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Jul 19, 2019 - Market Blog

7/19/19

 

Pre-emptive Strike!!

 

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Equities

 

U.S. Equities (/ES) are inching towards a quarter-point lift as a clear path to a rate cut was carved out by New York Fed President Williams who’s comments called on the FOMC to “act quickly”.  The S&P 500 (SPX) will attempt to re-assert itself atop the coveted 3,000 mark after falling from the perch earlier this week off mixed signals. Reportedly, successful phone dialogue with China prompted Treasury Secretary Mnuchin to hint at the return to possible face to face meetings on the horizon as the saga continues its intrigue. Japan saw a 2% windfall come in the Nikkei 225 as renewed hope around an eventual trade deal bolstered tech stocks. BOJ Governor Kuroda will be in Washington on Monday and is scheduled to speak at the International Monetary Fund as other sovereign countries try to prep for monetary loosening.  The ECB will also be on display later next week with a decision on their rates expected just before Friday’s U.S. GDP result. 

 

Credit Markets:

U.S. Treasury yields are rising slightly above the 2.0% threshold early on despite yesterday’s ultra-dovish comments by FOMC member Williams around “pre-emptive cuts to prolong the expansion.” Financials nearly tacked on 1% yesterday with American Express (AXP) likely dictating today’s follow-up in the space after sharing mixed earnings results moments ago.

 

Commodities:

 

Oil Futures (/CL) are rising by nearly 1.5% after reports surfaced that the U.S. Navy downing an Iranian manned drone in the highly contested strait of Hormuz as. The move will do little to erase the biggest weekly decline in seven weeks however as a global supply glut remains firmly intact. Gold Futures (/GC) are set to end the week at its highest mark since 2013 at $1436 an ounce as the greenback weakens off the reality of a potential 50 basis point rate cut. 

 

Pre-Market:

 

Consumer Sentiment will be making another appearance this morning with a 98.6 reading expected, indicating a healthy confidence in current economic conditions. Canada just reported a horrible retail sales number earlier which keeps any type of positive trend still elusive. Shares of Microsoft (MSFT) are climbing by 3% after beating on both top and bottom line estimates thanks in a large part to their Azure cloud offering.  Volatility appears to be simmering after an early rise in yesterday’s session in the CBOE Volatility Index (VIX) eventually settled near the low of the day just above 13. 

 

Major Economic Reports:

 

9:00 am CT – Consumer Sentiment

10:05 pm CT – FOMC member Bullard speaks

12:00 pm CT – Baker-Hughes Rig Count

3:30 pm CT – FOMC member Rosengren speaks

 

Notable Earnings:

 

Friday-7/19

 

A.M. – AXP, BLK, CLF, KSU, SLB, SYF, VGC

 

P.M. – N/A

 

Monday-7/22

 

A.M. – GNC,HAL,

 

P.M. – AMTD, CE, CR, STLD, WHR, ZION

 

*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

Jul 18, 2019 - Market Blog

7/18/2019

 

Earnings Cracks…

 

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Equities

Major U.S. equity indices  fell for the second straight day, as some of the latest earnings reports have exposed some potential growth concerns.  A cloudy economic picture and the ongoing trade dispute between the U.S. and China has increased worries for corporate executives.  In the industrial sector, CSX fell 10% to $71.38 after economic uncertainty pushed the company to cut its annual earnings outlook.  This weighed on other railroad stocks, sending Norfolk Southern (NSC) down 7.5% and pushed Union Pacific (UNP) 6.1% lower.  Bank of America’s (BAC) results were helped by its consumer division, but the company warned that it could be adversely affected by any Fed interest rate cuts.  The mega bank rose 0.7% in yesterday’s session to close at $29.19.  On the day, the Dow Jones Industrials ($DJI) lost 0.4% to 27219.85, the Nasdaq Composite (COMP) fell 0.5% to 8185.21, and the S&P 500 (SPX) slipped 0.7% to 2984.42.

 

Credit Markets:

With some sovereign debt yields in Germany, France and the Netherlands falling below zero, overseas investors have increased their U.S. Treasury holdings. Foreign investors increased their holdings of U.S. government debt by 1.6% in May, the most in eight years.   The yield on the 10yr. Treasury Note (TNX) settled  lower at 2.059% yesterday, from 2.124% on Tuesday.

 

Commodities:

Oil prices  fell to their lowest level in almost two weeks, as U.S. crude oil stockpiles saw a smaller than expected weekly decline and  gasoline stockpiles saw significant gains. U.S. crude oil futures (/CL) fell1.5% yesterday to settle at $56.78 a barrel.  Gold (/GC) rose 0.9% to $1,421.30 a troy ounce.

 

Pre-Market:

Netflix (NFLX) reported earnings after the close yesterday.  The video streaming service posted a drop in its earnings per share and steep drop in its paid net memberships additions which sent the shares tumbling by 10% or almost $40 lower.  The options market was predicting a $22 move in the shares, which was in line with the 2yr. average move.  The shares are currently trading near $324 in the pre-market.  As of this writing, U.S. crude oil futures (/CL) are 0.4% lower near $56.60 a barrel, and S&P 500 futures (/ES) are 0.1% lower near 2982.

 

Major Economic Reports:

7:30 am CT –  Jobless Claims      

7:30 am CT –  Philadelphia Fed Business Outlook Survey

9:00 am CT –   Leading Indicators

9:30 am CT –   EIA Petroleum Status Report

10:00 am CT – 2-Yr Note, 5-Yr Note & 7-Yr Note Announcement

12:00 pm CT – 10-Yr TIPS Auction

1:15 pm CT –   FOMC member Williams speaks

3:30 pm CT –   Money Supply

3:30 pm CT –   Fed Balance Sheet

 

Notable Earnings:

Thursday – 7/18:

A.M. – MS, MTB, NUE, PM, PPG, UNH, UNPL

P.M. – COF, ETFC, SKX, SWKS

 

Friday – 7/19:

A.M. – AXP, BLK, CLF, KSU, SLB, SYF, VGC

P.M. – 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.com or contact us at support@tradewise.com

Jul 17, 2019 - Market Blog

7/17/2019

 

Which way do we go?

 

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Equities

Stocks fell on Tuesday, led lower by shares of energy and technology companies, while bank earnings failed to generate much excitement.  The session began with very little price action.  The Dow Jones Industrial Average ($DJI) set a new all-time high in early going amid positive reactions to earnings reports from JPMorgan Chase (JPM), which was up 1% on the day and Goldman Sachs (GS) up nearly 2%.  Wells Fargo (WFC) and Johnson & Johnson (JNJ) beat earnings estimates, but their shares were down 3% and 1.6% respectively.  Price action picked up later in the day after President Trump said that there is still a long way to go with China on trade.  This helped drive stocks lower for the session.  On the day, the Dow Jones Industrial Average ($DJI) lost 0.1% to 27,335.63, the S&P 500 (SPX) fell 0.3% to 3004.04, while the Nasdaq Composite slipped 0.4% to 8222.79.

 

Credit Markets:

U.S. Treasury prices were weaker yesterday, after the June retail sales report checked in stronger than expected and seemingly diminished the prospect of a 50-basis points rate cut at the end of July FOMC meeting. Total retail sales were up 0.4% in June, following a downward revised 0.4% increase (from 0.5%) in May.  The 10-year yield increased 3 basis points to 2.124%, its highest since June 12.

 

Commodities:

U.S. crude oil futures (/CL) were trading higher most of the day, but tumbled just before the session ended, closing down more than 3% to $57.62 a barrel.  President Donald Trump and Secretary of State Mike Pompeo said that discussions with Iran were advancing over the Middle Eastern country’s nuclear program.  Oil prices have been trading higher in recent weeks over the fear of some type of military confrontation between Iran the U.S. or its allies amid the U.S. sanctions over Iran’s nuclear program.

 

Pre-Market:

Wall Street is nearly unchanged in pre-market trading , as a wave of quarterly reports from top tier companies such as Netflix (NFLX) and IBM (IBM), could fuel more stock gains or put an end to the market’s recent strength. On the earnings front this morning, United Airlines (UAL) are trading 0.1% higher in pre-market after lifting full-year guidance despite the fact it is trimming extra flights this year due to the ground of Boeing’s 737 Max jets.  Bank of America (BAC) reported better than expected earnings, but said net interest margin, declined.  Shares of the retail bank initially fell 1% in pre-market trading before reversing course and are now unchanged.   Shares of Qualcomm (QCOM) are 5% higher after the company gained support from DOJ, Energy, and Defense Departments to pause antitrust ruling enforcement.  As of this writing, U.S. crude oil futures (/CL) are up near 1.0% to $58.20 a barrel , while the S&P futures (/ES) are slightly lower near 3006.

 

Major Economic Reports:

6:00 am CT – MBA Mortgage Applications

 

7:30 am CT – Housing Starts

 

9:30 am CT – EIA Petroleum Status Report

 

1:00 pm CT – Beige Book

 

Notable Earnings:

 

Wednesday– 7/17:

A.M. – ABT, BAC, BK, PNC, USB

 

P.M. – AA, EBAY, IBM, KNI, NFLX, URI

 

Thursday– 7/18:

A.M. – MS, MTB, NUE, PM, PPG, UNH, UNPL

 

P.M. – COF, ETFC, SKX, SWKS

 

*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

 

Jul 16, 2019 - Market Blog

7/16/2019

 

‘Tis the Season

 

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Equities

U.S. Equities (/ES) appear to be somewhat subdued again this morning after a string of vanilla flavored earnings fail to prompt much action in either direction.  Yesterday saw a mild start to the week with the S&P 500 (SPX) barely managing a positive close at 3014 off extremely low volume. Small caps were the only major benchmark to close lower with a 0.52% retreat to end at 1561. The largest bank by assets, JP Morgan (JPM) just reported both top and bottom line estimates that beat the street although projecting a lowered interest forecast has the shares treading water just ahead of the open. Europe is pressing slightly higher across the board as a showdown develops for Theresa May’s replacement and the implications surrounding the impeding Oct Brexit deadline.  Asia is showing more vulnerability after Japan opened lower from an extended weekend holiday to fail nearly 1%. China also suffered a minor loss with no real momentum building on any type of trade resolution with the U.S. The CBOE Volatility Index (VIX) will be looking for a 7th straight contraction near 12.5 as the summer doldrums give little reason for traders to seek protection ahead of the FOMC Meeting at the end of July. 

 

Credit Markets:

The yield on 10 year Treasuries continues its about-face with a climb back to 2.132% off the strong retail reveal. Eyes will be focused on Fed Chair Powell later today who is scheduled to speak at a forum in Paris as the month-end Fed meeting draws closer with its accompanied possibility of a rate cut. The Bank of Australia also indicated its appetite for a rate adjustment if necessary overnight as the globe furthers its addiction towards monetary dependency to stimulate growth. 

 

Commodities:

Oil prices (/CL) are falling in line with the broader markets with a flat open near the $59.50 mark as platforms in the Gulf of Mexico return online after nearly 75% were halted as a precaution ahead of Hurricane Barry. Gold Futures (/GC) are slipping off the strong retail beat, but remain firmly above the $1400 an ounce level in an apparent basing pattern. 

 

Pre-Market:

Retail sales just came in 4x the estimated 0.1% increase for the month of June to help shake off 3 of the last four disappointing months. U.S. import prices dropped to a six month low with cheaper fuel as the major catalyst. Industrial Production snapped 4 consecutive missed expectations last month with a strong showing as a 0.1% increase is projected later this morning. Some of the biggest technology firms will be on the hot seat over the next few days with a hearing around anti-trust issues on Capitol Hill.  Earnings will continue to ramp up with United Airlines (UAL) expected after today’s close. Headliners such as: Bank of America (BAC), International Business Machines (IBM), and Netflix (NFLX) all await their fate in tomorrow’s session which will likely help dictate sentiment for the remainder of the month with lowered expectations. 

 

Major Economic Reports:

7:30 am CT – Retail Sales

7:30 am CT – Import and Export Prices

7:55 am CT – Redbook

8:15 am CT – Industrial Production

9:00 am CT – Business Inventories

9:00 am CT – Housing Market Index

12:00 pm CT –Fed Char Powell speaks

2:30 pm CT –FOMC Member Evans speaks

3:00 pm CT – Treasury International Capital

 

Notable Earnings:

Tuesday – 7/16:

A.M.–  GS, JNJ, JPM, SCHW, WFC

P.M. – CSX, CTAS, UAL

 

Wednesday– 7/17:

A.M. – ABT, BAC, BK, PNC, USB

P.M. – AA, EBAY, IBM, KNI, NFLX, URI

 

*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

Jul 15, 2019 - The Week Ahead

 

July 15, 2019

 

The Week Ahead 

 

Last Friday, the Nasdaq Composite (COMP), the Dow Jones Industrials ($DJI) and the S&P 500 (SPX) all made new closing highs.  July has gotten off to a good start with the three major indices all up at least 2.4% for the month so far.  Last week, Fed Chairman Powell’s comments before Congress indicated that he could cut interest rates as soon as the end of the month.  Investors took this as a positive sign for equities, and moved more money into stocks.  Market positivity along with a tropical storm in the Gulf of Mexico helped send U.S. crude oil futures (/CL) 4.5% higher on the week, and above $60 a barrel.  The rise in oil was a boost for the energy sector, making it the best performer in the S&P 500.  Up to this point, the rise in stocks has been broad based.  After reaching lows not seen since November 2016,  Treasury bond yields were up last week after data showed a greater than expected increase in inflation.  In addition,  last Friday, Eurozone industrial production showed a sharp rise in the month of May.  Investors seem to be counting on a rate cut, but these latest inflationary numbers might throw a wrench in their plans.

 

This week will mark the start of Q2 earnings and some important economic numbers.  Earnings season will kick off with some of the larger banks, Citigroup (C), Goldman Sachs (GS), Wells Fargo (WFC) and Morgan Stanley (MS) all reporting this week.  It will be interesting to see how the banks are navigating the current low interest rate environment.    On the tech front, International Business Machines (IBM) and  Netflix (NFLX) will both report on Wednesday after the close.   As for economic numbers, U.S. retail sales for June will be released on Tuesday morning and University of Michigan consumer confidence numbers will be out on Friday morning.

 

Major Earnings for the Upcoming Week (7/15-7/19):

 

Monday:

A.M. – C

P.M. –  N/A

 

Tuesday:

A.M.– GS, JNJ, JPM, SCHW, WFC

P.M. CSX, CTAS, UAL

 

Wednesday:

A.M. – ABT, BAC, BK, PNC, USB

P.M. – AA, EBAY, IBM, KNI, NFLX, URI

 

Thursday:

A.M. – MS, MTB, NUE, PM, PPG, UNH, UNPL

P.M. – COF, ETFC, SKX, SWKS

 

Friday:

A.M. – AXP, BLK, CLF, KSU, SLB, SYF, VGC

P.M. – N/A

 

Economic Releases (7/15-7/19):

 

Monday:

7:30 am CT – Empire State Mfg Survey

7:50 am CT – FOMC member Williams speaks

 

Tuesday:

7:30 am CT – Retail Sales

7:30 am CT – Import and Export Prices

7:55 am CT – Redbook

8:15 am CT – Industrial Production

9:00 am CT – Business Inventories

9:00 am CT – Housing Market Index

3:00 pm CT – Treasury International Capital

 

Wednesday:

6:00 am CT – MBA Mortgage Applications

7:30 am CT – Housing Starts

9:30 am CT – EIA Petroleum Status Report

1:00 pm CT – Beige Book

 

Thursday:

7:30 am CT – Jobless Claims      

7:30 am CT – Philadelphia Fed Business Outlook Survey

9:00 am CT – Leading Indicators

9:30 am CT – EIA Petroleum Status Report

10:00 am CT – 2-Yr Note, 5-Yr Note & 7-Yr Note Announcement

12:00 pm CT – 10-Yr TIPS Auction

1:15 pm CT – FOMC member Williams speaks

3:30 pm CT – Money Supply

3:30 pm CT – Fed Balance Sheet

 

Friday:

9:00 am CT – Consumer Sentiment

10:05 pm CT – FOMC member Bullard speaks

12:00 pm CT – Baker-Hughes Rig Count

3:30 pm CT – FOMC member Rosengren speaks

 

 *Follow us on Twitter @TradeWise

 

*BOLD above 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

 

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Jul 12, 2019 - Market Blog

7/12/19

 

Perfect Storm! 

 

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Equities

The S&P 500 (SPX) gained for a third day straight after drifting much of the session.  The benchmark briefly crossed above 3,000, while the Dow Jones Industrial Average ($DJI) surpassed 27,000 for the first time, thanks to a rally in health-care stocks after the Trump administration abandoned a plan to curb drug rebates.  The decision canceled a proposal that would have eliminated rebates from government drug plans, easing concerns of a massive disruption to the U.S. pharmaceutical industry.  A mid-morning tweet from President Trump, complaining about China trade policy, sent equities into a fleeting swoon and showed how sensitive the market remains to trade-related developments. Federal Reserve Chair Jerome Powell, who struck a dovish tone before a congressional panel Wednesday, returned to Capitol Hill on Thursday to answer senators’ questions and suggested that the central bank has room to ease as the tie between inflation and jobless rates has broken down.  Shares of United Health (UNH) jumped 5.5%, leading to the Dow Industrials to gain 0.8% to 27088.08, the highest close ever. The S&P 500 closed up 0.2%, to 2999.91, also a record, while the Nasdaq Composite (COMP) declined less than 0.1%, to finish at 8196.04.

 

Credit Markets:

Stronger inflation data lifted treasury yields Thursday, after new data showed consumer prices rose more than expected in June. U.S. government bonds (/ZN) fell sharply after the closely watched consumer-price index rose 0.1% in June from the prior month, while core prices rose 0.3%  Both readings were above the estimates.  The yield on the benchmark 10-year U.S. Treasury Note settled at 2.122%, the highest close since June 12, compared with 2.061% Wednesday.

 

Commodities:

Oil Futures (/CL) edged down 0.4% on to $60.20 a barrel, staying above the closely watched psychological level of $60.00.  Despite Thursday’s decline, oil has staged a powerful rebound after prices tumbled into a bear market of more than 20% below their April peak in early June. Crude is still 9.2% off its April highs even with its recent surge as oversupply remains.   

 

Pre-Market:

U.S. Equities are still climbing higher this morning after U.S. producer prices rose slightly in June as the cost of energy and other goods fell for a second straight month.  The increase offset an acceleration in services, leading to the smallest annual increase in producer inflation in nearly 2-1/2 years.  The producer-price index (PPI) rose a seasonally adjusted 0.1% in June from a month earlier.  The Stoxx Europe 600 was up 0.2% led by gains in chemical and auto sectors.  In Asia, the Shanghai Composite Index gained 0.4% and Japan’s Nikkei ticked up 0.2%.  Shares of Facebook (FB) are down 0.1% in pre-market after President Trump tweeted that he is not a fan of cryptocurrencies, and Facebook may need a banking charter for their cryptocurrency, Libra.  Shares of Illumina (ILMN) are 15% lower after the company reported preliminary Q2 sales below analyst estimates.  As of this writing the S&P 500 futures (/ES) are up a steady 0.2%, while Oil futures (/CL) are unchanged as Tropical Strom Barry continues a slow push toward the Louisiana coast.

 

Major Economic Reports:

 

7:30 am CT – PPI-FD

 

12:00 pm CT – Baker-Hughes Rig Count

 

Notable Earnings:

 

Friday-7/12

 

A.M. – INFY

 

P.M. – N/A

 

Monday-7/15

 

A.M. – C

 

P.M. – JBHT, SFBS, WTFC

 

*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

Jul 11, 2019 - Market Blog

7/11/2019

 

Banking on It!

 

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Equities

 

The S&P 500 (SPX) cleared a major hurdle yesterday by extending above 3,000 for the first time in history.  It has been nearly 5 years since the 2,000 mark was similarly beat as the rally has now extended for over a decade since overcoming the financial crisis. Yesterday’s dovish angle by the Federal Reserve likely paves the way for a rate cut as the market remains dependent on government intervention to stimulate growth. Yesterday saw 8 of 11 sectors close higher with energy stocks leading off an aggregate 1.4% advance.  The Dow Jones ($DJI) added 0.3% in Wednesday’s session while the S&P 500 (SPX) tacked on 0.5% during the same period. The Nasdaq Composite (COMP) accelerated by 0.8% to best its previous high back on July 3rd with FAANG stocks taking charge. The French Senate just defiantly passed a digital service tax today which will tack on a 3% charge to various digital services of several U.S. based internet companies to possibly complicate trade talks further. European markets remain mixed in a quiet session with Asia applauding the likelihood of a rate cut by advancing all major exchanges in the region. Volatility is compressing for a 3rd straight session now back below the 13 threshold in the CBOE Volatility Index (VIX) as trade talks remain muted. 

 

Credit Markets:

 

U.S. Treasury yields are ticking higher this morning after inflationary concerns rear its head as core inflation climbed 2.1% over a rolling 12 mo. period. The 10 year benchmark is near 2.082% currently ahead of today’s auction in 30 year bonds.   

 

Commodities:

 

Gold Futures (/GC) have been active early on after quickly surrendering $15 an ounce following the CPI report. The precious metal tagged a one-week high overnight after the dollar plummeted from Powell’s accommodative testimony.  Meanwhile, oil futures (/CL) are holding firm above $60 a barrel for a six-week high after producers were forced to evacuate nearly a dozen rigs in the Gulf of Mexico ahead of the first possible major storm of the season.  Further tension with Iran isn’t easing supply pressure either with a British tanker briefly held up before a military presence corrected the issue. 

 

Pre-Market:

Futures (/ES) are creeping modestly higher again this morning by nearly 0.2% after a CPI reading just came in stronger than expected to contradict inflationary projections. Tomorrow’s PPI reading now becomes even more important around the rate cut conversation should data begin to shift toward no required action. U.S. weekly jobless claims just fell to a 3 month low at 209K to reverse a troublesome trend picking up in June. FOMC Chairman Powell will be testifying in front of the Senate Banking Committee today with a handful of other voting members also making public appearances to clearly put the Fed in the driver’s seat. Delta Airlines (DAL) is getting a boost this morning after record revenue of $12.5 billion was generated over the last quarter sidestepping much of the Boeing (BA) 737 Airmax issues encountered by their counterparts. 

 

Major Economic Reports:

 

7:30 am CT – CPI

7:30 am CT – Jobless Claims

9:00 am CT – FOMC President Powell speaks

9:30 am CT – EIA Petroleum Status Report

10:00 am CT – FOMC Williams speaks

12:00 pm CT – 30-Yr Note Auction

12:30 pm CT – FOMC member Williams speaks

12:30 pm CT – FOMC member Quarles speaks

1:00 pm CT – Treasury Budget

3:30 pm CT – Fed Balance Sheet

3:30 pm CT – Money Supply

4:00 pm CT – FOMC member Kashkari speaks

 

Notable Earnings:

 

Thursday – 7/11:

A.M. – DAL

P.M. – N/A

 

Friday – 7/12:

A.M. – N/A

P.M. – 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.com or contact us at support@tradewise.com

Jul 10, 2019 - Market Blog

7/10/2019

 

Bad is good, and good is bad…

 

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Equities

U.S. equities were in a bit of a holding pattern as investors awaited Fed Chairman Powell’s testimony before Congress today.  All three of the main U.S. stock indices are near record highs, but have retreated since last Friday’s better than expected jobs data.  In this current market, good data is being treated as bad because it lessens the chance that the Fed may lower interest rates.  Consumer services and technology were two of the leading sectors in the S&P 500, with Advanced Micro Devices (AMD) gaining 3.5% to $33.15 a share.  U.S. chemical makers moved lower after German chemical giant BASF cut their profit forecast.   Dow (DOW) fell 1.3% to $47.87 a share.  On the day, the Nasdaq Composite (COMP) rose 0.5% to 8141.73, the Dow Jones Industrials ($DJI) fell less than 0.1% to 26783.49, and the S&P 500 (SPX) gained 0.1% to 2979.63.

 

Credit Markets:

The yield on the benchmark 10yr. Treasury note(TNX) rose slightly yesterday, to 2.07% from 2.03% on Monday.   As of this writing, the Fed Funds future market was giving an 18.3% chance that the Fed cuts rates by 50 basis points and an 81.7% chance that they cut by 25 basis points at their next July 31st meeting.

 

Commodities:

U.S. oil prices moved higher yesterday, as the energy market dealt with demand concerns and the ongoing supply risks posed by the growing tensions between the U.S. and Iran.   U.S. oil futures (/CL) rose 0.3% to settle at $57.83 a barrel.

 

Pre-Market:

U.S. equity futures have reversed earlier losses this morning, as traders await  Fed Chairman Powell’s testimony before Congress this morning at 9:00am CT.  The Fed Chairman’s prepared remarks were released earlier, sending futures higher as they indicated that he is open to rate cuts if economic growth concerns should arise.  As of this writing, U.S. crude oil futures (/CL) are 2.5% higher, near $59.30 per barrel, and S&P 500 futures (/ES) are 0.4% higher near 2995.

 

Major Economic Reports:

6:00 am CT –  MBA Mortgage Applications

9:00 am CT –  Atlanta Fed Business Inflation Expectations

9:00 am CT–   FOMC President Powell speaks

9:00 am CT –  Wholesale Trade

9:30 am CT –  EIA Petroleum Status Report

12:00 pm CT – 10-Yr Note Auction

12:30 pm CT – FOMC member Bullard speaks

1:00 pm CT –   FOMC Minutes

 

Notable Earnings:

  

Wednesday– 7/10:

A.M. – N/A

P.M. – BBBY

 

Thursday – 7/11:

A.M.–  DAL

P.M. – N/A

 

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Jul 09, 2019 - Market Blog

7/9/2019

 

Waiting for Powell…

 

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Equities

After making new record highs before the 4th of July holiday, U.S. stocks have reversed course after last Friday’s stronger than expected jobs number.  Many feel this weakens the case for the Fed to cut interest rates at its next meeting at the end of this month.  Dow Industrials member, Boeing (BA) fell 1.3% to $351.12 after a Saudi budget air carrier cancelled their order for the troubled 737 MAX jetliner.  Shares of Apple (AAPL) dropped 2% after Rosenblatt cut its rating on the stock to sell from neutral.  President Trump’s comments on a possible executive order concerning the price of prescription drugs sent Merck (MRK) and Pfizer (PFE) down 1.8% and 1.4%, respectively.  On the day, the Nasdaq Composite (COMP) lost 0.8% to 8098.38, the Dow Jones Industrials ($DJI) fell 0.4% to 26806.14, and the S&P 500 (SPX) lost 0.5% to 2975.95.

 

Credit Markets:

The yield on the benchmark 10yr. Treasury note(TNX) fell slightly yesterday, after posting its largest daily gain in over six months.  The yield on the 10yr. note settled at 2.030%, from 2.044% on Friday.

 

Commodities:

U.S. oil prices moved higher yesterday, as the energy benchmark tries to come back after the steep loss it suffered last Tuesday.  U.S. oil futures (/CL) rose 0.3% to $57.66 a barrel yesterday, as traders await a number of reports later scheduled for later in the week.

 

Pre-Market:

U.S. equity futures are lower this morning, as traders await  Fed Chairman Powell’s last speech before he speaks before Congress on Wednesday and Thursday.  Shares of Pepsico (PEP) are slightly higher, after their quarterly results came in a bit higher than what analysts had expected.  As of this writing, U.S. crude oil futures (/CL) are unchanged, near $57.75 per barrel, and S&P 500 futures (/ES) are 0.4% lower near 2965.

 

Major Economic Reports:

5:00 am CT –  NFIB Small Business Optimism Index

7:45 am CT –  FOMC Chairman Powell speaks

7:55 am CT –  Redbook

9:00 am CT –  FOMC member Bullard speaks

9:00 am CT – JOLTS

12:00 pm CT– FOMC member Bostic speaks

1:00 pm CT –  FOMC member Quarles speaks

 

Notable Earnings:

 

Tuesday – 7/9:

A.M.–  PEP

P.M. – N/A

 

Wednesday– 7/10:

A.M. – N/A

P.M. – BBBY

 

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

 

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Jul 08, 2019 - The Week Ahead

 

July 8, 2019

 

The Week Ahead 

 

U.S. stock futures are starting the week lower this morning after sliding on Friday amid investors’ doubts that the Federal Reserve would cut interest rates as much and as quickly as expected.  Stocks ended mixed last week after a modest pullback on Friday followed a series of new closing highs set earlier in the week.  (Markets were shuttered Thursday in observation of Independence Day and closed early on Wednesday).  Stocks got off to a  good start last Monday, as investors welcomed some progress in U.S.-China trade negotiations at the G-20 summit the previous weekend.  Semiconductor stocks were particularly strong after President Trump agreed to ease a ban on sales of chips to Chinese telecommunications giant Huwawei Technologies.  Friday saw the June payrolls report from the Labor Department come in well above expectations, suggesting that the U.S. economy maintained considerable momentum.  Average hourly earnings gains came in a bit below expectations, and weekly hours moved back near a two-year low.  On the day, the Dow Jones Industrial ($DJI) fell 0.2% lower to 26924.83, the Nasdaq Composite (COMP) slipped 0.1% to 8161.79 and the S&P 500 slid almost 0.2% to 2990.52.

 

U.S. Treasury prices fell Friday after a solid jobs report eased some of the pressure on the Federal Reserve to move aggressively to cut interest rates.  June payrolls rose by 224,000, topping expectations of 165,000.  May and April were revised lower to 72,000 from 75,000 and to 216,000 from 224,000 respectively.  On the day, the yield for the 10-year U.S. note had the largest single day increase since Jan. 4, closing at 2.044%, compared  with 1.952% the previous trading day.  Gold futures (/GC) slid Friday following the upbeat jobs report, logging the largest decline since mid-April, shedding 1.5% to 1396.70 an ounce. Oil futures (/CL)  swung between small gains and losses on the day, closing up 0.3% to $57.51 a barrel. 

 

This week Federal Reserve Chairman Jerome Powell is set to testify for two days before Congress starting Wednesday.  Powell testifies before the House Financial Services Committee Wednesday and at the Senate Banking Committee Thursday, and is expected to answer questions on the economy and Fed policy.  On the economic front, Wholesale trade and FOMC minutes will be released on Wednesday, CPI and Jobless Claims  on Thursday, while PPI will come out on Friday.  On the earnings front, Pepsi (PEP) will be releasing results Tuesday morning, Bed Bath and Beyond (BBBY) Wednesday morning and Delta Air Lines (DAL) Thursday morning. 

 

Major Earnings for the Upcoming Week (7/8-7/12):

 

Monday:

A.M. – AZZ

P.M. –  N/A

 

Tuesday:

A.M.– PEP

P.M. N/A

 

Wednesday:

A.M. – N/A

P.M. – BBBY

 

Thursday:

A.M. – DAL

P.M. –  N/A

 

Friday:

A.M. – N/A

P.M.–   N/A

 

Economic Releases (7/8-7/12):

 

Monday:

11:30 am CT – TD Ameritrade IMX

2:00 pm CT –   Consumer Credit

 

Tuesday:

5:00 am CT –  NFIB Small Business Optimism Index

7:45 am CT –  FOMC President Powell speaks

7:55 am CT –  Redbook

9:00 am CT –  FOMC member Bullard speaks

9:00 am CT – JOLTS

12:00 pm CT– FOMC member Bostic speaks

1:00 pm CT –  FOMC member Quarles speaks

 

 

Wednesday:

6:00 am CT –  MBA Mortgage Applications

9:00 am CT –  Atlanta Fed Business Inflation Expectations

9:00 am CT–   FOMC President Powell speaks

9:00 am CT –  Wholesale Trade

9:30 am CT –  EIA Petroleum Status Report

12:00 pm CT – 10-Yr Note Auction

12:30 pm CT – FOMC member Bullard speaks

1:00 pm CT –   FOMC Minutes

 

Thursday:

7:30 am CT – CPI

7:30 am CT – Jobless Claims

9:00 am CT – FOMC President Powell speaks

9:30 am CT – EIA Petroleum Status Report

10:00 am CT – FOMC Williams speaks

12:00 pm CT – 30-Yr Note Auction

12:30 pm CT – FOMC member Williams speaks

12:30 pm CT – FOMC member Quarles speaks

1:00 pm CT – Treasury Budget

3:30 pm CT – Fed Balance Sheet

3:30 pm CT – Money Supply

4:00 pm CT – FOMC member Kashkari speaks

 

Friday:

7:30 am CT – PPI-FD

12:00 pm CT – Baker-Hughes Rig Count

 

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