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The Big Picture: Renewed pandemic fear, S&P 500, Oil demand outlThe big story on the emergence of a new strain of COVID-19 in South Africa caused Wall Street’s three main indices ($SPX, $NDX, $RUT) to tumbled on Friday as they re-opened after Thursday’s Thanksgiving holiday with energy, financial and travel-related stocks bearing the brunt of the selloff. The renewal or pandemic fear has outlined as the biggest risk to today’s market, and it is likely to inject volatility to the market for the remaining of the year. Major indices dropped more than 2.0% on Friday, as investors sold risk assets. The $SPX fell 2.3%, the $NDX fell 2.2%, and the $DJI fell 2.5%. The $RUT 2000 underperformed with a 3.7% decline. WTI Crude Futures also fell -12.3% on Friday on worries of a supply glut. With Equal-Weighted $RSP sitting at its 50DMA confluence with resistance turned support at $156 range, there is a significant representation of $SPX stalling its sell off for this week. Last week’s leading sectors: $XLU (Utilities) +3.76% $XLP (Consumer Staples) +2.39% $XLV (Healthcare) +0.98% $SPX -2.20% This week’s watchlist: $MF, $PXD, $AA, $AMD and 55 more names. The new variant strain may also raise doubts over how quickly the Federal Reserve can move to unwind stimulus to tackle spiraling inflation. Eyes will be turned to the US jobs report due Friday, which will probably point to a continued recovery in the labor market. Elsewhere, Federal Reserve Chair Powell testifies before Congress, while a highly anticipated OPEC+ meeting is expected to offer guidance into the coalition’s crude output plans. Here’s what you need to know to start your week. Market Technicals $SPX (S&P 500) vs $RSP (S&P 500 Equal Weight) $SPX declined -2.20% (-103.34 points). Similarly, Equal Weighted $RSP declined -2.00% (-3.19 points). As the week’s Omicron driven selloff happened on a shortened trading session on Friday, it is worth to note that the transactional volume of that shortened session have far exceeded an recent full average day’s trading volume (50D Average Volume) in all major indexes. With $RSP sitting at its 50DMA confluence with resistance turned support at $156 range, there is a significant representation of $SPX stalling its current sell off for the week. The key index and level to watch for the week will be $RSP at $155.75 for further confirmation of market weakness. The immediate support to watch for $SPX this week is at 4,585 level, a further break of the low of Friday’s lowest price action. New pandemic wave? Wall Street’s three main indices tumbled on Friday as they re-opened after Thursday’s Thanksgiving holiday with energy, financial and travel-related stocks bearing the brunt of the selloff, sparked by the discovery of the new coronavirus strain. While little is yet known of the new variant first detected in South Africa, scientists said it has a high number of mutations that may make it vaccine-resistant and more easily transmissible than the Delta variant. Before Friday, investors had been upbeat about the strength of the economic recovery amid broad vaccine availability and advances in treatments, despite fears over steadily rising inflation. Jobs report A robust November jobs report could underline the case for the Fed to speed up unwinding its $120 billion-a-month stimulus program at its next meeting in mid-December. But a fresh wave of the pandemic could throw those plans into doubt. Concerns over spiraling inflation, coupled with signs of an accelerating economic recovery had prompted investors to begin pricing in a faster taper and earlier interest rate hikes. Friday’s non-farm payrolls report for November is expected to show that the economy added 550,000 jobs, bringing the unemployment rate down slightly to 4.5%. Powell and Yellen testimony Fed Chairman Jerome Powell, fresh from his nomination for a second term by President Joe Biden, is due to testify on the CARES Act, the central bank’s pandemic-era stimulus program, before the Senate Banking Committee in Washington on Tuesday. Treasury Secretary Janet Yellen is also due to testify. A similar hearing will be held before the House Financial Committee on Wednesday. Investors will be looking for fresh insights on the outlook for the economic recovery amid renewed pandemic uncertainty. Oil demand outlook Oil prices plunged $10 a barrel on Friday, their largest one-day decline since April 2020, as news of the new Omicron variant saw countries rush to restrict travel, adding to concerns that a supply glut could swell in the first quarter. The Organization of the Petroleum Exporting Countries and its allies (OPEC+) is due to meet on Thursday, after last week’s decision by the U.S. and other governments to release oil from strategic reserves in a bid to lower gasoline prices. For its part, OPEC+ has stuck to monthly output increases of 400,000 barrels per day (bpd) since August, despite calls to increase output to drive down oil prices.
AMEX:RSP
by jfsrevg
2
US Market Technicals Ahead (22 November – 26 November 2021)US markets will be closed on Thursday and will close early on Friday for the Thanksgiving holiday. The market will be paying close attention to Wednesday’s FOMC meeting minutes for fresh insights into the impact of soaring inflation on the future path of interest rates. Markets may also reprice the timing of future rate hikes if President Joe Biden were to promote current Fed Governor Lael Brainard to the Fed Chairman position, while the prospects of lower interest rates for longer could see a sell-off in U.S. Treasuries prompted by expectations for higher inflation. With $SPX (S&P 500) gaining +0.32% for the week, the bearish Rising Wedge formation of $RSP (S&P 500 equal weight) played out with a -1.24% loss. The correction in $RSP have reflected signs of fatigue in this market rally. Similar behavior of divergence is also witnessed between $QQQ and $QQQE. Last week’s leading sectors: $XLY (Consumer Discretionary) +3.76% $XLK (Technology) +2.39% $XLU (Utilities) +0.98% $SPX +0.32% This week’s watchlist: $ABNB, $AMAT, $AVTR, $ZIP, $BBW, $KLIC and 42 more names. There will also be a flurry of U.S. economic data on Wednesday ahead of the holiday, while PMI data out of the euro zone, UK and the U.S. during the week will outline the impact of supply chain issues and inflation on business activity. Here’s what you need to know to start your week. Market Technicals $SPX (S&P 500) vs $RSP (S&P 500 Equal Weight) The benchmark index $SPX erased previous week losses, gaining +0.32% (+15.09 points). With $SPX trading just 0.43% away from its all time high, $RSP (S&P 500 Equal Weight) has played out the Bearish Wedge Formation that was highlighted last week, declining -1.24%. The correction in $RSP have reflected signs of fatigue, and downside potential of $SPX towards 4,640 level in near term. The immediate support to watch for $SPX this week is at 4,670 level, a break of its short term uptrend line and 10DMA. Fed minutes On Wednesday, the Fed will publish the minutes of its November meeting, in which policymakers decided the U.S. economy was strong enough to start scaling back its pandemic-era asset purchase program, put in place to bolster the recovery. Since then, the economic recovery has continued to accelerate, with job gains picking up and inflation continuing to soar, leading Fed Vice Chair Richard Clarida to call last week for a discussion on a quicker taper to position the Fed to hike rates sooner. Last Thursday, Chicago Fed President Charles Evans, known as a policy dove, said he is “more open-minded” to raising interest rates next year than he was six months ago. Separately, Atlanta Federal Reserve President Raphael Bostic has signaled his support for a mid-2022 rate hike. The Fed is due to publish fresh quarterly forecasts following its next meeting in mid-December and these may give a better read on how much policymakers’ views have altered. Biden’s Fed pick The White House said last week that President Joe Biden will likely decide before Thanksgiving whether to keep incumbent Fed Chair Jerome Powell in place for another term or promote current Fed Governor Lael Brainard to the position. Analysts expect some stock market volatility around the announcement, particularly if Brainard is chosen. Powell, whose term is due to end in February next year, was appointed in 2018 by then-President Donald Trump. Brainard, who has been on the Fed board since 2014 is favored by progressive Democrats and is seen as more dovish than Powell. If Brainard is appointed markets may reprice the timing of future rate hikes, while the prospects of lower interest rates for longer could see a sell-off in U.S. Treasuries prompted by expectations for higher inflation. U.S. data dump The U.S. is to release a string of economic data on Wednesday before markets close for Thursday’s holiday. The highlight will be figures on personal income and spending, which includes the core PCE price index, rumored to be the Fed’s favored inflation gauge. The economic calendar also features a revised data on third-quarter GDP, initial jobless claims, durable goods orders, new home sales and consumer sentiment. Reports on existing home sales and November PMI data, which is expected to show only a modest improvement will be released on Monday and Tuesday, respectively. PMIs While November PMI data out of the U.S. is expected to show a modest uptick in business activity, similar surveys from the euro zone and the UK are expected to show activity in the manufacturing and services sectors is slowing. Rising infection numbers are leading to renewed restrictions in some parts of Europe, while spiking gas prices are fueling inflation, compounded by a global supply chain crunch. The European Central Bank is coming under increasing pressure to tighten its ultra-loose monetary policy to offset the hit to households spending power, but ECB President Christine Lagarde has pushed back, arguing that tightening policy now could choke off the economic recovery. Meanwhile, the Bank of England looks set to become the first of the world’s big central banks to raise rates since the onset of the pandemic, with investors and economists expecting a rate hike at its upcoming December 16 meeting.
SP:SPX
by jfsrevg
2
US Market Technicals Ahead (15 November – 19 November 2021)As U.S. inflation has surged to the highest level in over thirty years, inflation is likely to remain in focus in the coming week with investors looking ahead to the latest U.S. monthly retail sales figures along with earnings results from major retailers, including $WMT (Walmart). With $SPX (S&P 500) erasing its weekly losses from Friday’s late week rally, the bearish Rising Wedge formation of $RSP (S&P 500 equal weight) remains in play. Attention has being turned towards small-cap companies after a nine month consolidation breakout on $IWM (Russell 2000), setting a potential new leg of multi month long market rally leading by this companies. It is worth to note that $GLD (Gold) have also broken out of a multi month long trendline resistance, gaining +2.71% as the leading asset class of the week. China will provide an update on the economic recovery via industrial production and retail sales and wide there are expectation for a slowdown in its economic recovery, just as Europe is experiencing a fresh surge in Covid-19 infections. Here’s what you need to know to start your week. Market Technicals $SPX (S&P 500) vs $RSP (S&P 500 Equal Weight) The benchmark index $SPX retraced with a weekly loss of -0.31% (-14.68 points) confirming last week’s highlight on the over-extension of this rally which was 200% ATR away from its short term moving average, the first time since September 2020. With $SPX reducing its intraweek losses with Friday’s +0.72% gain, it is worth to note that $RSP (S&P 500 Equal Weight) has yet to break its Bearish Wedge Formation, which was has already played out in $SPX. The upwards consolidation of $RSP may be reflecting signs of fatigue, signaling downside potential of $SPX in near term. The immediate support to watch for $SPX this week is at 4,645 level, a break of its short term pivotal level. U.S. retail sales The highlight of the week’s economic calendar will be October retail sales data, due out on Tuesday, with economists expecting an increase of 1.1%, after a 0.7% rise in September. U.S. inflation has surged to the highest level in over thirty years amid a global supply chain crunch and data on Friday showed that consumer sentiment fell to its lowest in a decade this month, as higher prices eroded living standards. Investors are betting that the Federal Reserve will have to raise interest rates sooner than currently indicated to stop inflation spiraling upward. Retail earnings Third quarter earnings season is continuing to wind down, but investors will get an additional update on the strength of consumer spending this week with results from major retailers, including Home Depot ($HD), Walmart ($WMT), Target ($TGT), and Macy’s ($M). The earnings reports will face extra scrutiny ahead of the start of the holiday shopping season, with investors looking at guidance from retailers to determine whether inflation will eat into profits or be passed on to consumers. Third quarter earnings season has largely been upbeat. 459 of the companies in the S&P 500 have reported with 80% of earnings results beating analysts’ forecasts. China slowdown The recovery in the world’s number two economy is weakening and data on Monday, which includes reports on retail sales, fixed asset investment and industrial production is expected to confirm this. The loss of momentum in China, a key driver of global growth, is casting a shadow over the uneven global economic recovery from the pandemic. The recovery in China has been hit by an aggressive approach to containing Covid-19 outbreaks, a massive debt crisis in the country’s real estate sector and an energy crunch that has weighed on manufacturing activity. Analysts think the country’s central bank is likely to take a cautious approach to loosening monetary policy to bolster the economy as slowing growth combined with soaring inflation fuel concerns over stagflation. Meanwhile, U.S. President Joe Biden is to hold a virtual meeting with Chinese leader Xi Jinping on Monday, amid rising tensions between the world’s two largest economies. Pandemic resurgence hits Europe Europe is seeing a resurgence of the Covid-19 pandemic, adding to headwinds for the region’s already fragile economic recovery. Europe accounts for more than half of the average 7-day infections globally and about half of latest deaths, according to data compiled by Reuters, the highest levels since April last year when the virus was at its initial peak in Italy. Several countries, including the Netherlands, Germany, Austria and the Czech Republic are implementing restrictions or planning fresh measures to slow the spread. Holland entered a three-week partial lockdown on Saturday, the first in Western Europe since the summer. Germany reintroduced free Covid-19 tests on Saturday and Austria is to decide on Sunday whether to impose a lockdown on people who are not vaccinated.
SP:SPX
by jfsrevg
US Market Technicals Ahead (15 November – 19 November 2021)As U.S. inflation has surged to the highest level in over thirty years, inflation is likely to remain in focus in the coming week with investors looking ahead to the latest U.S. monthly retail sales figures along with earnings results from major retailers, including $WMT (Walmart). With $SPX (S&P 500) erasing its weekly losses from Friday’s late week rally, the bearish Rising Wedge formation of $RSP (S&P 500 equal weight) remains in play. Attention has being turned towards small-cap companies after a nine month consolidation breakout on $IWM (Russell 2000), setting a potential new leg of multi month long market rally leading by this companies. It is worth to note that $GLD (Gold) have also broken out of a multi month long trendline resistance, gaining +2.71% as the leading asset class of the week. China will provide an update on the economic recovery via industrial production and retail sales and wide there are expectation for a slowdown in its economic recovery, just as Europe is experiencing a fresh surge in Covid-19 infections. Here’s what you need to know to start your week. Market Technicals $SPX (S&P 500) vs $RSP (S&P 500 Equal Weight) The benchmark index $SPX retraced with a weekly loss of -0.31% (-14.68 points) confirming last week’s highlight on the over-extension of this rally which was 200% ATR away from its short term moving average, the first time since September 2020. With $SPX reducing its intraweek losses with Friday’s +0.72% gain, it is worth to note that $RSP (S&P 500 Equal Weight) has yet to break its Bearish Wedge Formation, which was has already played out in $SPX. The upwards consolidation of $RSP may be reflecting signs of fatigue, signaling downside potential of $SPX in near term. The immediate support to watch for $SPX this week is at 4,645 level, a break of its short term pivotal level. U.S. retail sales The highlight of the week’s economic calendar will be October retail sales data, due out on Tuesday, with economists expecting an increase of 1.1%, after a 0.7% rise in September. U.S. inflation has surged to the highest level in over thirty years amid a global supply chain crunch and data on Friday showed that consumer sentiment fell to its lowest in a decade this month, as higher prices eroded living standards. Investors are betting that the Federal Reserve will have to raise interest rates sooner than currently indicated to stop inflation spiraling upward. Retail earnings Third quarter earnings season is continuing to wind down, but investors will get an additional update on the strength of consumer spending this week with results from major retailers, including Home Depot ($HD), Walmart ($WMT), Target ($TGT), and Macy’s ($M). The earnings reports will face extra scrutiny ahead of the start of the holiday shopping season, with investors looking at guidance from retailers to determine whether inflation will eat into profits or be passed on to consumers. Third quarter earnings season has largely been upbeat. 459 of the companies in the S&P 500 have reported with 80% of earnings results beating analysts’ forecasts. China slowdown The recovery in the world’s number two economy is weakening and data on Monday, which includes reports on retail sales, fixed asset investment and industrial production is expected to confirm this. The loss of momentum in China, a key driver of global growth, is casting a shadow over the uneven global economic recovery from the pandemic. The recovery in China has been hit by an aggressive approach to containing Covid-19 outbreaks, a massive debt crisis in the country’s real estate sector and an energy crunch that has weighed on manufacturing activity. Analysts think the country’s central bank is likely to take a cautious approach to loosening monetary policy to bolster the economy as slowing growth combined with soaring inflation fuel concerns over stagflation. Meanwhile, U.S. President Joe Biden is to hold a virtual meeting with Chinese leader Xi Jinping on Monday, amid rising tensions between the world’s two largest economies. Pandemic resurgence hits Europe Europe is seeing a resurgence of the Covid-19 pandemic, adding to headwinds for the region’s already fragile economic recovery. Europe accounts for more than half of the average 7-day infections globally and about half of latest deaths, according to data compiled by Reuters, the highest levels since April last year when the virus was at its initial peak in Italy. Several countries, including the Netherlands, Germany, Austria and the Czech Republic are implementing restrictions or planning fresh measures to slow the spread. Holland entered a three-week partial lockdown on Saturday, the first in Western Europe since the summer. Germany reintroduced free Covid-19 tests on Saturday and Austria is to decide on Sunday whether to impose a lockdown on people who are not vaccinated.
AMEX:RSP
by jfsrevg
US Market Technicals Ahead (1 November – 5 November 2021)With major U.S. indices – S&P 500 $SPX, NASDAQ Composite $NDX, and Dow Jones Industrial Average $DJI – all at all-time high closes, market optimism will be tested from all sides this week, as a slew of corporate earnings, non-farm payrolls, and a Fed meeting that is expected to signal the start of QE tapering. Here’s what you need to know to start your week. The benchmark index $SPX have established a fresh new high with a further gain of +1.33% (+60.48 points), closing the week at 4,605 level. The new high was printed only in the final ten minutes of Friday’s trading session, as market was trading within its high and low range from Monday to Thursday. It is worth to note that the % of stocks that are participating in the 2021 market rally has been in decline. There are currently 50.59% stocks trading above their 200-Day Moving Average (down from 85%); and 53.12% of stocks trading above their 50-Day Moving Average (down from 84%). The immediate support to watch for $SPX this week is at 4,545 level, a resistance turned support level from September 2021’s peak. Earnings Season Rolls On Earnings continue to be the main story in stock markets around the world. While many of the biggest names have already reported, with Microsoft $MSFT and Alphabet $GOOGL being top performers last week and Apple $AAPL, Amazon $AMZN, and Facebook $FB – soon to be Meta – lagging, a much wider swath of companies will update on Q3 this quarter. Supply chain issues and inflation will of course be on investors’ minds as they watch these reports, as well as how much the Q3 U.S. growth slowdown hit these companies, and what that means for their respective outlooks. As companies lap pandemic affected quarters, figuring out what is the new normal for companies that are either recovering or were big 2020 winners will also be on the docket. Non-farm payrolls After October’s disappointing jobs report and the muted GDP number, November’s nonfarm payrolls report will test the strength of the U.S. economic recovery. Expectations are for 385K new jobs, after the NFP missed expectations in each of the last two months. Whether that lull was temporary and due to either the summer delta variant surge or supply chain issues remains to be seen. The report may weigh on the speed of Fed tapering, and might also give added impetus to Democrats in Congress on their budget package negotiations. Fed Meeting The Fed Open Market Committee (FOMC) report will be released on Wednesday after a two-day meeting. Fed chair Jerome Powell has said in recent weeks that the plan to start tapering in November is still on, so the question is whether that will bear out. Also to watch in Powell’s comments and the press conference that follows is what his current view on inflation is, after the debates over whether it is transitory or persistent, and what that means for the pace of interest rate hikes in the months (years?) to come. Of note, the US Dollar popped on Friday after trading lower much of the month, and will be in focus if there are any surprises. Manufacturing PMI reports As we enter the holiday season to finish the year, the supply chain snarls and various growth slowdowns will be in the spotlight. A number of PMI reports come out this week. China already kicked off with a disappointing 49.2, marking reduced activity. The U.S., U.K., Germany and other Euro Zone countries will all report. Expectations are for expansion across the board – numbers above 50 on the index – and will give an additional indicator on how the global economy sets up to finish the year, and perhaps how long consumers will have to purchase their holiday presents in advance. Crypto: Another Bitcoin ETF, And Monetary Tightening Two weeks ago it was Bitcoin, and last week it was ETH/USD as a leading cryptocurrency to set a new all-time high. Meanwhile, smaller and less grounded coins such as Shiba Inu continue to grab headlines. There are two headline stories to watch for crypto impact this week. First, a third bitcoin ETF is expected to start trading, as the VanEck Bitcoin Strategy ETF $XBTF is expected to list by Wednesday. Excitement over the first ETF, ProShares Bitcoin Strategy ETF $BITO, may have propelled bitcoin to all-time highs, but the response to the second, Valkyrie Bitcoin Strategy ETF $BTF, was more muted. It’s also worth watching how the crypto complex reacts to a tightening environment. Much of the investment thesis for crypto is tied to inflation and the value of money; an increase in the cost of capital via central bank tightening could make traditional currencies and assets relatively more attractive. While in large part a coincidence, the tightening cycle in 2018 and the simultaneous off year in crypto may be worth keeping in mind even as optimism in the sector remains high.
SP:SPX
by jfsrevg
US Market Technicals Ahead (13 September – 17 September 2021)It is a relatively busy week ahead in the US on the economic data front. This Tuesday’s U.S. inflation numbers could help dictate market direction in the coming week amid concerns that persistent rising inflation could prompt the Fed to roll back emergency stimulus measures. The timing of when central banks choose to scale back economic stimulus has been a key driver of market sentiment amid concerns over rising inflation. Elsewhere on economic data, US retail sales and industrial production numbers for August are seen pointing to a decline in domestic trade and modest factory activity growth. Numbers will be out on Thursday. The UK is also due to release what will be closely watched inflation data, along with updates on employment and retail sales. Appearances by European Central Bank officials may shed more light on last week’s decision to scale back bond purchases. Meanwhile, data from China is likely to underline that the pace of the recovery in the world’s number two economy is slowing. Here’s what you need to know to start your week. S&P500 (US Market) The benchmark index $SPX ended the week off its longest daily losing streak since February (-1.58%), posting five straight days of losses. Fears over slowing economic growth and rising inflation have weighed on the market. $SPX medium term trend channel remains intact, with no violation of its upper and lower bound trendline since the Bullish Reversal supported by its 50DMA highlighted in the earlier weeks. $SPX is now trading below its 20DMA after the failure of its Bullish Pennant consolidation, spiraling down towards its 50DMA that has pivoted the index since November 2020. The immediate support to watch for $SPX this week is at 4,425 level; a break down of 50DMA along with its short term support level. U.S. inflation Tuesday’s data on consumer price inflation will be the highlight of the economic calendar amid an ongoing debate over whether the current spike in inflation is likely to fade as the imbalance between supply and demand causing price increases in recent months eventually eases. In July, price increases slowed but remained at a 13-year high on a yearly basis amid tentative signs inflation has peaked. Market watchers will also be looking at Thursday’s figures on retail sales, which are expected to decline for a second straight month. UK data Last week Bank of England governor Andrew Bailey warned that the economic rebound in the UK is slowing, so this week’s data on inflation, employment and retail sales will be closely watched, particularly ahead of the Bank of England’s upcoming policy meeting on Sept 23. July data showed that inflation slowed to 2%, while retail sales fell 2.5% month-on-month. Tuesday's jobs data will also be in focus amid labor shortages and a record 8.8% increase in wage growth in June. The end of furlough schemes may push people into the jobs market, but skills shortages risk fueling price pressures driven by supply bottlenecks and commodity prices. ECB speakers In the euro zone, ECB Chief Economist Philip Lane and Bank of Finland Governor Olli Rehn are both due to make appearances, with investors hoping for more insights into last week’s decision to pare back emergency bond purchases over the coming quarter. The move is a small first step towards unwinding the emergency stimulus the ECB deployed to bolster the euro zone economy during the coronavirus pandemic. ECB President Christine Lagarde was eager to stress that the move wasn’t the start of tapering. The move by the ECB to trim bond purchases is expected to be followed by the Fed later this year, despite the disappointing August U.S. jobs report. China data China is to release data on industrial production, retail sales and fixed asset investment on Wednesday, which will show the economic impact of a widespread Covid outbreak in August, which saw Beijing partially close the world’s third-busiest container port and impose fresh restrictions across some areas of the country. While the latest outbreaks have been largely contained the Chinese economy is still facing headwinds. While exports have remained strong, boosted by robust global demand domestic demand has faltered amid virus containment measures, supply bottlenecks, tighter measures to tame property prices and a campaign to reduce carbon emissions.
ULong
by jfsrevg
US Market Technicals Ahead (23 August – 27 August 2021)All eyes will be on Federal Reserve’s annual Jackson Hole symposium’s speech by Fed’s Chairman Powell on Friday, with investors hoping for indications on when the Fed will begin tapering the monetary stimulus that has powered stocks to record highs since the COVID-19 pandemic. The economic calendar also features a string of economic data, including US personal spending and durable goods orders. Earnings will continue with Best Buy ($BBY) , Dell ($DELL) and HP ($HPQ) among the companies reporting. While stocks are still hovering near record highs all three major U.S. indexes posted weekly losses last week after tumultuous trading and more volatility looks likely to be in store in the week ahead. Here’s what you need to know to start your week. S&P500 (US Market) All three major U.S. indexes posted weekly losses with the benchmark index S&P 500 ($SPX) retracing -0.53% (-23.8 points), closing at 4,442 level. $SPX have successfully corrected out a 3 weeks price-volume divergence, supported at the 4,400 level that was highlighted in the previous week. With more volatility looks likely to be in store in the week ahead, the immediate support to watch for $SPX this week remains at 4,400 level; a further retest of immediate support along with a break of its 20D Moving Average. Jackson Hole The Fed is expected to communicate its plans for slowing its $120 billion per month asset purchase program, the first step down the road to eventual interest rate hikes. But the prospect of stimulus being reduced at a time when the rise of the highly contagious delta variant is clouding the outlook for the economic recovery has spooked markets. The Fed announced Friday that its annual symposium would be held online instead of at its usual location in Jackson Hole, Wyoming. The symposium will run from Thursday through Saturday, but the main event will be the keynote speech by Fed Chair Jerome Powell. Last week’s minutes of the Fed’s July meeting pointed to a greater likelihood of a taper beginning this year and Powell’s speech could be the last hint at the central bank’s next steps before its September policy meeting. Economic data Besides the Fed’s annual get-together market watchers will also have to digest a slew of economic data in the week ahead, including reports on home sales, durable goods and personal income and spending. Figures on existing home sales are released on Monday, followed a day later by a report on new home sales. Data on durable goods orders is due out on Wednesday and initial jobless claims numbers will be released Thursday. Revised figures on second-quarter GDP are also out on Thursday but are expected to show little change. Friday brings the release of personal spending data along with the core PCE price index, the Fed’s preferred gauge of inflation, which has been running near a 30-year high. Earnings While the second-quarter reporting season has essentially run its course, there are still some companies left to report during the week. JD.com ($JD), Palo Alto Networks ($PANW) and Madison Square Garden ($MSGS) are reporting on Monday. Best Buy ($:BBY), Nordstrom ($JWN), Urban Outfitters ($URBN) and Toll Brothers ($TOL) are some of the names reporting on Tuesday. Salesforce ($CRM) and Dick’s Sporting Goods ($DKS) are due to report on Wednesday. HP, ($HPQ) Dell ($DELL), Gap ($GPS), Abercrombie and Fitch ($ANF), Dollar General ($DG), Dollar Tree ($DLTR), Ulta Beauty ($ULTA) and Peloton ($PTON) will all report on Thursday. It’s been a stellar earnings season – so far 476 of the companies in the S&P 500 have posted results and of those, 87.4% have beaten consensus.
ULong
by jfsrevg
US Market Technicals Ahead (16 August – 20 August 2021)Investors will be waiting for the FOMC minutes due Wednesday for further clarification on the next monetary policy steps to direct the market in the week ahead. At its July meeting, the Federal Reserve left monetary policy unchanged, but said asset purchases could start being reduced soon amid signs of a solid recovery in the US labor market and temporary inflationary pressure, and despite the lingering threat of the Delta variant. On the economic data front, latest U.S. retail sales data, along with a flurry of retail earnings will also keep the focus on consumer strength. Several large retailers including Walmart ($WMT), Target ($TGT), Macy’s ($M), Lowe's ($LOW) and Home Depot ($HD) will be reporting quarterly results. Chinese data will give a snapshot of how the economy is faring as the delta variant of the coronavirus bears down and New Zealand looks set to be one of the first of the world's advanced economies to raise interest rates in the pandemic era. Here’s what you need to know to start your week. S&P500 (US Market) The S&P 500 ($SPX) and Dow Jones Industrial Average ($DOW) hit fresh all-time highs during the week as both indexes capped off modest gains for the week. The benchmark index $SPX ended the week gaining a further +0.63% (+28 points), closing at 4,466 level. $SPX remains above its multi-month long trend channel that was earlier highlighted. Every break out of $SPX trend channel resistance has been met with a rejection (6 times since 2021). It is also important to note of the diminishing volume observed, reflecting a short term price-volume divergence in this run up. The immediate support to watch for $SPX this week is revised up to 4,400 level; a retracement towards its minor resistance-turned-support, and its current 20DMA level. Federal Reserve minutes On coming Wednesday the Fed will release the minutes of its July meeting, which will be scrutinized for policymakers’ views on when to start scaling back the Fed’s monthly bond purchases, as well as their outlook on the economy. Last month Fed officials declared the recovery intact despite the rise of the delta variant and since then the stronger-than-forecast July jobs report prompted several policymakers to suggest the tapering of asset purchases might start sooner rather than later. U.S. retail sales The U.S. economy is growing strongly but the spread of the delta variant remains a headwind so upcoming economic data will provide a fresh insight into consumer demand after a report on Friday showing that consumer confidence fell to its lowest level in a decade. Consumer spending accounts for around 70% of U.S. economic output. Investors will be eyeing Tuesday’s U.S. retail sales data to see whether the shift in spending from goods to travel, leisure and services, which aren’t reflected in retail sales, continued in July. Economists are forecasting a 0.2% fall, amid another expected steep decline in auto sales. Other reports on the slate include industrial production on Tuesday and initial jobless claims Thursday as well as the Fed’s Empire State manufacturing index on Monday and the Philadelphia Fed manufacturing survey on Thursday. China recovery China, which is dealing with its largest outbreak of Covid since the early days of the pandemic, has imposed mass testing and travel restrictions, crimping economic activity. Several Wall Street investment banks, including Goldman Sachs last week cut their China growth forecasts for the rest of the year. Data on retail sales, industrial production and fixed asset investment all due out on Monday will show how the economy fared in July. The numbers are expected to slow, adding to concerns that the recovery in the world’s second-largest economy is losing momentum. The recovery from the pandemic has been uneven in China, with export demand driving most economic growth, while domestic demand has returned more slowly. New Zealand rate hike The Reserve Bank of New Zealand bank meets on Wednesday and looks set to become the first major economy to raise interest rates since the pandemic hit as its red-hot economic recovery continues. Super-strong jobs data have cemented expectations of a hike, which would be New Zealand's first since mid-2014. This is in sharp contrast to 2020, when rates were slashed 75 basis points to 0.25% and a move below zero became a real possibility.
U
by jfsrevg
US Market Technicals Ahead (9 August – 13 August 2021)With U.S. CDC (Centers for Disease Control and Prevention) reversing its stance on mask for vaccinated people amid the resurgence of the coronavirus pandemic, Investors will be watching closely on the main U.S. economic data reports on consumer and producer price inflation for any potential scale back of stimulus by the Federal Reserve. Several Fed officials are slated to speak during the week and their comments could help clarify the Fed’s position on tapering. Earnings will continue but will be fewer in number as earnings season winds down. Here’s what you need to know to start your week. S&P500 (US Market) The US market ended at all time highs on Friday, after monthly U.S. jobs report came in better than expected, as the economy continues to navigate out from the COVID-19 pandemic. The benchmark index $SPX ended the week gaining +0.79% (+34.9 points), closing at 4,438 level. $SPX remains above its multi-month long trend channel that was earlier highlighted. Every break out of $SPX trend channel resistance has been met with a rejection (6 times since 2021). It is also important to note of the diminishing volume observed, reflecting a short term price-volume divergence in this run up. The immediate support to watch for $SPX this week is revised up to 4,370 level; a breakdown of two weeks price support. Inflation numbers The U.S. consumer price index and the producer price index released Wednesday and Thursday, respectively will provide an insight into the current pace of inflation, one of the key factors along with the labor market, that the Fed looks at when making its monetary policy decisions. CPI is expected to moderate slightly after last month’s jump of 0.9%, the strongest gain since June 2008. The Fed has said the current surge in inflation is just temporary, but market sentiment has been hit by fears of higher inflation resulting in a sudden tapering. Friday’s stronger-than-expected nonfarm payrolls report was the last before the Fed gathers for its annual meeting in Jackson Hole, Wyoming, at the end of the month to discuss policy and decide future stimulus strategy. The upbeat jobs numbers coupled with uncomfortably hot inflation data could prompt Fed officials to announce plans to begin tapering bond purchases as soon as September, the first step down the road to eventual interest rate hikes. Earnings wind down Earnings will continue in the coming week, but the number of companies reporting will tail off as earnings season continues to wind down. Some of the names reporting include AMC Entertainment ($AMC), Coinbase Global Inc ($COIN), Sysco ($SYY), Chesapeake Energy ($CHK), eBay ($EBAY), Wendy’s ($WEN), Lordstown Motors ($RIDE), Walt Disney ($DIS) and Airbnb ($ABNB). It has been a stellar earnings season – out of the 427 companies in the S&P 500 that have reported earnings so far, 87.6% beat analyst expectations, the highest on record. Bitcoin higher as sentiment recovers Bitcoin rose to its highest level in two months on Sunday as market sentiment recovered but remined fragile. The digital currency hit $45,284, its highest since mid-June. One area of uncertainty for crypto investors is the U.S. infrastructure bill currently making its way through Congress, which contains a cryptocurrency tax provision, tacked on at the last minute.
U
by jfsrevg
US Stock In Play: $UONEK (Urban One Inc)$UONEK pivoted from its $3.50 support level, surging with a +17.73% intraday action which exceeded beyond its 3-months average implied volatility over 60%. Its price peak of the year was traded just two weeks ago, establishing a high of $5, and closing at $4.60. 52 weeks high of $UONEK was last traded at $6.84, on 17th June 2020. This price level is currently 61.15% away from the last closing price. $UONEK together with its subsidiaries, operates as an urban-oriented multi-media company in the United States. The company operates through four segments: Radio Broadcasting, Cable Television, Reach Media, and Digital.
NASDAQ:UONEKLong
by jfsrevg
US Stock In Play: $ASO (Academy Sports and Outdoors Inc)$ASO navigated out of its consolidated price pattern with a resurgent of its uptrend coupled high sessional volume, rallying up +15% this month (April). $ASO was previously whipsawing along its 20DMA over the course of 7 weeks since the start of February. $ASO is currently trading at $32.70, merely a dollar away from its all time high. At the current junction $ASO is displaying a congested price pattern with dried up volume, posing for an all time high breakout in the upcoming week. $ASO through its subsidiaries, operates as a sporting goods and outdoor recreational products retailer in the United States.
NASDAQ:ASOLong
by jfsrevg
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