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The Big Picture: Renewed pandemic fear, S&P 500, Oil demand outlThe big story on the emergence of a new strain of COVID-19 in South Africa caused Wall Street’s three main indices ($SPX, $NDX, $RUT) to tumbled on Friday as they re-opened after Thursday’s Thanksgiving holiday with energy, financial and travel-related stocks bearing the brunt of the selloff. The renewal or pandemic fear has outlined as the biggest risk to today’s market, and it is likely to inject volatility to the market for the remaining of the year. Major indices dropped more than 2.0% on Friday, as investors sold risk assets. The $SPX fell 2.3%, the $NDX fell 2.2%, and the $DJI fell 2.5%. The $RUT 2000 underperformed with a 3.7% decline. WTI Crude Futures also fell -12.3% on Friday on worries of a supply glut. With Equal-Weighted $RSP sitting at its 50DMA confluence with resistance turned support at $156 range, there is a significant representation of $SPX stalling its sell off for this week. Last week’s leading sectors: $XLU (Utilities) +3.76% $XLP (Consumer Staples) +2.39% $XLV (Healthcare) +0.98% $SPX -2.20% This week’s watchlist: $MF, $PXD, $AA, $AMD and 55 more names. The new variant strain may also raise doubts over how quickly the Federal Reserve can move to unwind stimulus to tackle spiraling inflation. Eyes will be turned to the US jobs report due Friday, which will probably point to a continued recovery in the labor market. Elsewhere, Federal Reserve Chair Powell testifies before Congress, while a highly anticipated OPEC+ meeting is expected to offer guidance into the coalition’s crude output plans. Here’s what you need to know to start your week. Market Technicals $SPX (S&P 500) vs $RSP (S&P 500 Equal Weight) $SPX declined -2.20% (-103.34 points). Similarly, Equal Weighted $RSP declined -2.00% (-3.19 points). As the week’s Omicron driven selloff happened on a shortened trading session on Friday, it is worth to note that the transactional volume of that shortened session have far exceeded an recent full average day’s trading volume (50D Average Volume) in all major indexes. With $RSP sitting at its 50DMA confluence with resistance turned support at $156 range, there is a significant representation of $SPX stalling its current sell off for the week. The key index and level to watch for the week will be $RSP at $155.75 for further confirmation of market weakness. The immediate support to watch for $SPX this week is at 4,585 level, a further break of the low of Friday’s lowest price action. New pandemic wave? Wall Street’s three main indices tumbled on Friday as they re-opened after Thursday’s Thanksgiving holiday with energy, financial and travel-related stocks bearing the brunt of the selloff, sparked by the discovery of the new coronavirus strain. While little is yet known of the new variant first detected in South Africa, scientists said it has a high number of mutations that may make it vaccine-resistant and more easily transmissible than the Delta variant. Before Friday, investors had been upbeat about the strength of the economic recovery amid broad vaccine availability and advances in treatments, despite fears over steadily rising inflation. Jobs report A robust November jobs report could underline the case for the Fed to speed up unwinding its $120 billion-a-month stimulus program at its next meeting in mid-December. But a fresh wave of the pandemic could throw those plans into doubt. Concerns over spiraling inflation, coupled with signs of an accelerating economic recovery had prompted investors to begin pricing in a faster taper and earlier interest rate hikes. Friday’s non-farm payrolls report for November is expected to show that the economy added 550,000 jobs, bringing the unemployment rate down slightly to 4.5%. Powell and Yellen testimony Fed Chairman Jerome Powell, fresh from his nomination for a second term by President Joe Biden, is due to testify on the CARES Act, the central bank’s pandemic-era stimulus program, before the Senate Banking Committee in Washington on Tuesday. Treasury Secretary Janet Yellen is also due to testify. A similar hearing will be held before the House Financial Committee on Wednesday. Investors will be looking for fresh insights on the outlook for the economic recovery amid renewed pandemic uncertainty. Oil demand outlook Oil prices plunged $10 a barrel on Friday, their largest one-day decline since April 2020, as news of the new Omicron variant saw countries rush to restrict travel, adding to concerns that a supply glut could swell in the first quarter. The Organization of the Petroleum Exporting Countries and its allies (OPEC+) is due to meet on Thursday, after last week’s decision by the U.S. and other governments to release oil from strategic reserves in a bid to lower gasoline prices. For its part, OPEC+ has stuck to monthly output increases of 400,000 barrels per day (bpd) since August, despite calls to increase output to drive down oil prices.
AMEX:RSP
by jfsrevg
2
US Market Technicals Ahead (25 October – 29 October 2021)Investors will be preparing for the busiest week of earnings season, with focus turning to reports from several tech giants including Apple ($AAPL), Alphabet ($GOOGL), Amazon ($AMZN), Microsoft ($MSFT) and Facebook ($FB). There are also some key economic reports in the coming week, including a first look at U.S. third quarter GDP (Advance GDP) on Thursday. Optimism is growing that after some large concessions, Democrats will get Senators Manchin and Sinema on board with President Biden’s economic package. The US economic outlook next year is still looking bright as pent up demand and more stimulus will spur growth. The European Central Bank will be holding its latest meeting against a background of persistent inflation pressures. Evergrande has bought another week to deal with the looming debt crisis casting a shadow over the world’s second largest economy and the Bitcoin rollercoaster rolls on. Here’s what you need to know to start your week. $SPX (S&P 500) The benchmark index $SPX continued its recovery with a gain of +1.64% (+73.53 points), closing the week at 4,544 level, a new all time high closing. The immediate support to watch for $SPX this week is at 4,450 50DMA level. Big tech earnings Four out of the five FAANG stocks are set to report earnings during the week – Facebook ($FB) is set to report on Monday, followed by Google parent Alphabet ($GOOGL) on Tuesday, while Apple ($AAPL) and Amazon ($AMZN) are reporting on Thursday. FAANG’s stellar growth and heavy weighting in the S&P 500 has given them an outsized impact on the broader equities market, propelling markets higher for over than a decade. Strong earnings results could help tech stocks broaden the lead they have established over value stocks in a market tug of war, with stock investors caught between a strong economic recovery and surging commodity prices on one side, and rising Treasury yields and inflation on the other. U.S. GDP Data on Thursday is expected to show the extent of the headwinds that hit the U.S. economy in the third quarter. Economists are forecasting that GDP growth slowed to 2.8% from 6.7% in the previous three months. The impact of the delta variant, along with rising prices, supply chain strains and labor shortages contributed to the soft patch in growth, but those effects should dissipate in the fourth quarter. Other economic data to watch during the week includes reports on durable goods orders on Wednesday, initial jobless claims on Thursday and personal income and expenditures on Friday. Friday’s data includes the core PCE price index, rumored to be the Federal Reserve’s favorite inflation measure. Economic data will be closely watched as it is coming just before the Federal Reserve’s November meeting the following week, where the central bank is expected to announce plans to begin cutting back on asset purchases, an important first step towards eventual rate hikes. ECB meeting The ECB is to hold its next policy meeting on Thursday amid tensions between officials over how long an inflation surge in the euro area is likely to last and whether the bank should tweak monetary policy as a result. At its last meeting in September policymakers deferred a decision on bond purchases to December, but since then euro area inflation has surged to a 13-year high amid supply bottlenecks and soaring energy prices. The Fed is likely to start tapering in November and the Bank of England has indicated that interest rate hikes are coming soon so the question is, will the ECB follow? Thursday’s post policy meeting press conference with ECB head Christine Legarde will likely give investors a clue into December’s decision. Evergrande buys time Reuters reported Sunday that China’s Evergrande had resumed work on more than 10 projects in six cities, including Shenzhen. The report came after the company appeared to avert a default last week, when it made a last-minute bond coupon payment, but there have still been no reports on progress about a comprehensive restructuring of the company’s massive debt pile. China’s second-largest property developer is mired in a debt crisis, with more than $300 billion in liabilities. The crisis at Evergrande has spread across the broader Chinese property sector, which economists say makes up around 30% of the economy, leading to a string of default announcements, rating downgrades, and slumping corporate bonds. Bitcoin volatility Bitcoin hit an all-time high of $67,016 on Wednesday, rising above April’s record propelled by bets the first U.S. bitcoin futures exchange traded funds would pave the way for more money to pour into digital assets. The new ETFs track bitcoin futures rather than the cash price. The new peak came after the world’s largest digital currency had struggled in recent months, briefly dipping below $30,000 as China cracked down on digital currencies. Bitcoin advocates believe the onset of ETFs will support prices. Others tout the digital currency as a hedge against inflation and say that is a bigger factor in its rally, but sceptics say it is more of a symptom. Either way, bitcoin volatility looks set to continue.
SP:SPXLong
by jfsrevg
2
US Market Technicals Ahead (11 October – 15 October 2021)Third-quarter earnings season gets underway with major banks; JPMorgan Chase ($JPM), Bank of America ($BAC), Wells Fargo ($WFC), Morgan Stanley ($MS) and Goldman Sachs ($GS) reporting later in the week. It is also a relatively busy week ahead on the economic data front with inflation driven US Consumer Price Index report (Wednesday) for September will will be closely watched while minutes from the last FOMC meeting (Thursday) is also set to be under Investors’ radar for further cues on the Fed’s tapering timeline. Here’s what you need to know to start your week. S&P500 (US Market) The benchmark index $SPX minimized its previously week loss with a technical rebound yielding at modest gain of +0.66% (+28.6 points), closing the week at 4,390 level. $SPX remains trading below its 20D and 50D Moving Averages. The past weeks of trading session have established several signs of fatigue in this tech driven rally; $SPX Short Term MA Crossover of 20 Days and 50 Days (technically known as ‘Death Cross’), last observed on 30th September 2020 $SPX multi-month long uptrend channel violation, observation of first lower high and lower low established below 20D and 50D MA over the period Up-Down Volume ratio is significantly much lesser than 1.0 over the past 30 days average (A ratio greater than 1.0 shows more volume on the upside than on the downside. A reading under 1.0 shows sellers have the upper hand.) With $SPX currently trading below its short term major MAs, it is important to remain risk adverse and diligent The immediate support to watch for $SPX this week remains at 4,270 immediate support level. A breakdown of 4,270 support level would point to further weakness for the month of October, which is considered to be a time when stocks historically decline, giving rise to the term the ‘October Effect.’ Bank earnings Some of the world’s biggest banks kick off U.S. earnings, with investors focused on global supply chain problems, labor shortages and the upcoming tapering of the Fed’s $120 billion monthly stimulus. Banks smashed profit estimates in the second quarter as the economy rebounded, with Wells Fargo ($WFC), Bank of America ($BAC), Citigroup ($C) and JPMorgan Chase ($JPM) posting a combined $33 billion in profits. That momentum likely slowed in the third quarter; earnings for financials are forecast to grow by 17.4%, versus nearly 160% in Q2, according to I/B/E/S data from Refinitiv. U.S. data The key U.S. economic report to watch this week is Wednesday’s data on consumer price inflation for September. While the rate of price increases has moderated inflation is still higher than it was pre-pandemic with the surge in demand after the economy reopened pushing up prices. Economists expect the consumer price index to match August’s 0.3% monthly increase and the 5.3% annual gain. Producer price inflation figures are due out on Thursday, followed by data on retail sales on Friday. Retail sales are expected to be pulled lower because of a plunge in vehicle sales amid supply chain bottlenecks, but excluding vehicles, retail sales are forecast to increase. Fed minutes The Fed is to publish its September meeting minutes on Wednesday amid expectations that it will begin tapering asset purchases before the end of this year, an important first step towards eventual rate hikes. Friday’s weaker-than-expected September jobs report did little to alter expectations the Fed could begin to scale back stimulus by the years end. Though the economy added just 194,000 jobs in September upward revisions to prior months’ data meant that all told the economy has now regained half of the jobs deficit it faced in December, compared with pre-pandemic employment levels. Fed Chair Jerome Powell said last month that he’d only need to see a “decent” September U.S. jobs report to be ready to begin to taper in November.
U
by jfsrevg
US Market Technicals Ahead (4 October – 8 October 2021)Data released last Friday reflects a faster pace of growth than expected in September for US Manufacturing and ISM Manufacturing PMIs. However, it’s likely that investor focus will return to worries about inflation, along with Federal Reserve tightening on the horizon. This Friday’s monthly US employment report will be adding to the potential market jitters, which will probably show job growth acceleration in September even with raised concerns about the rising COVID-19 cases. Although Fed Chair Powell has tried to distance policy from any single labor market metric in the past, he has clearly identified the incoming nonfarm payroll report as a key to the tapering decision at his press conference following the September meeting. Markets are also still contending with ongoing worries about China’s Evergrande Group (HK:3333), as the giant real estate developer continues to struggle with its massive debt overload. In short, there are a plethora of themes that could pressure markets as the first full week of October trading commences. Here is what you need to know to start your week. S&P500 (US Market) The benchmark index $SPX ended the final week of September with a weekly loss of -2.15% (-95.9 points), with its trading volume reaching a pinnacle that was last observed in early May this year. The past month of trading session have established several signs of fatigue in this tech driven rally; $SPX Short Term MA Crossover of 20 Days and 50 Days (technically known as ‘Death Cross’), last observed on 30th September 2020 $SPX multi-month long uptrend channel violation, observation of first lower high and lower low established below 20D and 50D MA over the period Up-Down Volume ratio is significantly much lesser than 1.0 over the past 30 days average (A ratio greater than 1.0 shows more volume on the upside than on the downside. A reading under 1.0 shows sellers have the upper hand.) With $SPX currently trading below its short term major MAs, it is important to remain risk adverse and diligent The immediate support to watch for $SPX this week is at 4,270 immediate support level. A breakdown of 4,270 support level would point to further weakness for the month of October, which is considered to be a time when stocks historically decline, giving rise to the term the ‘October Effect.’
UShort
by jfsrevg
US Market Technicals Ahead (27 September – 1 October 2021)Expect markets to remain at last week’s levels of raised volatility for the final week of the third quarter with investors keeping an eye on fresh economic data for the US including the ISM Manufacturing PMI and PCE inflation. Fed Chair Powell will also testify on Coronavirus and CARES Act before the Senate and lawmakers will try to pass a funding plan to avoid a government shutdown on October 1st. The Evergrande limbo is set to continue as markets expect an update on interest payment for a dollar-denominated bond and hope a default could be avoided. The 2-days ECB Forum on Central Banking will be keenly watched for more clues on the monetary policy outlook and traders will also pay attention to the outcome of the German federal election. Here’s what you need to know to start your week.
ULong
by jfsrevg
US Market Technicals Ahead (20 September – 24 September 2021)This Wednesday’s Fed policy announcement will be the main directional driver for equity markets as investors will be expecting to hear if the central bank will begin withdrawing stimulus this year. Several policymakers have been calling for early tapering despite the recent slowdown in inflation numbers. On the economic data front, notable publications include building permits and housing starts, the flash Markit PMI survey, new and existing home sales. Several other central banks will also hold meetings in the week ahead, including the Bank of Japan and the Bank of England. Meanwhile, embattled Chinese property developer Evergrande (HK:3333) faces the prospect of defaulting on its debts, stoking fears of contagion that could spread to markets outside of China. Here’s what you need to know to start your week. S&P500 (US Market) With stocks struggling in this seasonally weak month for the market, all three major averages are negative month to date , but still sit less than 3% below their all-time highs. The benchmark index $SPX ended with week on consecutive losses, posting a further loss of -0.97% (-43.3 points). The Federal Reserve’s highly anticipated September meeting is set to occur this week. Fed Chair Jerome Powell will hold a press conference Wednesday at the conclusion of the two-day meeting. Investors are awaiting for more specifics about the Fed’s tapering of its easy monetary policy, particularly after mixed economic data released over the past weeks. $SPX breached its 20DMA and 50DMA support, currently trading at the support zone of its medium term trend channel. This is the 7th occurrence since 25th March 2021, where $SPX would rebound in the immediate week and swing towards another all time high. The immediate support to watch for $SPX this week is at 4,375 level; a significant 2ATR breakdown from its current up trend channel, a first sign of weakness in this mid-term rally. Federal Reserve meeting The Fed will begin its two-day policy meeting starting Tuesday ahead of its policy announcement on Wednesday afternoon and investors will be on the lookout for any details of the central bank’s plans to start paring back its $120 billion a month emergency stimulus program. The Fed’s timeline for scaling back economic stimulus is important as it represents a first step towards eventual interest rate hikes. Several Fed officials have said tapering should start this year, a view Fed Chair Jerome Powell may echo, while stressing a rate hike is still way off. The Fed may stick to a cautious approach giving economic uncertainty due to rising COVID-19 cases and a weak jobs report for August. Economic data The U.S. data calendar for the week ahead is centered around housing figures, which are set to stabilize after a slight uptick in mortgage approvals for home purchases in recent weeks. Data on housing starts and building permits data are due out on Tuesday, followed by figures on existing home sales on Wednesday and data on new home sales is due for release on Friday. Market watchers will also be looking at Thursday’s report on initial jobless claims amid concerns over the hit to the economic recovery in the current quarter from the spread of the Delta coronavirus variant, especially among people who are hesitant to take vaccines. Central bank meetings Besides the Fed, several other major global central banks are also holding meetings in the coming days. The Bank of Japan, which also meets on Tuesday and Wednesday, is widely expected to keep policy steady but may warn about growing risks to exports from supply disruptions. On Thursday, Norway’s central bank is set to become the first from the developed world to hike rates since the pandemic, likely raising its main 0% rate to 0.25%. The Bank of England is unlikely to change policy at its Thursday meeting but may indicate whether it still views inflation as transitory. Crunch time for Evergrande Indebted Chinese property developer Evergrande has a bond interest payment of $83.5 million due on Thursday, with investors pricing in a high likelihood of default. That such a tiny amount could be the tipping point for a $355 billion behemoth with more than 1,300 developments across China and over $300 billion of liabilities shows how bad things are. China’s second largest developer has been scrambling to raise cash, with fire sales on apartments and stake sales in its sprawling business network, but with little success. Concerns that Evergrande could default on its debts is spilling over into China’s financial markets and even risks contagion that could spread to markets beyond China.
ULong
by jfsrevg
1
US Market Technicals Ahead (13 September – 17 September 2021)It is a relatively busy week ahead in the US on the economic data front. This Tuesday’s U.S. inflation numbers could help dictate market direction in the coming week amid concerns that persistent rising inflation could prompt the Fed to roll back emergency stimulus measures. The timing of when central banks choose to scale back economic stimulus has been a key driver of market sentiment amid concerns over rising inflation. Elsewhere on economic data, US retail sales and industrial production numbers for August are seen pointing to a decline in domestic trade and modest factory activity growth. Numbers will be out on Thursday. The UK is also due to release what will be closely watched inflation data, along with updates on employment and retail sales. Appearances by European Central Bank officials may shed more light on last week’s decision to scale back bond purchases. Meanwhile, data from China is likely to underline that the pace of the recovery in the world’s number two economy is slowing. Here’s what you need to know to start your week. S&P500 (US Market) The benchmark index $SPX ended the week off its longest daily losing streak since February (-1.58%), posting five straight days of losses. Fears over slowing economic growth and rising inflation have weighed on the market. $SPX medium term trend channel remains intact, with no violation of its upper and lower bound trendline since the Bullish Reversal supported by its 50DMA highlighted in the earlier weeks. $SPX is now trading below its 20DMA after the failure of its Bullish Pennant consolidation, spiraling down towards its 50DMA that has pivoted the index since November 2020. The immediate support to watch for $SPX this week is at 4,425 level; a break down of 50DMA along with its short term support level. U.S. inflation Tuesday’s data on consumer price inflation will be the highlight of the economic calendar amid an ongoing debate over whether the current spike in inflation is likely to fade as the imbalance between supply and demand causing price increases in recent months eventually eases. In July, price increases slowed but remained at a 13-year high on a yearly basis amid tentative signs inflation has peaked. Market watchers will also be looking at Thursday’s figures on retail sales, which are expected to decline for a second straight month. UK data Last week Bank of England governor Andrew Bailey warned that the economic rebound in the UK is slowing, so this week’s data on inflation, employment and retail sales will be closely watched, particularly ahead of the Bank of England’s upcoming policy meeting on Sept 23. July data showed that inflation slowed to 2%, while retail sales fell 2.5% month-on-month. Tuesday's jobs data will also be in focus amid labor shortages and a record 8.8% increase in wage growth in June. The end of furlough schemes may push people into the jobs market, but skills shortages risk fueling price pressures driven by supply bottlenecks and commodity prices. ECB speakers In the euro zone, ECB Chief Economist Philip Lane and Bank of Finland Governor Olli Rehn are both due to make appearances, with investors hoping for more insights into last week’s decision to pare back emergency bond purchases over the coming quarter. The move is a small first step towards unwinding the emergency stimulus the ECB deployed to bolster the euro zone economy during the coronavirus pandemic. ECB President Christine Lagarde was eager to stress that the move wasn’t the start of tapering. The move by the ECB to trim bond purchases is expected to be followed by the Fed later this year, despite the disappointing August U.S. jobs report. China data China is to release data on industrial production, retail sales and fixed asset investment on Wednesday, which will show the economic impact of a widespread Covid outbreak in August, which saw Beijing partially close the world’s third-busiest container port and impose fresh restrictions across some areas of the country. While the latest outbreaks have been largely contained the Chinese economy is still facing headwinds. While exports have remained strong, boosted by robust global demand domestic demand has faltered amid virus containment measures, supply bottlenecks, tighter measures to tame property prices and a campaign to reduce carbon emissions.
ULong
by jfsrevg
US Market Technicals Ahead (7 September – 10 September 2021)This week is a holiday-shortened week as US Markets will be closed on Monday in observance of US Labor Day. As Investors are weighing the impact of last Friday’s surprisingly soft August jobs report, Stocks are likely to look beyond the numbers and latch onto the latest data on labor and inflation in the coming week’s jobless claims and producer price index (PPI). Comments by Federal Reserve officials will also be in focus after the disappointing August employment report. Stock markets are likely to remain supported after the jobs data undermined the argument for near-term tapering. Meanwhile, all eyes will be turning to the European Central Bank's debate over whether it should start reducing its massive PEPP asset purchase program amid brighter prospects for the bloc's economic outlook. China is also set to release data on trade and inflation which is expected to underline that the recovery in the world’s number two economy is losing momentum. Here’s what you need to know to start your week. S&P500 (US Market) The stock market rally had another solid week, with growth and small-cap stocks leading once again. The Nasdaq ($NDX) ended Friday at a new peak, with the two other main indexes S&P 500 ($SPX) and Dow Jones Industrial ($DJI) closed red on that day following the far weaker-than-expected jobs report which raised fears about the pace of economic recovery but weakened the argument for tapering this month. The benchmark index $SPX ended the week with a modest gain of +0.53% (+24.1 points), inching up to another new record high.  $SPX medium term trend channel remains intact, with no violation of its upper and lower bound trendline since the Bullish Reversal supported by its 50DMA highlighted in the previous week. $SPX remains trading neatly above its 20DMA over the past 14 consecutive trading session. At the current junction, $SPX is consolidating within a bullish pennant pattern, signifying trading activity could remain subdued as traders return after the long weekend. The immediate support to watch for $SPX this week is revised upward towards 4,500 level; a break down of its current consolidated pennant pattern. U.S. data Friday’s PPI data for August will show how inflation pressures are shaping up after July data showed the largest annual increase in over a decade, as the swift economic recovery caused a mismatch between supply and demand. While the Fed has indicated that higher prices will likely prove transitory some worry that persistent price pressures could prompt the Fed to roll back easy money faster than expected. Weekly jobless claims data Thursday will also be closely watched after the Labor Department reported Friday that the economy added just 235,000 jobs in August, falling far short of economists' estimate of 750,000. Hiring in the leisure and hospitality sector stalled amid a resurgence in COVID-19 infections. But the unemployment rate fell to 5.2% from 5.4% in July and July job growth was revised sharply higher, pointing to underlying strength in the economy. Fed speakers Market participants will be watching out for any fresh clues on tapering from Fed officials in the wake of Friday’s disappointing jobs report. The labor market remains the key touchstone for the Fed, with Chair Jerome Powell indicating last week that reaching full employment was a pre-requisite for the central bank to start paring back its asset purchases. New York Fed President John Williams, who is viewed as close to Powell, is to speak about the economic outlook at an event on Wednesday.  Gamestop $GME Investors will be watching out for quarterly results from video game retailer GameStop ($GME), whose wild ride this year put a spotlight on retail investors' mania for so-called meme stocks that some say is one sign of irrational exuberance in markets. ECB meeting The ECB meets on Thursday against a background of calls from several hawkish policymakers to begin slowing its pandemic-era asset purchase stimulus program given a recent spike in inflation. Inflation in the euro area has surged to a 10-year high of 3%. The ECB has indicated that any increase in inflation is likely to be temporary, but some hawkish officials have recently diverged from this view. Markets are starting to react to the potential for more sustained euro zone inflation and reduced stimulus from the ECB. China data On Monday China releases August trade data which will be followed on Wednesday by figures on both consumer and producer inflation, also for last month. The reports come after a recent run of weak economic data which showed that the recovery in the world’s second largest economy is running out of steam amid restrictions to curb the spread of the Delta variant. Activity in China's services sector slumped into sharp contraction in August, a private survey showed on Friday and a similar survey of the manufacturing sector showed that factory activity contracted for the first time in almost one-and-a-half years last month. The slowdown has fueled expectations Beijing will roll out more support measures to revitalize growth.
ULong
by jfsrevg
US Market Technicals Ahead (23 August – 27 August 2021)All eyes will be on Federal Reserve’s annual Jackson Hole symposium’s speech by Fed’s Chairman Powell on Friday, with investors hoping for indications on when the Fed will begin tapering the monetary stimulus that has powered stocks to record highs since the COVID-19 pandemic. The economic calendar also features a string of economic data, including US personal spending and durable goods orders. Earnings will continue with Best Buy ($BBY) , Dell ($DELL) and HP ($HPQ) among the companies reporting. While stocks are still hovering near record highs all three major U.S. indexes posted weekly losses last week after tumultuous trading and more volatility looks likely to be in store in the week ahead. Here’s what you need to know to start your week. S&P500 (US Market) All three major U.S. indexes posted weekly losses with the benchmark index S&P 500 ($SPX) retracing -0.53% (-23.8 points), closing at 4,442 level. $SPX have successfully corrected out a 3 weeks price-volume divergence, supported at the 4,400 level that was highlighted in the previous week. With more volatility looks likely to be in store in the week ahead, the immediate support to watch for $SPX this week remains at 4,400 level; a further retest of immediate support along with a break of its 20D Moving Average. Jackson Hole The Fed is expected to communicate its plans for slowing its $120 billion per month asset purchase program, the first step down the road to eventual interest rate hikes. But the prospect of stimulus being reduced at a time when the rise of the highly contagious delta variant is clouding the outlook for the economic recovery has spooked markets. The Fed announced Friday that its annual symposium would be held online instead of at its usual location in Jackson Hole, Wyoming. The symposium will run from Thursday through Saturday, but the main event will be the keynote speech by Fed Chair Jerome Powell. Last week’s minutes of the Fed’s July meeting pointed to a greater likelihood of a taper beginning this year and Powell’s speech could be the last hint at the central bank’s next steps before its September policy meeting. Economic data Besides the Fed’s annual get-together market watchers will also have to digest a slew of economic data in the week ahead, including reports on home sales, durable goods and personal income and spending. Figures on existing home sales are released on Monday, followed a day later by a report on new home sales. Data on durable goods orders is due out on Wednesday and initial jobless claims numbers will be released Thursday. Revised figures on second-quarter GDP are also out on Thursday but are expected to show little change. Friday brings the release of personal spending data along with the core PCE price index, the Fed’s preferred gauge of inflation, which has been running near a 30-year high. Earnings While the second-quarter reporting season has essentially run its course, there are still some companies left to report during the week. JD.com ($JD), Palo Alto Networks ($PANW) and Madison Square Garden ($MSGS) are reporting on Monday. Best Buy ($:BBY), Nordstrom ($JWN), Urban Outfitters ($URBN) and Toll Brothers ($TOL) are some of the names reporting on Tuesday. Salesforce ($CRM) and Dick’s Sporting Goods ($DKS) are due to report on Wednesday. HP, ($HPQ) Dell ($DELL), Gap ($GPS), Abercrombie and Fitch ($ANF), Dollar General ($DG), Dollar Tree ($DLTR), Ulta Beauty ($ULTA) and Peloton ($PTON) will all report on Thursday. It’s been a stellar earnings season – so far 476 of the companies in the S&P 500 have posted results and of those, 87.4% have beaten consensus.
ULong
by jfsrevg
US Market Technicals Ahead (16 August – 20 August 2021)Investors will be waiting for the FOMC minutes due Wednesday for further clarification on the next monetary policy steps to direct the market in the week ahead. At its July meeting, the Federal Reserve left monetary policy unchanged, but said asset purchases could start being reduced soon amid signs of a solid recovery in the US labor market and temporary inflationary pressure, and despite the lingering threat of the Delta variant. On the economic data front, latest U.S. retail sales data, along with a flurry of retail earnings will also keep the focus on consumer strength. Several large retailers including Walmart ($WMT), Target ($TGT), Macy’s ($M), Lowe's ($LOW) and Home Depot ($HD) will be reporting quarterly results. Chinese data will give a snapshot of how the economy is faring as the delta variant of the coronavirus bears down and New Zealand looks set to be one of the first of the world's advanced economies to raise interest rates in the pandemic era. Here’s what you need to know to start your week. S&P500 (US Market) The S&P 500 ($SPX) and Dow Jones Industrial Average ($DOW) hit fresh all-time highs during the week as both indexes capped off modest gains for the week. The benchmark index $SPX ended the week gaining a further +0.63% (+28 points), closing at 4,466 level. $SPX remains above its multi-month long trend channel that was earlier highlighted. Every break out of $SPX trend channel resistance has been met with a rejection (6 times since 2021). It is also important to note of the diminishing volume observed, reflecting a short term price-volume divergence in this run up. The immediate support to watch for $SPX this week is revised up to 4,400 level; a retracement towards its minor resistance-turned-support, and its current 20DMA level. Federal Reserve minutes On coming Wednesday the Fed will release the minutes of its July meeting, which will be scrutinized for policymakers’ views on when to start scaling back the Fed’s monthly bond purchases, as well as their outlook on the economy. Last month Fed officials declared the recovery intact despite the rise of the delta variant and since then the stronger-than-forecast July jobs report prompted several policymakers to suggest the tapering of asset purchases might start sooner rather than later. U.S. retail sales The U.S. economy is growing strongly but the spread of the delta variant remains a headwind so upcoming economic data will provide a fresh insight into consumer demand after a report on Friday showing that consumer confidence fell to its lowest level in a decade. Consumer spending accounts for around 70% of U.S. economic output. Investors will be eyeing Tuesday’s U.S. retail sales data to see whether the shift in spending from goods to travel, leisure and services, which aren’t reflected in retail sales, continued in July. Economists are forecasting a 0.2% fall, amid another expected steep decline in auto sales. Other reports on the slate include industrial production on Tuesday and initial jobless claims Thursday as well as the Fed’s Empire State manufacturing index on Monday and the Philadelphia Fed manufacturing survey on Thursday. China recovery China, which is dealing with its largest outbreak of Covid since the early days of the pandemic, has imposed mass testing and travel restrictions, crimping economic activity. Several Wall Street investment banks, including Goldman Sachs last week cut their China growth forecasts for the rest of the year. Data on retail sales, industrial production and fixed asset investment all due out on Monday will show how the economy fared in July. The numbers are expected to slow, adding to concerns that the recovery in the world’s second-largest economy is losing momentum. The recovery from the pandemic has been uneven in China, with export demand driving most economic growth, while domestic demand has returned more slowly. New Zealand rate hike The Reserve Bank of New Zealand bank meets on Wednesday and looks set to become the first major economy to raise interest rates since the pandemic hit as its red-hot economic recovery continues. Super-strong jobs data have cemented expectations of a hike, which would be New Zealand's first since mid-2014. This is in sharp contrast to 2020, when rates were slashed 75 basis points to 0.25% and a move below zero became a real possibility.
U
by jfsrevg
US Market Technicals Ahead (9 August – 13 August 2021)With U.S. CDC (Centers for Disease Control and Prevention) reversing its stance on mask for vaccinated people amid the resurgence of the coronavirus pandemic, Investors will be watching closely on the main U.S. economic data reports on consumer and producer price inflation for any potential scale back of stimulus by the Federal Reserve. Several Fed officials are slated to speak during the week and their comments could help clarify the Fed’s position on tapering. Earnings will continue but will be fewer in number as earnings season winds down. Here’s what you need to know to start your week. S&P500 (US Market) The US market ended at all time highs on Friday, after monthly U.S. jobs report came in better than expected, as the economy continues to navigate out from the COVID-19 pandemic. The benchmark index $SPX ended the week gaining +0.79% (+34.9 points), closing at 4,438 level. $SPX remains above its multi-month long trend channel that was earlier highlighted. Every break out of $SPX trend channel resistance has been met with a rejection (6 times since 2021). It is also important to note of the diminishing volume observed, reflecting a short term price-volume divergence in this run up. The immediate support to watch for $SPX this week is revised up to 4,370 level; a breakdown of two weeks price support. Inflation numbers The U.S. consumer price index and the producer price index released Wednesday and Thursday, respectively will provide an insight into the current pace of inflation, one of the key factors along with the labor market, that the Fed looks at when making its monetary policy decisions. CPI is expected to moderate slightly after last month’s jump of 0.9%, the strongest gain since June 2008. The Fed has said the current surge in inflation is just temporary, but market sentiment has been hit by fears of higher inflation resulting in a sudden tapering. Friday’s stronger-than-expected nonfarm payrolls report was the last before the Fed gathers for its annual meeting in Jackson Hole, Wyoming, at the end of the month to discuss policy and decide future stimulus strategy. The upbeat jobs numbers coupled with uncomfortably hot inflation data could prompt Fed officials to announce plans to begin tapering bond purchases as soon as September, the first step down the road to eventual interest rate hikes. Earnings wind down Earnings will continue in the coming week, but the number of companies reporting will tail off as earnings season continues to wind down. Some of the names reporting include AMC Entertainment ($AMC), Coinbase Global Inc ($COIN), Sysco ($SYY), Chesapeake Energy ($CHK), eBay ($EBAY), Wendy’s ($WEN), Lordstown Motors ($RIDE), Walt Disney ($DIS) and Airbnb ($ABNB). It has been a stellar earnings season – out of the 427 companies in the S&P 500 that have reported earnings so far, 87.6% beat analyst expectations, the highest on record. Bitcoin higher as sentiment recovers Bitcoin rose to its highest level in two months on Sunday as market sentiment recovered but remined fragile. The digital currency hit $45,284, its highest since mid-June. One area of uncertainty for crypto investors is the U.S. infrastructure bill currently making its way through Congress, which contains a cryptocurrency tax provision, tacked on at the last minute.
U
by jfsrevg
US Market Technicals Ahead (2 August – 6 August 2021All eyes turn to the US July jobs report due this Friday, with investors on the watch for any catalysts that could encourage the Federal Reserve to tighten monetary policy sooner. Earnings will continue to dominate headlines, with more than a quarter of S&P 500 companies set to report this week. Berkshire Hathaway ($BRK.A), General Motors ($GM) and Uber ($UBER) are the headlining companies due to report their quarterly result. The crackdown by Chinese market regulators could continue to be a major story and in the UK the Bank of England is to hold its latest policy meeting where it is likely to echo the Fed’s view that there is still some way to go before stimulus can be reduced. Here is what you need to know to start your week. S&P500 (US Market) The benchmark index $SPX ended the week with a muted -0.10% (-4.3 points), closing near its peak at 4,400 level. $SPX remains above its multi-month long trend channel that was earlier highlighted. Every break out of $SPX trend channel resistance has been met with a rejection (6 times since 2021). The immediate support to watch for $SPX this week is revised up to 4,310 level; the 50DMA short term support level, along with a 75% retracement within its trend channel. July jobs report Friday’s U.S. non-farm payrolls report will provide fresh clues on the strength of the economic recovery and inform the outlook for Fed policymakers. Economists are expecting the economy to have added 900,000 jobs in July after a forecast-beating 850,000 in June. Last week Fed Chair Jerome Powell said the job market still had “some ground to cover” before it would be time to start scaling back stimulus measures the central bank enacted in the spring of 2020 to combat the economic fallout from the coronavirus pandemic. In June Fed officials began debating how to wind down bond purchases but there is no clear timetable yet for when it will begin pulling back emergency market support measures. Earnings Investors will get a fresh batch of earnings reports in the week ahead from companies such as Eli Lilly ($LLY), CVS Health ($CVS) and General Motors ($GM). Expectations of strong future earnings have been the key driver of the S&P 500’s gains this year, according to a Credit Suisse analysis of the index’s year-to-date performance that compared change in stock valuations with changes in expected earnings. U.S. stocks fell on Friday and registered losses for the week as Amazon ($AMZN) shares dropped after the company forecast lower sales growth, but the S&P 500 still notched a sixth straight month of gains. China crackdown China’s recent regulatory crackdown has frightened investors away from Chinese stocks and left tech companies operating in an uncertain environment. China has been tightening its regulatory grip on overseas share issuance after it launched a probe of ride-hailing giant Didi Global last month, just days after its listing in New York. Following a sharp selloff authorities moved to calm market jitters which put a floor under stocks and the yuan, for now. In the coming week investors will be looking to Chinese PMI data amid growing concerns over a slowdown in the world’s second largest economy, which could be the next test for markets. Bank of England meeting The Bank of England is expected to keep stimulus running at its current pace when it meets on Thursday, despite some disagreement among policymakers over the size of its bond-buying program against a background of rising inflation and an improving economy. Officials are likely to raise their inflation forecast for this year, but the outlook for growth remains uncertain amid concerns over the delta variant.
UShort
by jfsrevg
US Market Technicals Ahead (26 July – 30 July 2021)The earnings season is gathering pace as it enters into the busiest phase this week. Investors will be closely watching earnings from tech heavyweights with Apple ($APPL), Facebook ($FB), Microsoft ($MSFT), Alphabet ($GOOGL) and Amazon ($AMZN) are reporting quarterly results. US Federal Reserve will also be meeting this week, and more details will likely emerge on the tapering discussions that started in June. On the economic data front, the US is releasing the first estimate of Q2 GDP which is expected to be the peak of the post-pandemic recovery. Other data includes durable goods orders, and personal income and outlays. Here is what you need to know to start your week. S&P500 (US Market) All three of the major averages finished at record closing highs last week after the markets tumbled at the start of the week on concerns about the spread of the delta variant of Covid and how it would potentially hinder the economic recovery. The uncertainty briefly sent bond yields lower, and investors jumped into tech stocks. Both bonds and equities rebounded quickly by the end of the week. The benchmark index $SPX rallied +1.84% (+79.5 points), including an intraweek move of +4.18% from its week low during the week. $SPX is currently back trading above its multi-month long trend channel that was earlier highlighted. Every break out of $SPX trend channel resistance has been met with a rejection (6 times since 2021). The immediate support to watch for $SPX this week remains at 4,285 level; the 20DMA short term support level. Fed taper talk The Fed wraps up its two-day meeting on Wednesday and its statement will be scrutinized for any mention of the timeframe for tapering its asset purchase program, although Chairman Jerome Powell made it clear in his recent testimony to Congress that the U.S. economy still needs the central bank’s full support. In June, policymakers began debating when to start cutting monthly purchases of $120 billion of Treasuries and mortgage-backed securities. Powell may indicate that while a discussion on tapering has started, there is still time before officials reach a conclusion on what they will do. Policymakers are expected to highlight the risk from the rapidly spreading Delta variant, which investors worry could derail the economic recovery. Most analysts expect the Fed to give a clearer indication of its plans for scaling back its quantitative easing program at its annual conference in Jackson Hole, Wyoming, in late August, before a formal announcement on tapering later in the year. Data dump Aside from the Fed meeting, investors will get an update on the strength of the U.S. economy with an end-of-month data dump. Monday sees figures on new home sales, which are expected to hit new highs, followed by durable goods orders and consumer confidence on Tuesday. The highlight is on Thursday with a first look at second quarter GDP and while expectations have been trimmed back in recent weeks, growth is still expected to be strong at 8.6% annualized. This would mark the recovery of all the lost output caused by the pandemic and could be the peak of the post-pandemic recovery. Figures on personal income and spending are due Friday, which include the Fed’s rumored favorite measure of inflation – the core personal consumer expenditure price index. Earnings deluge U.S. earnings are kicking into high gear and investors will be watching the largest tech names to gauge whether a recent shift away from reflation trade and into growth stocks that led markets for the last decade will continue. Earnings from Apple ($AAPL) and Alphabet ($GOOGL) on Tuesday, Facebook ($FB) on Wednesday and Amazon ($AMZN) on Thursday could accelerate a shift back into growth. FAANG stocks – Facebook, Amazon, Apple, Netflix ($NFLX), and Google parent Alphabet – are usually known for delivering stellar stock market returns. But only Facebook and Alphabet have beaten the S&P 500 so far this year as investors piled into financials, energy firms and other companies that should benefit from the post pandemic economic rebound.
U
by jfsrevg
US Market Technicals Ahead (19 July – 23 July 2021)Despite solid results last week as earnings season ramped up, investors have been shifting their focus to data releases with global economic growth beginning to show signs of fatigue while many countries, particularly in Asia that are struggling to curb the highly contagious Delta variant of the coronavirus. The spectre of elevated inflation, which the market has long feared, is also haunting investors. Treasury yields were plunging, signaling fearful investors are padding their portfolios with Treasuries. The second-quarter earnings continues this week, with companies such as IBM ($IBM), Netflix ($NFLX), Intel ($INTC), Johnson & Johnson ($JNJ) and Twitter ($TWTR) reporting their results. Other key data to follow include: US building permits and housing starts. Here is what you need to know to start your week. S&P500 (US Market) The benchmark index $SPX corrected -0.99% (-43.2 points) to close at 4,328 level during the week, and perceived safe haven assets, including the yen and gold, edged higher amid fears of rising inflation and a surge in coronavirus cases, while oil prices fell on oversupply worries. The initial break out of $SPX trend channel resistance is met with rejection for its 3rd time as cautioned in the previous week. The channel support is currently priced at 4,240 level, -2% away from existing level. The immediate support to watch for $SPX this week is at 4,285 level; an immediate break of support level established this month.
U
by jfsrevg
US Market Technicals Ahead (12 July – 16 July 2021)The US Q2 earnings season kicks off next week for an update on the private sector recovery. Starting from Tuesday, big banks including JPMorgan Chase ($JPM), Goldman Sachs ($GS), Bank of America ($BOA), Wells Fargo ($WFC), Citigroup ($C) and Morgan Stanley ($MS) are due to report. On the data front, Investors will also keep an eye on Fed Chair Powell semi-annual report to Congress. On the data front, consumer and producer inflation, retail sales and industrial production will provide an update on the economic recovery. Elsewhere, China GDP growth for Q2, UK CPI and jobless numbers and BoJ interest rate decision will also be in the spotlight. Here is what you need to know to start your week S&P500 (US Market) All three major averages notched record closes on Friday, after a sell-off the day before prompted by fears of slowing growth and worries that new Covid-19 variants could stall the global economic recovery. The benchmark index $SPX gained +0.5% (+21.8 points) to close at 4,372 level during the week, notching up towards another new all time high. The price ascend have allowed $SPX to break out of its trend channel resistance for the 3rd time in since February 2021. It is important to remain cautious of the existing rally, as every breakout of the highlighted channel is met with price-volume divergence weakness, along with a correction towards its channel support. The immediate support to watch for $SPX this week is at 4,230 level; a confluence of resistance turned support level; and break of its 50DMA.
U
by jfsrevg
US Stock In Play: $DOCU (DocuSign Inc)$DOCU successfully broke beyond its 52-weeks high that was established in early September 2020, attaining a new all time high of $293.65 in its latest market session. The past four weeks of price soar in $DOCU (+22.96%) display a classical double bottom technical breakout from $235 since early June this year. $DOCU shows that it has strong prospects ahead for the coming H2 and that it's not simply a beneficiary of the COVID-environment. It is one of the few SaaS stocks, that's guiding for solid profits at approximately 17% operating margins. With current price implied volatility remaining 40% below its the peak level in September 2020, $DOCU is poised for further upside with $300 as the next psychological price resistance level. $DOCU provides cloud based software in the United States and internationally. The company provides e-signature solution that enables businesses to digitally prepare, sign, act on, and manage agreements.
NASDAQ:DOCULong
by jfsrevg
US Market Technicals Ahead (5 July – 9 July 2021)US Markets will be closed on Monday in observance of Independence Day. Investors will be waiting for the FOMC minutes due on Wednesday for further clarification on the next monetary policy steps after a hawkish shift prompted market turbulence last month. Elsewhere, the European Central Bank (ECB) will also publish the minutes of its latest meeting, while China will release what will be closely watched inflation figures. Here is what you need to know to start your week. S&P500 (US Market) The benchmark index $SPX rallies furthered its all time high establishment, gaining +1.48% (+63.4 points) to close at 4,439 level during the week. The price ascend have allowed $SPX to break out of its trend channel resistance for the 3rd time in since February 2021. It is important to remain cautious of the existing rally, as every breakout of the highlighted channel is met with price-volume divergence weakness, along with a correction towards its channel support. The immediate support to watch for $SPX this week is at 4,220 level; a resistance turned support level, also an approximate of 4 ATR14 away from existing volatility, which is unlikely to be tested this week. Fed minutes The minutes of the Fed’s June meeting, when officials opened talks on tapering bond-buying and indicated interest rate increases could come sooner than previously anticipated, are due to be released on Wednesday. The minutes are coming on the heels of Friday’s nonfarm payrolls report, which showed that the U.S. created the most jobs in 10 months in June, indicating that the economy closed out the second quarter with strong momentum as the reopening continued. The robust data did little to ease concerns that a strong recovery and rising wages could prompt the Fed to begin unwinding its easy money policies sooner than expected. ISM services data The ISM index of service industry activity is set to be released on Tuesday and is expected to show continued strong growth after hitting a record high in May amid a reopening made possible by vaccinations against the coronavirus. The report could also underline ongoing labor constraints as hiring continues to lag, leading companies to offer higher wages to attract staff. ECB minutes The ECB is to publish the minutes of its June policy meeting on Thursday. ECB-watchers will also be on alert for news of several meetings due to take place in the coming weeks as part of the banks review of its monetary policy strategy. The bank wants to revamp its inflation target – currently set out close to but not above 2% – and is aiming to get the review done by September. On Wednesday, euro zone powerhouse German is to publish industrial production figures and the European Commission is to release updated economic forecasts for the European Union. China inflation China is to release data on both consumer price inflation and producer price inflation on Friday. Market watchers will be paying close attention to the cost of raw materials, which have soared due to higher commodity prices, and whether these increases are being passed onto the consumer. Prices are jumping in China and around the world, adding to fears that a wave of inflation could threaten the global economic recovery if it continues.
U
by jfsrevg
US Stock In Play: $SHOP (Shopify Inc)Upon the announcement of expanded partnership with Facebook ($FB) and Google ($GOOGL) for its one-click checkout to be made available to all merchants selling on Facebook and Google even if they do not use $SHOP, $SHOP broke out of its Cup and Handle chart pattern with a significant rally of +14.62%, triggering along with surge in transactional volume exceeding 100% of its 50D average. With $SHOP making consecutive attempts to print a new all time high closing this week, a price action close above its mid-term trend channel is likely to impose a parabolical price surge in $SHOP in the next 2 weeks. 52 weeks high for $SHOP is at $1552.23. $SHOP a commerce company, provides a commerce platform and services in Canada, the United States, the United Kingdom, Australia, Latin America, and internationally. The company’s platform provides merchants to run their business in various sales channels, including web and mobile storefronts, physical retail locations, pop-up shops, social media storefronts, native mobile apps, buy buttons, and marketplaces; and enables to manage products and inventory, process orders and payments, fulfill and ship orders
NYSE:SHOPLong
by jfsrevg
US Stock In Play: $MDB (MongoDB Inc)$MDB broken out of a double bottom chart pattern from $325, general trend resumption price action behavior, rallying +17.36% within a week. $MDB is currently close at $380, its 3 months high. With $MDB current implied volatility remaining 40% away from its peak of $26/day that was set in March 2021, $MDB remains in traction to recapture its all time high of $428 at its current price action momentum that is defying general market weaknesses. $MDB provides general purpose database platform worldwide. The company offers MongoDB Enterprise Advanced, a commercial database server for enterprise customers to run in the cloud, on-premise, or in a hybrid environment; MongoDB Atlas, a hosted multi-cloud database-as-a-service solution; and Community Server, a free-to-download version of its database, which includes the functionality that developers need to get started with MongoDB. It also provides professional services, such as consulting and training.
NASDAQ:MDBLong
by jfsrevg