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FEAR NOT Brave Investors
Stock Mania, Bank Earnings and Trade Wars
The Week That Was:
All time highs for the major US indices with Amazon back at a Trillion dollar market cap. Nothing new on the trade war front between China and America. Fed chairman Powell testified to the Senate and Congress and said enough to excite the rate cut buy stocks mantra. OPEC in their monthly report projected more records from American producers and a drop off in demand. The first huricane of the year, Barry put a bid under oil and natural gas as did the cracks since PES shutdown.
The Bank of Canada left rates unchanged but Governor Poloz was more dovish then expected, the universal theme globally is the trade war has crushed confidence. Indeed Singapore chimed in with a -3.6% GDP annualised for Q2, with +1.0 expected. We saw more noise from Iran bully Europe into threatening to leave the nuclear treaty you would think they want a war.
Yields did come off theor lows but the USD sold off at week’s end. The fallout with Global PMIs continue to weaken, continues to overhang chatter with German and the UK manufacturing sectors particularly weak.
We remind you to stay on your toes, ad nauseum we repeat; In this surreal world that market prices can only go up, with bizzare acceptance that we can’t go down and you are a fool if you think otherwise. We have had mixed economic data, no concrete decision on the China and EU trade wars and no decision on Brexit. Here we are (see what ya wanna see).
The Week Ahead
Expect to see Iran and trade wars front and center. We watch the effect of Hurricane Barry has when it reaches landfall. We start off the week Sunday with a number of Chinese reports, House Prices, Fixed Asset Investment, GDP, Industrial Production and Retail Sales. Then with Amazon’s Prime Day on Monday.
Some analysts expect this to be the biggest sales day yet for Amazon, surpassing Black Friday and Prime Day from a year earlier. Rival retailers are expected to have their own web promotions in response. Retail Sales on Tuesday will be gleamed after Fed Chair Jerome Powell told Congress that report was one he’d be watching. Powell is also among a number of Fed speakers in the coming week, and he’s scheduled to make comments on monetary policy Tuesday at a Banque de France conference in Paris. Tuesday we also get import prices, industrial production, business inventories and homebuilders’ sentiment.
Traders will be over thinking all data ahead of the Federal Reserve’s next meeting on 30-31 July.
With the trade war, Most analysts still say a US-China trade deal will remain out of reach regardless for some time. On repeat “Again the issue is the disconnect between the story telling about the China deal and inconclusion between the Tories and Labor in the UK. What could go wrong?”
It is now over four months since the latest trade deal between the United States with China deadline of March 1. The White house said it needs more time, then turned around and slapped more tariffs on and said hey we are still talking. Are we the only one that sees the constant reset to keep markets elevated? If you have half a non partisan brain it should be all pretty clear the great game going on.
For emerging markets the still high US dollar means the Fragile 5 continue to shake. Argentina and Turkey are red letter risks, 12 weeks of losses in the last 16 have the Turkish lira sliding back higher to the dollar. Voters will be going to the polls in Poland, Argentina, Indonesia, the Philippines and Thailand this year.
Over $4 trillion of EM debt matures by the end of 2020, of which around a third is denominated in foreign currency, according to the Institute of International Finance. Nevertheless Banks are telling investors to buy, buy, buy, who is selling you should ask?
If you wanted to play in the big room at Vegas, you are living it. Understand risk and the madness of crowds for your own sanity and wealth.
Focus on yourself and what YOU CAN INFLUENCE, set your trading plan and goals in be set for 2019. One suspects it will be a year long Groundhog day for Trump, the GOP and the Democrats. We still have China and the U.S.trade wars.
Earnings last week included Delta Air Lines, Fastenal, PepsiCo. This week earnings season begins in earnest with the money center banks reporting; Citigroup reports on Monday; JPMorgan Chase, Goldman Sachs and Wells Fargo on Tuesday; PNC Financial, Bank of New York Mellon, and Bank of America on Wednesday; Morgan Stanley, SunTrust and BB&T on Thursday; Regions Financial, State Street, and American Express on Friday.
Eyes are on major railroads; Union Pacific Corp on Thursday and Kansas City Southern on Friday, amid concerns that new U.S. import tariffs threatened by the Trump administration could also lead to weakening demand for goods movers, including truckers, container companies and package carriers. Other big earnings include Microsoft on report Thursday and Netflix, the first FANG name of the quarter, reports Wednesday with Alcoa.
-comment section below data-
Geopolitical Tinderbox Radar
- Ahead of Hurricane Barry The U.S. Takes Off 4 More Oil Rigs
- Into The Vortex – EIA Reports +81 Bcf Natural Gas Storage Build
- OPEC Monthly Oil Market Report July 2019
- Around The Barrel – Crude Oil Draws Huge -9499k Bbls and Gasoline -1455k Bbls
- Bank of Canada Hold Interest Rate at 1.75% Says Economy Returning to Growth Around Potential
The Week That Was – Last Weeks Recap
- KB Homes Earnings Surprise After Homebuilder Selloff
- FedEx Earnings Beat, Warns of Amazon and Trade Wars Impact
- Micron Earnings Hit By Huawei Ban But Beats Lowered Expectations
- Lennar Guides Lower on Weaker West Sales and Order to Delivered Home Ratio
Biggest Stock Winners and Losers Last Week*
Which Stocks Moved US ETF’s Last Week
US Stock Indices Performance
The performance in shares of small-cap companies which are domestically focused than the large-cap firms is a concern for the optimism in the markets, belies such optimism. The small-cap Russell 2000 index has gained 16.6% for the year, which has underperformed the benchmark S&P 500 index which has risen over 19.5%. Whereas the DJIA, NDX and SPX have marked new records highs, it remains 9.7% below its August 2018 high.
The $SPX after it consolidated around previous ATH back at Tenkan coiled higher. We recalculated from +2/8 to +6/8 on the daily and Chikou caught up. BEst alternatives are or i of iii of wave V higher. Watch tenkan and Kijun for flattening or acceleration, Kijun turned up and we got impulse. Note speed and channel lines in tune with algo calibration curve.
On the weekly we stayed above the triple top and hit the upper band again. The ATH is over+2/8 after impulse off down in 3 waves to the cloud and then impulse higher. We closed again over Tenkan and 50 wma. Clearer here the wave alts we asked on the daily.and note larger fibs
10 Year Treasury Note
Energy and Commodities
US Crude Oil (WTI)
WTI broke the inner daily downtrend channel and cloud to run to the second channel after running through the 50 dma under the Tenkan, Key are channel and 50 dma with Kijun tests. A C wave or a iii of I are the alternatives. Watch for spits now with fear in the pricing.
WTI again finished the week over the weekly Tenkan and 50wma (green), now as key resistance outer channel, We have ran ahead of chikou (blue) needing balance – watch Murrey confluence with the cloud acting as support.
US Natural Gas (Henry Hub)
Natural Gas continued higher from last week’s break of the mini reverse head and shoulders to power through the daily Tenkan (orange) and flattening Kijun above. NG is doing work over thee 50dma and 2017-18 low and -3/8 Murrey Math 3/8 recalc. With record low futures longs Barry has increased pressure..
Natural Gas continued it’s rally off the lows under the 2017-18 lowing to closer over the Tenkan upside resistance at week’s end. After Price caught up to Chikou stopped the fall 2 weeks agp and the balance fed the coil higher.
Baltic Dry Index (BDI)
Australian Dollar – AUDUSD
The Aussie dollar continues to coil under the kijun with last week’s bounce off the bottom weekly channel and Murrey Math 0/8 right, above which it needs to clear to get a meaningful bounce in.
New Zealand Dollar – NZDUSD
The Kiwi rebound was halted at the downward channel aftr breaking the top of the cloud fueled by the bounce off recent lows back through the Tenken and Kijun. Murrey Math Above here is 2/8 and breakdown retest. Watch NZDJPY for Momentum shifts.
Canadian Dollar – USDCAD
The Loonie continues with strength after thrown back off top of the cloud and 50dma confluence which confirmed break at Tenkan. Nearing uptrend line and cloud base, Note downtrend line and cohesian with oil. Keep an eye on Tenkan and WTI control aspects.
Euro – EURUSD
More churning on the Euro Weekly between the Kijun and tenkan since it back tested the flag break that had been forming since September last year which had gathered the energy to get over the Kijun. EUR needs impulse to gather momentum.
EuroPound – EURGBP
Nothing new here .. EURGBP inching it’s way up to the 50 wma & top of channel locked in the channel with Tory leadership mess giving EUR a bid. Brexit channel closed over the Kijun & cloud. With all the politics the channel remains valid for now.
Japanese Yen – USDJPY
The dollar yen tried to rally but couldnt get over the tenkan. With the tenkan crossing through the kijun. Yen buying continued on the crosses, EURJPY and AUDJPY. Above us is a flattening cloud.
Mexican Peso USDMXN
Mexican peso continued to drift higher after the gap down to te trend line. Watch Kijun as its flattening and we are over tenkan and in the cloud.
Turkish Lire USDTRY
The Turkish Lire tested the tenkan but failed and we see the US Dollar closing over the downtrend formed since May right to the cloud. Above here is resistance all through the cloud to previous dollar uptrend.
Bitcoin rally was thrown back at the 61.8% of the major move at pace once to the 38% and tekan confluence to bounce to the 50%. Use your MM rules as algos control the herd here, support is the cloud and tenkan, be wary of sharp ABC, 1-2 moves.
The Week Ahead
Key US Economic and Central Bank Events This Week
Sun July 14, 2019
- 18:45 NZD External Migration & Visitors (May)
- 19:00 GBP Rightmove House Price Index (MoM)
- 21:30 CNY House Prices (YoY) (Jun)
- 22:00 CNY Fixed Asset Investment (YoY) (Jun)
- 22:00 CNY GDP (YoY) (QoQ) (Q2)
- 22:00 CNY Industrial Production (YoY) (Jun)
- 22:00 CNY Retail Sales (YoY) (Jun)
Monday, July 15, 2019
- All Day Holiday Japan – Marine Day
- 02:30 CHF PPI (MoM) (Jun)
- 08:30 USD NY Empire State Manufacturing Index (Jul)
- 18:45 NZD CPI (QoQ) (Q2)
- 21:30 AUD RBA Meeting Minutes
- 23:00 NZD RBNZ Offshore Holdings (Jun)
Tues July 16, 2019
- 04:00 EUR Italian Trade Balance (May)
- 04:30 GBP Average Earnings
- 04:30 GBP Claimant Count Change (Jun)
- 04:30 GBP Unemployment Rate (May)
- 05:00 EUR Italian CPI (MoM) (Jun)
- 05:00 EUR Italian HICP (MoM) (Jun)
- 05:00 EUR German ZEW Current Conditions (Jul)
- 05:00 EUR German ZEW Economic Sentiment (Jul)
- 05:00 EUR Trade Balance (May)
- 05:00 EUR ZEW Economic Sentiment
- 08:15 USD FOMC Member Bostic Speaks
- 08:30 USD Export Price Index (MoM) (Jun)
- 08:30 USD Import Price Index (MoM) (Jun)
- 08:30 USD Retail Sales (MoM) (Jun)
- 08:30 USD Retail Sales Ex Gas/Autos (MoM) (Jun)
- 08:30 CAD Foreign Securities Purchases (May)
- 08:30 CAD Foreign Securities Purchases by Canadians (May)
- 08:55 USD Redbook (YoY) (MoM)
- 09:15 USD Capacity Utilization Rate (Jun)
- 09:15 USD Industrial Production (MoM) (Jun)
- 09:15 USD Manufacturing Production (MoM) (Jun)
- 10:00 USD Business Inventories (MoM) (May)
- 10:00 USD NAHB Housing Market Index (Jul)
- Tentative NZD GlobalDairyTrade Price Index
- 11:30 USD 52-Week Bill Auction
- 15:30 USD Chicago Fed President Evans Speaks
- 16:00 USD US Foreign Buying, T-bonds (May)
- 16:00 USD Overall Net Capital Flow (May)
- 16:30 USD API Weekly Crude Oil Stock
- 20:30 AUD MI Leading Index (MoM)
- 20:30 SGD Trade Balance
Wednesday, July 17, 2019
- 04:00 EUR Italian Industrial New Orders (MoM)
- 04:00 EUR Italian Industrial Sales (MoM) (May)
- 04:30 GBP CPI (MoM) (Jun)
- 04:30 GBP House Price Index (YoY)
- 04:30 GBP PPI Input (MoM) (Jun)
- 04:30 GBP PPI Output (MoM) (Jun)
- 04:30 GBP RPI (MoM) (Jun)
- 05:00 EUR CPI (MoM) (Jun)
- 05:40 EUR German 30-Year Bund Auction
- 07:00 USD MBA 30-Year Mortgage Rate
- 07:00 USD MBA Mortgage Applications (WoW)
- 07:00 USD MBA Purchase Index
- 07:00 USD Mortgage Market Index
- 07:00 USD Mortgage Refinance Index
- 08:30 USD Building Permits (Jun)
- 08:30 USD Housing Starts (Jun)
- 08:30 CAD CPI (MoM) (Jun)
- 10:30 OIL EIA Crude Oil Inventories
- 14:00 USD Beige Book
- 19:00 JPY Reuters Tankan Index (Jul)
- 19:50 JPY Trade Balance (Jun)
- 21:00 KRW Interest Rate Decision (Jul)
- 21:30 AUD Employment Report(Jun)
Thursday July 18, 2019
- 02:00 CHF Trade Balance (Jun)
- 04:30 GBP BOE Credit Conditions Survey
- 04:30 GBP Retail Sales (MoM) (Jun)
- 04:30 HKD Unemployment Rate (Jun)
- Tentative GBP BoE FPC Meeting Minutes
- 08:30 USD Continuing Jobless Claims
- 08:30 USD Initial Jobless Claims
- 08:30 USD Jobless Claims 4-Week Avg.
- 08:30 USD Philadelphia Fed Manufacturing Index (Jul)
- 08:30 CAD ADP Nonfarm Employment Change
- 09:00 ZAR Interest Rate Decision (Jul)
- 09:30 USD FOMC Member Bostic Speaks
- 10:30 NG US Natural Gas Storage
- 11:30 USD 4-Week Bill Auction
- 11:30 USD 8-Week Bill Auction
- 13:00 USD 10-Year TIPS Auction
- 17:00 KRW PPI (MoM) (Jun)
- 19:30 JPY National CPI (MoM)
- 19:50 JPY Foreign Bonds Buying
- 19:50 JPY Foreign Investments in Japanese Stocks
- 23:00 NZD Credit Card Spending (YoY)
Friday July 19, 2019
- 00:30 JPY All Industries Activity Index (MoM)
- 02:00 EUR German PPI (MoM) (Jun)
- 02:00 EUR German WPI (MoM) (Jun)
- 04:00 EUR Current Account (May)
- 04:30 GBP Public Sector Net Borrowing (Jun)
- 08:30 CAD Retail Sales (MoM) (May)
- 10:00 USD Michigan Consumer Sentiment (Jul)
- 11:05 USD FOMC Member Bullard Speaks
- 13:00 OIL U.S. Baker Hughes Rig Count
- 15:30 CFTC speculative net positions
- 16:30 USD FOMC Member Rosengren Speaks
Notable Earnings Reports This Week
*EPS estimates via Morningstar where available
Monday July 15
- CITIGROUP INC C LUBY’S INC LUB ORGANIGRAM HLDG OGI PEOPLE CORP PEO SHIFTPIXY INC PIXY
- HUNT (JB) TRANS JBHT SERVISFIRST BCS SFBS VALENS GROWORKS VGW WINTRUST FINL WTFC
Tuesday July 16
- CANOPY RIVERS RIV CDN PAC RLWY CP CDN PAC RLWY-TS CP COMMERCE BANCSH CBSH DOMINOS PIZZA DPZ FIRST HRZN NATL FHN FIRST REP BK SF FRC GOLDMAN SACHS GS JOHNSON & JOHNS JNJ JPMORGAN CHASE JPM MERCANTILE BANK MBWM PROLOGIS INC PLD SYNOVUS FINL CP SNV WELLS FARGO-NEW WFC
- CINTAS CORP CTAS CSX CORP CSX FNF GROUP FNF FULTON FINL FULT HANCOCK WHITNEY HWC HOPE BANCORP HOPE INTERACTIVE BRK IBKR PINNACLE FIN PT PNFP SEATTLE GENETIC SGEN UNITED AIRLINES UAL UNITED FIN BCP UBNK
Wednesday July 17
- ABBOTT LABS ABT ALFA LAVAL AB ALFVY ASML HOLDING NV ASML BANK OF AMER CP BAC BANK OF NY MELL BK COMERICA INC CMA ERICSSON LM ADR ERIC MARTELLO TEC GP MTL OMNICOM GRP OMC PNC FINL SVC CP PNC PROGRESSIVE COR PGR SANDVIK AB SDVKY SKF AB SKFRY TEXTRON INC TXT US BANCORP USB WIPRO LTD-ADR WIT
- ADTRAN INC ADTN ALCOA CORP AA BANCORPSOUTH BK BXS CATHAY GENL BCP CATY CHOICE PPT REIT CHP COHEN&STRS INC CNS CROWN CASTLE CCI CROWN HLDGS INC CCK EAGLE BCP INC EGBN EBAY INC EBAY GREAT SOUTH BCP GSBC LIMELIGHT NETWK LLNW NETFLIX INC NFLX NVE CORP NVEC PERSEUS MINING PRU PLEXUS CORP PLXS PREFERRED BANK PFBC PZENA INVESTMNT PZN RLI CORP RLI SL GREEN REALTY SLG TEXAS CAP BCSHS TCBI TRISTATE CP HLD TSC TRIUMPH BANCORP TBK UMPQUA HLDGS CP UMPQ UTD RENTALS INC URI
Thursday July 18
- AB ELECTROLUX ELUXY ALLIANCE DATA ADS ALLY FINANCIAL ALLY ATL UNION BNCSH AUB BADGER METER BMI BB&T CORP BBT BLACKSTONE GRP BX BRYN MAWR BK CP BMTC CHART INDUSTRIE GTLS COUNTY BANCORP ICBK DANAHER CORP DHR DOVER CORP DOV EAST WEST BC EWBC GATX CORP GATX GENUINE PARTS GPC HOME BANCSHARES HOMB HONEYWELL INTL HON INSTEEL INDS IIIN M&T BANK CORP MTB MORGAN STANLEY MS NUCOR CORP NUE PETROLEUM GEO PGSVY PHILIP MORRIS PM POOL CORP POOL PPG INDS INC PPG S&T BANCORP INC STBA SANDY SPRING SASR SAP SE SAP SNAP-ON INC SNA SONOCO PRODUCTS SON SUNTRUST BKS STI UNION PAC CORP UNP UNITEDHEALTH GP UNH VOLVO AB-B VLVLY WEBSTER FINL CP WBS
- AEHR TEST SYS AEHR BANK OZK OZK BRIGHT SCHL-ADR BEDU CAPITAL ONE FIN COF CHEWY INC CHWY CROWDSTRIKE HLD CRWD E TRADE FINL CP ETFC EXPONENT INC EXPO FIRST FIN BC-OH FFBC GLACIER BANCORP GBCI INDEP BK MASS INDB INTUITIVE SURG ISRG MICROSOFT CORP MSFT MILLICOM INTL TIGO PEOPLES UTD FIN PBCT RESOURCES CNCTN RECN SKECHERS USA-A SKX WEST FRASER TBR WFT WESTERN ALLIANC WAL
Friday July 19
- AMER EXPRESS CO AXP AUTOLIV INC ALV BANCO LATINOAME BLX BLACKROCK INC BLK CITIZENS FIN GP CFG CLEVELAND-CLIFF CLF GENTEX CORP GNTX IBERIABANK CORP IBKC KANSAS CITY SOU KSU KINNEVIK AB ORD KNVKF MANPOWER INC WI MAN REGIONS FINL CP RF SCHLUMBERGER LT SLB SENSIENT TECH SXT STATE ST CORP STT SYNCHRONY FIN SYF
For More Earnings and estimates visit
Note these estimates and times are subject to change and for indication only. Trade and invest at your own risk.