Market Weekly: July 28 – August 3 2019

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FEAR NOT Brave Investors

Strange Time But remember The Joker once served as the Iranian ambassador for the United Nations.

Fed Rates, Stock Mania and No Fear

The Week That Was:

Stock markets showed no fear buying new highs, sated by the fear of missing out and eternal negative rates. Despite stronger US GDP and the chance of a 50 bp Fed Cut all but gone. A rational person would question why any cut? The ECB left rates unchanged as expected, the spectre of Deutschbank overhangs Europe as does the new British PM, Boris Johnson.The US said just enough for the algos on the trade war front between China and America. The testimony from Robert Mueller came and went, serving to cement the nation along partisan lines even more.

The market has put on their bets that the Fed could cut rates at its July 30-31 meeting — 25 or 50 basis points. Interest rate traders are betting that a rate cut of at least 25 basis points is a certainty, according to CME Group’s Fedwatch. They have priced in a 19.4% probability of a 50-basis point cut, which would drop the Fed’s target rate range to 1.75% to 2.00%. Earnings from Alphabet on Friday turned the indices back up. That is the pattern of this market just a few high delta stocks leading the way.

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

Another big week for potential volatility, led by trade wars and FOMC theories. We will get interest rate decisions from the Bank of Japan, US Federal Reserve and Bank of England, and the week with the US jobs report on Friday. In between we also get China’s private and government PMI reports.

Traders will be over thinking all data ahead of the Federal Reserve’s next meeting on 30-31 July. In the US we  

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. 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 more than a quarter of the S&P 500 companies reporting earnings. Names included Halliburton, TD Ameritrade Whirlpool, Coca-Cola Lockheed Martin, Biogen, Chipotle Mexican Grill, Harley Davidson, Boeing, Caterpillar, Facebook, Ford, Tesla, UPS, Northrop Grumman, FreeportMcMoran, Alphabet, Amazon.com, Intel, Starbucks, American Airlines, Mattel, Petrobras, McDonald’s, Twitter, Phillips 66 , Goodyear and Cabot Oil & Gas .

Last week more than a quarter of the S&P 500 companies report earnings.

We start off on Monday with Anadarko Beyond Meat Illumina Incyte and Transocean.

Tuesday Earnings Include: Encana Ralph Lauren Pfizer Proctor & Gamble Apple GrubHub Under Armour D.R. Horton Merck Altria ConocoPhillips Mastercard Electronic Arts Amgen

Wednesday Earnings Include:AMC Networks Garmin Humana Dominion Energy CME Group General Electric Hess Corp Western Digital Concho Resources Apache Occidental Petroleum Lam Research Whiting Qualcomm

Thursday Earnings include:Iron Mountain General Motors Intercontinental Exchange Yum! Brands Marathon Petroleum Verizon Clorox EOG Resources

Friday Earnings include: Sempra Energy LyondellBasell Seagate Exxon Mobil Chevron Noble Energy

-comment section below data-

Geopolitical Tinderbox Radar

Last Week’s Big Stories

• The U.S. Took Off 3 More Oil Rigs, – 8 in North Dakota
• US Q2 GDP 2.1% vs +1.8% Expected on Strong Consumption
• Into The Vortex – EIA Reports +36 Bcf Natural Gas Storage Build
• ECB Leaves Rates Unchanged As Expected, Will Examine QE Options
• U.S. Equity Deals Rebounded in Q2, Led by Uber and Lyft IPOs
• Around The Barrel – Crude Oil Draws Huge -10835k bbls on Hurricane Barry
• German Manufacturing Weakness Continues as PMI Hits Seven Low
• French Service Sector Expands While Manufacturing Falls Back Into Contraction
• Pipeline Gas Exports to Mexico Continue to Rise on Rising Demand
• Iron Ore Best Performing Commodity First Half of 2019, Cotton The Worse
• Chinese Aluminum Production Capacity Continues To Cap Prices 

The Week That Was – Last Weeks Recap

Earnings

• Twitter Earnings Rise With Strong User and Advertising Revenue Growth
• Cabot Oil & Gas Hit By Lowered Production and Natural Gas Prices
• Phillips 66 Record Midstream Earnings From Shale Oil Shipments
• Amazon Revenue Beats But Amazon Web Services Cloud Business Growth Misses
• Alphabet Earnings Beat With Strong Google Advertising and Cloud Revenue
• Tesla Larger Than Expected Loss But Cuts Cap Ex, Reaffirms Delivery Guidance
• Facebook Earnings Beat With Higher Advertising Revenue
• Caterpillar Earnings Hit By Tariffs and Lower Demand in China
• Harley Davidson Profit Lower But Positive Rider and Sales Forecasts
• Apple Looking To Buy Intel’s 5G Modem Chip Segment

Stock Markets

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 the ATH optimism. The small-cap Russell 2000 index had gained 16.6% for the year, which has underperformed the benchmark S&P 500 index which had risen over 19.5%. Whereas the DJIA, NDX and SPX have marked new records highs, it remained 9.7% below its August 2018 high.

S&P 500

The $SPX continues to trade off our daily speed lines, consolidated as Tenkan coiled higher after Kijun held amd Chikou caught up. Best alternatives are a (ii) or i-ii of iii of wave V higher. Speed and channel lines in tune with algo calibration curve.

On the weekly SPX closed above the triple top just on the upper band again. The ATH is over+2/8, the question is do we spit here or is this a reverting fractal per Adams Theory of the December move first? , Tenkan and 50 wma with a sharply climbing Kijun.

Apple $AAPL

Amazon $AMZN

Fixed Interest

10 Year Treasury Note

Energy and Commodities

US Crude Oil (WTI)

WTI finished inside the inner daily downtrend channel at the cloud base under tenkan,  50 dma and Kijun crossing,Failed to get back over Kijun even with ‘Iran tests’ and risk off mania. 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 under the weekly Kijun and 50wma (green) but over the Tenkan now as key resistance the channel, We hang  above the cloud base and chikou. Watch Murrey confluence with the cloud acting as support, failure.

US Natural Gas (Henry Hub)

Natural Gas reversed its break daily back throughTenkan (orange) after flattening Kijun was too much for a reversal. NG couldnt get above 50dma, 2017-18 low and -3/8 Murrey confluence. With record low futures longs the 1-2 set up in a bull flag has potential but flailing.

Natural Gas no change, maintained the downward channel thwarted by the tenkan and the 2017-18 lows. Use the channel as your guide with Tenkan upside resistance at week’s end. .

Baltic Dry Index (BDI)

Currency Markets

Australian Dollar – AUDUSD

The Aussie dollar sold off hard of the Kijun and daily cloud after the bounce off the bottom weekly channel and Murrey Math 0/8 gave up. above which it needs to clear into the cloud to get a meaningful bounce in. Closed at 50 dma

New Zealand Dollar – NZDUSD

The Kiwi rebound reversed at the 6/8 & Chikou confluence over the downward channel after breaking the top of the cloud only to close back at that cloud, break up line and 50 dma. The move accelerated after going back through the Tanken and Kijun.  Watch NZDJPY for Momentum shifts.

Canadian Dollar – USDCAD

Loonie bounced with USD from cloud and trend but still well under 50dma confluence with flat Tenkan above. Support is uptrend line and cloud base, Note downtrend line and cohesian with oil. Keep an eye on Tenkan and WTI control aspects.

Euro – EURUSD

Euro Weekly back testing lows after rejected by Kijun and Tenkan and back in the that had been forming since September last year. EUR telling us this is a larger pennant pattern or larger sideways dirge.

EuroPound – EURGBP

Nothing new here .. EURGBP inched it’s way up to the 50 wma & top of channel with Johnson as new PM seeing GBP weakened. Brexit channel closed over the Kijun & cloud. With Brexit the channel remains valid for now.

Japanese Yen – USDJPY

The dollar yen tried to rally but couldnt get over the channel but managed to close over the tenkan. Yen buying continued on the crosses, EURJPY and AUDJPY  Above us is a cloud twist

Mexican Peso USDMXN

Mexican peso continued to drift after the gap down to the trend line. Watch Kijun as its flattening and we are over tenkan under the cloud. USDMXN seems oblivious to the border crisis.

Turkish Lire USDTRY

The USD Turkish Lire repeated a test of the tenkan but failed and we see the Lire closing again around the downtrend formed since May. Above here is resistance all through the cloud to previous dollar uptrend 

Bitcoin

Bitcoin continues digesting rally 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 28, 2019

• 19:50 JPY Retail Sales (YoY) (Jun)

Monday, July 29, 2019

• 02:00 GBP Nationwide HPI (MoM)
• 03:00 EUR Spanish CPI (MoM)
• 03:00 EUR Spanish HICP (MoM)
• 03:00 EUR Spanish Retail Sales (YoY) (Jun)
• 04:00 EUR Italian PPI (MoM) (Jun)
• 04:30 GBP BoE Consumer Credit (Jun)
• 04:30 GBP Mortgage Lending (Jun)
• 09:00 EUR French 12-Month BTF Auction
• 10:30 USD Dallas Fed Mfg Business Index (Jul)
• 11:30 USD 3-Month Bill Auction
• 11:30 USD 6-Month Bill Auction
• 14:00 USD Loan Officer Survey
• 17:00 KRW Manufacturing BSI Index (Aug)
• 18:45 NZD Building Consents (MoM) (Jun)
• 19:30 JPY Unemployment Rate (Jun)
• 19:50 JPY Industrial Production (MoM) (Jun)
• 21:30 AUD Building Approvals (MoM) (Jun)
• 21:30 AUD Private House Approvals (Jun)
• Tentative JPY BoJ Monetary Policy Statement
• Tentative JPY BoJ Outlook Report (YoY)
• 23:00 JPY BoJ Interest Rate Decision

Tues July 30, 2019

• 01:30 EUR French GDP (QoQ) (Q2)
• 02:00 EUR German Import Price Index (MoM) (Jun)
• 02:00 EUR GfK German Consumer Climate (Aug)
• Tentative JPY BoJ Press Conference
• 02:45 EUR French Consumer Spending (MoM) (Jun)
• 02:45 EUR French Government Budget Balance (Jun)
• 03:00 CHF KOF Leading Indicators (Jul)
• 05:00 EUR Business and Consumer Survey (Jul)
• 05:00 EUR Business Climate (Jul)
• 05:00 EUR Consumer Confidence (Jul)
• 05:00 EUR Consumer Inflation Expectation (Jul)
• 05:00 EUR Selling Price Expectations (Jul)
• 05:00 EUR Services Sentiment (Jul)
• 05:00 EUR Industrial Sentiment (Jul)
• 05:45 EUR Italian 10-Year BTP Auction
• 08:00 EUR German CPI (MoM) (Jul)
• 08:00 EUR German HICP (MoM) (Jul)
• 08:30 USD Core PCE Price Index (MoM) (Jun)
• 08:30 USD Personal Income (MoM) (Jun)
• 08:30 USD Personal Spending (MoM) (Jun)
• 08:30 USD Real Personal Consumption (MoM) (Jun)
• 08:55 USD Redbook (MoM)
• 09:00 USD S&P/CS HPI Composite – 20 s.a. (MoM) (May)
• 10:00 USD CB Consumer Confidence (Jul)
• 10:00 USD Pending Home Sales (MoM) (Jun)
• 10:30 USD Dallas Fed Services Revenues (Jul)
• 10:30 USD Texas Services Sector Outlook (Jul)
• 16:30 USD API Weekly Crude Oil Stock
• 19:00 KRW Industrial Production (MoM) (Jun)
• 19:00 KRW Retail Sales (MoM)
• 19:00 KRW Service Sector Output (MoM) (Jun)
• 19:01 GBP GfK Consumer Confidence (Jul)
• 21:00 CNY Chinese Composite PMI (Jul)
• 21:00 CNY Manufacturing PMI (Jul)
• 21:00 CNY Non-Manufacturing PMI (Jul)
• 21:00 NZD ANZ Business Confidence (Jul)
• 21:00 NZD NBNZ Own Activity (Jul)
• 21:30 AUD CPI (QoQ) (Q2)
• 21:30 AUD Housing Credit (Jun)
• 21:30 AUD Private Sector Credit (MoM) (Jun)

Wednesday, July 31 2019

• 01:00 JPY Construction Orders (YoY)
• 01:00 JPY Household Confidence (Jul)
• 01:00 JPY Housing Starts (YoY) (Jun)
• 01:00 SGD Business Expectations (Q2)
• 02:00 GBP Nationwide HPI (MoM) (Jul)
• 02:00 EUR German Retail Sales (MoM) (Jun)
• 02:45 EUR French CPI (MoM)
• 02:45 EUR French HICP (MoM)
• 03:00 EUR Spanish GDP (QoQ) (Q2)
• 03:55 EUR German Unemployment Rate (Jul)
• 03:55 EUR German Unemployment (Jul)
• 04:00 EUR Italian Monthly Unemployment Rate (Jun)
• 04:00 CHF ZEW Expectations (Jul)
• 04:00 EUR Spanish Current account (May)
• 04:30 HKD GDP (QoQ)
• 05:00 EUR Italian CPI (MoM) (Jul)
• 05:00 EUR Italian HICP (MoM) (Jul)
• 05:00 EUR Core CPI (YoY)
• 05:00 EUR GDP (QoQ)
• 05:00 EUR HICP ex Energy & Food (YoY) (Jul)
• 05:00 EUR Unemployment Rate (Jun)
• 05:40 EUR German 10-Year Bund Auction
• 06:00 EUR Italian GDP (YoY) (Q2)
• 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
• 08:15 USD ADP Nonfarm Employment Change (Jul)
• 08:30 USD Employment Benefits (QoQ) (Q2)
• 08:30 USD Employment Cost Index (QoQ) (Q2)
• 08:30 USD Employment Wages (QoQ) (Q2)
• 08:30 CAD GDP (MoM) (May)
• 08:30 CAD IPPI (MoM) (Jun)
• 08:30 CAD RMPI (MoM) (Jun)
• 09:45 USD Chicago PMI (Jul)
• 10:30 USD Crude Oil Inventories
• 14:00 USD FOMC Statement
• 14:00 USD Fed Interest Rate Decision
• 14:30 USD FOMC Press Conference
• 18:30 AUD AIG Manufacturing Index (Jul)
• 19:00 KRW CPI (MoM) (Jul)
• 19:00 AUD Manufacturing PMI
• 20:00 KRW Trade Balance (Jul)
• 20:30 KRW Nikkei Manufacturing PMI (Jul)
• 20:30 JPY Manufacturing PMI (Jul)
• 21:00 AUD HIA New Home Sales (MoM)
• 21:30 AUD Export Price Index (QoQ) (Q2)
• 21:30 AUD Import Price Index (QoQ) (Q2)
• 21:30 JPY BOJ Deputy Governor Amamiya Speaks
• 21:45 CNY Caixin Manufacturing PMI (Jul)
• 23:45 JPY 10-Year JGB Auction

Thursday August 1, 2019

• All Day Holiday Switzerland – National Day
• 02:30 AUD Commodity Prices (YoY)
• 03:15 EUR Spanish Manufacturing PMI (Jul)
• 03:30 CHF SVME PMI (Jul)
• 03:45 EUR Italian Manufacturing PMI (Jul)
• 03:50 EUR French Manufacturing PMI (Jul)
• 03:55 EUR German Manufacturing PMI (Jul)
• 04:00 EUR Manufacturing PMI (Jul)
• 04:30 GBP Manufacturing PMI (Jul)
• 04:30 HKD Retail Sales (YoY) (Jun)
• 07:00 GBP BoE Inflation Report
• 07:00 GBP BoE QE Total (Aug)
• 07:00 GBP BoE Interest Rate Decision (Aug)
• 07:30 GBP BoE Gov Carney Speaks
• 07:30 USD Challenger Job Cuts (Jul)
• 08:30 USD Continuing Jobless Claims
• 08:30 USD Initial Jobless Claims
• 08:30 USD Jobless Claims 4-Week Avg.
• 09:30 CAD RBC Manufacturing PMI (Jul)
• 09:45 USD Manufacturing PMI (Jul)
• 10:00 USD Construction Spending (MoM) (Jun)
• 10:00 USD ISM Manufacturing Employment (Jul)
• 10:00 USD ISM Manufacturing PMI (Jul)
• 10:30 USD Natural Gas Storage
• 11:30 USD 4-Week Bill Auction
• 11:30 USD 8-Week Bill Auction
• 16:30 USD Total Vehicle Sales
• 19:50 JPY Monetary Base (YoY)
• 19:50 JPY Monetary Policy Meeting Minutes
• 21:30 AUD PPI (QoQ) (Q2)
• 21:30 AUD Retail Sales (MoM) (Jun)

Friday August 2, 2019

• 02:30 CHF CPI (MoM) (Jul) 
• 03:00 EUR Spanish Unemployment Change
• 03:30 CHF SVME PMI (Jul)
• 04:00 EUR Italian Industrial Production (MoM) (Jun)
• 04:30 GBP Construction PMI (Jul)
• 05:00 EUR Italian Retail Sales (MoM) (Jun)
• 05:00 EUR Retail Sales (MoM) (Jun)
• 08:30 USD Trade Balance (Jun)
• 08:30 USD Average Hourly Earnings (MoM) (Jul)
• 08:30 USD Average Weekly Hours (Jul)
• 08:30 USD Government Payrolls (Jul)
• 08:30 USD Manufacturing Payrolls (Jul)
• 08:30 USD Nonfarm Payrolls (Jul)
• 08:30 USD Participation Rate (Jul)
• 08:30 USD Private Nonfarm Payrolls (Jul)
• 08:30 USD U6 Unemployment Rate (Jul)
• 08:30 USD Unemployment Rate (Jul)
• 08:30 CAD Trade Balance (Jun)
• 09:00 SGD Manufacturing PMI (Jul)
• 09:45 USD ISM-New York Index (Jul)
• 10:00 USD Factory Orders (MoM) (Jun)
• 10:00 USD Michigan Consumer Sentiment (Jul)
• 13:00 USD U.S. Baker Hughes Oil & Gas Rig Count
• 15:30 USD CFTC speculative net positions

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Note these estimates and times are subject to change and for indication only. Trade and invest at your own risk.

Trade Smart!