Daily Market Update for 6/28Summary: Consumer Confidence data shocked investors as it hit a 16-month low and raised worries over slower economic growth.
Notes
Ideas always welcome in the comments. Errors will be amended as comments on TradingView or corrected inline in my blog.
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Tuesday, June 28, 2022
Facts: -2.98%, Volume higher, Closing Range: 1%, Body: 79% Red
Good: Nothing
Bad: Drop below 21d EMA, higher volume, closing range
Highs/Lows: Lower high, Lower low
Candle: Huge red body below a long upper wick
Advance/Decline: 0.26, four declining stocks for every advancing stock
Indexes: SPX (-2.01%), DJI (-1.56%), RUT (-1.86%), VIX (+5.23%)
Sector List: Energy (XLE +2.70%) and Utilities (XLU -0.37%) at the top. Technology (XLK -3.00%) and Consumer Discretionary (XLY -3.99%) at the bottom.
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Market Overview
Consumer Confidence data shocked investors as it hit a 16-month low and raised worries over slower economic growth.
The Nasdaq fell by -2.98% with higher volume than the previous day. The 79% red body is below a long upper wick which formed right at the open before the economic data was available. The market sold off the rest of the day, leaving the Nasdaq with a 1% closing range. There were four declining stocks for every 1 advancing stock.
The S&P 500 (SPX) was the next worst-hit index, falling by -2.01%. The Russell 2000 (RUT) declined by -1.86%. The Dow Jones Industrial Average (DJI) closed the day -1.56% lower. The VIX Volatility Index rose by +5.23%.
Only one of the eleven S&P 500 sectors gained. Energy (XLE) followed oil prices higher and closed up by +2.70%. The worst two sectors for today were Technology (XLK -3.00%) and Consumer Discretionary (XLY -3.99%).
CB Consumer Confidence came in at 98.7, lower than the forecast of 110.4. API Weekly Crude Oil Stock showed much higher demand than expected with inventories falling by -3.799 million barrels compared to the expectation of -0.110 million barrels.
The US Dollar Index (DXY) rose to +0.52%. US 30y, 10y, and 2y Treasury Yields all declined. High Yield (HYG) and Investment Grade (LQD) Corporate Bond prices moved opposite of Treasuries, declining for the day. Brent Oil rose to $113.54 a barrel.
The put/call ratio ended the day at 0.810. The CNN Fear & Greed index moved back to the edge of Extreme Fear.
All big six mega-caps declined. Meta (FB) had the biggest decline, falling by -5.20%. Apple (AAPL) had the smallest decline, but still lost -2.98% of its value today.
Exxon Mobile (XOM) and Chevron (CVX) topped the broader mega-cap list, advancing by +2.77% and +1.61%. Nvidia (NVDA) was at the bottom of the mega-cap list, falling by -5.26%.
The entire Daily Update Growth List declined today. Twitter (TWTR) held up the best, losing only -1.02% while much of the declined by more than 5%. Peloton (PTON) had the biggest decline, losing -8.62% and landing at the bottom of the growth list.
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Looking ahead
An update on GDP numbers for Q1 will be released in the morning. Fed Chair Jerome Powell is scheduled to speak at 9:00 am. Crude Oil Inventories get a weekly update after the market opens.
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Trends, Support, and Resistance
The Nasdaq fell back below the 21d EMA.
If the index would return to the trend line from the 6/16 low, that would require a +4.53% gain.
The gain required to get back to the five-day trend line is only slightly better, requiring a +3.69% gain.
If the one-day trend line were to continue into Wednesday, that would mean another -4.14% decline.
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Wrap-up
Big tech and growth stocks took another hit as Consumer Confidence dips on inflation worries. The US Dollar's continued strength relative to other currencies is also a headwind for large multinationals who need to repatriate a large portion of their revenues, bringing the forecast for top line and bottom line performance down. The lower market outlook for US companies is reflected in the widening gap between Corporate bond yields and Treasury bond yields.
Stay healthy and trade safe!
