Monday, August 2, 2021 –DIA 348.35 -.32%, QQQ 364.6 +.01%, SPY 437.59 -.21%, IWM 219.95 -.50%
ISM Manufacturing PMI came in lower than expected at 59.5 v. 60.9. China exports showed signs of slowing. US government bond yields dropped with the 10-year Note Index (TNX) 11.74 -.65 (attributed to European and Asian buyers). The day exhibited more news on the COVID-19 Delta Variant and reinstated social gathering and mask guidelines. In a sign of defensive positioning and demand for higher yields, Utilities (XLU) 66.48 +.77% was the top S&P 500 sector on the day. Basic Materials (XLB) 83.00 -1.21% and Energy (XLE) 49.02 -.75% were the clear laggards as traders paired economically sensitive shares. Leading the S&P 500 on the day, information technology services company DXC Technology (DXC) 42.61 +6.58% beat on earnings and revenues. Network and Cloud security firm Fortinet (FTNT) 284.62 +4.55% beat on earnings and revenue hitting another all-time high. In biotech, former high flier Vaxart (VXRT) 7.99 +11.13% announced that the FDA had cleared its investigational new drug (IND) application for its oral coronavirus vaccine. In a case of selling the news, payment processor Global Payments (GPN) 171.79 -11.18% beat on top and bottom line and raised guidance. In a rare miss on earnings this season biotechnology firm TG Therapeutics (TGTX) 27.42 -21.63% missed on the top and bottom lines.
Tuesday, August 3, 2021 – DIA 351.09 +.79%, QQQ 366.81 +.61%, SPY 441.15 +.81%, IWM 220.86 +.41%
Factory Orders came in slightly better at +1.5% v. +1.48% expected. In a reversal from the day before Energy (XLE) 49.86 +1.71% led the S&P 500 followed by Healthcare (XLV) 134.17 +1.39%. Pioneer Resources (PXD) 153.51 +7.84% led the energy sector higher. Information technology services firm Gartner Inc. (IT) 293.67 +10.83% handily beat on revenue, earnings, and also raised guidance. In biotech, Arcturus Therapeutics (ARCT) 58.25 +68.06% exploded higher on news of the approval of the company’s clinical trial application (CTA) from the Vietnam Ministry of Health to advance ARTC-154 mRNA vaccine targeting SARS-CoV-2 Delta virus. Supplier to the virtual cable and video delivery industry, Harmonic (HLIT) 10.63 +23.23% beat on top and bottom-line results. On the downside, fiber and high tech laser supplier IPG Photonics (IPGP) 177.69 -18.30% missed on earnings and revenue estimates and guidance going forward disappointed. Chinese internet game producers continued to be volatile, with NetEase (NTES) 93.06 -11.41% down on continued regulatory pressure.
Wednesday, August 4, 2021 –DIA347.99 -.88%,QQQ 367.34 +.14%,SPY 438.98 -.49%,IWM 218.11 -1.25%
ADP Employment came in far less than expected at +330K jobs v. +695K expected (the number is highly volatile and not well correlated to Commerce department jobs report). The ISM Services Employment index showed expansion for the month of July coming in at 53.8 v. a contraction in the June period at 49.3. Equity markets traded mixed with weakness in small caps and large technology advancing on the day. Communication Services (XLC) 82.07 +.28% was the lead sector, while Energy Services (XLE) 48.51 -2.71% was the worst performer. In the Healthcare Sector (XLV) 133.60 -.42% Moderna (MRNA) 419.05 +8.42% advanced ahead of earnings and the news that a key vaccine candidate for respiratory syncytial virus (RSV) was given Fast Track Approval designation by the FDA. On the downside in healthcare, Amgen (AMGN) 228.31 -6.46% beat on earnings but lowered earnings guidance on the investor call. Pandemic/lockdown favorite Zoom (ZM) 400.58 +6.86% moved higher as traders returned to the shares as news of the Delta variant dominated news coverage. The shares have recently formed a low-level cup with handle formation. In earnings news, payroll and human resource management software firm Paycom (PAYC) 442.86 +10.70% beat analyst estimates. Healthcare facilities firm DaVita (DVA) 133.78 +8.63% beat on earnings and broke out to a new all-time high. On the downside, consumer spending analysis firm Cardlytics (CDLX) 84.26 -27.31% disappointed on top and bottom line failing to meet analyst estimates. The stock has been volatile and on the decline since February.
Thursday, August 5, 2021- DIA 350.61 +.75%, QQQ 369.67 +.63%, SPY 441.76 +.63%,IWM 222.03 +1.80%
Initial Jobless Claims were reported in line with expectations at 385K. The 10-Year note index (TNX) 12.17 +.33 rose. Equity markets were broadly higher on the day with small caps outperforming. As a result of the higher yields, Financials (XLF) 37.11 +1.31% was the best sector in the S&P500 index. Healthcare (XLV) 133.05 -.41% fared the worst. Travel & entertainment concerns American Airlines (AAL) 20.91+7.51%, Royal Caribbean (RCL) 78.10 +7.5%, Carnival Cruise (CCL) 22.55 +7.18%, and Norwegian Cruise (NCLH) 24.18 +6.99% all were standouts. In earnings news, gaming and hospitality firm Wynn Resorts (WYNN) 98.68 +8.33% beat on top and bottom lines. The company reported an adjusted loss but better than expected, and was upgraded by Citigroup to Buy from Neutral with a 120 target price. Regeneron (REGN) 602.47 +3.70% rose on a beat of top and bottom lines with 1B more than expected in revenue for the company’s COVID-19 treatment. On the downside, portable oxygen manufacturer Inogen Inc. (INGN) 60.29 -26.71% beat on earnings but reported the microchip shortage would impact sales for another year.
Friday, August 6, 2021 – DIA 352.09 +.42%, QQQ 368.05 -.44%, SPY 442.49 +.17%, IWM 223.39 +.61%
Non-Farm Payrolls came in much better than expected +943K v. 870K.Average hourly earnings beat expectations as well +4% v. +3.8%. The Labor Force participation rate improved slightly coming in at 61.7%. A bright spot was that the U6-Underemployment rate fell to 9.2% vs, the prior 9.8%, and the markets expected 10%. As a result of the strong economic reports US Treasury bond yields lifted and the 10-year Note index (TNX) 12.90 +.73 moved higher. The US dollar strengthened and Gold prices fell below the important 1800-1790 support. With higher yields on the table Financial Services (XLF) +37.86 +2.02% outperformed. Goldman Sachs (GS) 397.89 +3.54% and JPMorgan (JPM) +157.50 +2.84% led the DJIA. Consumer Discretionary (XLY) 181.01 -.68% was the worst performer for a second day with Peloton Interactive (PTON) 112.69 -6.26%. The interactive bike and treadmill company reports earnings on 8/26 AMC. Data analytics firm LiveRamp Holdings (RAMP) 47.47 +22.25% beat on earnings and revenue reporting a profit of .09 v. -.01 expected. The stock had been in a long steady decline from January 15th when it hit a high of 87.38. On the downside, development-stage biotech Dicerna Pharmaceuticals (DRNA) 27.25 -28.14% dropped heavily on disappointing trial data for its drug for hyperoxaluria a condition that produces painful and recurrent kidney stones.
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