Traders Market Weekly: Independence, Precious and Formative

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    Ten of the 11 S&P 500 sectors closed in the red with losses ranging from 0.4% (utilities) to 4.0% (consumer discretionary). The lone holdout in the green was energy, up 2.7%.

    The energy sector, which closed with all components in the green, benefitted from higher oil prices ($111.96, +2.26, +2.4%), which stemmed from the reopening push in China and a Reuters report indicating Saudi Arabia and the UAE have limited spare capacity to boost output.

    The consumer discretionary sector was dragged down by its mega cap components, (AMZN 107.40, -5.82, -5.1%) and Tesla (TSLA 697.99, -36.77, -5.0%), but also Nike (NKE 102.78, -7.72, -7.0%) which reached a new 52-week low following its fiscal Q4 earnings report and soft fiscal Q1 revenue guidance. The few standouts in the sectors included Wynn Resorts (WYNN 59.49, +1.80, +3.12%) and Las Vegas Sands (LVS 34.51, +1.34, +4.0%), which drafted off the China reopening sentiment.


    Equity indices in the Asia-Pacific region ended the midweek session on a lower note despite the release of above-consensus Retail Sales from Australia and Japan.

    Japan’s Nikkei -0.9%;
    Hong Kong’s Hang Seng -1.9%;
    China’s Shanghai Composite -1.4%;
    India’s Sensex -0.3%; South Korea’s Kospi -1.8%;
    Australia’s All Ordinaries -1.1%.


    Japan’s May Retail Sales 3.6% yr/yr (expected 3.3%; last 3.1%) and June Household Confidence 32.1 (last 34.1)
    South Korea’s June Consumer Confidence 96.4 (last 102.6)
    Australia’s May Retail Sales 0.9% m/m (expected 0.4%; last 0.9%)
    Bank of Japan Governor Kuroda said that the BoJ will maintain its current policy stance since Japan has not felt much of an impact from the global inflationary trend.
    Toyota missed its production targets for May with overall production levels through the first five months of the year falling 9.7% yr/yr.


    Major European indices trade lower across the board.

    STOXX Europe 600 -1.3%;
    Germany’s DAX -2.1%;
    UK’s FTSE 100 -0.5%;
    France’s CAC 40 -1.4%;
    Italy’s FTSE MIB -1.5%;
    Spain’s IBEX 35 -1.8%.


    Eurozone’s June Business and Consumer Survey 104.0 (expected 103.0; last 105.0). May Private Sector Loans 4.6% yr/yr (last 4.6%) and loans to nonfinancial corporations 5.8% yr/yr (last 5.2%)
    Spain’s May Retail Sales 1.4% yr/yr (expected 1.3%; last 1.6%). Flash June CPI 1.8% m/m (expected 0.6%; last 0.8%); 10.2% yr/yr (expected 9.0%; last 8.7%)
    Swiss June ZEW Expectations -72.7 (last -52.6)
    Spain’s flash CPI for June was up more than 10.0% yr/yr, representing the sharpest rate of increase since late 1984.
    Two European Central Bank policymakers repeated that the ECB is highly likely to call for a 75-bps hike in September.
    Scotland is planning another independence referendum for October 2023.
    France lowered its growth forecast for the year to 2.5% from 4.0%.
    Germany’s finance ministry reportedly plans to reinstate its debt brake next year.


    Walt Disney (DIS 96.43, +0.51, +0.5%): Board of Directors unanimously votes to extend CEO Bob Chapek’s contract for three years
    Tesla (TSLA 689.97, -8.02, -1.2%): aiming to close San Mateo, CA office and eliminate 200 jobs, according to The Wall Street Journal
    Walmart (WMT 122.25, -0.12, -0.1%): FTC sues Walmart for “facilitating money transfer fraud”; Texas AG Pax­ton “launch­es inves­ti­ga­tion into Wal­mart for poten­tial­ly deceiv­ing Tex­ans about opioids”
    McDonald’s (MCD 244.55, +1.72, +0.7%): Atlantic Equities upgrades to Overweight from Neutral
    General Mills (GIS 71.96, +1.70, +2.4%): beats by $0.11, beats on revs; raises dividend
    Pinterest (PINS 20.34, +0.64, +3.3%): CEO Ben Silbermann is stepping down; Google exec Bill Ready named new CEO
    McCormick (MKC 81.55, -5.29, -6.1%): misses by $0.17, misses on revs; lowers FY22 EPS below consensus, reaffirms FY22 revs guidance
    Bed Bath & Beyond (BBBY 5.74, -0.79, -12.1%): misses by $3.10, misses on revenues


    Dow 31029.31 +82.32 (0.27%)
    Nasdaq 11177.88 -3.65 (-0.03%)
    SP 500 3818.83 -2.72 (-0.07%)

    NYSE Adv 1087 Dec 2005 Vol 920 mln
    Nasdaq Adv 1574 Dec 2728 Vol 5.5 bln

    Industry Watch

    Strong: Consumer Staples, Health Care, Information Technology, Communication Services
    Weak: Real Estate, Industrials, Materials, Energy, Financials

    Moving the Market

    — Lingering concerns about rate hikes and growth prospects
    — Cleveland Fed Pres. Mester (FOMC voting member) said she supports a 75basis point rate hike in July if economic conditions stay unchanged
    — Relative strength in mega caps


    Bond Wrap:
    Treasury yields closed lower. 10-yr note yield fell 11bp to 3.09%, 2-yr note yield fell 7bp to 3.07% in curve-flattening
    2-yr: -7 bps to 3.07%
    3-yr: -9 bps to 3.14%
    5-yr: -11 bps to 3.15%
    10-yr: -11 bps to 3.09%
    30-yr: -10 bps to 3.21%


    Ketanji Brown Jackson will be sworn in as the 104th associate justice of the Supreme Court on Thursday after Justice Stephen Breyer announced on Wednesday his retirement from the high court


    Equity indices in the Asia-Pacific region ended Thursday on a mostly lower note.

    Tokyo reportedly raised its coronavirus alert level to the second highest tier.
    China’s Manufacturing PMI dipped toward contractionary territory in the June reading while Non-Manufacturing PMI returned to expansion after pointing to contracting activity for three months in a row.
    Reserve Bank of New Zealand chief economist warned that the tide may have turned against housing being a one-way bet.
    South Korea increased its minimum wage by 5.0% yr/yr.

    —Equity Markets—

    Japan’s Nikkei: -1.5%
    Hong Kong’s Hang Seng: -0.6%
    China’s Shanghai Composite: +1.1%
    India’s Sensex: UNCH
    South Korea’s Kospi: -1.9%
    Australia’s ASX All Ordinaries: -1.9%


    China’s June Manufacturing PMI 50.2 (expected 50.5; last 49.6) and June Non-Manufacturing PMI 54.7 (last 47.8)
    Japan’s May Industrial Production -7.2% m/m (expected -0.3%; last -1.5%). May Housing Starts -4.3% yr/yr (expected 1.7%; last 2.4%) and Construction Orders 19.5% yr/yr (last 30.5%)
    South Korea’s May Industrial Production 0.1% m/m (expected 0.5%; last -3.3%); 7.3% yr/yr (expected 3.1%; last 3.5%). May Retail Sales -0.1% m/m (last -0.2%) and July Manufacturing BSI Index 82 (last 85)
    Hong Kong’s May Retail Sales -1.7% yr/yr (last 11.7%)
    Australia’s May Private Sector Credit 0.8% m/m (last 0.8%) and May Housing Credit 0.6% m/m (last 0.6%)
    New Zealand’s June ANZ Business Confidence -62.6 (last -55.6)


    Major European indices trade on a sharply lower note amid continued concerns about slowing growth.

    STOXX Europe 600: -2.1%,
    Germany’s DAX: -2.8%,
    U.K.’s FTSE 100: -2.0%,
    France’s CAC 40: -2.9%,
    Italy’s FTSE MIB: -2.7%,
    Spain’s IBEX 35: -2.2%


    Eurozone’s May Unemployment Rate 6.6% (expected 6.8%; last 6.7%)
    Germany’s May Retail Sales 0.6% m/m (expected 0.5%; last -5.4%); -3.6% yr/yr (expected -2.0%; last -0.4%). May Import Price Index 0.9% m/m (expected 1.6%; last 1.8%); 30.6% yr/yr (expected 31.5%; last 31.7%). June Unemployment Change 133,000 (expected -6,000; last -4,000) and Unemployment Rate 5.3% (expected 5.0%; last 5.0%)
    U.K.’s Q1 GDP 0.8% qtr/qtr, as expected (last 1.3%); 8.7% yr/yr, as expected (last 6.6%). Q1 Current Account deficit GBP51.70 bln (expected deficit of GBP39.80 bln; last deficit of GBP7.30 bln). Q1 Business Investment -0.6% qtr/qtr (last -0.5%); 8.3% yr/yr (last 8.5%). June Nationwide HPI 0.3% m/m (expected 0.5%; last 0.9%); 10.7% yr/yr (expected 10.8%; last 11.2%)\
    France’s May PPI -0.1% m/m (last 0.0%). May Consumer Spending 0.7% m/m (expected 0.2%; last -0.7%). Flash June CPI 0.7% m/m, as expected (last 0.7%); 5.8% yr/yr (expected 5.7%; last 5.2%)
    Italy’s May Unemployment Rate 8.1% (expected 8.4%; last 8.3%). May PPI 0.6% m/m (last 0.2%); 34.6% yr/yr (last 35.3%)
    Spain’s April Current Account deficit EUR480 mln (last surplus of EUR1.20 bln)
    Swiss May Retail Sales -1.6% yr/yr (last -5.5%) and June KOF Leading Indicators 96.9 (expected 96.3; last 97.7)


    French Finance Minister Le Maire said that the EU could implement the global minimum tax without Hungary’s participation.
    Italy is reportedly planning to spend another EUR8 bln to offset high energy costs.
    Russia warned that it will respond in kind if NATO infrastructure is established in Finland and Sweden.


    ^^^^ +1s & “Harry Truman” DITTOS on excellent articles & research above 🙂

    Just saw history made as new SCOTUS took oath & was installed
    DOW is a little better at -275 than earlier — but BITCOIN has cratered to 19,000 for low of year
    OIL + inflation + supply chain — makes this one of most difficult years ever
    if only our lawmakers would work together for good of people economically
    rather than spending millions on 1-sided JAN 6th committee
    as I hope for DIFF & younger candidates in 2024 to refocus for better future 🙂

    Even with problems in USA — we can be thankful to live in greatest & freest
    and most blessed nation — as we celebrate JULY 4th holiday ahead 🙂

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