The Bear Den by Shortside JonnyMarket Recap for the Week of February 22-26, 2021
Monday, February 22, 2021 – DIA 315.21 +.09%, QQQ 322.44 -2.59%, SPY 387.03 -.77%
The Chicago Fed National Activity Index came in far better than expected .66 v .40. Equity markets were focused on rising interest rates and the upcoming testimony by Fed chairman Powell on Tuesday. Big cap growth stocks got hit hard in the face of rising rates. The best sector on the day was energy (XLE) 47.78 +3.46% benefitting from the Texas freeze troubles. The worst was Technology (XLK) 133.05 -2.21%. Tesla was pounded (TSLA) 714.50 -8.55%, as was pandemic winner DocuSign (DOCU) 243.51 -8.16%. The tech carnage hit the Chinese internet names hard with heavy selling in JD.com (JD) 97.66 -7.95%. The bright spot was Cruise Lines which continued to benefit from improved COVID-19 trends; Royal Caribbean (RCL) 86.23 +9.33%, Norwegian Cruise Lines (NCLH) 28.56 +6.37%.
Tuesday, February 23 2021 – DIA 315.39 +.06%, QQQ 321.48 -.30% SPY 387.50 +.12%
The Housing Price Index came in slightly better than anticipated 1.1% v. 1.0%. The Case-Shiller Home Price Index came in stronger 10.1% v. 9.9% and up from the previous 9.2%. Fed Chairman Jerome Powell’s testimony calmed what had become an early morning trap door for equities, and by the end of the day, the market recovered with the Dow Jones and S&P 500 indices making back all of their losses. The tech-heavy Nasdaq 100 closed down but well off its lows of the day. Energy (XLE) 48.57 +1.65% once again led the S&P 500, while Consumer Discretionary (XLY) 164.95 -.66% was the laggard. Tesla (TSLA) 698.84 -2.19% recovered nicely from a -13.3% loss in the morning, appearing to trade in step with Bitcoin. The day’s disaster was Workhorse Group (WKHS) 16.465 – 47%! after losing a major contract with United Parcel Service. Crowdsource short squeeze play AMC Entertainment popped on renewed chatter (AMC) 7.70 +17.56%. The stock had peaked at 20.36 on January 27, then collapsed into the mid 5 dollar range.
Wednesday, February 24, 2021 –DIA 319.53 +1.31%, QQQ 324.13 +.82%, SPY 391.77 +1.10%
New Home Sales trounced expectations 923K v. 855K. Jerome Powell continued his 2nd day of testimony and reinforced his prior day’s assertion that the Federal Reserve would continue its asset purchase program for the foreseeable future. Equity markets continued the rally from Tuesday. The Dow Jones industrials hit a new high, led by Boeing (BA) 229.34 +8.12%. The stock tested its 20 day MA on Tuesday and has pivoted higher. Pandemic beneficiary Home Depot (HD) 259.97 -2.72% continues to consolidate after the 4th straight day of selling. Crowdsourced short squeeze plays GameStop surged (GME) 91.71 +103.9 % on the day, and AMC Entertainment (AMC) 9.09 +18.05 continued its recent spark. GameStop said its CFO would be resigning and all signs point to management being handled by the team from Chewy. (.com)
Thursday, February 25, 2021 – DIA 313.98 -1.74%, QQQ 312.83 -3.49%, SPY 382.33 -2.41%
Initial Jobless claims came better than expected but still elevated 730K v. 838K expected. (Texas power outage effect?) Durable Goods Orders for January came in strong at + 3.4% v. 1.1% expected. Markets got hit from the opening bell and turned into a route after the 7-year treasury auction disappointed. All sectors got hit hard with Consumer Discretionary (XLY) 160.48 -3.72% and Technology (XLK) 130.00 -3.5% leading to the downside. Defensive stocks fared best with Johnson & Johnson (JNJ) 162.14 +.10%, and Merck (MRK) 74.5 +.07% escaping the carnage. Moon shots on the day were ChromaDex Corporation (CDXC) 18.74 +92.4% (up on Nicotinamide Riboside, a COVID-19 treatment showing promise), Cardiac arrhythmia company Stereotaxis (STXS) 7.46% +32.27% beat on earnings and upbeat guidance.
Friday, February 26, 2021 – DIA 309.45 -1.44%, QQQ 314.14 +.42%, SPY 380.36 -.52%
Chicago Purchasing Managers Index was light 59.5 v. 61.1 expected. Michigan Consumer Sentiment was better than expected 76.8 v. 76.5. Personal income was slightly better +10% v. 9.5%, but spending was less than expected +2.4% v. 2.5%. The Markets were choppy all day and trying to gain direction. Technology (XLK) 130.69 +.53% finally stabilized and gained back some of Thursday’s losses. Energy (XLE) 48.15% -2.37% came under selling after a significant run. Home Depot (HD) 258.34 +1.21% an early pandemic favorite was up on the day but has underperformed on a relative strength basis since July. Salesforce.com (CRM) 216.5 -6.31 reported great earnings but tumbled after giving lower guidance due to the recent acquisition of Slack Technologies. Moon shot of the day was Select Medical Holdings (SEM) 31.20 +18.45%; the hospital and clinic operator reported earnings and revenue that blew away the consensus Street estimates.
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