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FEAR NOT Brave Investors
Uncertainty, Chaos and Trade Wars
The Week That Was:
The markets reached another level of volatilty and political scatter bombs this week that saw rates plummet, stocks continue to fall and oil and natural gas hit hard through a combination of ‘agressive US policy’. The US combined tariffs with immigration policy for Mexico. What rocked the markets was tariffs were taken off on Aluminum and steel just a week prior. There is the reality that this U.S. administration needs to restore trust with its trading and partners. China seems to think not. The flip side is, does the aggressive policy shifts scare countries into trade deals to avoid a full blown recession? The one thing keeping the bull going above all else is consumer and investor confidence, this is based on certainty and of course good old fashioned greed. The otherside of that coin is uncertainty and fear. Mexico is the country’s second largest trade partner, and the duties on imports could reportedly cost U.S. consumers at least $18.6 billion. It is the hidden cost of uncertainty that lurks, A quick remedy here is crucial.
The Fed is now witness to a situation where they are not only likely to lower rates but more than they would like. Whether this is a huge game of chicken by POTUS we will see, who blinks first? What we do know there are real losses here, as we have warned multiple times about these ‘shooting from the hip’ policies but even more a US President talking up the US stock market. Now there are plenty of people to blame of course as the trade wars and surprise policy announcements have nothing to do with the nervous marketplace.
Here is a sobering thoght and perhaps the trade noise is genius and a huge distraction from the fact that of the 20 stocks in the Dow transport index, including airlines such as Delta Air Lines, rail operators like Union Pacific Corp and delivery companies FedEx Corp and United Parcel Service were underperforming, if not warning that the growth in the U.S. economy was starting to slow even before the trade negotiations started getting ugly. That said the spotlight is now on Mexico, China and EU trade and any positives were be seen as the boon the punter wants, but there is still much fluff to come out, either sideways or a sharp fall, That is how markets work.
China for its part is issuing a white paper on trade this weekend. We are now at the point where does this spiral out of control or do the two leaders starting working up to a deal prior to the G-20? Again crude oil fell over 5% in a day, we are now under the “sweet spot” for US producers, a huge employer and export earner. The mexican standoff does not help this sector either. Over in the UK outgoing PM May readies for her meeting with President Trump. Rare earth bans from China continues to gather headlines BUT should be noted that China does need that business also.
By week’s end the Dow had another dismal week, ad nauseum, This week again should 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 decision on the trade war, no decision on Brexit and earnings have been marked down a beat won’t be hard to beat and here we are (see what ya wanna see).
The Week Ahead
A big week for trade wars continues, we get manufacturing and service sector Purchasing Managers’ Index (PMI) out from around the world to help us see how things are falling, how much the trade wars have hurt domestically. With most analysts saying a US-China trade deal will remain out of reach regardless of whether the two countries’ leaders meet at the upcoming G-20 meeting in Osaka, Japan, on 28-29 June.
We have two key central bank meetings with the RBA and ECB meeting, Fed Chair Powell is also talking. We finish the week with jobs reports out of the US and Canada.
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 three 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 high US dollar means the Fragile 5 continue to shake. Argentina and Turkey are red letter risks, 12 weeks of losses in the last 15 have the Turkish lira sliding back toward six to the dollar, the level that set caused panic last year. 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 Abercrombie & Fitch, Burlington Stores, Canada Goose, Costco, Designer Brands, Dick’s Sporting Goods, Dollar Tree, Gap, Calvin Klein parent PVH and Ulta Beauty. This week we get Amgen, Beyond Meat, Box Inc. Brown-Forman, Campbell Soup; CVS Health, J.M. Smucker, Salesforce, Tiffany & Co. and Zoom Video.
-comment section below data-
Geopolitical Tinderbox Radar
- U.S. Add 3 Oil Rigs, Still 88 Rigs Since Cycle High
- Around The Barrel – Crude Oil and Gasoline Outlook
- Into The Vortex – EIA Natural Gas Storage Outlook
- Trade War Escalates – Biggest Strategic Mistake Made by US Since Founding
- U.S. Puts 5% Tariff on Mexico With Threat of 25% Tied to Illegal Immigration
- Around The Barrel – Small Crude Oil Inventory Draw With Production Back at Record Highs
- Into The Vortex – EIA Reports Build of +114 Bcf in Natural Gas Storage
- Fitch Sees 2019 Australian GDP at 2.0% lowest since 2008-2009
- Global Financial Crisis No-Deal Brexit More Likely says Fitch
- After European Elections Bank of Canada Hold Interest Rate at 1.75% Says Oil Sector Beginning To Recover
- Texas Manufacturing Activity And New Orders Slide With Energy Prices
- Italian Debt More Than Twice EU limit, Risk EU Imposes $4 Billion Penalty
The Week That Was – Last Weeks Recap
Biggest Stock Winners and Losers Last Week*
Which Stocks Moved US ETF’s Last Week
US Stock Indices Performance
The $SPX continued lower after the tenkan touch gave it momentum through the daily cloud again after the recent ATH. The cloud and recent low are now resistance. The chikou and near Fibs, breaks support. Question is an A Completing, ABC complete or a 4 of (i) – use your 240 for guidance there.
On the weekly we see the previous high fail near +2/8 We had the fall, spat back above the weekly Tenkan and collapsed into the weekly cloud. Clearer here the wave alts we asked on the daily.and not larger fibs.
10 Year Treasury Note
Energy and Commodities
US Crude Oil (WTI)
Volatilty increased as WTIcontinued to break down after retesting the cloud and getting the ‘kiss of death’ on the Tenkan/kijun touch. The Daily ABC B or ii) broke with impulse testing the breakup level Feb. Note the acceleration after the kiss of death Note the Adams theory in the last two spits. Energy came from coiling between the 50dma and the Tenkan and channel.
WTI on the weekly cloud came off after touching the cloud twist, signifying all in – finished the week under the 50wma (green) and Tekan, rare to see Kijun Sen (pink) penetrated with chikou overshoot – so expect a retest there to bring chikou back in balance (blue) – watch Murrey confluence with the cloud acting as resistance.
US Natural Gas (Henry Hub)
Natural Gas pushed through the bottom of it’s tight range now testing the previous 100% or the 2017-18 low and -3/8 Murrey Math after came off the 50dma and Kijun and Tenkan crossover and as we offered at some point pressure gives way. Watch for a spit.
Natural Gas since closed back under the prev 100% also the 2017-18 low withupside resistance heavy with Tenkan and previous breaks proving too strong. When do the doldrums end?
Baltic Dry Index (BDI)
Australian Dollar – AUDUSD
The Aussie dollar showed life at the end of the week with the chikou and the Tenkan flattening above.AUD trying to get back into the range of 1/8 to 3/8 Murrey Math. $AUD got a boost from Rare Earths and also Future China orders to stockpile in commodities.
New Zealand Dollar – NZDUSD
The kiwi reversed higher at the end of the week in a 1-2pattern. #NZD is over ver the Tenkan with impulse and above is the previous daily channel, key is the tenkan and the Murrey Math 4/8
Canadian Dollar – USDCAD
The Loonie continues in its weekly channel touching the upper band. #CAD sits above the tenkan (orange) on the downside and the Murray Math 3/8 , from here tenkan and break points. The Kijun flattened at the Tenkan. Manic oil influenced price this week.
Euro – EURUSD
The Euro Weekly remains in the channel and potential bull flag under the tenkan Again we now evaulate if the previous spit reversal after breaking the highlighted Fib was conclusive. If we do get a rally over Tenkan Adam’s Theory should apply.
EuroPound – EURGBP
EURGBP locked in the channel with the recent May resignation putting it back to the mean. The channel that is Brexit closed over the Kijun as the EURUSD component held the channel, back testing the cloud. With all the politics the channel remains valid for now.
Japanese Yen – USDJPY
The dollar yen again led with for risk, geopolitical and market. The daily gives us a clearer look of what happened on the weekly after it spat the previous highs at a time when the USD index was making significant highs, divergence between the Yen and other currencies. Above us is tenkan tenkan(orange) which held and the effective double bottom from Mar/Dec 2018 is below under the daily cloud. The weekly cloud and pennant break (blue) the range.
Mexican Peso (USDMXN)
The Mexican peso in the big picture has been sideways for a LONG time under the cloud, MXN soft with the rest of the emerging markets closing near the tenkan in the USDMXN with the Weekly 5/8 Murrey Math resistance.
Turkish Lire (USDTRY)
The Turkish Lire despite the move still sits above the tenkan above the +3/8 Murrey Math and 6.05 USDTRY. We watch this develop, a right shoulder for a sharp ABC or another 1-2?
Bitcoinback through breakdown from Dec (red) above the pennant and the daily tenkan after flirting with 1-8 Murrey Math grid. Is this a C Wave playing out or something larger higher? Use your MM rules as the algos control the herd here with Tenkan and weekly highs your guides..
The Week Ahead
Key US Economic and Central Bank Events This Week
Sun June 2, 2019
- 18:30 AUD AIG Manufacturing Index (May)
- 19:00 AUD Manufacturing PMI
- 19:50 JPY Capital Spending (YoY)
- 20:30 KRW Nikkei Manufacturing PMI (May)
- 20:30 JPY Manufacturing PMI (May)
- 21:00 AUD MI Inflation Gauge (MoM)
- 21:30 AUD ANZ Job Advertisements (MoM)
- 21:30 AUD Business inventories (MoM) (Q1)
- 21:30 AUD Company Gross Operating Profits (QoQ) (Q1)
- 21:30 AUD Company Profits Pre-Tax (QoQ) (Q1)
- 21:45 CNY Caixin Manufacturing PMI (May)
Mon June 3 2019
- All Day Holiday New Zealand – Queen’s Birthday
- 01:00 INR Nikkei Markit Manufacturing PMI (May)
- 02:30 CHF CPI (MoM) (May)
- 02:30 AUD Commodity Prices (YoY)
- 03:15 EUR Spanish Manufacturing PMI (May)
- 03:30 CHF SVME PMI (May)
- 03:45 EUR Italian Manufacturing PMI (May)
- 03:50 EUR French Manufacturing PMI (May)
- 03:55 EUR German Manufacturing PMI (May)
- 04:00 EUR Manufacturing PMI (May)
- Tentative GBP Inflation Report Hearings
- 04:30 GBP Manufacturing PMI (May)
- 09:00 SGD Manufacturing PMI (May)
- 09:30 CAD RBC Manufacturing PMI (May)
- 09:45 USD Manufacturing PMI (May)
- 10:00 USD Construction Spending (MoM) (Apr)
- 10:00 USD ISM Manufacturing PMI (May)
- 11:30 USD 3-Month Bill Auction
- 11:30 USD 6-Month Bill Auction
- 17:00 USD Total Vehicle Sales
- 18:45 NZD Terms of Trade Index (QoQ) (Q1)
- 19:00 KRW CPI (MoM) (May)
- 19:00 KRW GDP (QoQ) (Q1)
- 19:01 GBP BRC Retail Sales Monitor (YoY) (May)
- 19:50 JPY Capital Spending (YoY) (Q1)
- 21:30 AUD Current Account (Q1)
- 21:30 AUD Net Exports Contribution (Q1)
- 21:30 AUD Retail Sales (MoM) (Apr)
- 23:35 JPY 10-Year JGB Auction
Tues June 4 2019
- 00:30 AUD RBA Interest Rate Decision (Jun)
- 00:30 AUD RBA Rate Statement
- 02:45 EUR French Government Budget Balance (Apr)
- 03:00 EUR Spanish Unemployment Change
- 04:00 EUR Italian Monthly Unemployment Rate (Apr)
- 04:30 GBP Construction PMI (May)
- 05:00 EUR Core CPI (YoY) (May)
- 05:00 EUR CPI (YoY) (May)
- 05:00 EUR Unemployment Rate (Apr)
- 05:20 AUD RBA Governor Lowe Speaks
- 08:55 USD Redbook (MoM)
- 09:45 USD Fed Chair Powell Speaks
- 09:45 USD ISM – NY Business Conditions (May)
- 10:00 USD Cap Goods Ship Non Defense Ex Air (MoM)
- 10:00 USD Factory Orders (MoM) (Apr)
- Tentative NZD GlobalDairyTrade Price Index
- Tentative GBP UK Parliament vote on Brexit deal
- 17:30 USD API Weekly Crude Oil Stock
- 18:30 AUD AIG Services Index (May)
- 19:00 KRW Current Account (Apr)
- 19:00 AUD Services PMI
- 19:01 GBP BRC Retail Sales Monitor (YoY) (May)
- 20:30 HKD Manufacturing PMI (May)
- 21:30 AUD GDP (QoQ) (Q1)
- 21:30 AUD RBA Chart Pack Release
- 21:45 CNY Caixin Services PMI (May)
Wed June 5 2019
- All Day Holiday Singapore – Hari Raya Puasa
- All Day Holiday India – Eid-Ul-Fitr
- 03:00 EUR Spanish Industrial Production (YoY) (Apr)
- 03:15 EUR Spanish Services PMI (May)
- 03:45 EUR Italian Services PMI (May)
- 03:50 EUR French Markit Composite PMI (May)
- 03:50 EUR French Services PMI (May)
- 03:55 EUR German Composite PMI (May)
- 03:55 EUR German Services PMI (May)
- 04:00 EUR Markit Composite PMI (May)
- 04:00 EUR Services PMI (May)
- 04:30 GBP Services PMI (May)
- 05:00 EUR PPI (MoM) (Apr)
- 05:00 EUR Retail Sales (MoM) (Apr)
- 06:15 EUR Spanish Consumer Confidence
- 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 (May)
- 08:30 CAD Labor Productivity (QoQ) (Q1)
- 09:45 USD FOMC Member Clarida Speaks
- 09:45 USD Markit Composite PMI (May)
- 09:45 USD Services PMI (May)
- 10:00 USD ISM Non-Manufacturing PMI (May)
- 10:30 USD Crude Oil Inventories
- 11:00 USD FOMC Member Bostic Speaks
- 14:00 USD Beige Book
- 19:50 JPY Foreign Bonds Buying
- 19:50 JPY Foreign Investments in Japanese Stocks
- 21:00 NZD ANZ Commodity Price Index (MoM)
- 21:30 AUD Trade Balance (Apr)
Thur June 6 2019
- All Day Holiday South Korea – Memorial Day
- 02:00 EUR German Factory Orders (MoM) (Apr)
- 04:30 HKD Foreign Reserves (USD)
- 05:00 EUR Employment Change (QoQ) (Q1)
- 05:00 EUR GDP (QoQ) (Q1)
- 07:30 USD Challenger Job Cuts (May)
- 07:45 EUR ECB Monetary Policy Statement
- 07:45 EUR ECB Interest Rate Decision (Jun)
- 08:30 USD Trade Balance (Apr)
- 08:30 USD Unit Labor Costs (QoQ) (Q1)
- 08:30 CAD Trade Balance (Apr)
- 08:30 EUR ECB Press Conference
- 08:30 USD Continuing Jobless Claims
- 08:30 USD Initial Jobless Claims
- 08:30 USD Jobless Claims 4-Week Avg.
- 10:00 CAD Ivey PMI n.s.a (May)
- 10:00 CAD Ivey PMI (May)
- 10:30 USD Natural Gas Storage
- 11:30 USD 4-Week Bill Auction
- 11:30 USD 8-Week Bill Auction
- 18:30 AUD AIG Construction Index (May)
- 19:30 JPY Household Spending (MoM) (Apr)
- 19:50 JPY Foreign Reserves (USD)
- 21:30 AUD Home Loans (MoM) (Apr)
Friday June 7, 2019
- All Day Holiday Hong Kong – Tuen Ng Day
- All Day Holiday China – Tuen Ng Day
- 01:00 JPY Coincident Indicator (MoM) (Apr)
- 01:00 JPY Leading Index (MoM) (Apr)
- 01:45 CHF Unemployment Rate
- 02:00 EUR German Industrial Production (MoM) (Apr)
- 02:00 EUR German Trade Balance (Apr)
- 02:45 EUR French Current Account (Apr)
- 02:45 EUR French Industrial Production (MoM) (Apr)
- 02:45 EUR French Trade Balance (Apr)
- 03:30 GBP Halifax House Price Index (MoM) (May)
- 04:00 EUR Italian Retail Sales (MoM) (Apr)
- 04:00 CNY FX Reserves (USD)
- 04:30 GBP Inflation Expectations
- 05:00 SGD Foreign Reserves USD (MoM) (May)
- 08:30 USD Average Hourly Earnings (MoM) (May)
- 08:30 USD Average Weekly Hours (May)
- 08:30 USD Government Payrolls (May)
- 08:30 USD Manufacturing Payrolls (May)
- 08:30 USD Nonfarm Payrolls (May)
- 08:30 USD Participation Rate (May)
- 08:30 USD Private Nonfarm Payrolls (May)
- 08:30 USD U6 Unemployment Rate (May)
- 08:30 USD Unemployment Rate (May)
- 08:30 CAD Capacity Utilization Rate (Q1)
- 08:30 CAD Employment Change (May)
- 08:30 CAD Full Employment Change (May)
- 08:30 CAD Part Time Employment Change (May)
- 08:30 CAD Participation Rate (May)
- 08:30 CAD Unemployment Rate (May)
- 10:00 USD Wholesale Inventories (MoM) (Apr)
- 13:00 USD U.S. Baker Hughes Total Rig Count
- 15:30 CFTC speculative net positions
Notable Earnings Reports This Week
*EPS estimates via Morningstar where available
Monday June 2
- FRAN Francesca’s Holdings Corp CTK CooTek (Cayman) IncSHLDQ Sears Holdings Corp CAL Caleres Inc EMES Emerge Energy Services LP USAT USA Technologies Inc QUES Quest Solution Inc
After Market Close
- BOX Box Inc After Market Close CALM Cal-Maine Foods Inc ROYT Pacific Coast Oil Trust CAL Caleres Inc COUP Coupa Software Inc ESES Eco-Stim Energy Solutions Inc MLAB Mesa Laboratories Inc WAGE WageWorks Inc
Tuesday June 3
- TIF Tiffany & Co. CBRL Cracker Barrel NAV Navistar Intern DCI Donaldson Compa CMD Cantel Medical OESX Orion Energy
- CRM Salesforce.com HQY Healthequity GME Gamestop Corp. AMBA Ambarella, Inc PVTL Pivotal Softwar GWRE Guidewire Softw NX Quanex Building USAT Usa Technologie OGEN Oragenics, Inc HDB Hdfc Bank Limit ONCE Spark Therapeut JAPAY Japan Tob VLVLY Ab Volvo RDSMY Koninklijke Dsm GNMSF Genmab A/s ZLNDY Zalando Se Adrs PORBF Pola Orbis LPL Lg Display Co TIER Tier Reit, Inc
Wednesday June 4
- AEO American Eagle. CPB Campbell Soup KHC The Kraft Heinz CMTL Comtech Telecom AMSC American Super DLNG Dynagas Lng UNICY Unicharm Corp NVZMY Novozymes A/s PLWTY Panalpina Welt DSCSY Disco Corp GGAL Grupo Financier UROV Urovant Science SHLO Shiloh Industries TOELY Tokyo Electronic
- CLDR Cloudera, Inc. FIVE Five Below, Inc SFIX Stitch Fix, Inc MDB Mongodb, Inc. UNFI United Natural SMAR Smartsheet ABM Abm Industries ESTC Elastic N.v. GEF Greif, Inc. REVG Rev Group, VISI Volt Information
Thursday June 5
- CIEN Ciena Corp SIG Signet Jewelers SJM The J. M. Smuckers HOME At Home Group MIK The Michaels SAIC Science Applic TNP Tsakos Energy KIRK Kirkland’s PD Pagerduty SEAC Seachange Inter FCEL Fuelcell Energy NTDOY Nintendo Co. BAYRY Bayer Aktienges IFNNY Infineon Techno ADXS Advaxis, Inc.
- OLLI Ollie’s Bargain. DOCU Docusign GES Guess?, MTN Vail Resorts DOMO Domo, Inc ZUMZ Zumiez PRSP Perspecta ZM Zoom Video BYND Beyond Meat
Friday June 6
- AKAOQ Achaogen, Inc. AMADY Amadeus It DNZOY Denso Corp. FRTAF Freenet Ag FUJIY Fujifilm GLPEY Galp Energia AVAL Grupo Aval GWGH Gwg Holdings ICAGY International RGSE Real Goods REPYY Repsol Sa SEKEY Seiko Epson SEOAY Stora Enso Oyj TOPCF Topcon Corp
For More Earnings and estimates visit Morningstar Earnings Here
Note these estimates and times are subject to change and for indication only. Trade and invest at your own risk.