Rebel Yell Morning Market Report

Your Daily Financial Market Briefing - Giving You An Investing Edge Before Each Trading Day Begins

The Day Ahead For July 24th Earnings Strong But Trade Issues Loom


Chart of Interest

The chart that interests us today is the biggest ETF Utility, XLU.

Treasury Bond yields began to rise yesterday. This will hurt interest rate sensitive stocks and ETFs. So this morning we take a look at Utilities via the largest ETF in the Utility space, XLU.

[Image 2]

XLU is flirting with breaking below its 20 day moving average (red line). It remains above the 50 day moving average (blue line). Our bias indicator is the weekly Displaced Moving Average Channel (yellow band) and it remain above,barely. This needs to be watched closely.

Last the Erlanger Volume Swing (EVS) is still positive but is fading. A break of the 0 line would be a big negative.

Macro

The biggest economic data point of the week will come on Friday at 8:30 a.m. EDT when we get the first look at Q2 GDP. The estimate is 4.1% up from 2.0% in Q1. Some estimates that we have seen have been as high as 5.2%. 

A strong report will surely send bond yields higher and that is what may be going on with the jump yesterday in bond yields.


Daily Playbook

In After Hours Trading


IPOs on deck of note none today. Secondaries of note BBGI MTLS.

In After Hours Trading: SURPRISES GOOGL +2.05 AMTD +.10 KALU +.08 CR +.06 STLS +.04 BRO +.03 OI +.03. MISSES none of note . FLAT: .

Lower Guidance: .

Mixed Guidance: .

Positive Guidance: CR.

What's Happening This Morning


U.S. futures: S&P +6.50, Dow Jones +106, NDX +14 and Russell 2000 +3.50 with fair values lower. Asia and Europe higher.

Gold,silver and copper higher. WTI Crude and Brent Oil Futures higher. Natural Gas is higher. $ is lower vs Euro, lower vs. Pound and lower vs. Yen. US 10 year Treasury price 119.50 with yields higher since yesterday. Prices as of 7:55 a.m. EDT.

Top Sectors Financials and Technology.

Weak Sectors Utilities and Industrial Goods.

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 Expected


Earnings due after the close (by avg. trade volume): T TXN SYK CNI CB EQR WCN AMP RHI CSL.

Earnings due tomorrow morning: BA KO UPS TMO NEE ANTM GD NOC GM BSX NSC HCA.

Rags & Mags: Inside Wall Street


China enacts stimulus with its monetary policy. (Bloomberg)

Food Stamp use remains above recession periods. (Bloomberg)

Nike (NKE) raises salaries for 7,000 employees or 10%. (CNBC)

U.S. meat in oversupply situation. (CNBC)

China may stop buying U.S. Oil which was 20% of production. (WSJ)

Apple (AAPL) is vulnerable if trade war accelerates. (WSJ)

Bond fund managers not buying into emerging markets rebound. (WSJ)

Hedge Fund Billionaire Leon Cooperman to shut Omega Advisors and convert to a family office by year end. (NYT)

Reported Earnings This Morning


Reported Earnings This Morning (Best to Worst absolute beats/misses [+.02 or greater/-.02 or worse]): SURPRISES BIIB +.71 LMT +.39 LLY +.20 HUBB +.19 ATI +.16 PCAR +.16 AVY +.11 UTX +.11 SHW +.09 HOG +.09 VZ +.05 JBLU +.02. MISSES MMM -.01.

Missing: .

Lower Guidance: .

Current Morning missing: .

Mixed Guidance: .

Positive Guidance: BIIB LMT LLY.

Data Points


Yesterday saw 1228 stocks rise and 1658 fall on the NYSE. NASDAQ saw 1433 rise and 1518 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.

Economics


FHFA Housing Price Index is out at 9:00 a.m. EDT and is expected to rise 0.4% from 0.1%.

Treasury 2 Year Auction will price $35 billion.

Politico

Conference & Analyst Meetings


Meetings, Conference Calls or Announcements of note, ALNY .

Conference of Note


Alzheimer Association International Conference.

International AIDS Society Conference on HIV Science.

M & A News

Key Upgrades and Downgrades

FirmUpgradesDowngrades
JP Morgan  
Goldman Sachs  
Morgan Stanley  
Deutsche Bank  
Citigroup CC Merrill Lynchp  
Merrill LynchMOS GIL 
Wachovia/Wells Fargo  
Credit Suisse  
Banc of America  
UBS  
Stifel  
William Blair  
Jefferies  
Bernstein  
Needham  
Raymond James  
Stifel  
Friedman Billings  
Bernstein  
Nomura  
Robert W. Baird  
Cowen  
Sun Trust RHBHGE  


Stocks

Google (GOOGL) came through with a strong earnings beat of $2.03. The company also beat on revenues. Google remains a force. Today it will open at a new all-time high.

Earnings season is nothing less than terrific as through last Friday 75 S&P 500 stocks had reported and the average rise was 20%. This morning as an example the only miss of note was 3M (MMM) that missed by $.01.

Considerations

Tomorrow sees the European Union led by Jean-Claue Juncker and Trade Chief Cecilia Malmstrom visit The White House to discuss trade and specifically auto tariffs with President Trump.

Then on Thursday the World Trade Organization (WTO) will meet to discuss the trade friction around the world. At the same time, North American countries are meeting on NAFTA.

If these three separate events go well, then stocks will push higher. However, if they go badly, then stocks will be set for a drop. Pay close attention to tomorrow and Thursday headlines from these events.

Video Of The Day

CNBC interviewed John Kilduff on Again Capital on the move in oil. The sabre rattling was worth a move of $1. The Trump Administration wants regime change in Iran.

Kilduff lays out potential next steps. A great interview.

Interview


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