Monday, August 23, 2021–DIA 353.45 +.65%, QQQ 373.23 +1.5%, SPY 447.26 +.88%, IWM 219.32 +1.9%
The Chicago Fed National Activity Index came at .53 above 50 shows expansion. The preliminary Markit Manufacturing PMI (Aug) was weak coming in at 61.2 v. 62.5 expected. The preliminary Markit Services PMI (Aug) was much weaker than expected posting at 55.2 v. 59.5. The major indexes continued higher from the Friday turnaround. The Federal Reserve announced the annual conclave of the world’s central bankers and economists would be tentative due to COVID-19 Delta variant concerns, pushing yields lower in government bonds. The 10-year Note index (TNX) 12.55 -.05 declined. Energy Services (XLE) 47.61 +3.75% led the S&P 500 Sectors in response to a technical trade in WTI Oil futures. The front-month oil contract successfully tested the 200-day moving average. Apache (APA) 17.29 +7.59%, Occidental (OXY) 23.47 +6.92, Devon Energy (DVN) 27.26 +6.07% and Diamondback (FANG) 72.20 -5.90% all moved higher. Famed asset manager Geoffrey Gundlach was interviewed saying that in general that stocks were overpriced but still cheaper than bonds. Pfizer (PFE) 49.93 +2.48% received full approval of the company’s COVID-19 vaccine. Moderna (MRNA) 411.89 +7.55% moved higher on the news as well.
Tuesday, August 24, 2021 –DIA 353.74 +.08%, QQQ 374.37 +.31%, SPY 447.97 +.16%, IWM 221.78 +.98%
New Home Sales reported in slightly better than expected at 708K v. 701K. The major indexes crept higher for the majority of the day but succumbed to selling pressure in the last hour for a low volume consolidation day ahead of the virtual Fed Jackson Hole meeting towards the end of the week. The 10-year note index (TNX) 12.90 +.35 moved higher as treasury yields rose. Energy Services (XLE) 48.40 +1.66% continued a rebound with Devon Energy (DVN) 28.53 +4.66% and Haliburton (HAL) 20.05 +4.37% leading the sector. As better news was reported on the COVID-19 Delta variant, the COVID-19 vaccine stocks Pfizer (PFE) 48.38 -3.10%, Moderna (MRNA) 394.94 -4.12% came under profit-taking. Also on the better news, travel and entertainment reopening plays moved higher: Las Vegas Sands (LVS) 42.72 +7.53% Wynn Resorts (WYNN) 99.44 +7.01%, Norwegian Cruise (NCLH) 25.78 +4.63%, and Carnival Cruise (CCL) 23.84 +4.42%. Reddit wallsteetbets meme stocks powered higher GameStop (GME) 210.29 +27.53%, AMC Entertainment (AMC) 44.26 +20.43% garnering their best performance since June. China-related ADRs rallied out of an oversold condition: In a move to placate Beijing, Pinduoduo (PDD) 99.12 +22.25% upon the release of earnings made public a pledge of $1.5 billion to the Chinese government to aid farmers in China. JD.com (JD) 75.22 +14.44%, NetEase (NTES) 92.65 +8.97%, Baidu (BIDU) 155.08 +8.63% all moved higher.
Wednesday, August 25, 2021-DIA 354.20 +.13%, QQQ 374.80 +.11%, SPY 448.93 +.21%, IWM 222.62 +.38%
Non-Defense Capital goods orders showed 0% growth v. +.5% expectation. Durable goods orders came slightly better deceleration at -.1% v. -.3% expected, but ex-defense they were much weaker -1.2% v. an expected +.4%. The market exhibited a low volatility upside consolidation of gains, but internally sector rotation was much more evident. Interest rates moved up as exhibited by the important 10 year Note index (TNX) 13.42 +.52. As a result, Financials (XLF) 39.68 +1.18% which had been underperforming the S&P500 in recent days led on the upside. American Express (AXP) 166.18 +3.09 and JPMorgan (JPM) 160.92 +2.06% led the DJIA. Technology (XLK) 157.48 -.06% was relatively weaker as interest rates rose, but certain names in the semiconductor space outperformed. Micron (MU) 74.04 +2.86%, Microchip (MCHP) 151.45 +2.30, Nvidia (NVDA) 222.13 +1.93% and KLA Inc. (KLAC) 334.02 +1.84% all caught buying interest. In retail and on the downside, Nordstrom Inc. (JWN) 31.14 -17.64% fell after beating earnings consensus numbers and was downgrade by JPMorgan Securities from ‘Neutral’ to ‘Underweight’, Gap Inc. (GPS) 27.48 -5.31% also disappointed on earnings. In biotechnology, Cassava Sciences (SAVA) 80.86 -31.38% plunged as the company addressed scrutiny and allegations concerning data on certain compounds in clinical trials.
Thursday, August 26, 2021 –DIA 352.16 -.57%, QQQ 372.42 -.64%, SPY 446.26 -.59%, IWM 220.20 -1.06%
Initial jobless claims were released slightly higher than expected 353K v.350K. Gross Domestic Product came in slightly lower than expected +6.6% v. 6.7%. The GDP Price Index came higher than expected +6.2% v. 6%. Markets were consolidating ahead of the Federal Reserve economic symposium in Jackson Hole come Friday. But world events and a brutal attack in Afghanistan killing 12 U.S. Marines and one Navy Corpsman shocked traders and bids faded from the market. A flight to safety was not evident in the price of gold or in lower interest rates. Of the 11 sectors in the S&P500 only Real Estate (XLRE) 46.45 +.06% remained positive. Energy Services (XLE) 48.03 -1.52% was the clear laggard on the day, but there were no significant standouts to the downside within the group. Within Technology (XLK) 156.49 -.63%, Hardware, and software provider NetApp Inc. (NTAP) 86.15 +4.72% reported a beat on earnings and revenues, while semiconductor related stocks proved strong for a second day, Microchip (MCHP) 155.94 +2.96%, Analog Devices (ADI) 167.36 +2.05%. In retail, Dollar Tree (DLTR) 93.48 -12.08% beat on earnings but disappointed on revenues, Ross Stores (ROST) 119.25 -3.82% released in-line earnings but disappointed on the outlook going forward.
Friday, August 27, 2021 –DIA 354.57 +.68%, QQQ 376.04 +.97%, SPY 450.10 +.86%, IWM 226.37 +2.80%
Personal income reported in stronger than consensus +1.1% v. +.2%. Michigan Consumer Sentiment reported in slightly weaker at 70.3 v.70.7. Markets took the release of Fed Chairman Jay Powell's speech with relief. The Nasdaq 100 and S&P 500 continued to new highs. Small caps outperformed on the day. WTI crude prices $68.74 +1.96% continued to advance from the test of the 200 dma on Monday. Energy Services (XLE) 49.31 +2.67% was the top the S&P500 sector on the day, with Occidental (OXY) 25.66 +6.92%, Cabot Oil (COG) 15.63 +6.25%, Apache (APA) 18.74 +5.94% the top 3 movers. Semiconductor related shares continued to show great relative strength, Lam Research (LRCX) 609.59 +4.14, Advanced Micro Devices (AMD) 111.40 +3.85%, Xilinx (XLNX) 156.27 +3.44%, and Applied Materials (AMAT) 136.55 +3.06% all moved higher. In earnings news, Workday (WDAY) 269.28 +9.13 beat on earnings, revenue, and raised guidance. The stock recently broke out of a downtrend from February. On the downside Peloton (PTON) 104.34 -8.55% after missing earnings announced a cut in bike prices and the possibility that the pandemic sales boom may be on pause.
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