Market Weekly: June 10 – June 16 2019

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FEAR NOT Brave Investors

China, Retail and Trade Wars

The Week That Was:

Tariffs, PMI , trade and jobs were the topics this week. A big miss on the US NFP number saw stocks leap higher in expectation of Fed rate cuts. We are back in the bad news is good cycle. After the close POTUS announced a deal with Mexico with no tariffs, immigration help and the buying of American agriculture. The Euro and Australian dollar both finished on strong highs after the RBA and ECB meetings combined with falling U.S. yields. Crude oil recovered about $4 off its lows but poor old natty continued it’s freefall as did copper. Gold meanwhile is having it’s best run for a while. Household wealth numbers saw Americans back to record highs after December’s stock market swoon.

The play where The US combined tariffs with immigration policy for Mexico will signal deal making and intention ahead of the G-20 for the EU and China in trade deals.China seems to think not.  but perhaps they blink now? Mexico is America’s second largest trade partner, this deal removes the hidden cost of uncertainty that lurks, A quick remedy here was crucial, and we got it.

The Fed is now witness to a situation where they are not only likely to lower rates but more than they would like. From last week “Here is a sobering thought 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.”

China for its part issued a white paper on trade last weekend. Then we got the US and Mexico actually doing a deal. 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? Rare earth bans from China continues to gather headlines BUT should be noted that China does need that business also.

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 decision on the China and EU trade wars, 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 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. Bac on China, this week we get Chinese foreign trade, money supply,  consumer prices, retail sales, industrial production and fixed asset investment this week. In Japan we get GDP, foreign trade in April.  On Saturday, G-20 finance ministers meet in Fukuoka, Japan, where US Treasury Secretary Steve Mnuchin is expected to meet with his Chinese counterpart. In the US we get inflation and retail sales reports. In the UK we have manufacturing and employment reports.  Switzerland meets on rates Thursday.

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 16 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 Amgen, Beyond Meat, Box Inc. Brown-Forman, Campbell Soup; CVS Health, Gamestop; J.M. Smucker, Salesforce, Tiffany & Co. and Zoom Video. This week we get Broadcom, Dave & Buster’s, HD Suply, Lululemon, RH and Thor Industries reporting.

-comment section below data-

Geopolitical Tinderbox Radar

Last Week’s Big Stories

• US Creates Just 75,000 New Jobs in April, Unemployment Lowest in 49 Years
• American Household Wealth Grows $2.19 Trillion to New Record
• Into The Vortex – EIA Reports Build of +119 Bcf in Natural Gas Storage
• U.S. Trade Deficit Rises Again With China As Exports Worst Since Jan 2016
• ECB Leaves Rates Unchanged As Expected, Prices New TLTRO at MRO+10bps
• Australian Trade Surplus Near Record Boosted By Iron Ore Exports
• Ford Chinese JV Antitrust Violations Fine in China Trade War Tit For Tat
• Around The Barrel – Crude Oil, Gasoline and Distillates Largest Build Since 1990
• Australian Growth Rate 0.4%, Exports The Bright Spot
• Fed Chair Powell Says With Trade Tensions Will Act As Appropriate to Sustain the Expansion
• RBA Cuts Rate by 25 bps to 1.25% Record Low to Support Jobs Growth
• US Manufacturing Contracts More in May Both ISM and Markit Report
• U.K. Manufacturing Sector Contracts Sharply After Brexit Stockpiling
• Ends Japanese Japan Manufacturing Output Fall Continues With Weak Demand
• China Manufacturing Falls Again in May Led by Lower Export Orders
• Confrontational China Says If U.S. wants to talk, We Will Keep Door Open

The Week That Was – Last Weeks Recap

Earnings

• Gamestop Plunges 40% After OP Sales Miss and Cancels Dividend
• Salesforce Beats Earnings And Raises CRM Guidance

Stock Markets

Biggest Stock Winners and Losers Last Week*

Which Stocks Moved US ETF’s Last Week

US Stock Indices Performance

S&P 500

The $SPX stopped just under the b or ii and +2/8. The index blew off the ABC through tenkan and Kijun meaning impulse. From here completed ABC and new 5 wave either X or i, alternative is recent low abc of A. The chikou, Cloud, ATH resistance. Use your 240 for guidance there.

On the weekly we see the previous high fail near +2/8 down in 3 waves to the cloud and then impulse higher. We closed over Tenkan W Clearer here the wave alts we asked on the daily.and not larger fibs.

Apple $AAPL

Amazon $AMZN

Fixed Interest

10 Year Treasury Note

Energy and Commodities

US Crude Oil (WTI)

WTI reversed hard through the 61.8% Fib after breaking down after retesting the cloud and getting the ‘kiss of death’ on the Tenkan/kijun touch.bThe Daily ABC,bB or ii)bbroke with impulse testing the breakup level Feb.bBoth the Tenkan and Kijun have flattened above.

WTI spat hard to close the week at the weekly Kijun. Stil finished the week under the 50wma (green) and Tenkan, was rare to see Kijun Sen (pink) penetrated with chikou overshoot – so we got the expected  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 through 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. Continues until upside goes.

Natural Gas closed back under the prev 100% also the 2017-18 low has continued to dribble lower. Upside resistance heavy with Tenkan and previous breaks proving too strong. When do the doldrums end?

Baltic Dry Index (BDI)  

Currency Markets

Australian Dollar – AUDUSD

The Aussie dollar continued higher after showed life at the end of last week with the chikou and the Tenkan flattening above. AUD got back into range of 1/8 to 3/8 Murrey Math. $AUDUD closed right at tenkan trying to turn through Kijun 

New Zealand Dollar – NZDUSD

The Kiwi motored after reversed higher at the end of last week in a 1-2pattern. #NZD is over the Kijun with impulse and above the previous daily channel closing in the cloud. Key was the tenkan and the Murrey Math 4/8 bust.

Canadian Dollar – USDCAD

The Loonie continues in its weekly channel with the USDCAD touching the upper band to sell off hard, accelerating as Kijun and Tenkan crossed as it went through cloud, breaking channel and cloud base which are now resistance. Kijun flattened at Tenkan. 

Euro – EURUSD

The Euro Weekly broke out of the bull flag that has been forming since Septembet last year with impulse to run into the Kijun.   If we do get a rally over Kijun to cloud base Adam’s Theory should apply.

EuroPound – EURGBP

Nothing new here .. EURGBP locked in the channel with the recent May resignation putting it back to the mean. Brexit channel 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 aided by falling US yields.  We are back testing the February break up which conicided with risk on Above us is flattening cloud, tenkan tenkan(orange) and Kijun (pink) be wary of a reversal.

Mexican Peso USDMXN

The Mexican peso in the big picture had been sideways for a LONG time under the cloud, the Mexican tariff saga causing weakness with the rest of the emerging markets. With the deal done after the close watch Kijun, tenkan cloud as support with the Weekly 5/8 Murrey Math resistance.

Turkish Lire USDTRY

The Turkish Lire  after completing the 8/8 move reversed in an ABC, accelerating through the Tenkan/Kijun crossover to restest the cloud. bounced back to tenkan, which is now resistance.  

Bitcoin

Bitcoinback trading orderly after spitting +2/8 restested +8/8 and Kijun confuence.  Use your MM rules as the algos control the herd here with Tenkan and weekly highs your guides.. Support is the cloud, be wary of sharp ABC, 1-2 moves.

The Week Ahead

Key US Economic and Central Bank Events This Week

Sun June 9, 2019

• 19:50 JPY Adjusted Current Account
• 19:50 JPY Bank Lending (YoY) (May)
• 19:50 JPY GDP (QoQ) (Q1)
• 22:00 CNY Exports (YoY) (May)
• 22:00 CNY Trade Balance (USD)

Mon June 10 2019

• All Day Holiday Australia – Queen’s Birthday
• All Day Holiday Switzerland – Whit Monday
• All Day Holiday Germany – Whit Monday
• 01:00 JPY Economy Watchers Current Index (May)
• 03:00 CNY FDI
• 04:00 EUR Italian Industrial Production (MoM) (Apr)
• 04:30 GBP Construction Output (MoM) (Apr)
• 04:30 GBP GDP (MoM)
• 04:30 GBP Industrial Production (MoM) (Apr)
• 04:30 GBP Trade Balance (Apr)
• 04:30 EUR Sentix Investor Confidence (Jun)
• 06:14 CNY Imports (YoY) (May)
• 07:30 BRL BCB Focus Market Readout
• 08:15 CAD Housing Starts (May)
• 08:30 CAD Building Permits (MoM) (Apr)
• 09:00 GBP NIESR GDP Estimate
• 09:00 GBP NIESR Monthly GDP Tracker
• 10:00 USD CB Employment Trends Index (May)
• 10:00 USD JOLTs Job Openings (Apr)
• 11:30 USD 3-Month Bill Auction
• 11:30 USD 6-Month Bill Auction
• 13:00 GBP BoE MPC Member Saunders Speaks
• 18:45 NZD Manufacturing Sales Volume (QoQ) (Q1)
• 19:50 JPY M2 Money Stock (YoY)
• 21:30 AUD NAB Business Confidence (May)
• 21:30 AUD NAB Business Survey (May)

Tues June 11 2019

• 02:00 JPY Machine Tool Orders (YoY)
• 04:30 GBP Average Earnings
• 04:30 GBP Employment Change
• Tentative CNY M2 Money Stock (YoY)
• Tentative CNY New Loans
• 04:30 EUR Sentix Investor Confidence (Jun)
• 06:00 USD NFIB Small Business Optimism (May)
• 08:30 USD PPI (MoM) (May)
• 08:55 USD Redbook (MoM)
• 10:00 USD IBD/TIPP Economic Optimism
• 12:00 USD WASDE Report
• 13:00 USD 3-Year Note Auction
• 17:30 USD API Weekly Crude Oil Stock
• 18:45 NZD Electronic Card Retail Sales (MoM) (May)
• 19:00 KRW Unemployment Rate (May)
• 19:25 AUD RBA Assist Gov Kent Speaks
• 19:50 JPY Core Machinery Orders (MoM) (Apr)
• 19:50 JPY PPI (MoM) (May)
• 20:30 AUD Westpac Consumer Sentiment (Jun)
• 21:30 CNY CPI (MoM) (May)
• 21:30 CNY PPI (YoY) (May)
• 23:00 KRW M2 Money supply (Apr)

Wed June 12 2019

• All Day Holiday Russia – Russia Day
• 01:30 EUR French Non-Farm Payrolls (QoQ)
• 03:00 EUR Spanish CPI (MoM) (May)
• 03:00 EUR Spanish HICP (MoM) (May)
• 04:15 EUR ECB President Draghi Speaks
• 05:00 AUD RBA Assist Gov Ellis Speaks
• 05:00 EUR ECB’s De Guindos Speaks
• 05:40 EUR German 10-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 CPI (MoM) (May)
• 08:30 USD Real Earnings (MoM) (May)
• 10:30 USD Crude Oil Inventories
• 11:00 USD Cleveland CPI (MoM) (May)
• 13:00 USD 10-Year Note Auction
• 14:00 USD Federal Budget Balance (May)
• 19:01 GBP RICS House Price Balance (May)
• 19:50 JPY BSI Large Manufacturing Conditions (Q2)
• 21:00 AUD MI Inflation Expectations
• 21:30 AUD Employment (May)
• 23:35 JPY 30-Year JGB Auction

Thur June 13 2019

• 00:30 JPY Tertiary Industry Activity Index (MoM)
• 01:45 CHF SECO Economic Forecasts
• 02:00 EUR German CPI (MoM) (May)
• 02:00 EUR German HICP (MoM) (May)
• 02:30 CHF PPI (MoM) (May)
• 03:30 CHF SNB Interest Rate Decision
• 03:30 CHF SNB Monetary Policy Assessment
• 04:00 EUR Italian Quarterly Unemployment Rate
• 04:00 CHF SNB Press Conference
• 05:00 EUR Industrial Production (MoM) (Apr)
• 05:30 ZAR Gold Production (YoY) (Apr)
• 05:30 ZAR Mining Production (Apr)
• Tentative EUR Eurogroup Meetings
• 07:00 USD OPEC Monthly Report
• 08:30 USD Continuing Jobless Claims
• 08:30 USD Initial Jobless Claims
• 08:30 USD Jobless Claims 4-Week Avg.
• 08:30 USD Export Price Index (MoM) (May)
• 08:30 USD Import Price Index (MoM) (May)
• 08:30 CAD New Housing Price Index (MoM) (Apr)
• 10:30 USD Natural Gas Storage
• 11:30 USD 4-Week Bill Auction
• 11:30 USD 8-Week Bill Auction
• 13:00 USD 30-Year Bond Auction
• 17:00 KRW Export Price Index (YoY) (May)
• 17:00 KRW Import Price Index (YoY) (May)
• 18:30 NZD Business NZ PMI (May)
• 18:45 NZD FPI (MoM) (May)
• 22:00 CNY Fixed Asset Investment (YoY) (May)
• 22:00 CNY Industrial Production (YoY) (May)
• 22:00 CNY Retail Sales (YoY) (May)

Friday June 14, 2019

• 00:30 JPY Capacity Utilization (MoM) (Apr)
• 00:30 JPY Industrial Production (MoM) (Apr)
• 02:00 EUR German WPI (MoM) (May)
• 02:45 EUR French CPI (MoM) (May)
• 02:45 EUR French HICP (MoM) (May)
• 04:00 USD IEA Monthly Report
• 04:00 EUR Italian Industrial New Orders (MoM) (Apr)
• 04:00 EUR Italian Industrial Sales (MoM) (Apr)
• 05:00 EUR Italian CPI (MoM) (May)
• 05:00 EUR Italian HICP (MoM) (May)
• 05:00 CNY Outstanding Loan Growth (YoY)
• Tentative EUR EU Finance Ministers Meeting
• 08:30 USD Retail Sales (MoM) (May)
• 09:15 USD Capacity Utilization Rate (May)
• 09:15 USD Industrial Production (MoM) (May)
• 10:00 USD Business Inventories (MoM) (Apr)
• 10:00 USD Michigan Consumer Sentiment (Jun)
• 13:00 USD U.S. Baker Hughes Rig Count
• 13:00 USD U.S. Baker Hughes Total Rig Count
• 15:30 GBP CFTC speculative net positions

Notable Earnings Reports This Week

*EPS estimates via Morningstar where available

Monday June 9

Before Open

• THO Thor Industries UXIN Uxin Limited LOVE The Lovesac BBCP Concrete Pumpin SHLO Shiloh Industri CASY Caseys General IBN Icici Bank AMRS Amyris DPSGY Deutsche Post AACAY Aac Technologie LMNR Limoneira AXGT Axovant Science ANIX Anixa Bioscience KNCAY Konica Minolta

After Market Close

• CASY Caseys General AZRE Azure Power ASNA Ascena Retail LAKE Lakeland Indust

Tuesday June 10

Before Open

• CHS Chico’s Fas HDS Hd Supply HRB H&R Block JW.A John Wiley CBKC Christopher HDB Hdfc Bank JAPAY Japan Tob Inc VLVLY Ab Volvo SSKN Strata Skin SMMT Summit LIOPF Lion Corp

After Close

• PLAY Dave & Buster’s CPST Capstone Turbin TMDX Transmedics Grp

Wednesday June 11

Before Open

• KHC The Kraft Heinz ONCS Oncosec Medical UNICY Unicharm Corp NVZMY Novozymes A/s PLWTY Panalpina DSCSY Disco Corp HEXO Hexo Corp. CULP Culp, Inc.

After Close

• LULU Lululemon Athletica RH Restoration TLRD Tailored Brands NEPT Neptune Technol OXM Oxford Industries

Thursday June 12

Before Open

• ADBE Adobe Systems DLTH Duluth Holdings TUFN Tufin Software T LIVX Livexlive SECO Secoo Holding CRWS Crown Crafts NTDOY Nintendo Co. FNSR Finisar Corp BAYRY Bayer Aktienges IFNNY Infineon PHGUF Pharming SSNLF Samsung ROX Castle Brands HOCPY Hoya Corp. FUJHY Fuji Heavy COVTY Covestro Ag UBSFY Ubisoft YAMHF Yamaha Motor LXFT Luxoft Holding

After Close

• AVGO Broadcom Inc. UROV Urovant Scienc

Friday June 13

Before Open

• ICAGY FUJIY Fujifilm AMADY Amadeus It DNZOY Denso Corp. REPYY Repsol Sa SEOAY Stora Enso Oyj SEKEY Seiko Epson FRTAF Freenet Ag AVAL Grupo Aval TOPCF Topcon Corp UBA Urstadt VIRC Virco GWGH Gwg Holdings AEMD Aethlon Medical AKAOQ Achaogen GLPEY Galp Energia

After Close

• Nil

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.

Trade Smart!