Monday, July 26, 2021 – DIA 351.41 +.24%, QQQ 368.49 +.08%, SPY 441.02 +.25%, IWM 220.19 +.29%
New Home Sales came in much lower than expected at 676K v. 800K. Markets on balance consolidated gains from the prior week. Regulatory action out of China concerning the crackdown of the country’s online and in person educational services had a larger effect on China shares, as Alibaba Group (BABA) 191.76 -7.19, and Tencent (TCTZF) 60.1 -8.35% were hit hard. Interest rates moved lower during the trading session but stabilized by the end of the day with the 10-year note index (TNX) 12.76 -.35 declining. Travel & entertainment stocks continued to rebound and moved higher, with cruise lines Carnival (CCL) 23.16 +5.46%, Norwegian (NCLH) 26.02 +4.62%, and Royal Caribbean (RCL) 80.88 +4.07%, and lodging company Marriot (MAR) 142.49 +2.38% leading. Toymaker Hasbro (HAS) 103.72 +12.24% broke out after reporting a better than expected rebound in revenue and earnings. Communications company Twitter (TWTR) 68.69 -4.18% pulled back into the previous trading range from the prior week’s earnings-related advance. Chinese Bitcoin mining company Bit Digital Inc (BTBT) 8.87 +109.69% was the upside outlier on the day. The stock hit a high of 33 back on January 4th and has been in a steady decline since then.
Tuesday, July 27, 2021 – DIA 350.62 -.22%, QQQ 364.43 -1.10%, SPY 439.01 -.46%, IWM 217.62 -1.17%
Durable Goods Orders came in much weaker than expected at +.8% v. +2.1% est. Ex-transportation posted weak as well at +.3% v. +.8% est. As a result, US Treasuries rallied and interest rates fell as reflected in the 10-year note index (TNX) 12.34 -.42 decline. Utilities (XLU) 66.86 +1.72% was the top S&P 500 sector. Communication Services (XLC) 82.93 -1.19% was the laggard. Software and internet infrastructure firm F5 Networks (FFIV) 204.57 +6.20% beat earnings and revenue estimates and was upgraded by BofA securities from Neutral to Buy. IT technology firm Xerox (XRX) 24.81 +5.04% beat on earnings and revenues as well. US Physical Therapy (USPH) 119.50 +17.38% soared on optimism related to a regulatory filing stating that the company had seen sustained strength in patient volumes surpassing pre-COVID-19 levels. In M&A news, healthcare information services firm Inovalon Holdings (INOV) 36.95 +12.96% was reported to be in potential acquisition talks by Nordic Capital. On the downside, specialty semiconductor manufacturer SkyWater Technology (SKYT) 15.75 -45.43% gave second-quarter preliminary results estimates that are far below revenue and earnings expectations.
Wednesday, July 28, 2021 – DIA 349.36 -.36%, QQQ 365.83 +.38%, SPY 438.83 -.04%, IWM 220.82 +1.47%
No high-impact data was released on the day. It was 2nd and the final day of the FOMC meeting with no surprises. The lead sector on the day was Energy (XLE) 49.71 +.91% with Hess (HES) 77.49 +4.63%, and Marathon (MRO) 11.78 +3.61% outperforming. Consumer Staples (XLP) 71.04 -.86% was the laggard on the day with confectioner and snack maker Mondelez (MDLZ) 63.40 -2.81% reported in-line earnings on better than anticipated revenue, along with an improved sales outlook. China’s regulators clarified and appeared to reverse some of the rhetoric concerning the publicly traded online tutoring companies and tech sector, which benefited technology in general. Among other China companies NetEase (NTES) 100.14 +13.38%, JD.com (JD) 70.28 +8.51%, and Trip.com (TCOM) 27.99 +7.70% rebounded from the break in the china tech sector earlier in the week. On the downside, restaurant chain Cheesecake Factory (CAKE) 47.75 -13.20% released respectable comparable sales and earnings but still left investors unsatisfied.
Thursday, July 29, 2021 – DIA 350.82 +.42%, QQQ 366.48 +.18%, SPY 440.65 +.41%, IWM 222.52 +.77%
Gross Domestic Product came in at a robust +6.5% but much less than the +8.5% expected. The GDP Price index came in higher than expected at +6.1% v. 5.4%. Pending home sales showed a decline of -1.9% v. an anticipated increase of +.3%. Technology (XLK) 184.22 +1.13% was the best sector on the day, leading the NASDAQ 100, Align (ALGN) 676.98 +8.86%, Xilinx (XLNX) 147.25 +6.29%, and QUALCOMM (QCOM) 150.99 +6.00%, all three beat earnings estimates handily. The small caps as measured by the Russell 2000 (IWM) 222.52% +.77% performed best on the day as there was talk of a final infrastructure spending package finally passing in Congress. On the downside software as a service provider Citrix Systems (CTXS) 99.00 -13.57% reported better than expected earnings but revenues fell well short.
Friday, July 30, 2021 – DIA 349.48 -.38%, QQQ 364.57 -.52%, SPY 438.51 -.49%, IWM 221.05 -.66%
Personal income for June came in better than expected at +.1% v, -.3% expected. Personal expenditure came in healthier at +1% v. the +.7% expected. The Core Personal Expenditure price index for June was less than expected coming in at +.4% v. +.6%. The same for year over year +3.5% v. +3.7%. The markets were weak throughout the session as traders appeared to focus on the prior evening’s earnings and guidance from Amazon (AMZN) 3327.59 -7.56%. The company reported slowing revenue growth. Also weighing on the equity markets were the changing guidance by the CDC over COVID-19 and the new Delta variant concerns. Sector-wise Technology (XLY) 180.43 -2.06% fared worst on the day but there were upside standouts due to earnings surprises: Semiconductor equipment manufacturer KLA Corporation (KLAC) 348.16 +8.99% beat on earnings and revenue and gave a good outlook. Diabetes monitoring device manufacturer DexCom (DXCM) 515.51 +13.04% beat on earnings and revenue. Office team collaboration software company Atlassian (TEAM) 325.12 +21.86% beat street estimates handily and added 23K+ new customers. On the downside, internet content Pinterest (PINS) 58.90 -18.24 disappointed on user growth.
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