The Day Ahead For July 18th Sees Federal Reserve Chairman Powell Head To House For Testimony
Stocks are continuing to have a strong month. Key to the continued outperformance is the S&P 500 holding above 2800. A break of this level would be a problem.
The inability to clear 2800 in March and June led to selling. So we should expect the same here if we cannot clear this key level. So far so good. There have been two closes above 2800, yesterday and last Friday. Pay attention to this level.
Conversely, the Russell 2000 made its closing high for the year on June 20th. That high was 1706.99. Yesterday the Russell 2000 closed at 1687.26. Pay attention to the Russell 2000 closely because if it rolls over that is a hint of trouble on the horizon.
In After Hours Trading
IPOs on deck of note Coastal Financial (CCB), Crinetics Pharmaceuticals (CRNX), DERMadoctor (DDOC), Rubius Therapeutics. Secondaries of note GWRS, NSTG and RMBL.
In After Hours Trading: SURPRISES ADTN +.15 CSX +.14 FNF +.03 IBKR +.16 MLNX +.16 UAL +.16. MISSES none of note. FLAT: .
Lower Guidance: .
Mixed Guidance: .
Positive Guidance: MLNX.
What's Happening This Morning
U.S. futures: S&P -0.50, Dow Jones +7, NDX -8 and Russell 2000 -1.70 with fair values modestly positive. Asia mixed and Europe higher.
Gold,silver and copper lower. WTI Crude and Brent Oil Futures lower. Natural Gas is higher. $ is higher vs Euro, higher vs. Pound and higher vs. Yen. US 10 year Treasury price 120.16 with yields flat since yesterday. Prices as of 7:40 a.m. EDT.
Top Sectors All sectors except Conglomerates.
Weak Sectors Conglomerates.
One month winners Utilities, Healthcare and Consumer Goods.
Three Month Winners Utilities Conglomerates, Services and Technology.
Six Month Winners Services, Technology and Conglomerates.
One Year Winners All except for Utilities.
Year To Date Conglomerates, Services and Technology.
Earnings due after the close (by avg. trade volume): IBM AXP CCI KMI EBAY CP URI SLG AA.
Earnings due tomorrow morning: TSM SAP PM UNP DHR BK BBT TRV RCI KEY NUE FITB SNA WBC.
Rags & Mags: Inside Wall Street
Google was fine $5 billion by the European Union (EU) and told they had 90 days to fix illegal actions. (Bloomberg)
The Dollar rose after the first day of Federal Reserve Chairman Powell's testimony. Day 2 of testimony starts at 10:00 a.m. EDT. (Bloomberg)
Former Federal Reserve Chairman Bernanke as well as Former Treasury Secretaries Geithner and Paulson are concerned about the "next crisis". (Bloomberg)
President Trump says he misspoke on Russia meddling. (NYT)
Federal Reserve Chairman Powell pushed by Senators on slow wage growth. (NYT)
Are you prepared for financial stress when it returns. (NYT)
Congress may make changes to 401(k) Plans. (WSJ)
Reported Earnings This Morning
Reported Earnings This Morning (Best to Worst absolute beats/misses [+.02 or greater/-.02 or worse]): SURPRISES ABT +.02 ASML +.16 GWW +.63 MTB +.10 MTG +.13 MS +.20 NTRS +.04 NVS +.03 TXT +.17 USB +.02. MISSES ERIC -.33.
Lower Guidance: .
Current Morning missing: .
Mixed Guidance: GWW.
Positive Guidance: .
Yesterday saw 1646 stocks rise and 1219 fall on the NYSE. NASDAQ saw 1716 rise and 1246 fall.
The SP 500 is back above its 50 day exponential moving average and is above its 200 day exponential moving average. The Russell 2000 is above its 50 day moving exponential average and is above 200 day exponential moving average.
The 10 day spread moving average of breadth is in cash. The Madison Market Timing Indicator is still invested.
YTD 54% of stocks are higher and 54% are lower. Updated 7/6/18 close.
June Housing Starts are due out at 8:30 a.m. EDT and are expected to drop to 1,318,000 from 1,350,000.
Weekly Crude Oil Inventories are due out at 10:30 a.m. EDT.
Federal Reserve Chairman Powell moves on to the House in his second day of Humphrey Hawkins testimony.
June Beige Book is due out at 2:00 p.m. EDT.
Conference & Analyst Meetings
Meetings, Conference Calls or Announcements of note, GSRX NCS .
Conference of Note
M & A News
Farnborough International Airshow
Key Upgrades and Downgrades
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|Goldman Sachs||CXO||NFX CLX AVGO|
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|Citigroup CC Merrill Lynchp|| || |
|Merrill Lynch||PAA|| |
|Wachovia/Wells Fargo|| || |
|Credit Suisse|| || |
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|UBS|| || |
|Stifel|| || |
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The price of Crude Oil via USO has now dropped -7.43% in the last week. This drop will be a plus for gasoline price dropping. As noted above, watch to see how crude oil inventories play out at 10:30 a.m. EDT.
Gold via GLD is in a bigger world of hurt here. It has fallen from April by -9.23%. Key levels for gold are holding $115. We be putting up our next GLD option trade in <a href="https://goldandenergyoptionstrader.com/page/geo/">Gold & Energy Options Trader</a> fairly soon.
Rumor has it a rework of the 401(k) is in the works on the Hill. Anything that encourages more investment in stocks and other assets is a plus.
We need to see how this plays out but this got our attention this morning and we will be writing more about this as more details emerge.