Monday, August 30, 2021 – DIA 354.08 -.14%, QQQ 380.26 +1.12%, SPY 452.23 +.44%, IWM -.41%
Pending home sales were unexpectedly down coming in -1.8% v. +.4. The major indexes traded mixed through the day with large-cap tech outperforming and small caps declining. Traders continued to assess Fed chairman Jay Powell’s remarks at the Jackson Hole economic symposium. Interest rates declined as a result of the soft tone of Powell concerning interest rates and his continued belief that inflation would be transitory. The 10-Year note index (TNX) 12.85 -.27 moved lower with those rates. Encouraged by that assessment, traders continued to bid up large-cap tech names. Apple (AAPL) 153.12 +3.04% and Microsoft (MSFT) 303.59 +1.29% both continued the push to all-time highs. Financials (XLF) 38.45 -1.41% moved lower on the decline in rates with American Express (AXP) 164.26 -2.6%, Travelers (TRV) 159.44 -1.63%, and Goldman Sachs (GS) 413.60 -1.45% were all a drag on the DJIA. The major airlines came under selling pressure on continuing C-19 Delta fears affecting Labor Day bookings: Delta (DAL) 39.91 -3.88%, United (UAL) 45.91 -3.77%, American (AAL) 19.51 -3.51% and Southwest (LUV) 49.17 -3.36% were all on the decline.
Tuesday, August 31, 2021 – DIA353.92 -.05%, QQQ 379.95 -.08%, SPY 451.56 -.15%, IWM 225.92 +.20
The Housing Price Index came in at a lower rate than had been expected +1.6% v. +2.1% (MoM). The Case-Shiller Home Price Index came in stronger at +19.1% v. +18% consensus. Chicago Purchasing Managers Index (PMI) showed expansion but at a slower pace than expected 66.8 v. 68. The major indexes were mixed on the opening and closed the month on a soft note. Energy (XLE) 48.40 -.68% and Technology (XLK) 158.86 -.53% were weakest on the day. Chinese ADRs continued to rally from recent depressed levels NetEase (NTES) 97.42 +8.70% which beat on earnings and addressed regulatory concerns on the call, Pinduoduo (PDD) 100.02 +5.31%, Baidu (BIDU) 157.02 +2.51%, and JD.com (JD) 78.56 +2.44% all moved higher. On the downside, conference call telecom company Zoom (ZM) 289.50 off -16.69% reported solid earnings but guidance going forward was tempered for revenue growth in the small enterprise segment of the business. Also on the downside, Wells Fargo (WFC) 45.70 -5.60% came under selling pressure as the prospect for more regulatory sanctions stemming from prior violations of consumer protections became evident.
Wednesday, September 1, 2021 – DIA 353.55 -.10%, QQQ 380.58 +.17%, SPY 451.80 +.05%, IWM 227.44 +.67%
ADP employment change came in much weaker than expected +374K v. 613K. The ISM manufacturing Employment Index (Aug.) showed contraction coming in at 49 v. 51.4, while the ISM Manufacturing Prices Paid Index came in slightly better than expected but at a still elevated level at 79.4 v. 83.8. The ISM New Orders Index came in stronger than expected 66.7 V. 65.6. Real Estate (XLRE) 48.50 +1.72% was the lead sector on the day, while Energy Services (XLE) 47.69 -1.47% was the standout laggard, with Devon Energy (DVN) 28.24 -4.43%, Marathon (MRO) 11.26 -4.17%, Diamondback (FANG) -3.86%, Valero (VLO) 63.95 -3.56% all down. China ADR listed companies continued their rally from severely oversold conditions, Pinduoduo (PDD) 105.83 +6.81%, Baidu (BIDU) 165.18 +5.20%, JD.com (JD) 80.78 +2.83% moving higher. Semiconductor chip maker Ambarella (AMBA) 131.96 +27.41% beat on earnings and received several analyst price target upgrades. On the downside, pharmaceutical firm Abbvie (ABBV) 112.27 -7.05% was down as the FDA Issued new warnings for the company’s JAK inhibitor drug, Rinvoq. Wells Fargo (WFC) 43.45 down -4.92% extended the prior day's losses from potential regulatory sanctions.
Thursday, September 2, 2021 – DIA 345.87 +.37%, QQQ 380.40-.05%, SPY 453.19 +.31%, IWM 229.02 +.69%
Initial Jobless Claims came in line at 340K v. 345K. Unit Labor Costs came in higher than expected +1.3% v. +.9%. As the effects of Hurricane Ida became more evident oil and distillate prices rose, with WTI crude $69.67 +1.08% moving higher. Energy Services (XLE) 48.90 +2.54% the lead sector on the day rallied from the previous day’s drubbing with Cabot Oil (COG) 17.35 +6.7%, Occidental (OXY) 26.58 +5.98%, Apache (APA) 19.85 +4.20%, Marathon (MRO) 11.72 +4.09%, Halliburton (HAL) 20.46 +3.91%, and Devon (DVN) 29.32 +3.82% all outperforming. On the downside, Gap Stores (GPS) 25.68 -2.91% continued is sell-off from a high in May. The company announced its participation in the Goldman Sachs Global Retail Conference on September 9th. Also on the downside Autodesk (ADSK) 287.47 -5.20% had its price target cut by Morgan Stanley from $334 to $324. The stock has been in a significant correction since its last earnings report on August 25.
Friday, September 3, 2021- DIA 354.14 -.21, QQQ 381.57 +.31%, SPY 453.08 -.02%, IWM 227.96 -.46%
Nonfarm Payrolls came in at a very disappointing +235K way below the +750K expected. The ISM Services PMI reported slightly better than expected at 61.7 v. 61.5. Uncharacteristically given the weak jobs report, Interest rates moved higher on the day as shown by the 10-Year Note index (TNX) 13.22 +.28 . Technology (XLK) 159.36 +.40% shrugged off the upturn in rates to lead the markets, with digital document software firm, DocuSign (DOCU) 310.05 +5.26% showing a beat on earnings and revenues. Semiconductor manufacturing equipment maker, Network Appliance (NTAP) 91.35 +1.78% moved higher. While specialty chip manufacturer Nvidia (NVDA) 228.43 +2.00% advanced up and out of a shallow pullback from all-time highs. The cruise industry was weak across the board as traders reacted to the weak jobs report and continuing C-19 Delta concerns, Carnival (CCL) 22.96 -4.41%, Royal Caribbean (RCL) 79.43 -4.22% Norwegian (NCLH) 24.62 -3.38% leading downward. Craft retailer Joann Inc. (JOAN) 10.28 -19.44% disappointed on earnings and was downgraded by Telsey Advisory Group from Outperform to Market Perform, and the price target was lowered from $18 to $14.
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