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Showing Week of May 22, 2017

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May 28, 2017 - Weekend Market Update

TradeWise – Weekend Update

May 28, 2017

 

U.S. stocks posted strong weekly gains and once again showed their resilience despite mediocre growth numbers. Expectations of GDP rising above 3% for the second quarter have fizzled as April reports bite into estimates. 2% may be a more realistic goal as markets have ignored the data and expect better things into the end of 2017. Durable Goods orders are also underperforming but the plow horse economy continues to show solid albeit unspectacular results. Investors have embraced the new economy as the major stock indices are at or near all-time highs. The Fed hinted at shrinking the balance sheet according to last week’s FOMC minutes, which put the S&P 500 on a 7-session win streak into the holiday weekend. For the week, the S&P 500 Index (SPX) rose 1.4% while the Blue Chip-heavy Dow Jones Industrial Average ($DJI) finished up 1.3%.  The Nasdaq (QQQ) led the major indices finishing up 2.4% while the small caps (IWM) continues to lag as it rose only 1.1%.  Smalls caps (IWM) have underperformed so far this year and could be the catalyst for another leg up if it isn’t signaling a market reversal.  

Treasury prices didn't show much reaction to the Fed's plans which have been expected all year. The Fed's deliberate effort to spell its intentions out carefully and ahead of time are aimed at avoiding any surprises. The anticipation for a rate hike in June is up to an 83% probability according to the Fed Funds market but yields remain at low levels. The Fed may or may not raise rates at the June FOMC, but if they do it won't be because the second-quarter growth is surging. Oil (/CL) showed some choppiness in the week, falling sharply following OPEC output cuts that also completely met expectations. Crude rallied all month into OPEC's meeting then swung sharply lower on Thursday. A rebound on Friday could not salvage the week as oil fell 2%. Option volatility continues to reflect little downside risk as stocks surge into the end of the month. The closely watched CBOE Volatility index (VIX) finished the week down 18% and it settled below the $10 level once again. The ‘sell in May and go away’ scenario has been forgotten as markets are still in an upward trend.  

Following Monday's day off for Memorial Day, an extremely heavy week of data kicks off on Tuesday with the biggest piece yet of second-quarter GDP: April consumer spending. The report will also include the Fed's PCE inflation gauges where continued weakness is expected. Consumer confidence, which in contrast to consumer spending has been very strong, follows on Tuesday amid expectations for continued strength. Pending home sales follow on Wednesday and will offer an advance indication on the Spring success of the housing market. The Beige Book will be Wednesday's highlight offering the Federal Reserve's assessment of the economy and setting the backdrop for June's FOMC. Thursday will start off with ADP's payroll estimate, which can be erratic, followed by ISM's manufacturing report, which has been strong. The consensus for May nonfarm payroll growth is a very solid 185,000 with the unemployment rate seen holding at a very low 4.4%. Average hourly earnings could be the key to this report but are not expected to show much improvement in what would underscore the trouble for the consumer. Trade data will also be posted Friday morning and offer another key input for second-quarter GDP.  


Major Earnings for the Upcoming Week:

Monday:

A.M. –  Markets

P.M. Closed

 

Tuesday:

A.M.– N/A

P.M.N/A

 

Wednesday:

A.M. – ADI, KORS

P.M. –BOX, PANW

 

Thursday:

A.M. –CIEN, DG, EXPR, MBLY

P.M. –FIVE, LULU, RH, WDAY, ZUMZ

 

Friday:

A.M.– N/A

 

Economic Releases (5/29– 6/2):

Monday:

Memorial Day – U.S. Markets Closed

                                                                                                                                                                          

Tuesday:

7:30 am CT – Personal Income and Outlays

8:00 am CT – S&P Case-Shiller HPI

9:00 am CT – Consumer Confidence

9:30 am CT – Dallas Fed Mfg. Survey

 

Wednesday:

6:00 am CT – MBA Mortgage Applications

7:00 am CT – Fed’s Kaplan Speaks

8:45 am CT – Chicago PMI

9:00 am CT – Pending Home Sales

1:00 pm CT – Beige Book

 

Thursday:

Auto Sales – All Day

7:15 am CT – ADP Employment Report

7:30 am CT – Weekly Jobless Claims

7:30 am CT – Productivity and Costs

8:45 am CT – PMI Mfg. Index

9:00 am CT – ISM Mfg. Index

9:00 am CT – Construction Spending

9:30 am CT – Natural Gas Inventories

10:00 am CT – Oil Inventories

 

Friday:

7:30 am CT – May Jobs Report

7:30 am CT – International Trade

12:00 pm CT – Baker Hughes Rig Count

 

*Follow us on Twitter @TradeWise

 

*BOLDabove indicates important and potential market-moving news and information

                                                   

TradeWise is offering a free trial for 2 trading strategies for 60 days each: Use coupon code  marketblog to apply this trial on your current account at www.tradewise.com  or contact us at support@tradewise.com

 

Join the other recipients and help provide some feedback on our daily market blog and Weekend Update by sending an e-mail to support@tradewise.com.  Your suggestions are important to us in providing the highest quality service.

May 26, 2017 - Market Blog

5/26/2017

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The tech sector once again led stocks to finish at all-time highs on Thursday. Both the Nasdaq (QQQ) and S&P 500 (SPY/SPX) settled at record closes as Amazon.com (AMZN) and Alphabet/Google (GOOGL) closed in on $1,000 a share. Much of the gains were caused by optimism that the Fed will begin to unwind its balance sheet successfully by the end of the year. This morning, U.S. equity futures (/ES) are modestly lower as investors begin to look to the Memorial Day weekend. There was little news overnight but yesterday's admission by Paul Ryan that the border adjustment tax was most likely a futile act may help the tax reform plan move forward. Oil prices (/CL) have given up overnight gains and continue to slide ahead of the Wall Street open. The OPEC agreement to extend the production cut quota for another nine months yesterday was largely priced into crude and when additional cuts were not announced, traders were disappointed and pushed oil prices lower.  

 

Bond prices are firmer with yields down around the world as stocks decline. The inverse Treasury Note yield is off over 2 bps to 2.23%. Note there's an early close in Treasuries today (12 pm CT) ahead of the long Memorial Day weekend. Weakness in oil prices has weighed on equities after the almost 5% drop Thursday. Overseas, the Nikkei closed 0.64% lower while most European markets are down almost 1%, with the German DAX and French CAC leading. The FTSE is the exception, trading flat as the Sterling softens as the latest poll showed the Conservative Party lead has slipped. Today's U.S. calendar features the second look at Q1 GDP, April durable goods and the final May reading on consumer sentiment.  

 

Stock Stories:

Costco (COST) – 10 lbs of peanut butter – The warehouse retailer posted a solid quarter yesterday as EPS beat expectations despite a miss on top-line revenue.  The stock is jumped almost 2% yesterday after the report and is up another 1.5% ahead of the opening bell.

 

Major Economic Reports:

7:30 am CT – Durable Goods Orders

7:30 am CT – GDP

9:00 am CT – Consumer Sentiment

12:00 pm CT – Baker-Hughes Rig Count

 

Notable Earnings:   

Friday – 5/26:   

Before Market:   BIG

After Market:  N/A

 

Tuesday – 5/30:

Before Market:  N/A

After Market:  N/A

 

*Follow us on Twitter @TradeWise

 

**BOLD above indicates important and potential market-moving news and information

 

TradeWise Advisors is offering a free trial for 2 trading strategies for 60  days each: Use coupon code  Marketblog to apply this trial on your current account at www.tradewise.comor contact us at support@tradewise.com

 

**Watch and listen to the TradeWise team every Thursday from 12:30-1:30 CT in the Swim LessonsSM chat room on the thinkorswim® by TD Ameritrade Trading Platform**

                                  

Join the other recipients and help provide some feedback on our daily market blog by sending an e-mail to support@tradewise.com.  Your suggestions are important to us in providing the highest quality service.

May 25, 2017 - Market Blog

5/25/2017

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Stocks finished Wednesday’s session on a high note as the benchmark S&P 500 (SPX) settled at a new all-time high. The $2400 level had been a major resistance level that looks to be firmly broken and may signal more upside in the near-term. This morning, U.S. equity futures (/ES) are higher as they take their lead from Asian markets which were higher overnight. After the low score from the CBO on the initial Republican health plan proposal, the hope is the GOP will move the plan to the side and get focused on tax repeal. This optimism continues to propel stocks to record levels. Yesterday’s FOMC minutes indicated an interest rate hike could be seen "soon." However, there was a caveat that it "Members generally judged it would be prudent" to wait to ensure the Q1 slowing was temporary before tightening further. Although the comments were seen as Dovish, it most likely signaled that the Fed will continue their ‘3-hike’ plan for 2017.  

 

Oil (/CL) prices are down over 1.5%, which breaks a three week bull run and stands as the biggest one-day drop since May 4th.  Crude producing nations reportedly have agreed to extend production cuts for an additional nine months. The proposed cuts are expected to be shared by non-OPEC producers later today. U.S. Treasuries are up ahead of the Wall Street open and extended yesterday’s modest gains. The inverse 10-year yield is falling and is reflecting the Dovish comments out of the FOMC minutes. Overseas, equity markets are mixed as Asia rose but European stocks have given up overnight gains. On the domestic calendar, investors will be watching the Weekly Jobless claims data, trade balance figures, wholesale inventories and the weekly natural gas inventory report.  

 

Stock Stories:

Best Buy (BBY) – Upside Surprise – The electronics retailer posted blowout quarterly results this morning. The Company soundly beat both EPS and top-line revenue as online sales sparked their growth by jumping 22% y/y.  The stock is responding positively as the shares are up over 12% ahead of the opening bell.

 

Major Economic Reports:

All Day- OPEC Meeting

7:30 am CT – Weekly Jobless Claims

7:30 am CT – International Trade in Goods

9:00 am CT – Fed’s Brainard speaks

9:30 am CT – Natural Gas Inventories

10:00 am CT – Kansas City Fed Mfg. Index

12:00 pm CT – 7-Year Note Auction

 

Notable Earnings:   

Thursday – 5/25:   

Before Market:   ANF, BBY, DLTR, HRL, IGT, MDT, SHLD, TD

After Market:  BRCD, COST, DECK, GME, MRVL, SPLK, ULTA

 

Friday – 5/26:

Before Market:  BIG

After Market:  N/A

 

*Follow us on Twitter @TradeWise

 

**BOLD above indicates important and potential market-moving news and information

 

TradeWise Advisors is offering a free trial for 2 trading strategies for 60  days each: Use coupon code  Marketblog to apply this trial on your current account at www.tradewise.comor contact us at support@tradewise.com

 

**Watch and listen to the TradeWise team every Thursday from 12:30-1:30 CT in the Swim LessonsSM chat room on the thinkorswim® by TD Ameritrade Trading Platform**

                                  

Join the other recipients and help provide some feedback on our daily market blog by sending an e-mail to support@tradewise.com.  Your suggestions are important to us in providing the highest quality service.

May 24, 2017 - Market Blog

5/24/2017

 

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U.S. Equities will be looking to secure its 5th consecutive positive session today with futures (/ES) barely hanging onto gains pre-market.  Yesterday saw the S&P 500 temporarily peak above a key $2400 level before finishing just shy at $2398. Ten of eleven sectors pressed higher with financials and healthcare leading on the day. Consumer discretionary slumped with AutoZone (AZO) accounting for a 10% intra-day loss off a weaker sales target.  The Dow Jones Industrials ($DJI) were better by 43 points as Caterpillar (CAT) and Goldman Sachs (GS) propped up the weighted index to 20937.  The recently hot Nasdaq Composite (COMP) tacked on a more modest 5 point gain to end at 6138 which is inching back towards its 6170 highs recorded mid-May. Overseas, Chinese markets shrugged off a credit rating downgrade by Moody’s to close moderately higher even as growing leverage begins to become of greater concern amongst analysts. 

 

The U.S. dollar has attempted to recover from 6 month lows this week off President Trump’s pro-growth initial budget proposal. An impending rate hike in the June FOMC meeting is also offering some support. Treasury rates saw the highest intra-day spike in two weeks with a 3 basis point climb off the same. Crude has seen an impressive 12% rally so far in May with 5 straight sessions of gains now in the books. Weekly inventory numbers are due at 9:30 CT and economists are predicting a decline of 2.4 Million barrels just a day before a pivotal OPEC meeting assembly.  The cartel is expected to curb production levels for the next 9 months in an attempt to further stabilize global pricing.  Gold Futures (/GC) were off nearly ½ of a percent to start out the week at 1255 an ounce in response to the renewed interest in the dollar along with general equity accumulation. 

 

Today will feature more housing data in an attempt to redeem yesterday’s disappointing new home sales which fell well short of expectations despite lowered borrowing costs as of late. Existing home sales will be looking for an annualized rate near 5.65 Million during the hottest season of the year. The 1:00 CT release of the FOMC Meeting minutes will also keep investors captivated in one of the final chances before the June 14th rate decision to get an in-depth look at the inner workings of the committee. 

 

Stock Stories:

Intuit (INTU) –Really Getting Into IT! – The makers of QuickBooks and TurboTax are ecstatic this morning after an upbeat earnings result.  Revenue jumped 10% to $2.5 Billion over the last quarter with the user base of QuickBooks essentially doubling.  The company cited an arrangement with Uber and the surge in other self-employment income as a primary driver with more complicated taxes forcing filers to utilize their solution.  However, any extreme simplification to the tax code with President Trump’s promise would likely hamper their recent success.  Shares are up nearly 9% pre-market in response. 

 

Major Economic Reports:

8:00 am CT – Housing Price Index

9:00 am CT – Existing Home Sales

9:30 am CT – Crude Oil Inventories  

12:00 pm CT – 5 year Note Auction

12:15 pm CT – FOMC Member Kaplan speaks

1:00 pm CT – FOMC Meeting Minutes

 

Notable Earnings:   

 

Wednesday – 5/24:   

Before Market:  AAP, BMO, CHS, LOW,TIF, SDRL

After Market:  NTAP, GES, HPQ, PVH, WSM, SCVL

 

Thursday – 5/25:

Before Market:  ANF, BBY, DLTR, HRL, IGT, MDT, TD

After Market:  BRCD, COST, DECK, GME, MRVL, SPLK, ULTA, ZOES

 

*Follow us on Twitter @TradeWise

 

**BOLD above indicates important and potential market-moving news and information

 

TradeWise Advisors is offering a free trial for 2 trading strategies for 60  days each: Use coupon code  Marketblog to apply this trial on your current account at www.tradewise.com or contact us at support@tradewise.com

 

**Watch and listen to the TradeWise team every Thursday from 12:30-1:30 CT in the Swim LessonsSM chat room on the thinkorswim® by TD Ameritrade Trading Platform**

                                  

Join the other recipients and help provide some feedback on our daily market blog by sending an e-mail to support@tradewise.com. Your suggestions are important to us in providing the highest quality service.

 

May 23, 2017 - Market Blog

5/23/2017

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U.S. equity futures (/ES) are pointing to a positive open as the market looks to extend the rally that began last Thursday. Headlines are being dominated by the terrorist attack in Manchester, England and the submission of the President's budget proposal. Both had little effect on the futures as investors respond to encouraging economic data from Europe and look to the day's domestic data, which will include reports on purchasing manager's intentions, new home sales, and manufacturing in the Richmond Fed district.  President Trump continues his first trip abroad and is focusing on revival of the stalled peace process between Israel and Palestine.    

 

Oil (/CL) prices are down slightly and have pulled back from new one-month highs made just yesterday.  Crude markets are taking notice of Trump's budget proposal, which will be delivered to Congress today and has us selling up to half the U.S. oil reserves. Kuwait's oil minister also said today that not all OPEC countries and allied oil producers were behind the Saudi-Russian led proposal to extend the prevailing output agreement for another nine months. This will come to a head at the cartel's meeting on Thursday. U.S. Treasuries are up slightly and brushing off gains in equities. Overseas, stocks were mixed as Asian equities closed mostly lower while European markets are in positive territory.  

 

Stock Stories:

Toll Brothers (TOL) – Building! – The homebuilder posted solid quarterly numbers this morning as its results solidified the recent housing strength. The Company beat both EPS and top-line revenue and raised its outlook above estimates. The stock is responding positively as the shares are up over 3% ahead of the opening bell.

 

Major Economic Reports:

8:45 am CT – PMI Composite Flash

9:00 am CT – New Home Sales

9:00 am CT – Richmond Fed Mfg. Index

12:00 pm CT – 2-year Note Auction results

2:15 pm CT – Fed’s Kashkari speaks

4:00 pm CT – Fed’s Harker speaks

 

Notable Earnings:   

Tuesday – 5/23:   

Before Market:   AZO, DSW, TTWO, TOL

After Market:  TCS, INTU, UVV

 

Wednesday – 5/24:

Before Market:  AAP, BMO, CHS, LOW, TIF, SDRL

After Market:  NTAP, GES, HPQ, PVH, WSM, SCVL

 

*Follow us on Twitter @TradeWise

 

**BOLD above indicates important and potential market-moving news and information

 

TradeWise Advisors is offering a free trial for 2 trading strategies for 60  days each: Use coupon code  Marketblog to apply this trial on your current account at www.tradewise.comor contact us at support@tradewise.com

 

**Watch and listen to the TradeWise team every Thursday from 12:30-1:30 CT in the Swim LessonsSM chat room on the thinkorswim® by TD Ameritrade Trading Platform**

                                  

Join the other recipients and help provide some feedback on our daily market blog by sending an e-mail to support@tradewise.com.  Your suggestions are important to us in providing the highest quality service.

May 22, 2017 - Market Blog

5/22/2017

*Oil pumping!  Option Trade Ideas for your Inbox!  Get 2 Free Strategies for 60 days  - email support@tradewise.com or call 877.733.6786*

 

U.S. equity futures (/ES) are flat to slightly higher to start the week. President Trump is currently touring the Middle East on his first foreign trip since taking office. Despite calls that Trump’s tax reform and deregulation plans will get pushed back and potentially pared down, stocks rallied strongly into the end of last week.  Equities still finished in the red for the second consecutive week but momentum remains to the upside. For all the jobs everywhere, consumer spending is soft and is probably behind the uneven performance of the housing sector. What looked to be a slingshot second quarter is starting off mediocre at best.    

 

Oil (/CL) prices logged a new one-month high at $51.25 overnight and are currently just below this level ahead of the Wall Street open. Crude demand has picked up after prices wobbled on Friday following weekly data showing an 18th consecutive weekly rise in the U.S. oil rig count. Markets are anticipating this Thursday's OPEC meeting will affirm a nine-month extension in the 1.8 M barrel-a-day output reduction, which has been in place since the start of the year and is due to finish at the end of June. U.S. Treasuries are relatively flat and following stocks this morning. The 10-year rate is up just over 1 bp higher at 2.245%. Overseas stocks were mixed overnight, having rallied in Japan on follow through from the recovery on Wall Street last Friday. In the U.S. today, Fedspeak features amid an otherwise light economic slate. On tap are speeches by Harker, Kashkari, Brainard, and Evans and all are FOMC voters. The data calendar is very light with only the third tier April Chicago Fed national activity index due.   

 

Stock Stories:

Ford (F) – Driven Out – Ford will replace CEO Mark Fields with Ford Smart Mobility chief Jim Hacket, according to reports citing people familiar with the matter. The automaker's move to shake up management comes during a time of significant pressure to share-price value.  The stock is responding positively ahead of a press conference this morning.

 

Major Economic Reports:

7:30 am CT – Chicago Fed National Activity Index

9:00 am CT – Fed’s Kaskari speaks

9:00 am CT – Fed’s Harker speaks

6:30 pm CT – FOMC Member Brainard speaks

8:10 pm CT – FOMC Member Evans speaks

 

Notable Earnings:   

Monday – 5/22:   

Before Market:   BAH

After Market:  A, NDSN

 

Tuesday – 5/23:

Before Market:  AZO, DSW, TTWO, TOL

After Market:  TCS, INTU, UVV

 

*Follow us on Twitter @TradeWise

 

**BOLD above indicates important and potential market-moving news and information

 

TradeWise Advisors is offering a free trial for 2 trading strategies for 60  days each: Use coupon code  Marketblog to apply this trial on your current account at www.tradewise.comor contact us at support@tradewise.com

 

**Watch and listen to the TradeWise team every Thursday from 12:30-1:30 CT in the Swim LessonsSM chat room on the thinkorswim® by TD Ameritrade Trading Platform**

                                  

Join the other recipients and help provide some feedback on our daily market blog by sending an e-mail to support@tradewise.com.  Your suggestions are important to us in providing the highest quality service.