Monday, July 19, 2021 –DIA 340.01 -1.94%, QQQ 354.67 -.82%, SPY 425.11 -1.44%
No high-impact data on the day. Markets gapped lower on the opening and continued selling off throughout the day in an orderly manner from over weekend news on the Coronavirus Delta variant taking hold in some regions of the world and certain areas within the United States. The day had all the elements of a risk-off trade. U.S. Government bonds rallied and their yields collapsed as evidenced by the 10-year Note index (TNX) 11.81 -1.19 in a flight to quality. With respect to industry sectors, Energy (XLE) 46.96 - 3.53%, Financials (XLF) 35.11 -2.80%, and Basic Materials (XLB) 79.35 -2.15% were all hit hardest. The usual suspects in the travel & entertainment space also suffered. Cruise lines, Carnival (CCL) 19.72 -5.74%, and Norwegian (NCLH) -5.49%, as well as airline United (UAL) 43.46 -5.54% traded down hard. On the upside in biotech news Cytokinetics (CYTK) 27.00 +40.41% bolted higher on the release of positive results in a stage 2 trial of CK-274 which is being developed for a possible treatment for hypertrophic cardiomyopathy.
Tuesday, July 20, 2021 – DIA 345.08 +1.53%, QQQ 358.79 +1.16%, SPY 431.06 +1.43%
Leading economic indicator Building Permits (MoM) fell short of expectations coming in at 1.598M v. 1.70M while the coincident economic indicator Housing Starts (MoM) exceeded expectations coming in at 1.643M v. 1.59M. Equity markets gapped higher on the open but late in the day lost steam. It was almost the exact opposite action of Monday as the news on the Delta variant of COVID-19 appeared to be re-examined in light of clarifications made by healthcare authorities in Europe. Sector-wise Industrials (XLI) 102.57 +2.80%, Financials (XLF) 35.98 +2.48% and Consumer Discretionary (XLY) 179.22 +1.85% led the S&P. Boeing (BA) 217.15 + 4.91% (EPS due 7/28 BMO) led the DJIA. Followed by Honeywell (HON) 229.66 +4.08%. Pandemic favorite DocuSign (DOCU) 301.27+4.07% led the NASDAQ 100 followed by Microchip (MCHP) 137.03 +3.83%. Leading the S&P 500 on the day HCA Healthcare (HCA) 248.90 +14.37% beat earnings and revenue estimates while reporting that the pandemic slowdown in business had lifted. On the downside, selling again returned the shares of Glaukos (GKOS) 47.93 -14.88% as Wells Fargo downgraded the stock from equal weight to underweight.
Wednesday, July 21, 2021 – DIA 347.99 +.84%. QQQ 361.56, SPY 434.55 +.81%
No high-impact market data was released. The markets continued to stabilize and move higher from Monday’s selling pressure. As oil prices recovered, Energy (XLE) 49.25 +3.49% continued to rebound and led the S&P 500 followed by Financials (XLF) 36.60 +1.72%. Chevron (CVX) 99.82 +3.41% led the DJIA. Diamondback (FANG) 79.34 +5.9% rallied. The cruise lines rebounded Norwegian (NCLH) 26.08 +10.14%, Carnival (CCL) 23.19 +9.44%, Royal Caribbean (RCL) 78.90 +5.35%. There were two big gainers on the day 1) Cassava Sciences (SAVA) 117.6 +29.47% broke out to a new high. The company will present data on its Alzheimer’s drug candidate simufilam at the Alzheimer’s Association International Conference later in July. If approved it would be a competitor to the drug Aduhelm made by Biogen (BIIB) which recently won a controversial approval for the drug by the FDA. 2) The healthcare technology company Apollo Medical Holdings (AMEH) 104.24 +18.96% was added to the S&P small-cap 600. On the downside, mattress manufacturer and retailer Sleep Number (SNBR) 97-78 -12.88% missed on earnings and revenue sighting supply chain issues. Also on the downside after missing earnings Healthcare Services Group (HCSG) 26.92 +-12.37%. The housekeeping, laundry, and dining services provider to the healthcare facility company cited a client restructuring and regulatory issues for the sequential decreases in quarterly revenue.
Thursday, July 22, 2021 – DIA 348.26 +.08%, QQQ 363.95 +.66%, SPY 435.46 +.21%
Initial Jobless Claims jumped unexpectedly to 419K v. 350K, and up from the prior 368K. The Chicago Fed National Activity Index for Jun fell to 0.09 from the prior 0.26. Equity markets continued the consolidation with an upside bias. Reacting to a decline in government bond yields Technology (XLK) 153.00 +.74% advanced along with Healthcare (XLV) 129.98 +.74%. Salesforce.com (CRM) 248.28 +2.55% led the DJIA after closing on its purchase of Slack Technologies (WORK). Followed by Microsoft (MSFT) 286.14 +1.68% which hit a new all-time high. On earnings news, Texas Instruments (TXN) 183.91 -5.32% beat on earnings but fell on weak projections for chip demand, and a lack of information provided to analysts on the call. Also in earnings news, pandemic favorite Domino’s Pizza (DPZ) 538.82 +14.55% broke out to an all-time high which was attributed to its focus on digital sales. In biotechnology Seres Therapeutics (MCRB) 7.95 -61.83% fell on the release of top-line results of its phase 2-b trial evaluating the company’s SER-287 compound for the treatment of ulcerative colitis disappointed.
Friday, July 23, 2021 – DIA 350.57 +.66%, QQQ 368.20 +1.17%, SPY 439.94 +1.03%
Preliminary Markit PMI came ahead of expectations 63.1 v. 62, but the preliminary number for Markit Services PMI came in much lower than expected at 59.8 v. 64.8. All three major indexes DJIA, NASDAQ Composite and S&P 500 all finished at all-time new highs. In the 11 sectors of the S&P 500 Communication Services (XLC) 83.5 +2.48% was the strongest with Facebook (FB) 369.79 +5.30% (earnings due July 28 AMC) breaking out to new all-time highs. The stock was reiterated outperform at Credit Suisse with a price target raised from 400 to 480. Intel (INTC) 53.00 -5.29% weighed on the DJIA after the company reported earnings that beat consensus, but amid indications of market share loss to competitor Advanced Micro Devices (AMD) 92.15 +1.03% Energy Services (XLE) 48.52 - .37% was the laggard on the day after having a strong rebound from Monday’s weakness. Staffing and employment services company Robert Half (RHI) 92.30 +7.36% broke out to new highs after beating earnings and revenue and improved guidance for the 3rd quarter. Boston Beer Company (SAM) 701.00 -26.02% was pounded by a miss on earnings as the company reported $4.75 a share v. a consensus $6.69 estimate due to weak hard seltzer sales. Goldman Sachs downgraded the stock from a Buy rating to a neutral rating while lowering its price target to $875 from $1550.
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