 49.5 versus 48.1
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 versus 46.1 versus 46.7 versus 45.2
Bears: 19.1 versus 18.3
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: 2.166% versus 2.120%. Bonds rallied into Thursday, then fell Friday
on rather weak jobs data. Something of the inverse of what you would
expect.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.210%
versus 2.136% versus 2.129% versus 2.175% versus 2.169% versus 2.189% versus
2.217% versus 2.183% versus 2.197% versus 2.185% versus 2.225% versus 2.264%
versus 2.24% versus 2.191% versus 2.201 versus 2.246% versus 2.262% versus
2.257% versus 2.264% versus 2.221% versus 2.266% versus 2.253% versus 2.296%
versus 2.291% versus 2.303% versus 2.287% versus 2.330% versus 2.255% versus
2.241% versus 2.270% versus 2.261% versus 2.318% versus 2.331% versus 2.346%
versus 2.316% versus 2.361% versus 2.375% versus 2.375% versus 2.368% versus
2.34% versus 2.304% versus 2.268% versus 2.20% versus 2.140% versus 2.140%
versus 2.148%
EUR/USD: 1.18621 versus 1.19131. Euro faded into the weekend but holding
the 20 day EMA, the support for its solid uptrend.
Historical: 1.19131 versus 1.18938 versus 1.19731 versus 1.19678 versus
1.19212 versus 1.18 versus 1.17516 versus 1.1813 versus 1.17595 versus
1.17107 versus 1.17812 versus 1.17445 versus 1.17751 versus 1.18216 versus
1.17652 versus 1.17596 versus 1.17619 versus 1.17975 versus 1.1774 versus
1.18718 versus 1.18457 versus 1.18072 versus 1.18281 versus 1.18293 versus
1.1683 versus 1.17419 versus 1.1646 versus 1.1637 versus 1.16640 versus
1.16271 versus 1.15280 versus 1.15549 versus 1.14735 versus 1.14672 versus
1.13986 versus 1.14335 versus 1.14682 versus 1.13964
USD/JPY: 110.254 vs 110.049. Resting after its bounce off the lows in its
trading range.
Historical: 110.049 versus 110.289 versus 109.652 versus 108.04 versus
109.160 versus 109.573 versus 109.195 versus 109.648 versus 109.173 versus
109.205 versus 109.333 versus 109.842 versus 110.6621 versus 109.927 versus
109.183 versus 109.177 versus 110.03 versus 109.09 versus 110.09 versus
110.757 versus 110.689 versus 109.963 versus 110.717 versus 110.368 versus
110.28 versus 110.704 versus 111.07 versus 111.166 versus 111.897 versus
111.176
Oil: 47.29, +0.06. Down for another week after peaking in early August on
its last bounce. Trying to put in a higher low near the 50 day MA, however.
Gold: 1330.40, +8.20. Gold continues its climb following breaking out over
the April and June twin peaks just over a week back.
MONDAY
NASDAQ is bumping at a new high, and the MO of this market is that new highs
are sold. Typically 1 to 2 weeks after the high is hit and after more
upside is added. Thus, at this juncture, after having picked up several
nice positions, the play is not so much buying but letting positions work as
high as they will, then bank some gain.
The news can always impact this and over this weekend North Korea tested a
sixth nuclear bomb, one it claims to be hydrogen and warhead ready. That
puts a nice pall over everyone. There is also the usual sniping in the
government and in these somewhat disunited states right now. Harvey waters
are receding -- in some places -- while fires rage just outside of Los
Angeles. Always plenty on the market's plate.
Headlines are dominated by the North Korean nuke, and we will have to see
how the world markets handle this when they open. Nonetheless, the US open
is a long way off: Tuesday. Things can cool quite a bit in terms of the
nuke test.
Further, this market, while pushed and pulled by the news, still finds its
same pattern. Despite the small cap and midcap collapse, the large cap
indices held intact and are continuing upside, doing what they have done in
other moves in the rally. Thus, we are sticking with the plan of
anticipating a continued move higher by NASDAQ and the other indices,
followed by another reversal of the new high. That is the apparent
algorithm programming and thus far, despite all of the predictions of a
selloff that won't bounce, the indices have bounced. The algos bought on
the last dip and as that aspect remained we would expect the other to
remain.
So, we let our upside run some more this week, then we start looking at
banking gain. Do we pick up new upside positions? Typically on breakouts
you look for more breakouts. We will indeed look for some great stocks in
good position to move with a quick burst, but in this market MO/pattern, it
is getting long into the move to buy a lot of new positions. We have
already picked up a lot of good positions as the move started and on some we
have even banked some gain already. We are disinclined to load up a bunch
of new positions on the upside given the market MO. If that MO shows a
change at some point, we will change with it. We can always keep some
partial positions open if we want to test that potential change if the move
next week is strong. Otherwise, we want to let our current positions run,
take gain after some more upside, and not load up on a lot of new positions
given the move is well underway.
Have a great Labor Day weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6435.33
Resistance:
6461 is the July 2017 prior all-time high
Support:
6341.70 is the all-time high from early June.
6300 is the mid-June interim high
The 50 day EMA at 6285
The 2016 trendline at 6217
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
The 200 day SMA at 5865
5800 from the February consolidation lows
5661 is the late January upper gap point
5601 is the January lower gap point
S&P 500: Closed at 2476.55
Resistance:
2453.46 is the June prior all-time closing high
2491 is the August all-time high
2498 is the upper channel line from the March 2009 uptrend channel
Support:
The 50 day EMA at 2448
2409 is the July 2017 closing low
2406 is the all-time high from May 2017
2401 is the March 2017 all-time high
The 200 day SMA at 2362
2352 is the recent May 2017 low
2348 is the April 2017 lower gap point
2329 is the March and April twin lows
2322 is the March 2017 low
2301 is the late January 2017 high
2298 is the late January 2017 high
2282 - 2280 from January 2017
2277.53 is the December 2016 high
The November 2016 all-time high at 2213.25
2194 is the August 2016 prior all-time high
2175 is the June 2016 high
Dow: Closed at 21,987.56
Resistance:
22,086 is the mid-August lower high
22,179 is the August 2017 all-time high
Support:
The 50 day EMA at 21,705
21,681is the July prior all-time high
21,638 is the July 2017 closing high
21,529 is the June 2017 high
21,169 is the March 2017 all-time high
The 200 day SMA at 20,748
20,547 is the lower gap point from late April 2017
20,412 is the March 2017 low
20,400 is the mid-April 2017 low.
20,126 is the January 2017 intraday high
20,101 is the late January closing high.
19,994 - 19,999 (early January high, upper gap point from late January
19750 is the lows of the December/January range
19,732 is the January 2017 low
18,669 is the August 2016 all-time high
18,595 is the July 2016 peak
18,351 is the prior all-time high from May 2015
Wall Street Takes August Jobs Report in Stride
01-Sep-17 16:30 ET
Dow +39.46 at 21988.86, Nasdaq +6.67 at 6435.31, S&P +4.90 at 2478.00
https://www.briefing.com/investor/markets/stock-market-update/2017/9/1/wall-street-takes-august-jobs-report-in-stride.htm
[BRIEFING.COM] Equities ended another positive week on a positive note as investors took a relatively disappointing August jobs report in stride, pushing the Nasdaq (+0.1%) to a new record high (6,435.33). The S&P 500 and the Dow climbed 0.2% apiece, ending the day in the middle of their trading ranges. Trading volume was especially light as many investors got a jump start on the extended Labor Day weekend.
The Employment Situation Report for August disappointed on nonfarm payrolls (156K actual vs 183K Briefing.com consensus), nonfarm private payrolls (165K actual vs 173K Briefing.com consensus), the unemployment rate (4.4% actual vs 4.3% Briefing.com consensus), and the average workweek (34.4 actual vs 34.5 Briefing.com consensus). However, another tepid average hourly earnings reading (+0.1% actual vs +0.2% Briefing.com consensus) overshadowed the less-than-stellar metrics.
Average hourly earnings have been reluctant to pick up despite a tightening of the labor market, effectively tempering inflation and, therefore, the market's rate-hike expectations. The fed funds futures market currently places the chances of an additional rate hike this year--which the Fed needs to meet its forecast of three rate hikes in 2017--at 41.4%.
Treasury yields moved solidly higher on Friday to end the week relatively flat. The 10-yr yield climbed four basis points to 2.16%, registering a weekly loss of one basis point, while the 2-yr yield jumped three basis points to 1.35%, settling the week higher by one basis point. Meanwhile, the U.S. Dollar Index (92.77, +0.18) added 0.2% to end the week higher by 0.1%.
Seven of the eleven sectors settled Friday's session in positive territory, but the underperformance of the influential health care (-0.1%) and technology (-0.2%) spaces kept the broader market's gain in check. Still, the two groups ended the week at the top of the leaderboard--in first and second place, respectively. Health care climbed 3.0% for the week while technology added 2.1%.
The energy sector (+0.8%) was the top performer on Friday, followed closely by the financials (+0.4%), consumer discretionary (+0.5%), and materials (+0.7%) groups. Within the consumer discretionary space, automakers outperformed after reporting their U.S. sales for the month of August.
Fiat Chrysler (FCAU 15.86, +0.73), Ford Motor (F 11.35, +0.32), and General Motors (GM 37.36, +0.82) showed notable strength, climbing 4.8%, 2.9%, and 2.2%, respectively. However, GM was the only one to report an increase in sales (+7.5%). FCAU and F reported respective year-over-year declines of 11.0% and 2.1%.
On the earnings front, lululemon athletica (LULU 61.68, +4.13) jumped 7.2% after beating both top and bottom line estimates and issuing above-consensus guidance. The SPDR S&P Retail ETF (XRT 39.70, +0.53) finished higher by 1.4%.
In Washington, reports indicate that the White House will not shut down the government in October in an attempt to gain funding for President Trump's promised barrier along the U.S.-Mexico border. The decision will potentially make it easier for Congress to reach a deal on a short-term budget.
Reviewing Friday's economic data, which included the Employment Situation Report for August, the August ISM Manufacturing Index, July Construction Spending, and the final reading of the University of Michigan Consumer Sentiment Index for the month of August:
The August Employment Situation Report:
August nonfarm payrolls hit 156,000 while the Briefing.com consensus expected a reading of 183,000. The prior month's reading was revised to 189,000 from 209,000. Nonfarm private payrolls added 165,000 while the Briefing.com consensus expected an increase of 173,000. The previous month's reading was revised to 202,000 from 205,000.
The unemployment rate rose to 4.4% (Briefing.com consensus 4.3%). Average hourly earnings increased 0.1% (Briefing.com consensus +0.2%), while the previous month's reading was left unrevised at 0.3%. The average workweek was reported at 34.4 (Briefing.com consensus 34.5). The previous month's reading was left unrevised at 34.5.
The key takeaway from the report is that wage inflation is still not picking up despite the low unemployment rate. That will keep the Goldilocks narrative in place, which has served as a perfectly-cooked bowl of porridge for a stock market that has feasted on a backdrop of modest growth and low inflation.
The ISM Index for August rose to 58.8 from an unrevised reading of 56.3 in July while the Briefing.com consensus expected an uptick to 56.8.
The key takeaway from the survey is that it connotes a manufacturing sector running with a full head of steam, although that interpretation conflicts somewhat with the drop in the manufacturing workweek reported in the Employment Situation report for August.
The Construction Spending report for July declined 0.6% while the Briefing.com consensus expected an increase of 0.5%. The prior month's reading was revised to -1.4% from -1.3%.
The key takeaway from the report is that the decline in construction spending will act as a drag on Q3 GDP forecasts.
The final reading of the University of Michigan Consumer Sentiment Index for August declined to 96.8 (Briefing.com consensus 97.1) from 97.6 in the preliminary reading.
The key takeaway from the report is that consumer sentiment remains at high levels despite the (geo)political drama as consumers reportedly have maintained a favorable assessment of their own financial situations.
The U.S. equity market will be closed on Monday in observance of Labor Day.
Nasdaq Composite +19.6% YTD
S&P 500 +10.6% YTD
Dow Jones Industrial Average +11.3% YTD
Russell 2000 +4.2% YTD
Week In Review: Back to Record Territory
The stock market moved notably higher for the second week in a row as investors continued to buy the mid-August dip that pulled the major averages from their all-time highs. The Nasdaq moved back into record territory, climbing 2.7% to settle the week at a new all-time high. Meanwhile, the Russell 2000, the S&P 500, and the Dow added 2.6%, 1.4%, and 0.8%, respectively.
Eight sectors settled the week in the green--health care (+3.0%), technology (+2.1%), industrials (+1.5%), materials (+1.9%), consumer discretionary (+1.6%), energy (+0.8%), consumer staples (+0.5%), and real estate (+0.4%)--while three groups finished in the red--financials (-0.1%), utilities (-0.6%) and telecom services (-1.4%).
The week's most notable headlines in chronological order:
Monday--S&P 500 +0.1%, Nasdaq +0.3%, Dow unch
Crude futures drop and gasoline futures rise after Hurricane Harvey, which hit the Texas coast over the weekend, forced the closure of many oil refineries.
Reports indicate that Apple (AAPL) will hold a product event on September 12, in which the company is expected to unveil its much-anticipated iPhone 8.
Gilead Sciences (GILD) announces that it will acquire Kite Pharmaceuticals (KITE) for approximately $11.9 billion, or $180.00 per share, in cash.
Tuesday--S&P 500 +0.1%, Nasdaq +0.3%, Dow +0.3%
North Korea fires a ballistic missile over the Japanese island of Hokkaido, marking the first time since 2009 that Pyongyang has fired over Japan's main islands.
President Trump says "all options are on the table" in response to North Korea's latest missile test.
Wednesday--S&P 500 +0.5%, Nasdaq +1.1%, Dow +0.1%
Second estimate of second quarter GDP beats estimates (3.0% actual vs 2.7% Briefing.com consensus).
ADP National Employment Report for August comes in better than expected (237,000 actual vs 180,000 Briefing.com consensus).
Thursday--S&P 500 +0.6%, Nasdaq +1.0%, Dow +0.3%
The latest reading of the core PCE Price Index shows that consumer prices decelerated on a year-over-year basis in July--dropping to +1.4% from +1.5% in June.
July personal income beats estimates (+0.4% actual vs Briefing.com consensus +0.3%) while personal spending falls short (+0.3% vs Briefing.com consensus +0.4%).
Friday--S&P 500 +0.2%, Nasdaq +0.1%, Dow +0.2%
The Employment Situation Report for August misses estimates; nonfarm payrolls (156K actual vs 183K Briefing.com consensus).
The ISM Manufacturing Index comes in better than expected (58.8 actual vs 56.8 Briefing.com consensus).
Reports indicate that the White House will not attempt to shut down the government, even if it doesn't secure funding for a barrier along the U.S.-Mexico border.
Economic data was the focal point this week as investors received a slew of economic reports--the most notable of which were the Employment Situation Report for August and the core PCE Price Index for July. Both reports helped ease the market's rate-hike concerns, providing further evidence that inflation has been, and will continue to be, relatively sluggish.
The core PCE Price Index, which excludes food and energy, increased by 0.1% in July (Briefing.com consensus 0.1%), but dropped on a year-over-year basis to +1.4% from +1.5% in June. The Fed has set a year-over-year target of 2.0% for inflation so July's deceleration doesn't bode well for the notion that the Fed will be able to follow through with its forecast of one additional rate hike this year.
In addition, the August jobs report provided no signs of a pick up in inflation in the near term as it showed another relatively weak increase in average hourly earnings (0.1% actual vs 0.2% Briefing.com consensus). On a year-over-year basis, average hourly earnings have risen 2.5%, unchanged from the 12-month period ending in July.
The fed funds futures market currently places the chances of another rate hike this year at 41.4% and considers the June 2018 FOMC meeting as the most likely time for the next rate-hike announcement with an implied probability of 54.4%. Last week, the market expected the next rate hike to occur in June 2018 with an implied probability of 58.0%.
Looking ahead, the market's attention will likely shift from rate hikes to the Fed's balance sheet during the next FOMC meeting, which is scheduled to take place September 19-20, as the U.S. central bank is expected to announce the start of a plan to reduce its massive $4.5 trillion balance sheet.
Bulls Rack Up Another Win Ahead of Friday's Jobs Report
31-Aug-17 16:25 ET
Dow +55.67 at 21949.40, Nasdaq +60.35 at 6428.64, S&P +14.06 at 2473.10
[BRIEFING.COM] Equities moved higher once again on Thursday, extending the S&P 500's winning streak to five sessions in a row. The Russell 2000 (+1.0%) and the Nasdaq (+1.0%) finished comfortably ahead of the benchmark S&P 500 (+0.6%) while the Dow Jones Industrial Average (+0.3%) underperformed. For the month, the benchmark index ticked up 0.1%.
Investors were happy to dial back their rate-hike expectations on Thursday following yet another tepid inflationary report. The latest reading of the core PCE Price Index showed that consumer prices decelerated on a year-over-year basis in July--dropping to +1.4% from +1.5% in June--and remain well below the Fed's longer run target of 2.0%.
Treasury yields ended the day lower across the curve following Thursday's economic data with the benchmark 10-yr yield dropping two basis points to 2.12%. Likewise, the U.S. Dollar Index (92.61, -0.23) slipped, losing 0.3%. As for the fed funds futures market, the implied probability of a December rate hike now sits at 36.4%, slightly lower than where it stood at this time last week (38.7%).
In the equity market, nine of the eleven sectors settled the day in positive territory with the influential health care group (+1.7%) leading the charge after closing above its 50-day simple moving average (919.36) for the first time in three weeks on Wednesday. Biotech names showed particular strength, sending the iShares Nasdaq Biotechnology ETF (IBB 333.35, +9.03) higher by 2.8%.
Like the health care space, the top-weighted technology sector (+0.7%) also finished ahead of the broader market on Thursday as Apple (AAPL 164.00, +0.65) added another 0.4% to settle August with a monthly gain of 10.3%. The tech sector was the top-performer in the month of August, climbing 3.2% to extend its year-to-date advance to 25.3%.
The lightly-weighted materials space (+0.7%) also outperformed on Thursday, but the remaining advancers finished with gains of no more than 0.5%. On the flip side, the heavily-weighted financial space (unch) settled with the telecom services sector (-0.5%) at the bottom of the sector standings, extending its monthly loss to 1.9%.
Elsewhere, crude oil climbed 2.6% to $47.14/bbl, breaking its four-session losing streak. Tropical Storm Harvey remains a key factor in the crude and gasoline futures market as it has forced the closure of many refineries along the Texas coast. Thursday reports indicate that Motiva Enterprises' Port Arthur refinery, the biggest in Texas, may be shut down for up to two weeks.
Political news was fairly light on Thursday, but Treasury Secretary Steven Mnuchin did say the White House has a "very detailed" tax plan ready that will be released to the public by the end of September.
Reviewing Thursday's economic data, which included July Personal Income, Personal Spending, core PCE Prices, Initial Claims, August Chicago PMI, and July Pending Home Sales:
Personal income ticked up 0.4% in July (Briefing.com consensus +0.3%) after an unrevised reading of 0.0% for June. Personal spending rose 0.3% (Briefing.com consensus +0.4%), while the prior month's reading was revised to 0.2% from 0.1%. The core PCE Price Index, which excludes food and energy, increased 0.1% (Briefing.com consensus +0.1%).
The key takeaway from the report was that inflation pressures remained subdued, which suggests to market participants that expectations for another rate hike this year can also remain subdued.
The latest weekly initial jobless claims count totaled 236,000, as expected. Today's tally was above the revised prior week count of 235,000 (from 234,000). As for continuing claims, they declined to 1.942 million from an unrevised count of 1.954 million.
This report marks the 130th straight week that initial claims have been below 300,000, which is reflective of an environment in which employers are reluctant to let go of their workers.
Chicago PMI for August hit 58.9, unchanged from July and in line with the Briefing.com consensus.
All of the barometer components, with the exception of employment, were above their year-ago levels.
Pending Home Sales for July declined 0.8% (Briefing.com consensus +0.5%). Today's reading follows a revised 1.3% increase in June (from +1.5%).
On Friday, the Employment Situation Report for August will be released at 8:30 ET and has the power to jolt, or further dampen, the chances of a December rate hike. The Briefing.com consensus expects that the report will show the addition of 183,000 nonfarm payrolls, an increase of 0.2% in average hourly earnings, and an unemployment rate of 4.3%.
In addition, investors will receive several other pieces of economic data on Friday, including the August ISM Manufacturing Index (Briefing.com consensus 56.8), July Construction Spending (Briefing.com consensus 0.5%), and the final reading of the University of Michigan Consumer Sentiment Index for the month of August (Briefing.com consensus 97.1)--all of which will be released at 10:00 ET.
Also of note, August auto and truck sales will be released throughout the day.
Nasdaq Composite +19.4% YTD
Dow Jones Industrial Average +11.1% YTD
S&P 500 +10.4% YTD
Russell 2000 +3.6% YTD
S&P 500 Registers Fourth-Consecutive Victory
30-Aug-17 16:25 ET
Dow +27.06 at 21893.73, Nasdaq +66.42 at 6368.29, S&P +11.29 at 2459.04
https://www.briefing.com/investor/markets/stock-market-update/2017/8/30/s-and-p-500-registers-fourthconsecutive-victory.htm
[BRIEFING.COM] The equity market rallied on Wednesday as investors continued to buy the dip that pulled the major U.S. indices from their all-time highs earlier this month. The S&P 500 (+0.5%) registered its fourth-consecutive victory, marking its longest winning streak in three months, and settled above its 50-day simple moving average (2,451.08). The Nasdaq (+1.1%) outperformed while the Dow (+0.1%) lagged.
Wednesday's session began in the wake of a strong batch of economic data, which included both a better than expected ADP National Employment Report (237,000 actual vs 180,000 Briefing.com consensus) and an above-consensus second estimate of second quarter GDP (3.0% actual vs 2.7% Briefing.com consensus).
Stocks opened the session relatively flat as investors took a moment to digest the hotter than expected reports--weighing the thought of economic growth against the thought that said growth might help justify a further tightening of monetary policy. The bulls eventually won out and then led a slow and steady climb into the afternoon.
Biotechnology stocks showed notable strength throughout the session, evidenced by the iShares Nasdaq Biotechnology ETF (IBB 324.32, +6.50), which settled higher by 2.1%. Incyte (INCY 138.27, +13.30) led the biotech rally, jumping 10.6%, following news that the company, and partner Eli Lilly (LLY 80.49, +1.94), will resubmit a new drug application for baricitinib by the end of January 2018.
The influential health care sector (+0.6%), which houses biotech names, finished a step ahead of the broader market, near the top of the leaderboard. The top-weighted technology sector (+0.8%) also outperformed, as did the consumer discretionary (+0.7%) and materials (+0.7%) groups.
Within the tech space, chipmakers exhibited notable strength, sending the PHLX Semiconductor Index higher by 1.7%. Analog Devices (ADI 83.72, +4.17) led the semiconductor rally after beating both top and bottom line estimates and issuing above-consensus guidance. ADI shares climbed 5.2% to a fresh three-month high.
On the flip side, select countercyclical sectors underperformed, including consumer staples (unch), utilities (-0.4%), and telecom services (-0.6%). The energy sector (unch), which is considered to be a cyclical group, also struggled as the price of crude oil dropped for the fourth session in a row.
The commodity held a modest gain in the early afternoon, but moved sharply lower following an EPA announcement approving emergency fuel waivers for Gulf and East Coast states in response to Tropical Storm Harvey. WTI crude futures finished lower by 0.6% at a price of $45.96/bbl.
In the bond market, U.S. Treasuries finished the midweek session on a flattish note with the benchmark 10-yr yield settling unchanged at 2.14%. Meanwhile, the 2-yr yield climbed one basis point to 1.33% after trading as high as 1.35% in the morning session.
Also of note, the U.S. Dollar Index (92.86, +0.59) climbed 0.6% after touching a multi-year low on Tuesday and the CBOE Volatility Index (VIX 11.20, -0.50) dropped 4.3%.
Reviewing Wednesday's economic data, which included the ADP Employment Change Report for August, the second estimate of second quarter GDP, and the weekly MBA Mortgage Applications Index:
The ADP National Employment Report showed an increase of 237,000 in August (Briefing.com consensus 180,000) while the July reading was revised higher to 201,000 from 178,000.
The second estimate of second quarter GDP pointed to an expansion of 3.0%, while the Briefing.com consensus expected a reading of 2.7%. The first estimate came in at 2.6% last month.
The key takeaway from the report is that it was driven by a pickup in both consumer and business spending, which is typically a good mix for accelerating economic growth.
The weekly MBA Mortgage Applications Index dropped 2.3% to follow last week's 0.5% decrease.
On Thursday, investors will receive a slew of economic reports, including July Personal Income (Briefing.com consensus 0.3%), Personal Spending (Briefing.com consensus 0.4%), and core PCE Prices (Briefing.com consensus 0.1%) at 8:30 ET, Initial Claims (Briefing.com consensus 236K) also at 8:30 ET, August Chicago PMI (Briefing.com consensus 58.9) at 9:45 ET, and July Pending Home Sales (Briefing.com consensus 0.5%) at 10:00 ET.
Nasdaq Composite +18.3% YTD
Dow Jones Industrial Average +10.8% YTD
S&P 500 +9.8% YTD
Russell 2000 +2.5% YTD
Investors Shrug Off North Korean Missile Launch
29-Aug-17 16:25 ET
Dow +56.97 at 21866.67, Nasdaq +18.87 at 6301.87, S&P +2.06 at 2447.75
https://www.briefing.com/investor/markets/stock-market-update/2017/8/29/investors-shrug-off-north-korean-missile-launch.htm
[BRIEFING.COM] The major U.S. indices eked out a victory on Tuesday, overcoming a further tightening of geopolitical tensions following yet another North Korean ballistic missile launch. The Nasdaq (+0.3%) led the advance, followed closely by the Dow (+0.3%), the S&P 500 (+0.1%), and the small-cap Russell 2000 (+0.1%). Equity indices settled near their best marks of the day.
North Korea rattled equity markets around the globe on Tuesday morning after firing a missile over the Japanese island of Hokkaido--marking the first time since 2009 that Pyongyang has fired over Japan's main islands. In response, President Trump said "all options are on the table" and reports indicated that the U.S. and Japan will call for an international embargo on oil exports to North Korea.
Wall Street opened solidly lower, but quickly began retracing its opening loss, and moved higher still as the reversal in sentiment sent short sellers running for cover. The rally was led by the industrial sector (+0.7%), which benefited from strength in defense names following the North Korean launch. Dow component Boeing (BA 240.49, +3.31) finished higher by 1.4%.
Dow component Untied Technologies (UTX 118.70, +3.37) also bolstered the industrial group, jumping 2.9%, following a Wall Street Journal report that the company is nearing a deal to buy Rockwell Collins (COL 130.74, +2.75) for a price of up to $140 per share. In addition, transports outperformed, pushing the Dow Jones Transportation Average (+0.9%) to its third-consecutive win.
The top-weighted technology sector (+0.4%) also outperformed on Tuesday, helping to mitigate the negative performance of the influential financial space (-0.5%). The financial sector suffered amid broad weakness, but select property and casualty insurers bounced back from yesterday's sell off, which was in response to the devastation caused along the Texas coast by Tropical Storm Harvey.
Like yesterday, WTI crude futures moved lower, dropping 0.3% to $46.22/bbl, amid concerns about near-term demand following the closure of many oil refineries along the Texas coast. Meanwhile, RBOB gasoline futures climbed 1.3% to $1.64/gallon.
As for the remaining sectors, health care (+0.2%) and consumer staples (+0.3%) finished in the green while consumer discretionary (-0.2%), energy (-0.1%), materials (-0.6%), utilities (-0.2%), telecom services (-0.2%), and real estate (-0.1%) settled in the red.
Retailers struggled after Finish Line (FINL 8.50, -1.92) issued a very disappointing second quarter warning and reduced its fiscal 2018 outlook. The shoe-retailer dropped 18.4% and Nike (NKE 52.73, -1.00) moved 1.9% lower in sympathy. In addition, Best Buy (BBY 55.02, -7.45) tumbled 11.9% despite beating both top and bottom line estimates and raising its guidance for the fiscal year.
U.S. Treasuries moved higher across the curve in response to the North Korean missile test, but finished a ways off from their best marks of the day. The benchmark 10-yr yield dropped two basis points to 2.14%, but traded as low as 2.09% in the early morning. Meanwhile, the U.S. Dollar Index (92.28, +0.11) managed to eke out a small victory, coming back from a loss of around 0.6%.
It's also worth mentioning that the CBOE Volatility Index (VIX 11.76, +0.44) held a huge gain of around 27.0% early on Tuesday morning, but trimmed that gain to 3.8% by the closing bell.
The Reviewing Tuesday's economic data, which was limited to the Consumer Confidence report for August and the Case-Shiller Home Price Index for June:
The consumer confidence reading for August rose to 122.9 from the prior month's revised reading of 120.0 (from 121.1). The Briefing.com consensus expected the survey to hit 120.3.
The key takeaway from the report is that consumer confidence remained high as the current labor market assessment overshadowed a lot of the political drama that has called into question the ability to implement a tax reform plan this year.
The June Case-Shiller 20-city Index hit 5.7%, which is in line with the Briefing.com consensus. The prior month's reading was left unrevised at 5.7%.
On Wednesday, investors will receive several economic reports, including the weekly MBA Mortgage Applications Index at 7:00 ET, the ADP Employment Change Report for August (Briefing.com consensus 180K) at 8:15 ET, and the second estimate of second quarter GDP (Briefing.com consensus 2.7%) at 8:30 ET.
Nasdaq Composite +17.1% YTD
Dow Jones Industrial Average +10.6% YTD
S&P 500 +9.3% YTD
Russell 2000 +2.0% YTD
Limited Moves for the Major Indices
28-Aug-17 16:20 ET
Dow -5.27 at 21809.70, Nasdaq +17.37 at 6283.00, S&P +1.19 at 2445.69
https://www.briefing.com/investor/markets/stock-market-update/2017/8/28/limited-moves-for-the-major-indices.htm
[BRIEFING.COM] It was a mixed outing on Wall Street to begin the week, as trading volume and conviction were both on the light side. The Nasdaq Composite (+0.3%) and Russell 2000 (+0.4%) were today's winning standouts among the major indices while the S&P 500 (+0.05%) and Dow Jones Industrial Average (-0.02%) lagged behind.
Today's session wasn't accompanied by any market-moving headlines, so much of the trading interest revolved around specific stocks and/or industry groups.
One stock of note that outperformed was Apple (AAPL 161.47, +1.61, +1.0%). The market's most heavily-weighted issue gained 1.0% on the back of a report that the company is planning a product event for Tuesday, September 12. It is widely thought the event will feature the introduction of the iPhone 8, which has been eagerly anticipated by legions of customers and investors.
Apple's relative strength lent a measure of support to the broader market along with the biotech stocks, which jumped in the wake of an announcement from Gilead Sciences (GILD 74.69, +0.90, +1.2%) that it is going to acquire Kite Pharmaceuticals (KITE 178.05, +38.95, +28.0%) for approximately $11.9 billion, or $180.00 per share, in cash.
The offer from Gilead was a 29% premium over Kite's closing price on Friday. The iShares Nasdaq Biotechnology ETF (IBB 316.89, +5.84, +1.9%) advanced 1.9%.
Some other trading activity of note surrounded plays related to Hurricane Harvey. Property insurance stocks were laggards all day on concerns about rising claim costs associate with the storm, which produced record flooding and forced the closure of the Port of Houston and many oil refineries along the Texas coast.
While gasoline futures traded higher on news of the closures, crude futures settled the day 2.7% lower at $46.57 per barrel on concerns about weaker demand for oil in the short-term due to the refinery shutdowns.
Separately, home improvement retailers Home Depot (HD 151.20, +1.55, +1.0%), Lowe's (LOW 73.80, +0.45, +0.6%), and Lumber Liquidators (LL 38.70, +1.64, +4.4%) moved up on the notion that they will be beneficiaries of remodeling/refurbishment/new construction activity in the affected areas.
The energy sector (-0.5%) was one of the day's biggest laggards, but it did manage to cut its losses in half after oil prices rebounded off their lows of $46.15. On a related note, there were reports that Saudi Arabia and Russia are seeking a 3-month extension to the oil production cut deal that has been embraced by OPEC and certain non-OPEC nations.
The financial sector (-0.5%) was the other key laggard of the day, yet relative strength in the health care (+0.6%) and information technology (+0.3%) sectors offset the weakness elsewhere and enabled the S&P 500 to eke out a slim gain to begin the week.
Elsewhere, the Treasury market manged some modest gains of its own, bolstered by the strong demand seen at the 2-yr note and 5-yr note auctions, as well as a modicum of safe-haven buying interest in front of next month's budget and debt ceiling debates. The 10-yr note yield dipped one basis point to 2.16%.
The dollar was on the defensive throughout the day, which pushed the U.S. Dollar Index (92.26, -0.48, -0.5%) to its lowest close since 2015.
Today's lone economic release showed a widening in the goods deficit to $65.1 billion in July (Briefing.com consensus -$64.3 billion) from $64.0 billion in June and a 0.4% increase in Wholesale Inventories (Briefing.com consensus +0.2%) in July versus a 0.6% increase in June.
Neither the stock market nor the Treasury market showed much reaction to that report. On Tuesday the economic calendar will feature the Case-Shiller Home Price Index for June (Briefing.com consensus 5.7%) at 9:00 a.m. ET and the Consumer Confidence report for August (Briefing.com consensus 120.3) at 10:00 a.m. ET.
Nasdaq Composite +16.7% YTD
Dow Jones industrial Average +10.4% YTD
S&P 500 +9.2% YTD
Russell 2000 +1.8% YTD
InvestmentHouse - Friday Maintains the Status Quo (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
- Friday maintains the status quo but of course that leaves the stock
indices still split heading into this week.
- NASDAQ, SOX, DJ30 still solid upside. SP500, RUTX, SP400still struggling.
Hello everyone! Apologies for the delayed report -- things got a bit wet
down here, and preparing for the event stole away a lot of our time last
week as well. Right now we are watching almost horizontal rain -- still!
And forecasts are for 15" to 20" through Wednesday. Hey, it rained 15" in
just over 3 hours last night. Spread out over 3 days, that now seems like a
cakewalk. At least it lets the water drain some in between the squalls.
Finding those silver linings.
Friday's silver lining for the stock market was it did not collapse. A rise
in futures failed to result in a new break higher, but the market also
avoided the sharp declines experienced late week the prior two weeks. So,
not falling was a win. High praise indeed!
SP500 4.08, 0.17%
NASDAQ -5.69, -0.09%
DJ30 30.27, 0.14%
SP400 7.50, 0.44%
SOX -5.44, -0.50%
RUTX 0.26%
VOLUME: NYSE -8%, NASDAQ -11%. Volume fell farther below average in a week
of very anemic trade. NYSE well below average, NASDAQ way below average as
well. No volume either way as the market closes the week noncommittal.
ADVANCE/DECLINE: NYSE 2.1:1, NASDAQ 1.5:1.
Cohn said Friday there would be tax reform before year end and that the
Administration would start a push this coming week. Futures jumped on the
news, but staying power was so-so at best.
Durable Goods orders were not bad once you took out Boeing. Of course, if
you take out defense spending Durables were -7.85 versus -6.8% overall. At
least business investment rose 0.4%, the third highest of the year.
The news helped, didn't hurt, didn't do much for the market in the end.
After the session, the stock indices remain in their same patterns, some
quite nice, some quite worrisome.
CHARTS
http://investmenthouse1.com/ihmedia/f/charts/sp500.jpg
http://investmenthouse1.com/ihmedia/f/charts/NASDAQ.jpg
http://investmenthouse1.com/ihmedia/f/charts/DJ30.jpg
http://investmenthouse1.com/ihmedia/f/charts/RUTX.jpg
http://investmenthouse1.com/ihmedia/f/charts/SP400.jpg
http://investmenthouse1.com/ihmedia/f/charts/SOX.jpg
NASDAQ continues its rather solid 5 week consolidation of its last high,
holding the early week bounce up to the 50 day MA's. Not selling, working
on a positive pattern, not bad action.
DJ30 bounced from the 50 day MA early week, then spent the rest of the week
testing laterally. Still a pretty solid ACBD pattern here as well, making
the first bounce, and now after this test it needs to show a new break
higher in the pattern.
SOX faded Friday, but is holding the 50 day MA, trying to put in a higher
low at that important point to try to make the break higher. Important
index for next week.
SP500 made a big recovery Tuesday off the prior sharp selloff. After that,
however, SP500 stalled out and then moved laterally the rest of the week.
That closed it below the 50 day MA's, and the 2017 trendline. Precarious
position for the large caps.
SP400 still shows the bear flag despite moving higher Friday. After the
selloff, SP500 gapped higher Tuesday, rallying to the 200 day SMA. That
slammed the door shut on the rebound, however, and indeed a Friday move
higher through the 200 day MA was pushed back to close below that level.
Yes it enjoyed a gain, but it could not hold a break over that important
level.
RUTX shows very similar action, posting a Friday gain but also a doji below
the 200 day MA. This after a week of recovering from the prior sharp
Thursday selloff.
SUMMARY: Three indices working on some pretty darn decent upside patterns.
Three indices still unable to recover with any strength, and are also in
real danger of breaking back lower. Which one takes charge is STILL the
question for this upcoming week.
MARKET STATS
DJ30
Stats: +30.27 points (+0.14%) to close at 21813.67
Nasdaq
Stats: -5.68 points (-0.09%) to close at 6265.64
Volume: 1.44B (-10.56%)
Up Volume: 746.12M (-156.83M)
Down Volume: 650.23M (-36.36M)
A/D and Hi/Lo: Advancers led 1.51 to 1
Previous Session: Advancers led 1.47 to 1
New Highs: 79 (+16)
New Lows: 33 (-12)
S&P
Stats: +4.08 points (+0.17%) to close at 2443.05
NYSE Volume: 663.3M (-7.72%)
A/D and Hi/Lo: Advancers led 2.07 to 1
Previous Session: Advancers led 1.03 to 1
New Highs: 110 (+13)
New Lows: 18 (-17)
MONDAY
Still some great index patterns, still some sucking on the tailpipe. Still
some great leaders, just not a mass of leaders across the market. Some of
the weaker patterns became oversold then rebounded last week. Retailers
enjoyed some good moves after their long selloffs. Some potential
recoveries, some potential rollovers. Same position as the week before,
just older and wiser right?
That still leaves stocks such as NVDA, SOHU, DATA, NFLX, ACAD and others in
position to make a new move higher.
Looking at SDS again, the upside play on a downside SPY move, because it is
in a position to move higher as SPY moves lower. IWM? Looks like a
classic bear flag: after a violent selloff through the prior Thursday, IWM
has had its rebound to test the 200 day SMA break.
With the market still not coming together with either the good index
patterns pulling the weaker indices higher or vice versa, look at both sides
of the ledger and play the moves that are solid moves.
Hopefully the rain that won't stop will stop, at least maybe 'falling'
horizontally. Whether it does or not, however, the market will open Monday
and perhaps this week will show the break from the patterns.
Friday Maintains the Status Quo (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
- Friday maintains the status quo but of course that leaves the stock
indices still split heading into this week.
- NASDAQ, SOX, DJ30 still solid upside. SP500, RUTX, SP400still struggling.
Hello everyone! Apologies for the delayed report -- things got a bit wet
down here, and preparing for the event stole away a lot of our time last
week as well. Right now we are watching almost horizontal rain -- still!
And forecasts are for 15" to 20" through Wednesday. Hey, it rained 15" in
just over 3 hours last night. Spread out over 3 days, that now seems like a
cakewalk. At least it lets the water drain some in between the squalls.
Finding those silver linings.
Friday's silver lining for the stock market was it did not collapse. A rise
in futures failed to result in a new break higher, but the market also
avoided the sharp declines experienced late week the prior two weeks. So,
not falling was a win. High praise indeed!
SP500 4.08, 0.17%
NASDAQ -5.69, -0.09%
DJ30 30.27, 0.14%
SP400 7.50, 0.44%
SOX -5.44, -0.50%
RUTX 0.26%
VOLUME: NYSE -8%, NASDAQ -11%. Volume fell farther below average in a week
of very anemic trade. NYSE well below average, NASDAQ way below average as
well. No volume either way as the market closes the week noncommittal.
ADVANCE/DECLINE: NYSE 2.1:1, NASDAQ 1.5:1.
Cohn said Friday there would be tax reform before year end and that the
Administration would start a push this coming week. Futures jumped on the
news, but staying power was so-so at best.
Durable Goods orders were not bad once you took out Boeing. Of course, if
you take out defense spending Durables were -7.85 versus -6.8% overall. At
least business investment rose 0.4%, the third highest of the year.
The news helped, didn't hurt, didn't do much for the market in the end.
After the session, the stock indices remain in their same patterns, some
quite nice, some quite worrisome.
CHARTS
http://investmenthouse1.com/ihmedia/f/charts/sp500.jpg
http://investmenthouse1.com/ihmedia/f/charts/NASDAQ.jpg
http://investmenthouse1.com/ihmedia/f/charts/DJ30.jpg
http://investmenthouse1.com/ihmedia/f/charts/RUTX.jpg
http://investmenthouse1.com/ihmedia/f/charts/SP400.jpg
http://investmenthouse1.com/ihmedia/f/charts/SOX.jpg
NASDAQ continues its rather solid 5 week consolidation of its last high,
holding the early week bounce up to the 50 day MA's. Not selling, working
on a positive pattern, not bad action.
DJ30 bounced from the 50 day MA early week, then spent the rest of the week
testing laterally. Still a pretty solid ACBD pattern here as well, making
the first bounce, and now after this test it needs to show a new break
higher in the pattern.
SOX faded Friday, but is holding the 50 day MA, trying to put in a higher
low at that important point to try to make the break higher. Important
index for next week.
SP500 made a big recovery Tuesday off the prior sharp selloff. After that,
however, SP500 stalled out and then moved laterally the rest of the week.
That closed it below the 50 day MA's, and the 2017 trendline. Precarious
position for the large caps.
SP400 still shows the bear flag despite moving higher Friday. After the
selloff, SP500 gapped higher Tuesday, rallying to the 200 day SMA. That
slammed the door shut on the rebound, however, and indeed a Friday move
higher through the 200 day MA was pushed back to close below that level.
Yes it enjoyed a gain, but it could not hold a break over that important
level.
RUTX shows very similar action, posting a Friday gain but also a doji below
the 200 day MA. This after a week of recovering from the prior sharp
Thursday selloff.
SUMMARY: Three indices working on some pretty darn decent upside patterns.
Three indices still unable to recover with any strength, and are also in
real danger of breaking back lower. Which one takes charge is STILL the
question for this upcoming week.
MARKET STATS
DJ30
Stats: +30.27 points (+0.14%) to close at 21813.67
Nasdaq
Stats: -5.68 points (-0.09%) to close at 6265.64
Volume: 1.44B (-10.56%)
Up Volume: 746.12M (-156.83M)
Down Volume: 650.23M (-36.36M)
A/D and Hi/Lo: Advancers led 1.51 to 1
Previous Session: Advancers led 1.47 to 1
New Highs: 79 (+16)
New Lows: 33 (-12)
S&P
Stats: +4.08 points (+0.17%) to close at 2443.05
NYSE Volume: 663.3M (-7.72%)
A/D and Hi/Lo: Advancers led 2.07 to 1
Previous Session: Advancers led 1.03 to 1
New Highs: 110 (+13)
New Lows: 18 (-17)
MONDAY
Still some great index patterns, still some sucking on the tailpipe. Still
some great leaders, just not a mass of leaders across the market. Some of
the weaker patterns became oversold then rebounded last week. Retailers
enjoyed some good moves after their long selloffs. Some potential
recoveries, some potential rollovers. Same position as the week before,
just older and wiser right?
That still leaves stocks such as NVDA, SOHU, DATA, NFLX, ACAD and others in
position to make a new move higher.
Looking at SDS again, the upside play on a downside SPY move, because it is
in a position to move higher as SPY moves lower. IWM? Looks like a
classic bear flag: after a violent selloff through the prior Thursday, IWM
has had its rebound to test the 200 day SMA break.
With the market still not coming together with either the good index
patterns pulling the weaker indices higher or vice versa, look at both sides
of the ledger and play the moves that are solid moves.
Hopefully the rain that won't stop will stop, at least maybe 'falling'
horizontally. Whether it does or not, however, the market will open Monday
and perhaps this week will show the break from the patterns.
Stocks Finish Week on a Positive Note
25-Aug-17 16:30 ET
Dow +31.57 at 21814.97, Nasdaq -5.68 at 6265.63, S&P +4.22 at 2444.50
https://www.briefing.com/investor/markets/stock-market-update/2017/8/25/stocks-finish-week-on-a-positive-note.htm
[BRIEFING.COM] Investors pushed the stock market modestly higher on Friday to end a largely positive week on a positive note. The S&P 500 and the Dow added 0.2% and 0.1%, respectively, while the tech-heavy Nasdaq underperformed, shedding 0.1%. For the week, the S&P 500 added 0.7%.
Arguably the most-anticipated events of the week--Friday speeches from Fed Chair Janet Yellen and ECB President Mario Draghi--turned out to be nonevents as the two central bankers provided the market with little to no new information.
Ms. Yellen praised the Fed's regulatory efforts while Mr. Draghi spoke in favor of open trade and argued for raising potential output growth, which was received as dovish. The two central bankers delivered their speeches at the annual Jackson Hole Symposium, which will wrap up on Saturday.
The U.S. Dollar Index (92.49, -0.74, -0.8%) moved sharply lower following the speeches, ending the day at its lowest level since January 2015. Meanwhile, U.S. Treasuries finished mostly higher; the 10-yr yield dropped three basis points to 2.17% while the 2-yr yield settled flat at 1.33%.
In the equity market, nine of the eleven sectors finished Friday in positive territory, but gains were modest for the most part. The telecom services group (+0.8%) showed relative strength while the remaining advancers settled with gains of 0.5% or less. Technology (-0.1%) and health care (-0.1%) were the two laggards.
Within the tech sector, chipmakers showed relative weakness, sending the PHLX Semiconductor Index lower by 0.5%. Broadcom (AVGO 245.59, -9.46) led the semiconductor retreat, dropping 3.7%, despite beating bottom-line estimates.
Meanwhile, within the health care group, biotech names underperformed, evidenced by the 0.6% decrease in the iShares Nasdaq Biotechnology ETF (IBB 311.05, -1.82).
On a positive note, the Dow Jones Transportation Average, which is seen as a leading indicator, registered its third win of the week, climbing higher by 1.3%.
Reviewing Friday's economic data, which was limited to July Durable Orders:
July durable goods orders declined 6.8%, which is more than the 6.0% decrease expected by the Briefing.com consensus. The prior month's reading was revised to +6.4% (from +6.5%). Excluding transportation, durable orders increased 0.5% (Briefing.com consensus +0.5%) to follow the prior month's revised uptick of 0.1% (from 0.2%).
The upshot of the report was in the shipments and new orders for nondefense capital goods excluding aircraft. Shipments for that component, which factors into GDP computations, increased 1.0% while orders, which are considered a proxy for business spending, increased 0.4%. The key takeaway from the report, then, is that it connotes good growth news for the manufacturing sector early in the third quarter.
On Monday, investors will receive two pieces of economic data--July International Trade in Goods and Advance Wholesale Inventories. Both reports will cross the wires at 8:30 ET.
Nasdaq Composite +16.4% YTD
Dow Jones Industrial Average +10.4% YTD
S&P 500 +9.1% YTD
Russell 2000 +1.6% YTD
Week In Review: No News is Good News
No news proved to be good news for the bulls this week, giving them an opportunity to reclaim control of the U.S. equity market, which rode a two-week slide into Monday's session. The S&P 500 and the Dow finished with gains of 0.7% apiece while the Nasdaq (+0.8%) finished a tick above its peers.
Ten sectors settled the week in the green--real estate (+2.3%), telecom services (+2.0%), materials (+1.3%), health care (+1.1%), technology (+1.0%), utilities (+1.0%), energy (+1.0%), financials (+0.8%), consumer discretionary (+0.4%), and industrials (+0.4%)--while one group finished in the red--consumer staples (-1.0%).
The week's most notable headlines in chronological order:
Monday--S&P 500 +0.1%, Nasdaq -0.1%, Dow +0.1%
U.S. and South Korea forces begin their annual military exercise; North Korea says the exercise will only add fuel to the fire
Tuesday--S&P 500 +1.0%, Nasdaq +1.4%, Dow +0.9%
Politico reports that White House and Congressional leaders have worked together to make significant strides in framing a tax-reform proposal
Wednesday--S&P 500 -0.4%, Nasdaq -0.3%, Dow -0.4%
President Trump threatens a government shutdown if his promised barrier along the U.S.-Mexico border doesn't secure funding
This event happened on Tuesday night, but the market reacted on Wednesday
Thursday--S&P 500 -0.2%, Nasdaq -0.1%, Dow -0.1%
Grocers take a beating following news that Amazon's (AMZN) acquisition of Whole Foods Market (WFM) will close on August 28
Friday--S&P 500 +0.2%, Nasdaq -0.1%, Dow +0.2%
Fed Chair Janet Yellen says any changes to financial regulations should be modest and she is open to reviewing the Volcker Rule.
ECB President Mario Draghi speaks in favor of open trade and argues for raising potential output growth
One of the most talked about news items this week was the possibility of a government shutdown. Without going into the political details, the gist for the market is simple; the probability of a government shutdown appears to be higher now than it was a week ago.
A shutdown may stifle economic growth a bit, but the market has traditionally held up pretty well during halts in government spending. To avoid a shutdown, Congress will need to pass a new spending bill, and President Trump will have to sign it, by the end of September.
Following this week's events, the fed funds futures market now points to the June 2018 FOMC meeting as the most likely time for the next rate-hike announcement with an implied probability of 58.0%. Last week, the market expected the next rate hike to occur in March 2018 with an implied probability of 51.5%.
Investors Cautious Ahead of Jackson Hole Speeches
24-Aug-17 16:30 ET
Dow -28.69 at 21783.40, Nasdaq -7.08 at 6271.31, S&P -3.72 at 2440.28
https://www.briefing.com/investor/markets/stock-market-update/2017/8/24/investors-cautious-ahead-of-jackson-hole-speeches.htm
[BRIEFING.COM] Equities ticked lower in a range-bound trade on Thursday as central bankers kicked off a three-day symposium in Jackson Hole, Wyoming. The Dow (-0.1%) and the Nasdaq (-0.1%) settled roughly in line with the benchmark S&P 500, which dropped 0.2%.
Investors hesitated to move the market ahead of comments from the world's two most influential central bankers--Fed Chair Janet Yellen and European Central Bank President Mario Draghi. The two will speak on Friday at 10:00 ET and 15:00 ET, respectively.
Lingering concerns over a potential government shutdown also held sentiment in check on Thursday, but House Speaker Paul Ryan helped ease those concerns a bit, saying he is confident that the debt ceiling will be raised before it hits the limit.
Ten of the eleven sectors finished Thursday's session in negative territory, but losses were pretty modest in general. The consumer staples space (-1.3%) exhibited notable weakness, but the remaining laggards finished with losses of no more than 0.4%. The health care group (+0.3%) was the lone advancer.
Grocers like Wal-Mart (WMT 78.34, -1.62), Costco (COST 151.33, -8.04), and Kroger (KR 21.10, -1.86) weighed on the consumer staples group, dropping 2.0%, 5.0%, and 8.1%, respectively, following news that Amazon's (AMZN 952.45, -5.55) acquisition of Whole Foods Market (WFM 41.98, +0.30) will close on Monday.
In addition, J.M. Smucker (SJM 107.51, -11.34) and Hormel Foods (HRL 32.09, -1.83) also influenced the consumer staples group lower, losing 9.5% and 5.4%, respectively, after missing both top and bottom line estimates
Elsewhere on the corporate front, retailers were a focal point following another large batch of retail earnings. The reactions were largely positive, evidenced by the SPDR S&P Retail ETF (XRT 38.84, +0.35), which moved higher by 0.9%.
Dollar Tree (DLTR 78.50, +4.18), Abercrombie & Fitch (ANF 11.25, +1.64), Guess? (GES 14.86, +2.38), Signet Jewelers (SIG 60.54, +8.65), Michaels Stores (MIK 21.27, +1.66), and Burlington Stores (BURL 86.11, +1.16) added between 1.4% and 19.1% after all six companies beat earnings estimates.
In the bond market, U.S. Treasuries moved lower across the curve, sending the benchmark 10-yr yield two basis points higher to 2.19%. The 2-yr yield also climbed two basis points, finishing at 1.33%.
Reviewing Thursday's economic data, which included the weekly Initial Claims Report and July Existing Home Sales:
The latest weekly initial jobless claims count totaled 234,000 while the Briefing.com consensus expected a reading of 237,000. Today's tally was above the unrevised prior week count of 232,000. As for continuing claims, they stayed unchanged at 1.954 million from the revised count of 1.954 million (from 1.953 million).
The report marked the 129th straight week initial claims have been below 300,000, which is reflective of a tight labor market.
Existing home sales for July decreased 1.3% from June to an annualized rate of 5.44 million units while the Briefing.com consensus expected a reading of 5.56 million. The prior month's reading was revised to 5.51 million from 5.52 million.
The key takeaway from the report is that neither the availability nor the affordability of homes is high, which is keeping sales activity from being all that it could be otherwise.
On Friday, investors will receive just one piece of economic data--July Durable Orders (Briefing.com consensus -6.0%). The report will cross the wires at 8:30 ET.
Politics Persuade Equities Modestly Lower
23-Aug-17 16:25 ET
Dow -87.80 at 21812.09, Nasdaq -19.07 at 6278.39, S&P -8.47 at 2444.00
https://www.briefing.com/investor/markets/stock-market-update/2017/8/23/politics-persuade-equities-modestly-lower.htm
[BRIEFING.COM] The equity market moved modestly lower on Wednesday amid concerns of a potential government shutdown and following a New York Times article that highlighted a rift between President Trump and Senate Majority Leader Mitch McConnell. The Nasdaq (-0.3%) and the Dow (-0.4%) settled roughly in line with the S&P 500, which dropped 0.4%. The major averages closed the session near the bottom of their relatively narrow trading ranges.
Soon after Wall Street cheered Tuesday reports suggesting that White House aids and Congressional leaders have worked together to make significant strides in framing a tax-reform proposal, the New York Times published an article that painted the relationship between Congress and the White House in a different light. Specifically, the NY Times reported that President Donald Trump and Senate Majority Leader Mitch McConnell haven't spoken to one another in weeks.
Mr. McConnell said in an interview on Wednesday afternoon that he and President Trump are "committed to advancing [their] shared agenda together and anyone who suggests otherwise is clearly not part of the conversation." The equity market did not react to the senator's remarks.
It's also worth mentioning that, on Tuesday night, President Trump put the possibility of a government shutdown on the table if he is unable to secure funding for his promised barrier along the U.S.-Mexico border and expressed his belief that the U.S. will likely pull out of the North American Free Trade Agreement (NAFTA). Both actions would likely ruffle some feathers within the GOP.
The aforementioned headlines don't bode well for the belief that Mr. Trump will be able to work with Congress in passing the pro-growth promises of his presidential campaign. However, it's also important to not lose sight of the fact that Wednesday's slide was modest in scope and retraced only a small portion of Tuesday's rally. The S&P 500 still trades solidly higher for the week, up 0.8%.
Eight of the eleven sectors finished Wednesday's session in negative territory with the consumer discretionary (-0.8%), industrials (-0.9%), and health care (-0.7%) sectors leading the retreat. One of the consumer discretionary space's weakest components was Lowe's (LOW 73.01, -2.81), which dropped 3.7% in reaction to worse than expected earnings and disappointing earnings guidance.
Within the industrial space, transports showed notable weakness, sending the Dow Jones Transportation Average lower by 1.3%. However, on a positive note, Dow component United Technologies (UTX 117.03, +1.34) jumped 1.2% after the New York Post reported that an unidentified hedge fund has been accumulating a stake in the company and is pressuring the aerospace giant to spin off its non-core businesses.
On the flip side, the real estate (+1.0%), utilities (+0.3), and energy (+0.4%) spaces finished in the green. The energy sector benefited from a rise in the price of crude oil, which climbed 1.2% to $48.41/bbl. The commodity was trading modestly lower in the morning session, but moved sharply higher after the Energy Information Administration (EIA) reported that U.S. crude stockpiles declined by 3.3 million barrels for the week ended August 18.
In the bond market, U.S. Treasuries rallied in a curve-flattening trade on Wednesday with the 10-yr yield dropping four basis points to 2.17% and the 2-yr yield ticking one basis point lower to 1.31%.
Reviewing Wednesday's economic data, which included July New Home Sales and the weekly MBA Mortgage Applications Index:
New Home Sales in July hit an annualized rate of 571,000, which is below the revised June rate of 630,000 (from 610,000), and lower than the Briefing.com consensus of 615,000.
The key takeaway from the report is that new home sales growth is continuing at a frustratingly slow pace despite the tailwinds of low mortgage rates and low unemployment.
The weekly MBA Mortgage Applications Index ticked down 0.5% to follow last week's 0.1% increase.
On Thursday, investors will receive two pieces of economic data--the weekly Initial Claims Report (Briefing.com consensus 237K) and July Existing Home Sales (Briefing.com consensus 5.56 million). The two reports will be released at 8:30 ET and 10:00 ET, respectively.
Nasdaq Composite +16.6% YTD
Dow Jones Industrial Average +10.4% YTD
S&P 500 +9.2% YTD
Russell 2000 +0.9% YTD
Buy-the-Dip Rally Pushes S&P 500 Above 50-Day Moving Average
https://www.briefing.com/investor/markets/stock-market-update/2017/8/22/buythedip-rally-pushes-s-and-p-500-above-50day-moving-average.htm
22-Aug-17 16:30 ET
Dow +196.14 at 21899.89, Nasdaq +84.35 at 6297.46, S&P +24.14 at 2452.47
[BRIEFING.COM] Wall Street rallied on Tuesday as investors bought the dip that has dented the major averages in recent weeks. Equities crept higher throughout the morning, hit some resistance at the S&P 500's 50-day simple moving average (2,450.29), and then overcame the key technical level in the late afternoon. The Nasdaq (+1.4%) led the advance, followed by the S&P 500 (+1.0%), and then the Dow (+0.9%).
Tax reform came back into focus on Tuesday following a Politico report that President Trump's team has made significant progress on a tax-reform proposal. The potential framework laid out in the article fell somewhat short of the market's original expectations, but Wall Street took it as a positive nonetheless as investors have been starved for some sense of progress on tax reform.
Strength was broad-based on Tuesday with six sectors--financials, consumer discretionary, industrials, materials, technology, and health care--settling with gains of at least 1.0%. The top-weighted technology sector (+1.5%) led the charge, breaking a three-session losing streak. Within the tech group, chipmakers showed notable strength, sending the PHLX Semiconductor Index higher by 1.6%.
Like chipmakers, biotechnology names outperformed, evidenced by the 1.9% increase in the iShares Nasdaq Biotechnology ETF (IBB 310.52, +5.84). The biotech rally helped the influential health care sector (+1.2%) settle just a step below the technology group at the top of the sector standings. The lightly-weighted materials space also outperformed, adding 1.2%.
On the flip side, the consumer staples (unch), utilities (+0.2%), and real estate (-0.1%) sectors struggled, finishing solidly behind the broader market. The energy space (+0.7%) did notably better, but also finished a ways behind the broader market. Crude oil reclaimed some of Monday's plunge, climbing 0.6% to $47.64/bbl, but not enough to really excite the bulls within the energy space.
As for earnings, DSW (DSW 18.43, +2.74) surged 17.5% after beating both top and bottom line estimates. Conversely, Medtronic (MDT 81.76, -1.76) and Toll Brothers (TOL 37.27, -0.99) dropped 2.1% and 2.6%, respectively, despite reporting better than expected earnings.
In the bond market, U.S. Treasuries tumbled across the yield curve with longer-dated issues settling at their session lows. The benchmark 10-yr yield climbed four basis points to 2.22% while the 2-yr yield advanced three basis points to 1.32%. Meanwhile, the U.S. Dollar Index (93.45, +0.45) jumped 0.5%, reclaiming all of Monday's slide.
Reviewing Tuesday's economic data, which was limited to the FHFA Housing Price Index for June:
The FHFA Housing Price Index for June rose 0.1%. The prior month's reading was revised to 0.3% (from 0.4%).
On Wednesday, investors will receive just two pieces of economic data--the weekly MBA Mortgage Applications Index and July New Home Sales (Briefing.com consensus 615K). The two reports will cross the wires at 7:00 ET and 10:00 ET, respectively.
Nasdaq Composite +17.0% YTD
Dow Jones Industrial Average +10.8% YTD
S&P 500 +9.5% YTD
Russell 2000 +1.0% YTD
Little Changed
https://www.briefing.com/investor/markets/stock-market-update/2017/8/21/little-changed.htm
21-Aug-17 16:20 ET
Dow +29.24 at 21703.75, Nasdaq -3.40 at 6213.11, S&P +2.82 at 2428.33
[BRIEFING.COM] The equity market opened the week with a rather uneventful performance that left the major averages little changed from where they settled last Friday's session. The S&P 500 (+0.1%) and the Dow (+0.1%) both eked out narrow victories while the Nasdaq (-0.1%) slipped just a tick below its unchanged mark.
Eight of the eleven sectors finished Monday's session in positive territory--consumer discretionary (+0.2%), industrials (+0.1%), materials (+0.1%), health care (+0.5%), consumer staples (+0.4%), utilities (+0.3%), telecom services (+0.7%), and real estate (+1.1%). Countercyclical groups showed relative strength as all four--health care, consumer staples, utilities, and telecom services--finished ahead of the broader market.
On the flip side, the top-weighted technology (-0.1%) and financials (-0.2%) sectors struggled throughout the session, keeping a lid on any bullish sentiment. Within the tech group, chipmakers exhibited particular weakness, sending the PHLX Semiconductor Index lower by 0.7%. Today's loss puts the technology sector in negative territory for the month (-0.1%).
The energy sector (-0.6%) settled at the very bottom of the sector standings, extending its month-to-date loss to 7.2%. The sector moved lower in tandem with the price of crude oil, which dropped 2.4% to $47.56/bbl. Monday's loss breaks a three-session winning streak for the commodity.
Corporate news was light on Monday, but it's worth pointing out that Dow component Nike (NKE 53.61, -1.34) tumbled once again, dropping 2.4%, after being downgraded to 'Hold' from 'Buy' at Jefferies. The company moved solidly lower on Friday in sympathy with Foot Locker (FL 31.82, -2.56), which has plunged 44.6% since delivering a disappointing earnings report on Friday morning.
U.S. Treasuries started the week on a higher note, sending the benchmark 10-yr yield one basis point lower to 2.18%. Meanwhile, the U.S. Dollar Index (93.03, -0.33) slipped 0.4% ahead of the Kansas City Fed's Economic Symposium in Jackson Hole, Wyoming, which will kick off on Thursday.
Investors did not receive any economic data on Monday.
On Tuesday, market participants will receive just one economic report--the FHFA Housing Price Index for June--which will cross the wires at 9:00 ET.
Nasdaq Composite +15.4% YTD
Dow Jones Industrial Average +9.8% YTD
S&P 500 +8.5% YTD
Russell 2000 unch YTD
Thursday and Friday a Repeat of the Prior Week (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
- A Thursday and Friday repeat of the prior week.
- A double drop starts changing the market's MO
- NASDAQ, SOX still working on good patterns. DJ30 in a nice ABCD
consolidation.
- Some say Friday was a key, but for this market, Monday and Tuesday and
whether a rebound emerges is very important.
A repeat of the prior week, just a bit lower. Two weeks back the market
dropped Tuesday to Thursday with Thursday a big drop, then a modest Friday
recovery. That was followed by a bounce.
This past week, after a solid Monday, the stock indices struggled, then
dropped hard Thursday. A modest session Friday, indeed a doji on SP500 just
as on the prior Friday.
SP500 -4.45, -0.18%
NASDAQ -5.38, -0.09%
DJ30 -76.22, -0.35%
SP400 -0.23%
RUTX -0.08%
SOX 0.20%
VOLUME: NYSE +18%; NASDAQ -3%. Expiration saw NYSE volume finally break
average. With SP500 showing a doji after a dump, perhaps this volume
forecasts a rebound. Again. NASDAQ volume held solid at average as the
index shows a doji at the prior week's low. Not bad at all.
ADVANCE/DECLINE: NYSE 1.2:1; NASDAQ 1.1:1.
Now, do they bounce this coming week, repeating the process?
It is true that this is a double drop, not just one sharp drop that then
leads to a new high as seen again and again in this rally, but a sharp drop,
a bounce, then another sharp drop. That is a change in the MO of these
moves in the uptrend and is ugly enough to break the pattern of dip buying.
It was enough of a change for Mr. Gartman to predict Friday could be the
most important day for the markets in the bull run. Why? A market closing
a week at multiweek lows is often a failing market.
A decent argument based in technical analysis, but I would suggest that
Monday and/or Tuesday are more important. Reason: Indeed this pattern has
shown itself many times in this rally, and after the initial selloff then
pause to end a week, the rallies renewed early the next week. Thus, how the
market fares Monday and Tuesday likely tells much more than Friday.
All speculation about the most important day aside, NASDAQ and SOX remain in
quite decent patterns in terms of holding their trends and forming some good
bases. After two hard days of selling, to still be in the pattern is a
positive, using the selling to wring out the weak hands that ultimately sets
up the demand outstripping supply and a new break higher. That is the
theory, and if SP500 along with SP400 and RUTX were not struggling, you
would anticipate they would keep on working through the pattern and make a
new upside break. As it is, you have once again a bifurcated market, and we
saw how they started coming together last time: the large caps tried to
catch down to the small and midcaps. They never got together that time, not
really close. But, they tried to rally, stalled, sold hard Thursday. Do
they come together this time?
There are still good stocks as well. AMAT is setting up a nice pattern and
LRCX' pattern is similar. China stocks turned a bit squirrely on the week
but finished quite well. AAPL and FB in FAANG remain decent. Software
remains strong, e.g. DATA, GLUU, TTWO, VMW. On the flip, some leaders and
those setting up broke, e.g. machinery, financial, and some strong stocks
such as HON are starting to crack. Then you have consumer stocks such as
PG, CLX looking better along with utilities. Oh, that is great -- stocks
that launched many a dull market.
Will the algorithms buy those stocks, just rotate from other groups as in
the past? Doubt it. At least not only those stocks. NASDAQ and SOX are
still in good patterns while RUTX, SP400 are anchor chains. Again, that
puts NASDAQ and SOX in focus and, surprise, puts market performance
paramount on Monday and Tuesday.
THE MARKET
CHARTS
SOX: SOX continues working on its 3 month triangle pattern, closing the
week just below the 50 day MA. That leaves SOX working in the pattern and
still, despite the selling, leaving it in position to finish the job and
breakout.
NASDAQ: Showing a doji over the 2016 trendline, holding at the prior week's
low and the 61% Fibonacci retracement. That has NASDAQ showing a double
bottom at that retracement, and that pattern at that level is a good rally
point. Compare to the action May to early July: Rally, double bottom at the
61%/78% Fibonacci retracement, then a rally to a new high.
DJ30: Yes DJ30 sold off Thursday with the market, Friday as well. This all
inside the July to August run to a new high. DJ30 has stair-stepped back to
the 50 day MA's and the 78% Fibonacci retracement. That, despite the
selling, puts DJ30 in great position to rebound again.
SP500: Broke the 2016 trendline Thursday, sold farther Friday, showing a
doji -- just as the prior Friday. Of all the large cap indices, SP500 shows
the most Gartman-like concern: new low to end the week after a new low the
prior week. We went ahead and picked up a partial downside position on
SP500 to end the week.
SP400: After bouncing off the 200 day SMA the prior Friday and Monday,
SP400 rolled over and suffered another Thursday thumping. That selling took
SP500 through the 200 day SMA. Friday a gap lower, but showing a doji.
Similar to SP500, SP400 fits the lower weekly close in a series of lower
weekly closes.
RUTX: Same action as SP400, just sharper. Held the 200 day the prior week,
bounced, rolled back over and crashed the 200 day Thursday. A big selloff
Friday with a gap lower, but recovering off the low to a doji with tail. On
the Friday low it tested the May and some of the April lows. RUTX is in a
range where it can find support to bounce. It likely attempts a recovery
early week, stalls at the 200 day, then heads down to test the January,
March, April lows.
LEADERSHIP
Some areas losing bids, others holding up well enough.
Semiconductors: AMAT and LRCX somewhat reflect the SOX and its triangle
pattern. AMAT posted earnings Friday and they were good enough to keep it
working on the pattern. MCHP lost some luster but still holding the 50 day
in a decent pattern. SLAB is setting up decently as is ON, BRKS. AVGO is
testing and holding the 50 day MA in a 3 month consolidation. QRVO
struggled some to end the week but is holding the 50 day. Many are at best
'mushy': AMD, XLNX, MU.
China stocks: Turned choppy the past two weeks but held on and some good
moves to end the week. BABA gapped on earnings, added more Friday. BIDU
tested, but is setting up well at the 20 day EMA. HTHT, BZUN enjoyed strong
weeks again. SOHU is set up very well to break higher. SINA looks solid
still. YY recovering from a gap lower on earnings. BITA looks good to go.
Not all is great. JD broke lower, NTES continues to struggle.
Software: Excellent for the most part. VMW holding its earnings gap,
seeing up well for a new move GLUU broke sharply higher Friday. DATA is
setting up well as is TTWO.
FAANG: AAPL down to end the week, but holding the 20 day EMA and May/June
high. FB holding near the 20 day EMA in a 4 week lateral move after gapping
higher. NFLX holding the 50 day SMA and the June prior high. AMZN sold back
for the 50 day MA but held at the prior week's low. GOOG showed the same
move. If the bids return, all are in decent position to move.
Financial: C is the best of the group, holding the 50 day MA's with a doji.
BAC broke the 50 day MA. GS sold off. JPM trying to hold the 50 day MA's.
Machinery: Outside of CAT, a lot of carnage, e.g. CMI, DE, TEX. HON is
struggling, falling through the 50 day MA on another strong volume session.
MARKET STATS
DJ30
Stats: -76.22 points (-0.35%) to close at 21674.51
Nasdaq
Stats: -5.39 points (-0.09%) to close at 6216.53
Volume: 1.98B (-2.94%)
Up Volume: 838.77M (+336.63M)
Down Volume: 1.11B (-410M)
A/D and Hi/Lo: Advancers led 1.04 to 1
Previous Session: Decliners led 3.89 to 1
New Highs: 29 (-6)
New Lows: 124 (+5)
S&P
Stats: -4.46 points (-0.18%) to close at 2425.55
NYSE Volume: 900M (+17.48%)
A/D and Hi/Lo: Advancers led 1.15 to 1
Previous Session: Decliners led 4.4 to 1
New Highs: 38 (-15)
New Lows: 164 (+19)
SENTIMENT INDICATORS
VIX: 14.26; -1.29
VXN: 17.85; -0.75
VXO: 12.91; +0.09
Put/Call Ratio (CBOE): 1.11; +0.04. Second session over 1.0 after several
weeks below. Enough of these and the market can rebound, but typically this
is after some serious selling, not what we have seen the past few weeks.
Bulls and Bears: Significant drop in bulls, falling 10 points in two weeks.
It hit 60+ for twi straight weeks, enough to set up a drop due to
overexuberance. Bears back up to 18.1, last hit 5 weeks earlier.
Bulls: 50.5 versus 57.5
Bears: 18.1 versus 17.0
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 50.5 versus 57.5
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
versus 46.1 versus 46.7 versus 45.2
Bears: 18.1 versus 17.0
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: 2.197% versus 2.185%. Up week for bonds, bouncing off the 50 day EMA
to a higher recovery high. Friday up but then faded to flat. Still heading
higher despite a supposedly more hawkish Fed and better economy. White House
turmoil? Geopolitical tensions? Sure, but the latter are not all the
issues.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.185%
versus 2.225% versus 2.264% versus 2.24% versus 2.191% versus 2.201 versus
2.246% versus 2.262% versus 2.257% versus 2.264% versus 2.221% versus 2.266%
versus 2.253% versus 2.296% versus 2.291% versus 2.303% versus 2.287% versus
2.330% versus 2.255% versus 2.241% versus 2.270% versus 2.261% versus 2.318%
versus 2.331% versus 2.346% versus 2.316% versus 2.361% versus 2.375% versus
2.375% versus 2.368% versus 2.34% versus 2.304% versus 2.268% versus 2.20%
versus 2.140% versus 2.140% versus 2.148%
EUR/USD: 1.17595 versus 1.17107. Still in the 2.5 week test of the high
logged in early August.
Historical: 1.17107 versus 1.17812 versus 1.17445 versus 1.17751 versus
1.18216 versus 1.17652 versus 1.17596 versus 1.17619 versus 1.17975 versus
1.1774 versus 1.18718 versus 1.18457 versus 1.18072 versus 1.18281 versus
1.18293 versus 1.1683 versus 1.17419 versus 1.1646 versus 1.1637 versus
1.16640 versus 1.16271 versus 1.15280 versus 1.15549 versus 1.14735 versus
1.14672 versus 1.13986 versus 1.14335 versus 1.14682 versus 1.13964 versus
1.14010 versus 1.14220 versus 1.13508 versus 1.13710 versus 1.13510 versus
1.14208 versus 1.14432 versus 1.13786 versus 1.13409 versus 1.11834 versus
1.11928 versus 1.11484 versus 1.11670 versus 1.11346 versus 1.11419 versus
1.11968 versus 1.11466 versus 1.12213 versus 1.12086 versus 1.11930 versus
1.11965
USD/JPY: 109.205 versus 109.333. Rallied through Tuesday, sold back to the
June and August lows as of Friday. Showed a big doji with tail Friday so
may be ready to try the upside again. Definitely bouncing up and down in
its range.
Historical: 109.333 versus 109.842 versus 110.6621 versus 109.927 versus
109.183 versus 109.177 versus 110.03 versus 109.09 versus 110.09 versus
110.757 versus 110.689 versus 109.963 versus 110.717 versus 110.368 versus
110.28 versus 110.704 versus 111.07 versus 111.166 versus 111.897 versus
111.176 versus 111.128 versus 111.863 versus 111.89 versus 112.096 versus
112.582 versus 112.536 versus 113.314 versus 113.152 versus 113.929 versus
114.063 versus 113.913 versus 113.126 versus 113.253 versus 113.270 versus
112.413 versus 111.993 versus 112.340 versus 112.24 versus 111.943 versus
111.299 versus 111.357 versus 111.278 versus 111.470 versus 111.729 versus
110.873 versus 110.854 versus 109.560 versus 110.060 versus 109.97
Oil: 48.73, +1.64. Nice break higher after a week and more fading back to
the 50 day SMA. Strong upside move as rig count falls to a multiweek low.
Gold: 1290.30, -2.10. After bumping back up to the April and June highs
last week, gold sold to the 20 day then rebounded into Thursday. Again
having issues at the April and June highs. Definitely in the range for now.
MONDAY
There is a lot more of the same in terms of news and economics. The
political discourse descended to new lows the past week and the market sold
with it, but that could easily have been worse. Perhaps the market starts
factoring in the Trump administration is going to get little accomplished
with the Goldman people in control. They will push the same old policies
that benefit the big businesses and not much else, and in this climate no
democrat, and likely many republicans, will vote for something that would
benefit big corporations. My plan from last week would appeal to those
wanting to help small businesses, but then again, the Goldman people are in
charge of the White House now and that kind of initiative has a snowball's
chance in hell of getting even mentioned.
That is all the backdrop anyway. The market factors this in and it shows up
in the patterns. We will play the patterns that take control as the indices
trade Monday and Tuesday.
Ironically, if the indices bounce early week, the question then shifts to
whether they hold the move and continue or roll over again. If they sell,
no question. If they bounce, I would hazard that the indices will hold the
move this time off the double bottom test of NASDAQ, the ABCD from DJ30, the
SOX triangle.
We are looking at plays in line with the positive patterns on NASDAQ and
SOX, but of course cannot ignore the downside in the event this time the
algorithms do not buy the dip, this time a double dip.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6256.56
Resistance:
The 50 day EMA at 6263
6300 is the mid-June interim high
6341.70 is the all-time high from early June.
6461 is the June 2017 prior all-time high
Support:
6205 is the late May all-time high
The 2016 trendline at 6141
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
The 200 day SMA at 5838
5800 from the February consolidation lows
5661 is the late January upper gap point
5601 is the January lower gap point
S&P 500: Closed at 2441.32
Resistance:
The 50 day EMA at 2446
2453.46 is the June prior all-time closing high
2487 is the upper channel line from the March 2009 uptrend channel
Support:
2439 is the early June all-time closing high
2406 is the all-time high from May 2017
2401 is the March 2017 all-time high
2352 is the recent May 2017 low
2348 is the April 2017 lower gap point
The 200 day SMA at 2339
2329 is the March and April twin lows
2322 is the March 2017 low
2301 is the late January 2017 high
2298 is the late January 2017 high
2282 - 2280 from January 2017
2277.53 is the December 2016 high
The November 2016 all-time high at 2213.25
2194 is the August 2016 prior all-time high
2175 is the June 2016 high
Dow: Closed at 21,858.32
Resistance:
21,681is the July prior all-time high
22,179 is the August 2017 all-time high
Support:
The 20 day EMA at 21,836
The 50 day EMA at 21,574
21,169 is the March 2017 all-time high
20,553 is the lows of the week of May 15
20,547 is the lower gap point from late April 2017
The 200 day SMA at 20,484
20,412 is the March 2017 low
20,400 is the mid-April 2017 low.
20,126 is the January 2017 intraday high
20,101 is the late January closing high.
19,994 - 19,999 (early January high, upper gap point from late January
19750 is the lows of the December/January range
19,732 is the January 2017 low
18,669 is the August 2016 all-time high
18,595 is the July 2016 peak
18,351 is the prior all-time high from May 2015
Equities End the Week on a Lower Note
18-Aug-17 16:30 ET
Dow -76.22 at 21674.51, Nasdaq -5.39 at 6216.51, S&P -4.46 at 2425.51
https://www.briefing.com/investor/markets/stock-market-update/2017/8/18/equities-end-the-week-on-a-lower-note.htm
[BRIEFING.COM] The major averages finished in negative territory for the second day in a row on Friday, adding to their losses for the week. The Dow led the retreat, losing 0.4%, while the S&P 500 and the Nasdaq finished lower by 0.2% and 0.1%, respectively. For the week, the Dow, the S&P 500, and the Nasdaq finished with respective losses of 0.8%, 0.7%, and 0.6%.
Equities opened modestly lower, but retraced those early-morning losses and moved into positive territory following an Axios report that suggested White House Chief Strategist Steve Bannon would be let go--and indeed he was with the official notice crossing the wires in the afternoon.
Mr. Bannon has been described as perhaps the most polarizing figure within President Trump's inner circle, so it could be argued that his departure will make it easier for Mr. Trump to find common ground with Congress. However, it could also be argued that the headline simply provided a good excuse for some buying following Thursday's big sell off.
Regardless, the bears cut into the modest gains on Friday afternoon and eventually dragged the major averages into the red. Only three sectors--energy, utilities, and materials--finished in the green.
The utilities and energy spaces finished at the top of the day's leaderboard, adding 0.6% apiece. Crude oil underpinned the energy group, jumping 3.2% to $48.57/bbl. The commodity benefited from rumors that one of the largest oil refineries in the U.S. has been shut down. Despite Friday's advance, crude oil still finished 0.5% lower for the week.
As for the remaining sectors, materials (+0.1%) eked out a small victory while financials (-0.1%), consumer discretionary (-0.5%), industrials (-0.3%), technology (-0.1%), health care (-0.4%), consumer staples (-0.4%), telecom services (-0.5%), and real estate (-0.7%) finished in the red.
In corporate news, Foot Locker (FL 34.38, -13.32) plunged 27.9% to its lowest level in nearly four years after the shoe apparel retailer missed both top and bottom line estimates and reported far worse-than-expected same-store sales. Athletic merchandise suppliers like Nike (NKE 54.95, -2.51) and Under Armour (UAA 17.12, -0.69) also sold off, dropping 4.4% and 3.9%, respectively.
Deere (DE 117.31, -6.67) also finished solidly lower, losing 5.4%, after reporting better than expected earnings but worse than expected revenues. Conversely, Ross Stores (ROST 59.02, +5.69) jumped 10.7% after reporting better than expected earnings and revenues.
U.S. Treasuries finished Friday on a mixed note after backing off their morning highs; the 2-yr yield climbed one basis point to 1.31% while the 10-yr yield dropped one basis point to 2.19%.
Reviewing Friday's economic data, which was limited to the preliminary reading of the University of Michigan Consumer Sentiment Index for August:
The preliminary reading of the University of Michigan Consumer Sentiment Index for August rose to 97.6 (Briefing.com consensus 94.0) from 93.4 in July.
The August increase was fueled by a rebound in the Expectations Index, which returned to levels from the start of 2017.
Investors will not receive any economic data on Monday.
Nasdaq Composite +15.5% YTD
Dow Jones Industrial Average +9.7% YTD
S&P 500 +8.3% YTD
Russell 2000 +0.1% YTD
Week In Review: Playing Politics
Wall Street had another disappointing week, its second in a row, as investors continued to drag the major U.S. indices from their all-time highs. The Dow, the S&P 500, and the Nasdaq finished with losses of 0.8%, 0.7%, and 0.6%, respectively, while the small-cap Russell 2000 underperformed (-1.2%), dropping to its flat line for the year.
Five sectors settled the week in the green--utilities (+1.3%), materials (+0.4%), real estate (+0.2%), consumer staples (+0.1%), and technology (unch)--while six groups finished in the red--energy (-2.7%), telecom services (-1.8%), consumer discretionary (-1.8%), industrials (-1.1%), health care (-0.8%), and financials (-0.5%).
The week's most notable headlines in chronological order:
Monday--S&P 500 +1.0%, Nasdaq +1.3%, Dow +0.6%
Investors breathed a sigh of relief after a quiet weekend in regards to North Korea
Tuesday--S&P 500 -0.1%, Nasdaq -0.1%, Dow unch
North Korea decided against executing last week's threat to launch missiles towards the U.S. territory of Guam
July Retail Sales came in hotter than expected (+0.6% actual vs +0.3% Briefing.com consensus)
Wednesday--S&P 500 +0.1%, Nasdaq +0.2%, Dow +0.1%
President Trump ended his Manufacturing Council and Strategy & Policy Forum following the departure of several CEOs
The FOMC minutes from the July meeting showed concerns about softer than expected inflation readings
Thursday--S&P 500 -1.5%, Nasdaq -1.9%, Dow -1.2%
Rumors that NEC Director Gary Cohn plans to resign circulated; the White House said the rumors are false
Terrorist attacks in Spain killed 14 and left more than 100 injured
Friday--S&P 500 -0.2%, Nasdaq -0.1%, Dow -0.4%
President Trump fired White House Chief Strategist Steve Bannon
The SPDR S&P Retail ETF (XRT) settled at its worst level since February 2016 following this week's batch of earnings
Thursday's session was perhaps the most notable of the week as the S&P 500 registered its second-worst performance of the year. The major indices opened Thursday's session with modest losses, but moved deeper into negative territory following a rumor that President Trump's chief economic advisor Gary Cohn plans to resign from his position following the president's controversial comments regarding last weekend's events in Charlottesville, VA. The White House later declared that the rumor was "100% false", but it did little to reverse the market's downward trend.
True or not, the rumor didn't do much to dispel the notion that working with the president could be a political liability, especially considering that it came on the heels of Mr. Trump's Wednesday decision to disband his Manufacturing Council and Strategy & Policy Forum in response to several CEOs leaving the two groups. The chief executives cited Mr. Trump's controversial Charlottesville comments as the reason for their departures. If Republicans in Congress start distancing themselves from Mr. Trump, it will be that much harder for him to push through his pro-growth agenda.
However, those concerns eased a bit on Friday after President Trump fired White House Chief Strategist Steve Bannon, a decision that was well received by the market. Mr. Bannon was the chief executive of Mr. Trump's presidential campaign and has been described as perhaps the most polarizing figure within President Trump’s inner circle. Therefore, in the absence of Mr. Bannon, the thinking is that the president might dial back his rhetoric a bit, making it easier for the White House to work with Congress in passing the president's pro-growth agenda.
Following this week's events, the fed funds futures market now points to the March 2018 FOMC meeting as the most likely time for the next rate-hike announcement with an implied probability of 51.5%. Last week, the market expected the next rate hike to occur in June 2018 with an implied probability of 57.5%.
Wall Street Takes a Beating on Thursday
17-Aug-17 16:30 ET
Dow -274.14 at 21750.73, Nasdaq -123.19 at 6221.90, S&P -38.10 at 2429.97
https://www.briefing.com/investor/markets/stock-market-update/2017/8/17/wall-street-takes-a-beating-on-thursday.htm
[BRIEFING.COM] Equities fell to heavy selling pressure on Thursday, dragging the major U.S. indices into negative territory for the week. The tech-heavy Nasdaq was hit the hardest, dropping 1.9%, as technology stocks underperformed. Meanwhile, the S&P 500 and the Dow settled with losses of 1.5% and 1.2%, respectively. For the week, the S&P 500 holds a loss of 0.5%.
The major indices opened Thursday's session with modest losses, but moved deeper into negative territory following a rumor that President Trump's chief economic advisor Gary Cohn plans to resign from his position as the Director of the National Economic Council. The White House later declared that the rumor was "100% false", but it did little to reverse the market's downward trend.
Reports indicate that Mr. Comey--who is seen as a key driver of Mr. Trump's economic agenda--is frustrated about comments from President Trump regarding last weekend's events in Charlottesville, VA. True or not, Thursday's rumor underlined the notion that President Trump's pro-growth agenda could be dead on arrival in Congress if lawmakers find it to be a political liability to work with the president.
However, it's also important to remember that many investors are looking for excuses to pull out of a market that just registered yet another record high a little more than a week ago on August 7. Following Thursday's slide, the Dow, the S&P 500, and the Nasdaq hover 1.7%, 2.1%, and 3.1%, respectively, below their record-high closing levels.
It's also worth pointing out that a van plowed into a crowd of people in Barcelona on Thursday, killing 13 and injuring more than 50. Local police deemed the incident a terrorist attack. While events similar to this one haven't prompted selling in the equity market so far this year, today's attack certainly didn't help the already bearish sentiment on Wall Street.
All 11 sectors finished Thursday's session in negative territory with the top-weighed technology sector (-2.0%) leading the retreat. Cisco Systems (CSCO 31.04, -1.30) was one of the tech sector's weakest components, dropping 4.0%, despite hitting both top and bottom line estimates. Chipmakers also showed notable weakness, pushing the PHLX Semiconductor Index lower by 2.6%.
The industrial sector also finished behind the broader market, losing 1.7%, as transports weighed, evidenced by the 2.4% decrease in the Dow Jones Transportation Average. Airlines led the transport retreat, pushing the US Global Jets ETF (JETS 29.02, -1.00) lower by 3.3%.
On the flip side, four sectors--health care (-1.3%), consumer staples (-0.9%), utilities (-0.8%), and real estate (-0.7%)--finished ahead of the broader market. Within the consumer staples group, Wal-Mart (WMT 79.70, -1.28) showed relative weakness, dropping 1.6%, despite reporting better than expected earnings.
In the bond market, Treasuries held losses in early-morning action, but began climbing as the equity market weakened. The benchmark 10-yr yield traded as high as 2.25%, but ended the day three basis points below its flat line at 2.20%.
Reviewing Thursday's economic data, which included the weekly Initial Claims Report, the August Philadelphia Fed Index, the July Industrial Production & Capacity Utilization Report, and the Conference Board's Leading Economic Index for July:
The latest weekly initial jobless claims count totaled 232,000 while the Briefing.com consensus expected a reading of 240,000. Today's tally was below the unrevised prior week count of 244,000. As for continuing claims, they declined to 1.953 million from the revised count of 1.956 million (from 1.951 million).
There are no new takeaways from those data series, which continue reflecting a tight labor market.
The Philadelphia Fed Survey for August declined to 18.9 from an unrevised 19.5 in July while economists polled by Briefing.com had expected a reading of 17.0.
The key takeaway from the report is that it showed a rebound in new orders after July figures hinted at a weak start to the third quarter.
Industrial Production increased 0.2% in July (Briefing.com consensus 0.3%) while Capacity Utilization was unchanged at 76.7% (Briefing.com consensus 76.7%) from a revised reading of 76.7% in June (from 76.6%).
The key takeaway from the report is that factory output in July remained at levels seen in February. The lack of significant change in capacity utilization suggests that the resource slack will persist, tempering inflation expectations.
The Conference Board's Leading Indicators report for July increased 0.3% (Briefing.com consensus 0.3%) after moving higher by an unrevised 0.6% in June.
On Friday, investors will receive just one economic report--the preliminary reading of the University of Michigan Consumer Sentiment Index for August (Briefing.com consensus 94.0). The report will cross the wires at 10:00 ET.
Nasdaq Composite +15.6% YTD
Dow Jones Industrial Average +10.1% YTD
S&P 500 +8.5% YTD
Russell 2000 +0.1% YTD