Monday, 06/13/2022 – DIA 305.58 -2.80%, QQQ 275.41 -4.65%, SPY 375.00 -3.8%, 170.20 -4.70% CNN Fear & Greed Index @17 (Extreme Fear)
No high-impact data was released on the day. Equity markets gapped lower once again on a continuation of Friday’s selling rout brought on by the higher than expected CPI inflation numbers. In the eleven S&P 500 economic sectors, Real Estate (XLRE) 39.19 -4.81% fared worst as bond prices fell and interest rates rose. The 10-year Note Yield Index (TNX) 33.66 +2.1 rose to new multi-year highs. Late in the day, a WSJ released a report that pointed to the potential of the FOMC was considering a hike in Fed Funds of as much as ¾ of a percent. Communication Services (XLC) 54.03 -4.73% was the second most brutal hit, followed by Consumer Discretionary (XLY) 137.80 -4.62%. Selling appeared indiscriminate and across the board but well managed by the market. New lows beat out new highs 800 to 1 on the NYSE, and decliners beat advancers 17 to 1. In a sign of a potential short-term capitulatory move, speculative assets such as Bitcoin 23, 250.72 – 15% also came under intense selling pressure due to news flow related to cryptocurrency lender Celsius freezing all withdrawals. In a related move, business intelligence software provider MicroStrategy (MSTR) 152.15 -25% fell on concerns that the company’s foray into cryptocurrencies as a hedge against inflation might affect the firm’s finances.
Tuesday 06/14/2022 – DIA 304.30 -.42%, QQQ 275.91 +.18%, SPY 373.87 -.30%, IWM 169.38 -.48% CNN Fear & Greed Index @17 (Extreme Fear)
The Producer Price Index for May (YoY) reported at +10.8% vs. +10.9% expected. PPI Ex-Food and Energy came better than expected at +8.3% vs. +8.5%. The major indices continued to hit new lows for the move but stabilized at support closing mixed. In a sign of a risk-on rotation, Technology Services (XLK) 126.07 +.63% was the best performer in the 11 S&P 500 economic sectors, followed by Energy Services (XLE) 84.24 +.19%, while defensive sectors Consumer Staples (XLP) 69.54 -1.18% and Healthcare Services 120.53 -.95% fared the worst. Boeing Aircraft (BA) 122.16 +5.44% (News flow on 737 aircraft) led the DJIA flowed by Microsoft (MSFT) +.92%, while Proctor & Gamble (PG) 133.84 -3.12 % performed worst in the index, followed by Coca-Cola (KO) 59.23 -2.74%. Leading the NDX100 index, Chinese internet retailers continued their outperformance with Pinduoduo (PDD) 60.92 +11.96%, Baidu (BIDU) 140.80 +6.76%, and JD.com (JD) 63.51 +6.0% moving higher, as the IPO market was reported to have strengthened in Shanghai and Shenzhen. In the S&P 500 index Federal Express (FDX) 229.75 +14.41% soared as activist firm DE Shaw was awarded board seat representation. Enterprise software purveyor, Oracle (ORCL) 70.72 +10.41%, took second after FedEx when it reported better than expected earnings and revenues. Leading the index lower, medical device and therapeutics firm Baxter International (BAX) 67.48 -5.71% broke to new 52-week lows after reports of unusual put option activity.
Wednesday 06/15/2022 – DIA 307.23 +.96%, QQQ 282.80 +2.5%, SPY 379.20 +1.43%, IWM 171.86 +1.46% CNN Fear & Greed Index @20 (Extreme Fear) - FOMC Decision Day
Retail Sales for May (MoM) showed an unexpected decline of -.3% vs. +.2% expected. Equity markets gapped higher then traded in a range up until the FOMC decision on a 75 basis point hike was released with a downgrade of expectations for GDP growth of 1.7%. After the news hit the wires, there were several buy and sell programs, but as Chairman Powell gave his 2:30 pm post-decision remarks/Q&A stocks stabilized and moved broadly higher. Consumer Discretionary (XLY) 141.56 +2.81% was the top S&P 500 sector followed by Real Estate (XLRE) 39.80 +2.29%, while Energy Services (XLE) 82.38 -2.21% was conspicuously weak. Boeing Aircraft (BA) 133.72 +9.46% led the DJIA for the second day in a row, followed by Microsoft (MSFT) 251.76 +2.97%, Latin American internet marketplace MercadoLibre (MELI) 672.69 +9.13% topped the NDX100 followed by Netflix (NFLX) 180.11 +7.5%. The worst-performing stocks in the index were Chinese internet firms NetEase (NTES) 102.80 -2.23% and Pinduoduo (PDD) 60.19 -1.20%, which appeared to be in consolidation from recent price gains. As noted above, the energy sector was quite weak as President Biden started to apply political pressure on the industry, with Valero (VLO) 128.30 -4.07% the worst-performing stock in the S&P 500 index, followed by Schlumberger (SLB) 41.52 -3.93%. Other names in the sector also were hit, Marathon Petroleum (MPC) 98.90 -3.67%, Baker Hughes (BKR) 31.74 -3.61%, Devon Energy (DVN) 68.46 -3.02%.
Thursday, 06/16/2022 – DIA 299.90 -2.39%, QQQ 271.39 -4.03%, SPY 366.65 -3.31%, IWM 163.90 -4.63% CNN Fear & Greed Index @14 (Extreme Fear)
Building Permits were reported weaker than expected at 1695K vs. 1785K annualized for May (MoM). Housing Starts were also much weaker than expected at 1549K vs. 170ed. Initial Jobless claims were slightly higher at 218K vs. 215K expected but still at a historically low level. The Philadelphia Fed Manufacturing Survey showed contraction at -3.3 vs. 5.5 expected. Equity markets gapped lower on the open, erasing the previous day’s Fed induced positive performance. Risk-off trades were evident from the beginning of the session, especially in the Energy Services (XLE) 77.74 -5.63% sector, as traders and investors reacted to the White House putting pressure on the industry to reduce profits and expand production. Consumer Staples (XLY) 134.63 -4.90% was the second worst-performing sector, followed by Technology Services (XLK) 123.49 -4.07%. Defensive sectors fared best with Consumer Staples (XLP) 69.08 -.76% and Healthcare Services (XLV) 199.96 -1.47% were relative best performers. Walmart (WMT) 120.62 +1.04% led the DJIA, followed by Procter & Gamble (PG) 133.32 +.61%. American Express (AXP) 137.5 -5.96% was the hardest hit in the index, along with Nike (NKE) 107.12 -5.57%. In the NDX100 index, only three stocks closed up on the day, with drug developer AstraZeneca (AZN) 60.86 +.48% in the top spot. On the downside, EV manufacturer Lucid Group (LCID) 15.55 -11.24% was the worst performer in the NDX100, followed by LatAm internet merchant MercadoLibre (MELI) 612.70 -8.92% and Tesla (TSLA) 639.30 -8.54%. Gold miner Newmont (NEM) 64.71 +3.24% led the S&P 500 as the dollar declined and Gold rallied by 2%. The worst performers for the S&P 500 were traveling and gaming-related issues Norwegian Cruise Lines (NCLH) 10.38 -11.51%, Royal Caribbean (RCL) 35.16 -11.41%, Carnival Cruise Lines (CCL) 26.91 -11.08%, and Penn National Gaming (PENN) 26.91 -11.04%.
Friday, 06/17/2022 – DIA298.72 -.16%, QQQ 274.69 +1.22%, SPY 365.86 +0.22%, IWM 165.18 +.78% CNN Fear & Greed Index @14 (Extreme Fear)
No high-impact data was released. Federal Reserve Chairman Powell gave a speech on monetary policy. Equity markets stabilized, closing mixed on the day. Energy Services (XLE) 73.49 -4.25% fell under continued political pressure from the Biden Administration. In the S&P 500, leading to the downside were ConocoPhillips (COP) 93.74 -8.47%, Devon Energy (DVN) 58.02 -8.30%, Diamondback (FANG) 122.29 -8.52%, and Pioneer Resources (PXD) 221.77 -8.17%. Interest rates declined, with the 10-Year Note (yield) Index 32.39 -.68. On the lower rates, Discover Financial (DFS) 94.42 +5.46%, Capital One Financial (COF) 107.26 +5.04%, and American Express (AXP) 144.18 +4.86% all moved higher. Communication Services (XLC) 53.84 +1.43% performed best in the S&P 500, with Charter Communications (CHTR) 441.96 +6.41% and Warner Brothers Discovery (WBD) 14.22 +4.18% the standouts in the sector. Biotechnology moved higher as vaccine provider Moderna (MRNA) 128.03 +5.74% moved higher on the FDA approving an emergency use authorization (EUA) for vaccinations of children as young as six months. Vertex Pharmaceutical (VRTX) 263.09 +4.83% and Incyte Corporation (INCY) 71.27 +4.75% also moved higher.
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