U.S. stock futures remained flat as the last day of September began, following three consecutive weeks of gains for the major averages. Despite a challenging start to September, historically the weakest month for the stock market, markets rebounded as the month progressed, buoyed by the Federal Reserve’s interest rate cuts. Investors are now looking ahead to a significant test later in the week with the release of September’s jobs report on Friday. Additionally, Carnival is set to announce its quarterly earnings on Monday morning, adding to the week’s financial highlights.
European markets began the week and the final trading session of September on a negative note, with auto stocks leading the decline, down 3.8%. Stellantis, listed in Milan, saw its shares plummet by 13.5% after the automaker revised its 2024 annual guidance downward due to worsening global industry conditions. Similarly, France’s Renault experienced a drop of over 6% on Monday, while German automakers Porsche and Volkswagen both fell by around 3%.
China’s CSI 300 index experienced a significant surge, rallying by 8.48% to close at 4,017.85. This impressive performance was driven by strong gains in healthcare and tech stocks, marking a nine-day winning streak. It was the index’s best day since September 2008 and its highest level since August 2023. In contrast, Japan’s Nikkei 225 index faced a sharp decline, tumbling nearly 5% on Monday. This drop, coupled with a weakening yen against the dollar.
Economic Calendar
Earnings Calendar
Notable reports for Monday before the bell include CCL. After the bell there are no notable reports.
News & Technicals’
U.S. East and Gulf Coast port workers are poised to go on strike at midnight on Monday, with no negotiations currently scheduled to prevent the stoppage. This strike threatens to halt container traffic from Maine to Texas, potentially costing the economy up to $5 billion a day. The disruption could affect the flow of essential goods, from food to automobiles, at major ports, risking job losses and increasing inflation just weeks before the U.S. presidential election. With no talks planned before the Monday deadline, the situation remains critical.
Oil markets have not priced in an ‘all-out war’ despite the recent escalation in tensions following the killing of a Hezbollah leader by an Israeli airstrike in Beirut. The confirmation of the leader’s death by Hezbollah did not lead to a sharp reaction in oil prices. Instead, the global benchmark Brent crude saw a modest increase of 1.56%, reaching $73.10 per barrel, while U.S. West Texas Intermediate futures rose by 1.09%, trading at $68.19 per barrel.
The French-Italian conglomerate Stellantis, which owns brands like Chrysler, Dodge, Jeep, and Maserati, has issued a warning about lower-than-expected sales across most regions for the second half of the year. As a result, Stellantis has revised its adjusted operating income (AOI) margin for the full-year 2024 to a range of 5.5% to 7.0%, down from its previous “double digit” outlook. Similarly, Aston Martin, famous for its iconic models featured in James Bond films, has also announced reductions in its profit margin and production targets for the year.
With the corporate buyback blackout in full effect the indexes could easily experience choppy market conditions as we wait for the official kickoff to 4th quarter earnings on OCT. 11. I continue to suggest raising your stoploss levels to protect your positions with the T2122 staying very elevated in the short-term. That said, I would not rule out the possibility of a little volatility today due to end of quarter window dressing.
Markets gapped higher on Thursday, supposedly in response to MU’s beat and raise from Wednesday night. SPY gapped 0.79%, DIA gapped up 0.50%, and QQQ gapped up 1.58%. However, that was about it for the Bulls as the SPY and QQQ sold off until about 1:30 p.m. At that point those two major index ETFs bounce about half way back to their open by 2 p.m. and ground sideways the rest of the day. Meanwhile, after its own gap higher, DIA just meandered sideways around that opening level all day. This action gave us gap-up, black-bodied candles with significant lower wicks in the SPY and QQQ. It is worth noting that SPT also printed a new all-time high and a new all-time high close. As for DIA, it printed a gap-up, white-bodied, Spinning Top Bull Harami inside its recent consolidation. This all happened on below-average volume in the DIA and QQQ as well as well-below-average volume in SPY.
On the day, eight of the 10 sectors were in the green with Basic Materials (+2.33%) far out in front, leading the rest of the market higher. On the other side, Energy (-1.97%) lagged far, far behind the other sectors. At the same time, SPY gained 0.40%, DIA gained 0.60%, and QQQ gained 0.75%. VXX closed flat at 48.48 and T2122 spiked back up into the lower half of its overbought territory at 85.90. At the same time, 10-Year bond yields rose to close at 3.796% while Oil (WTI) dropped another 3.21% to close at $67.45 per barrel. (The drop in oil came on a combination of factors. Even mor China stimulus, a modest de-escalation in Israeli-Hezbollah attacks, and OPEC+ publishing a highly bullish long-term oil demand forecast.) So, the three major index ETFs opened divergently, but on small moves. From there the move happened in the morning with the afternoon being just a dead-money grind sideways.
The major economic news scheduled for Thursday include Weekly Initial Jobless Claims, which came in a bit lighter than expected at 218k (compared to a forecast of 224k and a previous week value of 222k). At the same time, the Weekly Continuing Jobless Claims were a bit higher than predicted at 1,834k (versus a 1,828k forecast and the prior week’s 1,821k number). Meanwhile, Preliminary August Core Durable Goods Orders (month-on-month) came in stronger than anticipated at +0.5% (versus a +0.1% forecast and July’s -0.1% reading). On the headline side, Preliminary August Durable Goods Orders (month-on-month) were flat at 0.0% (compared to a forecast of -2.8% and well down from July’s blowout +9.9% value). At the same time, Q2 Core PCE Prices were exactly as expected at +2.80% (compared to a forecast and prior quarter reading of +2.80%). In terms of Gross Domestic Product, Q2 GDP was +3.0% (versus a +3.0% forecast and well up from Q1’s +1.6%). On the price side, the Q2 GDP Price Index was down as expected at +2.5% (compared to the +2.5% forecast and Q1’s +3.0% value). Later, August Pending Home Sales were up, but below the anticipated numbers at +0.6% (versus a +0.9% forecast but much better than July’s -5.5% reading). Finally, after the close, the Fed Balance Sheet showed a $29 billion contraction for the week, from $7.109 trillion to $7.080 trillion.
In Fed news, Fed Governor Bowman was contrary to what other Fed governors and FOMC members have been touting for months. She told a Mid-size Bank Coalition of America workshop that “use of the Fed’s discount window is for emergencies, rather than for more usual liquidity needs.” This is a start contrast to the Chair and her peers who have been trying to get more banks to use the facility more. Bowman went on to say that she fears “unintended consequences” of banks posting collateral at the Fed Discount Window. Later, in a pre-recorded opening remarks video for the Annual US Treasury Market Conference, Fed Chair Powell recalled the “flash crash” in 2014 and praised inter-agency cooperation that got us through that as well as the pandemic crisis. A few minutes later, NY Fed President Williams announced the creation of a new committee at the NY Fed, the Reference Rate Use Committee, to study the use of interest rate benchmarks across various financial markets. (How the use of reference rates is changing and the underlying markets are changing due to electronic trading and globalization of markets for example.)
Later, Fed Vice Chair for Supervision Barr told the Treasury Market Conference that the Fed is considering new requirements for banks to improve their liquidity. He said, smaller (community) banks would be excluded but that big banks would be required to keep a minimum level of liquid reserves as well as pre-positioned collateral at the Fed Discount Window. Bass said this would be on a “tiered basis” with larger cash reserve requirements for larger banks. Shortly afterward, Treasury Sec. Yellen said that labor market and inflation data suggest the US economy is on a “soft landing path” as the “last mile” in taming inflation is bringing housing costs down. She said, “I always believed that there was a path to a soft landing, that it was possible to bring inflation down while maintaining a strong labor market, and to me, that’s what the data suggests has happened.” She went on to say that U.S. deficit reduction was necessary to keep interest costs manageable over time, but added that the Biden administration thought it important to continue to invest in parts of the economy that would fuel future growth. She continued by saying that banks are well capitalized but stressed the importance of the Fed Discount Window in ensuring stability during times of stress.
In other Fed news, Fed Governor Cook told an Ohio State University event that she whole-heartedly supported at 50-basis-point rate cut by the FOMC last week. Cook said, “That decision reflected growing confidence that, with an appropriate recalibration of our policy stance, the solid labor market can be maintained in a context of moderate economic growth and inflation continuing to move sustainably down to our target.” She continued, “The return to balance in the labor market between supply and demand, as well as the ongoing return toward our inflation target, reflects the normalization of the economy after the dislocations of the pandemic.” Cook went on, “This normalization, particularly of inflation, is quite welcome, as a balance between supply and demand is essential for sustaining a prolonged period of labor-market strength.”
After the close, BB, COST, and SCHL all missed on revenue while beating on earnings. It is worth noting that BB and SCHL both had massive misses on revenue.
In stock news, on Thursday, the UAW announced that it had reached a tentative deal with F related to the River Rouge tool and die unit. At the same time, MSFT announced it plans to invest $2.7 billion in Brazil over the next three years to enhance its cloud computing infrastructure. Later, V agreed to buy British IP Group’s Featurespace unit (which uses AI to provide “payment protection”) for $935 million according to the UK’s Sky News. At the same time, the CEO of STLA told Reuters that he wants to follow the Chinese “low-cost mindset” in its EV production. This came even as he attacked the EU tariffs on Chinese EVs, such as those in which STLA has an ownership stake. Later, Reuters also reported that C and APOS have formed a joint-venture $25 billion private credit and direct lending program. At the same time, GOOGL announced it will invest $3.3 billion to build two data centers in SC.
Elsewhere, IT trade news outlet The Information reported AMZN has already amassed its goal of $1.8 billion in ad-spending pledges for 2025 for its video-streaming service. In marginally noteworthy news, a major insider and top-three shareholders of DJT has sold almost all of his company stock holdings. Andrew Litinsky sold 7.5 million shares (5.5% of DJT stock), leaving him with 100 shares. At the same time, LUV, AAL, and DAL canceled over 1,200 flights and delayed more than 4,100 due to Hurricane Helene. Later, Bloomberg reported that LVMHF founder Arnault had lost $24 billion of his personal fortune this year. However, on Thursday, China gave the greenlight to massive stimulus, causing traders to bet on sales gains by his LVMHF luxury goods. The 9.9% stock price increase netted the tycoon a +17 billion day, increasing his net worth to $201 billion. After the close, MTN announced it will cut 14% of its “corporate workforce” and less than 1% of operational employees, as it seeks to cut $100 million in costs annually by 2026.
In stock legal and governmental news, on Thursday, WFC announced it had sent the Fed a third-party review of its risk and control overhauls. This is a critical step toward getting the Fed to lift the bank’s $1.95 trillion asset cap, which was imposed because of WFC’s lax controls and fraudulent back-dating of accounts. Later, the Wall Street Journal reported that SMCI is being investigated by the US Dept. of Justice related to its accounting practices. (The report said the investigation is just in its early, data-gathering stage.) At the same time, the NHTSA announced that GM will recall over 18k vehicles over brake line problems. Later, East Coast port employers filed a NRLB complaint against the Intl. Longshoreman Assn. for unfair labor practices. The filing alleges the union refuses to resume talks prior to its scheduled strike on October 1.
Elsewhere, the FTC issued the previously-rumored consent decree which approves the CVX $53 billion acquisition of HES. However, as a condition of the approval, the HES CEO is barred from taking a board seat on CVS. Later, the NTSB issued an urgent safety recommendation on rudder control systems for some BA 737 airplanes after an investigation of a February incident involving a jammed rudder on a UAL 737 MAX 8. At the same time, the SEC announced that DKNG has agreed to pay a $200k penalty to settle charges of selectively disclosing of material non-public information via social media. After the close, the TX Public Utility Commission unanimously approved an expansion of its ERCOT electric grid to improve access for COP, XOM, FANG, CVX, and DVN. (This is of note because the TX electric grid is already stretched and the pre-approval report said it expects the oil and gas drillers could account for almost one-third of the state’s summer electric usage by 2038.
In miscellaneous news, on Thursday, BAC analysts released a report claiming that certain sectors outperform in a steepening yield curve environment such as should be created by a Fed rate-cutting cycle. BAC said, Healthcare and rising momentum lead sector performance during a Bull Market steepening. On the other side, BAC said Basic Resources and High Risk stocks tend to outperform during Bear Market yield curve steepening. Elsewhere, Reuters reported OPEC+ plans to go ahead with oil production increases (180k barrels per day) in December. Saudi Arabia was committed to the increase and Russia strongly opposed. In addition, OPEC+ will drop its unofficial $100/barrel price target in order to win back market share (from the US, Canada, China and Brazil). Meanwhile, silver closed at its highest level since 2012 and gold hit a record level on Thursday.
In geopolitical news, Reuters reported Thursday that a senior Pentagon official said that China’s newest nuclear-powered submarine sank earlier this year. Apparently, the first-in-class Chinese nuclear attack sub sank alongside its pier sometime between May and June.
Overnight, Asian markets were mixed but leaned toward the red with seven of the 12 regional exchanges under break-even. Even so, the big moves were all on the plus side as Shenzhen (+6.71%) was WAY OUT FRONT followed by Hong Kong (+3.55%), Shanghai (+2.88%), and Japan (+2.32%). In Europe, the picture is mostly green with only three of 14 bourses in the red. The CAC (+0.29%), DAX (+0.84%), and FTSE (+0.54%) lead the region higher in early afternoon trade. In the US, as of 7:40 a.m., Futures are pointing toward a start just on the red side of break-even. The DIA implies a -0.01% open, the SPY is implying a -0.05% open, and the QQQ implies a -0.14% open at this hour. At the same time, 10-Year bond yields are down a bit to 3.789% and Oil (WTI) is just on the green side of flat at $67.79 per barrel in early trading.
The major economic news scheduled for Friday includes the August Core PCE Price Index, August PCE Price Index, August Personal Spending, August Goods Trade Balance, and August Retail Inventories (all at 8:30 a.m.), Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, and Michigan 5-Year Inflation Expectations (all at 10 a.m.). There are no major earnings reports scheduled for either before the open or after the close.
With that background, it looks like the Bulls are pushing back after a gap down to start the premarket. All three major index ETFs gapped lower to start the early session, but all three have also put in decisive white-body candles since that open to get back to even. Obviously, all three remain above their T-line (8ema). So, the short-term trend is still bullish. The mid-term trend is now also bullish with QQQ the laggard but now well over its downtrend line going back to the July all-time high. In the longer-term we still have a strong Bull trend all three major index ETFs and remain near all-time highs. With regard to extension, none of the major index ETFs are extended above its T-line (8ema) after Thursday’s gap and then black-body candle. However, the T2122 indicator is back up in the lower half of its overbought range. So, markets have room to run either direction, but the Bulls still clearly have momentum and the Bears have more slack to work with today if they can reverse sentiment. With regard to those 10 big dog tickers, they are evenly split with five in the red and five in green. It is worth noting that the biggest dog, NVDA (-0.56%) leads the losses and has twice the dollar-volume of the next closest, which is TSLA (+0.83%) and that second dog is leading the gainers. Finally, remember it is Friday and the next to last trading day of the month. So, prepare your account for the weekend news cycle and don’t forget to pay yourself…lock-in profits where you can.
As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the Man in the Green Bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby, it’s a job. The gains are real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!
See you in the trading room.
Ed
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
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On Wednesday, stocks opened up undecided. SPY opened down 0.01%, DIA opened 0.10% higher, and QQQ opened 0.09% lower. From that point, DIA immediately began to sell off, reaching the lows of the day at 1:40 p.m. Meanwhile, SPY and QQQ rallied modestly after the open, reversing and beginning to selloff at 10:20 a.m. They both reached their lows between 1 p.m. and 2 p.m. After that, all three major index ETFs traded sideways in a tight range along the lows. This action gave us a large black-bodied Bearish Engulfing candle that retested and stayed above its T-line (8ema). At the same time, SPY printed a black-bodied, indecisive Spinning Top. Finally, QQQ gave us a white-bodied Inverted Hammer type candle (not a Shooting Star due to a gap lower not up). This happened on well-below-average volume in all three major index ETFs.
On the day, nine of the 10 sectors were in the red with Energy (-1.79%) far out in front leading the rest of the market lower. On the other side, Utilities (+0.26%) held up much better than the other sectors and was the only green on the sector board. At the same time, SPY fell 0.22%, DIA dropped 0.71%, and QQQ gained 0.09%. VXX closed up 1.36% to 48.41 and T2122 plummeted down to the center of its mid-range at 59.68. At the same time, 10-Year bond yields jumped to close at 3.791% while Oil (WTI) dropped 2.40% to close at $69.84 per barrel. (The drop in oil came on a combination of factors. Even mor China stimulus, a modest de-escalation in Israeli-Hezbollah attacks, and OPEC+ publishing a highly bullish long-term oil demand forecast.) So, the three major index ETFs opened divergently, but on small moves. From there the move happened in the morning with the afternoon being just a dead-money grind sideways.
The major economic news scheduled for Wednesday included August Building Permits which came in up but slightly lighter than expected at 1.470 million (compared to forecast of 1.475 million and the July reading of 1.406 million). Meanwhile, August New Home Sales were down but better than predicted at 716k (versus a forecast of 699k and the July value of 751k). This was a 4.7% decline on a month-on-month basis. Later, Weekly EIA Crude Oil Inventories showed a much bigger decline than expected at -4.471 million barrels (compared to a forecast calling for a 1.300-million-barrel draw and prior week reading of 1.630 million barrels.
In Fed news, Fed Governor Kugler said Wednesday that she “strongly supported” the half percent rate cut at last week’s FOMC meeting. Kugler said, “The labor market remains resilient, but the FOMC now needs to balance its focus so we can continue making progress on disinflation while avoiding unnecessary pain and weakness in the economy.” She continued, “I strongly supported last week’s decision and, if progress on inflation continues as I expect, I will support additional cuts.”
After the close, MU and WS reported beats on both the revenue and earnings lines. At the same time, CNXC bear on revenue while missing on earnings. However, FUL and JEF missed on both the top and bottom lines.
In stock news, on Wednesday, the union that represents striking BA workers in the Pacific Northwest told Reuters that the workers are not interested in the latest offer from the company. (BA called that offer their “best and final” offer.) At the same time, unions for LUV workers announced company plans to reduce service to and from Atlanta in 2025 as part of cost cutting plans. This will lead to the loss of an unspecified number of jobs. Later, VLKAF (Volkswagen) flatly rejected union calls for more talks as the unions threaten strikes following a bitter first round of negotiations over potential German plant closures. At the same time, META unveiled new Augmented Reality glasses and AI updates. Later, STLA and French nuclear fuel firm Orano announced they are dropping a previously planned joint venture to recycle electric car batteries. Meanwhile, MRK announced bad results from a late-stage trial for its experimental colorectal cancer drug. (441 trial participants who took the drug did not show significant improvement in survival compared to existing treatments.)
Later, PYPL announced it will allow merchants to buy, hold, and sell cryptocurrency from their business accounts. After the close, PFE withdrew its sickle cell disease treatment Oxbryta from all markets worldwide and discontinued all studies and programs related to the treatment. (This decision was “based on the totality of clinical data, which indicates the benefits of the drug o not outweigh the risks” according to a PFE statement.) PFE reported $92 million in revenue from Oxbryta in Q2. At the same time, SPR announced it will begin employee furloughs in three weeks unless the BA strike in the Pacific Northwest ends before that time. Later, BX confirmed previous rumors that it has invested $13.3 billion in an AI data center in the Northeast England. At the same time, Bloomberg reported that SDXOF (France’s Sodexo) is strongly considering a big to takeover rival ARMK. (ARMK share spiked in after-hours trading.)
In stock legal and governmental news, on Wednesday, BAC (Merrill lynch subsidiary) agreed to pay $3.8 million to settle two SEC charges related to investment limits and fees. At the same time, Australia’s securities regulator fined fund giant Vanguard $9 million for misleading claims about its ethical and green investment funds. Later, the NHTSA announced that STLA will recall 15,000 Fiat vehicles in the US due to software errors that may cause airbags to deploy with excessive force. At the same time, GOOGL filed a complaint with the European Commission against what it alleges are anti-competitive practiced by MSFT to lock their customers into the MSFT Azure cloud computing platform. Later, X announced that an arbitration board has ruled in favor of Nippon Steel’s $14.9 billion buyout of the company. However, the United Steelworkers which represents the vast majority of X employees said it disagreed with the decision and this did not change its opposition to the deal.
Meanwhile, Transportation Sec. Buttigieg and Acting Labor Sec. Su wrote a letter to the CEOs of CSX, CNR, and CP urging the companies to guarantee paid sick leave for all workers. (The letter said 10k of their workers do not have paid sick leave. A rail trade group responded by saying that 60% of rail workers do have paid sick leave…as if that was something to exclaim.) Later, GOOGL, GS, BCSF, BNS, LEGH, and CELH agreed to pay a combined $3.8 million in penalties to the SEC to settle charges over late filings and disclosures. At the same time, CSLLY received a $121 million contract from the HHS Dept. to increase the US stockpile of bird flu vaccine to 40 million doses. After the close, AEO sued AMZN alleging the ecommerce giant infringed on its Aerie trademarks on clothing and accessories.
In miscellaneous news, on Wednesday, US ports along the East Coast and Gulf Coast extended their delivery hours for importers as companies rush to clear cargo through the ports ahead of a potential and looming strike on October 1. (The strike could cover five of the top 10 busiest ports in the US.) Elsewhere, a global banking trade group (Inst. Of Intl. Finance) reported Wednesday that global debt rose to a record $312 trillion at the end on Q2. This resulted in a global debt-to-GDP ratio of 327%. Oddly, the “developed countries” ratio fell to its lowest level since 2018, driven by declines in household and non-financial corporate sector borrowing. Later, a group of House GOP members, led by the Chair of the Select Committee on China, said Wednesday that the panel’s top priority is legislation to prevent US investment in China. The group painted the issue as needing to stop US investors from funding our own country’s demise (by funding the enemy China). Many Democrats are more than willing to go along with such initiatives as Populism and Nationalism has apparently completely replaced free trade and “the invisible hand of the market” philosophies.
In government funding news, after the close, the House passed a stop-gap spending continuing resolution to fund government operations through December 20. The move comes after MAGA extremists lost their bid to tie a voter suppression amendment to the bill. The bill passed 341-82 with all “no votes” being cast by Republicans. (As a side note, this leaves House Speaker Johnson in the same predicament as his ousted predecessor, having had to go against the MAGA wing of his party in order to actually govern. There is no word on whether a move will be made to oust Johnson, but it is doubtful prior to the election since Republicans don’t want to refresh the view of their party as wholly dysfunctional, having passed no legislation of any meaning and caused potential shutdowns seven different times since January 2023. Number eight comes on December 20.) Senate Majority Leader Schumer had prepared for the last-minute wrangling by putting a placeholder on the Senate schedule. So, the Senate voted on the bill from the House and passed it 78-18. The bill now goes to the President, where it will be signed.
Overnight, global markets have been given a leg up by MU’s beat and forecast raise last night. MU raised Q3 guidance a half billion higher than estimates to $8.7 billion for the quarter. As a result, all tech-related and chip names in particular soared higher. Asian markets were mostly green with just three of the 12 exchanges in the red. Shenzhen (+4.44%), Hong Kong (+4.16%), and Shanghai (+3.61%) led broad and strong gains across the region. In Europe, we see a similar picture taking shape as 12 of the 14 bourses are well into the green. The CAC (+1.50%), DAX (+1.14%), and lagging FTSE (+0.16%) lead the region higher in early afternoon trade. In the US, as of 7:30 a.m.), Futures are pointing toward a gap higher to start the day. The DIA implies a +0.42% open, the SPY is implying a +0.76% open, and the QQQ implies a +1.42% open at this hour. At the same time, 10-Year bond yields are down to 3.77% and Oil (WTI) has dropped another 2.73% to $67.77 per barrel in early trading.
The major economic news scheduled for Thursday include Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, August Core Durable Goods Orders, August Durable Goods Orders, Q2 Core PCE Prices, Q2 GDP, and Q2 GDP Price Index (all at 8:30 a.m.), August Pending Home Sales (10 a.m.), and the Fed Balance Sheet (4:30 p.m.). We also hear from Fed Governor Bowman (9:15 a.m.), Fed Chair Powell (9:20 a.m.), Fed member Williams (9:25 a.m.), Fed Vice Chair Barr (10:30 a.m.), Treasury Sec. Yellen (11:15 a.m.), Fed Vice Chair Barr (1 p.m.), and Fed member Kashkari (1 p.m.). The major earnings reports scheduled for before the open are limited to ACN, KMX, JBL, and SNX. Then, after the close, BB, COST, and SCHL report.
In economic news later this week, on Friday, August Core PCE Price Index, August PCE Price Index, August Personal Spending, August Goods Trade Balance, August Retail Inventories, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, and Michigan 5-Year Inflation Expectations are reported.
In terms of earnings reports later this week, on Friday, there are no earnings reports scheduled.
So far this morning, ACN and JBL reported beats on both the revenue and earnings lines. Meanwhile, KMX beat on revenue while missing by a penny on earnings.
With that background, it looks like the Bulls are charging this morning on that MU forecast optimism. All three major index ETFs gapped up significantly to start the premarket. However, SPY and DIA have printed tiny Doji candles since while QQQ has followed-through with a decent-size white-body candle that is now within 2% of its all-time highs. It is worth noting that SPY sits at a new all-time high by three-quarters of a percent in the early session. Obviously, all three remain above their T-line (8ema). So, the short-term trend is still bullish. The mid-term trend is now also bullish with QQQ the laggard but now well over its downtrend line going back to the July all-time high. In the longer-term we still have a strong Bull trend all three major index ETFs and remain near all-time highs. With regard to extension, QQQ is extended far above its T-line (8ema) after the premarket gap up. However, the other two major index ETFs are not yet too far extended above their T-lines. However, the T2122 indicator is back down in the middle of its mid-range. So, markets may have room to run either direction, but the Bulls clearly have momentum early and the Bears have much more slack to work with today if they can reverse sentiment. With regard to those 10 big dog tickers, all 10 are in the green with INTC (+2.89%), AMD (+2.54%), and NVDA (+2.27%) leading the gains. As usual, However, that biggest dog, NVDA, is leading the dollar-volume traded this morning by a factor of three compared to any other ticker.
As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the Man in the Green Bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby, it’s a job. The gains are real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!
See you in the trading room.
Ed
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
Hit and Run Candlesticks / Road To Wealth Youtube videos
Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service
Wall Street is working to stabilize after a mixed session on Wednesday, with Nasdaq 100 futures rising by 1.3%. This boost was largely driven by Micron Technology, whose shares surged 14% in extended trading following the release of strong guidance for the current quarter. Traders are now looking ahead to the weekly jobless claims report, expected on Thursday, with economists surveyed by Dow Jones predicting 223,000 initial unemployment claims for the week ending September 21.
European stocks saw an uptick on Thursday morning, driven primarily by a strong performance in the mining sector, which surged over 3.6%. Technology and household goods stocks also contributed to the positive momentum, each rising around 3%. Conversely, oil and gas stocks declined by more than 2.8% following a Financial Times report indicating that Saudi Arabia is considering abandoning its unofficial oil price target of $100 per barrel. Among the notable gainers, shares of the French luxury group Kering climbed significantly.
Chinese stocks continued their upward trajectory as state media reported that the nation’s top leaders had endorsed the government’s recent economic support measures. The CSI 300 index in Mainland China extended its winning streak to seven consecutive days, reaching its highest point in approximately four months following a pivotal meeting that reaffirmed the government’s commitment to stimulus efforts. Meanwhile, South Korea’s Kospi surged by 1.9%, driven by significant gains in SK Hynix. The chip maker announced the commencement of mass production of the world’s first 12-layer HBM3E chip, designed for AI memory applications.
Economic Calendar
Earnings Calendar
Notable reports for Thursday before the bell include CAN, KMX, JBL, & SNX. After the bell reports include COST, BB, & MTN.
News & Technicals’
Global chip stocks experienced a significant rally on Thursday following U.S. memory semiconductor maker Micron’s announcement of revenue guidance that exceeded expectations, propelling its share price upward. This positive sentiment extended to South Korea, where shares of Samsung Electronics and SK Hynix also saw gains. In Europe, Dutch semiconductor equipment maker ASML surged over 4% in early trading. Other semiconductor companies, including ASMI, BE Semiconductor, and STMicroelectronics, also posted sharp increases.
Russian President Vladimir Putin announced that Russia is making several clarifications to its nuclear doctrine, specifically defining the conditions under which nuclear weapons may be used. He mentioned that the draft amendments to the doctrine will broaden the scope of states and military alliances subject to nuclear deterrence. In a stern warning to Western nations, Putin declared that any attack on Russia by a non-nuclear state, if supported by a nuclear-armed nation, would be treated as a “joint attack,” signaling a significant shift in Russia’s strategic defense policy.
The Federal Trade Commission (FTC) is intensifying its efforts against “automation” companies that promise to launch and manage online businesses for customers in return for an upfront investment. The latest target of this crackdown is Ascend Ecom, which operated an e-commerce scheme primarily on Amazon. The FTC has accused Ascend and similar companies of misrepresentation and making deceptive earnings claims, highlighting the need for greater scrutiny and regulation in this sector to protect consumers from fraudulent business practices.
OpenAI’s board is currently deliberating plans to restructure the organization into a for-profit business. This news follows the announcement by Chief Technology Officer Mira Murati that she will be leaving the company after six and a half years. Later the same day, CEO Sam Altman revealed that Chief Research Officer Bob McGrew and Vice President of Research Barret Zoph are also set to depart. These significant leadership changes come at a pivotal moment for OpenAI as it considers a major shift in its business model.
With the earnings results out of MU the market is once again all excited about AI as the institutions work to stabilize the sector pushing new record highs in the SPY at the open. However, it would be wise to be careful chasing at the open and watch for potential whipsaws as the market reacts to huge day of economic data and Fed speakers including the Chairman himself.
Stock futures dipped on Wednesday, following record-high closes for the S&P 500 and Dow, which rose by 0.25% and 0.20%, respectively. The Nasdaq Composite also saw gains, increasing by 0.56% and nearing its record high, now less than 4% away. Despite these positive movements, concerns about a slowing economy persist, especially after the Federal Reserve’s rate cut last week. Investors are now looking ahead to upcoming economic data, including new home sales for August, set to be released on Wednesday morning, and weekly jobless claims on Thursday.
European stocks edged lower on Wednesday, trimming gains from the previous session that were driven by Chinese stimulus measures. The banking sector was notably affected, with the banking index falling by approximately 0.4% as investors closely watched UniCredit’s potential acquisition of Commerzbank, Germany’s second-largest lender. Additionally, German software giant SAP saw a significant drop, landing at the bottom of the Stoxx 600, following reports from Bloomberg that the company is under investigation in the U.S. for alleged price-fixing.
China’s stock market led the Asia-Pacific region on Wednesday, driven by new stimulus measures announced by Beijing the previous day. This positive sentiment also saw the offshore yuan briefly strengthen to 6.995 against the U.S. dollar, marking the first time it broke the 7.00 level since May 2023. Hong Kong’s Hang Seng index reflected this optimism, rising by 0.63% in its final trading hour. Meanwhile, investors turned their attention to Australia’s inflation data, which showed a 2.7% year-on-year increase in the consumer price index for August.
Economic Calendar
Earnings Calendar
Notable reports for Wednesday before the bell notable report includes CTAS. After the bell includes MU, CNXC, FUL, JEF, & WS.
News & Technicals’
Caroline Ellison, the key witness in the case against FTX founder Sam Bankman-Fried, was sentenced to two years in prison by a New York federal court in Manhattan. She was also ordered to forfeit $11 billion. Ellison, who managed the Alameda Research hedge fund linked to FTX, had agreed to a plea deal in December 2022, shortly after the cryptocurrency exchange declared bankruptcy. During sentencing, Judge Lewis Kaplan acknowledged her significant cooperation but stated he could not grant her a “literal get-out-of-jail-free card.”
The Biden administration has endorsed the latest government funding proposal, reducing the likelihood of a shutdown before the November 5 presidential election. House Speaker Mike Johnson, R-La., introduced a new three-month funding bill on Sunday after his initial proposal failed in the GOP-controlled House. This appropriations bill aims to fund the government through December 20, instead of March 2025, and notably excludes the SAVE Act, a contentious voter ID bill.
Italy’s UniCredit has surprised German authorities with a potential multibillion-euro merger involving Frankfurt-based Commerzbank. Market observers indicated to CNBC on Tuesday that this move might have caused a sense of national embarrassment for Germany’s government. Some argue that the outcome of this takeover attempt could challenge the essence of the European project. On Monday, Milan-based UniCredit announced it had increased its stake in Commerzbank to approximately 21% and has requested to raise this holding to up to 29.9%.
Japan has been facing a rice shortage in recent months, driven by a combination of adverse weather conditions and a surge in tourism. This situation has been exacerbated by Japan’s restrictive rice policies. In August, many supermarkets frequently ran out of white rice, prompting stores to limit purchases to one bag per person.
After another round of record-high closes futures suggest a bit softer open for Wednesday. Uncertainty of 4th quarter earnings and the pending GDP and core PCE numbers are a natural reason for choppy price action and weaker than average volume. With the T2122 indicator continuing to register a short-term overbought condition avoid overtrading and have a plan to protect positions if a profit-taking wave begins.
Markets were mostly undecided and treading water again Tuesday. To the extent there was any directionality, it was slightly bullish. SPY opened 0.15% higher, DIA opened 0.12% higher, and QQQ gapped up 0.30%. From there, all three major index ETFs sold off the first hour, rallied the second hour, and then ground sideways the rest of the day popping back up to the highs the last five minutes of the day. All three major index ETFs remain above their T-line (8ema). This action gave us a white-bodied Spinning Top in the DIA. At the same time, SPY printed a white-bodied Hanging Man. Finally, QQQ printed a white-bodied candle somewhere in between a Hanging Man and a Spinning Top, that sits right at a resistance level from the August highs. This happened on below-average volume in all three of the major index ETFs.
On the day, seven of the 10 sectors were in the green, with Basic Materials (+1.97%) well out in front leading the rest of the market higher. On the other side, Financial Services (-0.39%) and Utilities (-0.37%) lagged well behind the other sectors. At the same time, SPY gained 0.29%, DIA gained 0.24%, and QQQ gained 0.48%. VXX was flat, ending up to 47.76 and T2122 climbed a bit into the middle of its over-bought range to close at 90.96. At the same time, 10-Year bond yields fell a bit to close at 3.732% while Oil (WTI) gained 1.66% to close at $71.54 per barrel on supply fears led by Israeli escalation of attacks on Lebanon. So, markets were slightly bullish on what was largely a non-committal, undecided day with traders making few bets as markets drifted sideways much of the day. SPY and DIA both closed at new all-time high closes.
The major economic news scheduled for Tuesday was limited to Conference Board Consumer Confidence, which came in lower at 98.7 (compared to a forecast of 103.9 and well down from August’s 105.6 reading). Later, after the close, Weekly API Crude Oil Stocks had a much larger drawdown than expected at -4.339 million barrels (compared to a forecasted 1.100-million-barrel drawdown and far different than the previous week’s 1.960-million-barrel inventory build).
In Fed news, Fed Governor Bowman (probably the most hawkish permanent member of the FOMC board) explained her lone dissent to the FOMC’s half percent rate cut last week. She told a KY Banker’s Assn. that inflation gauges “remain uncomfortably above” the Fed’s 2% target. Therefore, she opposed a half-percent cut and instead supported a quarter percent reduction. Bowman said, “The U.S. economy remains strong and core inflation remains uncomfortably above our 2% target.” She continued, “I preferred a smaller initial cut in the policy rate while the U.S. economy remains strong and inflation remains a concern.” Bowman explained, “I continue to see greater risks to price stability, especially while the labor market continues to be near estimates of full employment (4.2%).” She also said that she feared a rate cut would “unleash a considerable amount of pent-up demand and cash on the sidelines” (thus, possibly reigniting inflation).
After the close, KBH reported beats on both the revenue and earnings lines.
In stock news, on Tuesday, oil and gas operators in the Gulf of Mexico scaled back or shut down operations ahead of a storm predicted to become a hurricane Wednesday. SHEL, CVX, and BP were the headline names that evacuated rigs in the gulf. At the same time, as previously revealed, SMAR announced it will be acquired by BX and Vista Equity Partners in a $8.4 billion all-cash deal ($56.50/share). Later, BIIB released results promising from a Phase 3 study of its lupus treatment. At the same time, the Chairman of Nippon Steel publicly asked the United Steelworkers union to “come to the table” to find a resolution allowing Nippon Steel to acquire X. Later, about 2,000 hotel workers walked off the job in a strike at the largest HLT hotel in the world in HI. (Overall, 4,000 hotel workers struck HLT in Honolulu, Sandiego, and San Francisco.) At the same time, KO announced that it is pulling its “Spiced Coke” flavor and said it was discontinuing the flavor. This comes less than six months after KO announced the new “permanent flavor” was intended to target younger drinkers.
Elsewhere, Elliott Management announced it would request a special meeting of the board of LUV as soon as next week as the activist investor seeks to push out the CEO. Later, AMCI Testing announced that TSLA Full Self-Driving software is still “suspect” and requires improvement to ensure robotaxi safety. (The testing company said that a 1,000-mile evaluation found that the software required human intervention 75 times and the time between required human interventions decreased as the test went on.) At the same time, the Teamsters Unions announced it had reached a four-year deal with BWA, covering 700 workers. (This ends a two-week strike at BWA.) Later, MSFT announced it will spend $1.3 billion in Mexico over the next three years to build out cloud computing infrastructure. After the close, Reuters reported that negotiations remain at a standstill between MPC and the Teamsters Union as the strike at MPC refineries enters its third week. At the same time, regulatory filings showed that BRKB sold another $863 million of BAC stock between September 20 and September 24.
In stock legal and governmental news, on Tuesday the Dept. of Justice sued V for allegedly conducting an illegal monopoly over debit cards. The suit accuses V of using “exclusionary agreements” with partners to prevent and smother potential rivals in that space. Later, BVNRY received a $63 million order from the US government to produce bulk and freeze-dried smallpox and Mpox vaccines. At the same time, the UK anti-trust watchdog agency said that “concerns remain” over GOOGL ad-privacy plans. (This is GOOGL’s plans to retain third-party cookies in the Chrome browser for better targeting ads.) Later, the FTC announced that INVH agreed to pay a $48 million fine for deceiving renters about their lease costs.
Meanwhile, the US State Dept. approved the sale of $740 million of Stinger missiles (made by RTX) to Egypt. At the same time, a Brazilian state announced they had signed a $180 million deal with AMZN and five other companies, selling the companies carbon credits and the money to purportedly be used for conservation of the Amazon region. After the close, META announced it will not immediately join the EU’s AI Pact ahead of bloc’s new AI law comes into effect. At the same time, a federal judge ruled a NY City law requiring DASH, GRUB, and UBER to share the end customer data with restaurants. The judge ruled the law violated the First Amendment by regulating commercial speech.
In geopolitical news, on Tuesday, Israel continued its new campaign of attacks on Lebanon (Hezbollah). After 1,300+ Israeli attacks Monday killed more than 500 and wounded thousands, on Tuesday they launched several dozen additional attacks, killing at least dozens more. In response, Hezbollah fired 300 rockets into Israel. As the rest of the world called for de-escalation and the stop of illegal bombings, Israeli PM Netanyahu said the attacks will not end. He urged the Lebanese people to change governments and throw out Hezbollah “before that group leads them into the abyss” (i.e. gets them bombed to rubble by Israel). Meanwhile, the IDF spokesman called on the people of Southern Lebanon to move away from buildings and gatherings “for their own safety.” Oil prices initially spiked on Monday, but retreated as the attacks cooled Monday night. However, another spike took place Tuesday as the attacks resumed.
In overnight news, Asia was buoyed Wednesday by more stimulus from Beijing. The People’s Bank of China (central bank) lowered the rate charged on one-year loans by more than it has ever been lowered before. This comes on top of the broad package of stimulus announced Tuesday. As a result, the Chinese yuan rose to more the seven per US dollar for the first time in 16 months. Elsewhere, SAP stock took a hit on news that the US is investigating the German software giant for over-charging US agencies over the course of a decade.
Overnight, Asian markets were evenly mixed with six exchanges in the red and six in the green. Taiwan (+1.47%), Shenzhen (+1.21%), and Shanghai (+1.16%) led the gainers while South Korea (-1.34%) and Singapore (-1.09%) were by far the biggest losers. In Europe, markets are mostly green at midday with four of 14 bourses in the red. The CAC (-0.33%), DAX (-0.43%), and FTSE (+0.27%) lead the region on volume as usual in early afternoon trade. In the US, as of 7:15 a.m., Futures are pointing toward a mixed, flat start to the day. The DIA implies a +0.07% open, the SPY is implying a -0.01% open, and the QQQ implies a -0.15% open at this hour. At the same time, 10-Year bond yields are up to 3.76% and Oil (WTI) is down 0.63% to $71.10 per barrel in early trading.
The major economic news scheduled for Wednesday includes August Building Permits (8:30 a.m.), August New Home Sales (10 a.m.), and Weekly EIA Crude Oil Inventories (10:30 a.m.). The major earnings reports scheduled for before the open are limited to CTAS. Then, after the close, CNXC, FUL, JEF, MU, and WS report.
In economic news later this week, on Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, August Core Durable Goods Orders, August Durable Goods Orders, Q2 Core PCE Prices, Q2 GDP, Q2 GDP Price Index, August Pending Home Sales, and the Fed Balance Sheet. We also hear from Fed Chair Powell, Fed member Williams, Fed Vice Chair Barr, Treasury Sec. Yellen, Fed Vice Chair Barr, and Fed member Kashkari. Finally, on Friday, August Core PCE Price Index, August PCE Price Index, August Personal Spending, August Goods Trade Balance, August Retail Inventories, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, and Michigan 5-Year Inflation Expectations are reported.
In terms of earnings reports later this week, on Thursday, we hear from CAN, KMX, JBL, SNX, BB, COST, and SCHL. Finally, on Friday, there are no earnings reports scheduled.
In last minute news mortgage news, the Mortgage Bankers Assn. reports a surge in demand for loans last week. This was led by a 20% increase in refinance loan applications on the week (week-on-week). (This was a massive 175% increase over the same week one year earlier.) Meanwhile, the loan applications for the purchase of a new home rose 1% week-on-week, but were also 2% higher than the same week of 2023. The national average 30-year, fixed-rate, conforming-loan interest rate was 6.13% down from 6.15% the week prior., APO (Apollo Global Mgmt.) offered to make a $5 billion “equity-like” investment into INTC. This is both a vote of confidence in INTC, but depending on the board mindset may also offer an alternative to the friendly take-over offer from QCOM. Either way, INTC shares spiked in premarket on the news.
With that background, it looks like the SPY is flat and undecided in the premarket. At the same time, QQQ gapped down a bit but is also undecided at that point. Meanwhile, DIA gapped down the most in the early session, but also has a strong white-bodied candle so far that had climbed back up to positive territory early. All three remain above their T-line (8ema). So, the short-term trend is still bullish. The mid-term trend is now also bullish with QQQ the laggard but now well over its downtrend line going back to the July all-time high. In the longer-term we still have a strong Bull trend all three major index ETFs and remain near all-time highs. With regard to extension, none of the three major index ETFs are too far extended above their T-lines. However, the T2122 indicator has climbed back into the top half of its overbought range. So, markets may have room to run either direction, but the Bears still have more slack to work with today. With regard to those 10 big dog tickers, seven of the 10 are in the red with AAPL (-0.99%) well out in front leading the losses. However, that biggest dog, NVDA (+0.26%) is among the leader among the gainers and has traded 3x the dollar-volume of any other ticker so far today (normal for NVDA).
As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the Man in the Green Bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby, it’s a job. The gains are real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!
See you in the trading room.
Ed
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
Hit and Run Candlesticks / Road To Wealth Youtube videos
Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.
DISCLAIMER: Investing / Trading involves significant financial risk and is not suitable for everyone. No communication from Hit and Run Candlesticks Inc, its affiliates or representatives is not financial or trading advice. All information provided by Hit and Run Candlesticks Inc, its affiliates and representatives are intended for educational purposes only. You are advised to test any new trading approach before implementing it. Past performance does not guarantee future results. Terms of Service
U.S. stock futures saw a slight uptick on Tuesday in response to recent policy changes in China hoping to buoy economic declining confidence. The modest gains were primarily driven by increases in the utilities and financial sectors. Traders are also anticipating new economic data, including the Conference Board’s consumer confidence reading for September and the Richmond Fed manufacturing index, both set to be released later in the morning.
By mid-morning, the pan-European Stoxx 600 index had risen by 0.8%, driven by strong performances in the mining, technology, and household goods sectors. In contrast, telecoms, health care, and utilities were the only sectors in negative territory. Auto stocks also showed significant gains, with BMW up 3%, and both Mercedes Benz Group and Volkswagen increasing by 2%.
The People’s Bank of China announced a reduction in the reserve requirement ratio by 50 basis points, aiming to stimulate economic activity. Meanwhile, Australia’s central bank maintained its benchmark policy rate at 4.35%, aligning with economists’ expectations. Following these announcements, Hong Kong’s Hang Seng index surged nearly 4%, marking its best day in over seven months. In Japan, the Nikkei 225 closed 0.57% higher at 37,940.59, and the Topix rose by 0.54% to 2,656.73, as Japanese markets resumed trading after a holiday.
Economic Calendar
Earnings Calendar
Notable reports for Tuesday before the bell include AZO & THO. After the bell reports include KBH, PRGS, SFIX, & WOR.
News & Technicals’
A year after identifying geopolitics as the world’s biggest risk, JPMorgan Chase CEO Jamie Dimon reiterated his concerns, stating that “geopolitics is getting worse, they are not getting better” in an interview with CNBC-TV18. Dimon emphasized the escalating geopolitical tensions and urged the U.S. to brace for a prolonged conflict between Ukraine and Russia.
Boeing announced it has extended its “best and final” offer, which includes higher pay and other benefits, but the union rejected it, stating it was not a negotiated proposal. Over 30,000 Boeing machinists initiated a strike on September 13 after decisively rejecting a tentative agreement. The financial repercussions of the strike will hinge on its duration, with Bank of America estimating that it is costing Boeing $50 million per day.
President Joe Biden is preparing to deliver his final annual address to the United Nations General Assembly in New York. In his speech, Biden will aim to reconcile his diplomatic achievements and objectives with the ongoing conflicts in the Middle East, Ukraine, and Sudan. Additionally, foreign leaders are taking the opportunity this week to meet with Biden’s potential successors, Vice President Kamala Harris and former President Donald Trump.
Southwest Airlines’ COO informed staff that the company will need to make “difficult decisions” to enhance profitability. The airline has already announced plans to implement assigned seating, introduce red-eye flights, and offer seats with extra legroom. Southwest is facing pressure from activist investor Elliott Investment Management, which is advocating for a change in leadership.
Big policy changes in China are helping markets around the world continue the recent bullishness but keep in mind that it also signals the major problems with the Chinese economy. With the corporate buyback blackout, a pending GDP and core PCE reading along with uncertainty of coming 4th quarter earnings I would not be surprised to see continued choppy market conditions. Also keep and eye on the growing geopolitical tensions with the potential of pushing energy prices substantial higher.
Stock futures edged higher on Monday, trying to build on the rate cut momentum that pushed the Dow Jones Industrial Average to a record closing level. Investors are keenly awaiting economic data on the service and manufacturing sectors, which could provide further insights into the health of the economy. Additionally, market participants will be closely monitoring speeches from key Federal Reserve officials, including Atlanta Fed President Raphael Bostic, Chicago Fed President Austan Goolsbee, and Minneapolis Fed President Neel Kashkari, for clues on the central bank’s future monetary policy direction.
European stocks remained flat in early trading on Monday, reflecting concerns over declining business activity in Germany and France, the region’s two largest economies. In France, the Purchasing Managers’ Index (PMI) for manufacturing and services fell sharply to 47.4, an eight-month low, significantly missing the Reuters forecast of 50.6 and dropping from 53.1 in August. Similarly, Germany’s business activity contracted, with the PMI decreasing from 48.4 in August to 47.2 in September, marking a seven-month low.
Recent economic data highlights several key trends across Asia-Pacific. China’s youth unemployment rate has surged for the second consecutive month, reaching its highest level this year, as reported by the National Bureau of Statistics. This rise reflects a cooling labor market amid broader economic weakening. Meanwhile, the Reserve Bank of Australia is commencing a two-day policy meeting to determine the country’s future monetary direction. In Singapore, both headline and core inflation rates exceeded expectations in August, with year-on-year increases of 2.2% and 2.7%, respectively.
Economic Calendar
Earnings Calendar
Notable reports for Monday before the bell there are no notable reports. After the bell includes AIR.
News & Technicals’
Global semiconductor leaders Taiwan Semiconductor Manufacturing Co. (TSMC) and Samsung Electronics are reportedly in discussions with the United Arab Emirates (UAE) to explore the possibility of establishing Mega factories in the Middle East. According to a report by the Wall Street Journal, these facilities would be primarily funded by the UAE, with Abu Dhabi’s sovereign wealth fund, Mubadala, playing a crucial role in financing the expansion of the country’s domestic semiconductor manufacturing capabilities.
Europe appears to be on the brink of an economic downturn as its largest economies, Germany and France, grapple with political and economic challenges. Recent data released on Monday indicates that business activity in both countries continued to decline in September. In Germany, the HCOB flash composite Purchasing Managers’ Index (PMI) dropped to a seven-month low, while in France, the composite PMI fell to an eight-month low.
Republican House Speaker Mike Johnson has introduced a revised temporary government funding proposal, incorporating significant amendments from the original bill presented earlier this month. The new proposal aims to fund the government through December 20 and notably excludes any provisions of the SAVE Act, a Trump-backed election security measure that would mandate proof of citizenship for voter registration. This adjustment reflects ongoing negotiations and compromises within the legislative process to ensure continued government operations.
RH CEO Gary Friedman explained to CNBC’s Jim Cramer why the upscale home furnishing retailer avoids official social media accounts, emphasizing the importance of authenticity. Friedman criticized paid promotions by online influencers, stating that such tactics lack genuineness. He highlighted that enduring brands earn their reputation by being truthful, rather than relying on “fake fans” or paid endorsements on platforms like Instagram or TikTok. According to Friedman, true brand value comes from honesty and integrity, not from artificial online popularity.
The premarket futures continue push higher hoping to continue the bullish rate cut momentum however, with most stocks in their black out period we should we watchful for a pullback or a resting consolidation as we wait for the next round of earnings. Slowing economic conditions in Asian and European markets will add some weight to today’s economic reports and could effect today’s sentament.
Friday was a day where most of the move came at the open. SPY gapped down by 0.53%, DIA gapped down 0.46%, and QQQ opened 0.17%. From there, all three of the major index ETFs meandered sideways with QQQ having the most volatility, SPY the least, and DIA had a slight bullish trend. All three remain well above their T-line (8ema) and the only other retest was SPY retesting support from above and passing. This all gave us indecisive candles across all three with long-legged Doji candles in SPY and QQQ while DIA printed a white-bodied Spinning Top candle. This happened on below-average volume in the SPY, DIA, and QQQ.
On the day, nine of the 10 sectors were in the red, with Industrials (-0.83%) and Healthcare (-0.78%) in front of the others leading the rest of the market lower. On the other side, Utilities (+1.68%) were the only sectors in green and held up much, much better than the other sectors. Meanwhile, SPY lost 0.52%, DIA lost 0.20%, and QQQ lost 0.19%. VXX fell another 0.61% to close at 47.43 and T2122 fell just outside of its over-bought range to the top of its mid-range at 78.17. At the same time, 10-Year bond yields rose to close at 3.745% while Oil (WTI) fell just 0.25% to close at $71.77 per barrel. So, Friday was basically modest gap lower and then a dead market as markets seemed to want to get past triple-witching and the weekend.
There was no major economic news or earnings reports scheduled for Friday.
In Fed news, Fed Governor Waller discussed the FOMC’s half percent rate cut with CNBC. Waller said that rate cut was the right decision because the economy is strong and inflation is coming down…and the Fed wants to keep it that way. Waller said that recent data pushed him in the direction of a larger rate cut, while noting “estimates” suggest that core PCE is running below target and that was what pushed him over the edge toward supporting the larger rate cut. As always, Waller said that future rate decisions will be data dependent and that the FOMC could pause if inflation progress stalls, but he’s also open to another larger cut if the jobs market makes it appropriate. Finally, Waller said he does not believe the Fed is “behind the curve” (or ahead) and he thinks that inflation is “on the right path.” Later, Fed Governor Bowman released a statement that her dissenting vote to the FOMC’s half percent rate cut, instead voting for a quarter-point cut, to avoid “a premature declaration of victory over inflation.” She echoed Chair Powell (and Governor Waller) in saying that the economy and job market remain strong, but that “core personal expenditure prices are still rising faster than 2.5% from 12 months earlier.” Bowman continued, “We have not yet achieved our inflation goal. (So,) I believe that moving at a measured pace toward a more neutral policy stance will ensure further progress in bringing inflation down to our 2% target. This approach would also avoid unnecessarily stoking demand.” (Her statement did not specifically say so, but apparently, she believes a measured pace is best defined as quarter point rate moves.)
In stock news, on Friday, CEG announced plans to restart the 3-Mile Island nuclear power plant, saying that it had contracted to sell the power to MSFT for use in AI data centers. CEG said it plans to invest $1.6 billion to upgrade and restart the plant. CEG stock gapped up 13% and closed up 22.31% on the news. (However, as of day end, the Nuclear Regulatory Commission said it had not received an application from CEG, which would need to be approved before restarting the plant.) At the same time, NVO announced disappointing results from a phase 2a trial of its experimental oral anti-obesity drug monlunabant. The trial found patients lost just 6.5% of their body weight over 16 weeks using the once-daily pill. (NVO fell nearly 5% on the news.) Later, CAH announced it has agreed to buy private cancer center operator Integrated Oncology Network for $1.12 billion in cash. The move gives CAH access to 100 cancer treatment centers in 10 states for distribution of its drugs.
Meanwhile, Bloomberg reported APOS has been given $5 billion by BNPQY to expand its private credit investments. At the same time, the Wall Street Journal reported that QCOM made a buyout offer for INTC earlier in the week. This news broke Friday afternoon, and INTC popped 7% on the news, but closed up 3.31%. (No details on the offer or response were given. However, the Journal said it had three sources, including people on both sides of the offer.) It’s worth noting that even if INTC accepted the offer, there would be huge hurdles in getting regulatory approval…and that approval would need to come from several governments. After the close, BA’s new CEO Ortberg made his first major move by firing the head of the company’s Space and Defense unit, effective immediately. The company name the unit’s COO to assume the duties until a replacement can be found.
In stock legal and governmental news, on Friday, a German court ruled against AMZN and in favor of NOK in the phone company’s patent infringement suit. (The case is over video technologies in streaming devices that AMZN is selling without a NOK license.) At the same time, AAL asked the US Dept. of Transportation to let it to delay resuming two daily flights to China from the US. AAL cited lags in travel demand for China that have not recovered from pre-pandemic levels (COVID being the reason the flights were discontinued originally). (DAL and UAL had both sought the same permission earlier.) Later, the US Dept. of Energy announced plans to award $3 billion across 25 projects in 14 states in support of battery manufacturing. ALB, HON, and LUNMF are among the companies receiving these grants. At the same time, the NHTSA said that F will recall 144k vehicles over rearview camera freezing problems. Later, the FDA approved AZN’s self-administered nasal spray flu vaccine. (This is the first of its kind drug approved.)
Elsewhere, the FDA also approved ZVRA’s drug for a rare and fatal genetic disorder. (The FDA had previously declined to approve the ZVRA drug and ordered an extended review.) Later, the SEC ruled that FOX can avoid a vote by shareholders asking it to consider labeling news and opinion shows to distinguish them for viewers as activist investors. The SEC agreed with FOX that the matter is not a shareholder matter, but rather an “ordinary business decision.” At the same time, and Italian judge ordered a $84 million seizure of assets and money from the Chairman of STLA related to alleged tax fraud. Later, the FTC sued UNH, CI, and CVS, alleging that their pharmacy benefits manager units steered patients away from lower-cost insulin to higher-cost products by excluding the lower-cost products from their lists of covered drugs distributed to patients. At the same time, the NHTSA announced that GM is recalling 450k pickups and SUVs in the US over an inoperative warning light for low brake fluid.
Meanwhile, the conservative US 5th District Court of Appeals revived a suit brought by drug companies and their trade groups challenging the right of the government to negotiate drug prices. The court did not address the merits of the case but instead found the TX judge was wrong to dismiss the case in February, saying he did not have jurisdiction to hear the case, even though it was brought in his court. At the same time, SATS received approval from the FCC to buildout the company’s 5G network for Boost Mobile. (SATS says it plans to cover 80% of the US by the end of 2024.) Later, the JNJ subsidiary used for the “Texas Two-Step” attempt to avoid the liability of talc lawsuits filed for bankruptcy again (a third time) to advance JNJ’s $10 billion settlement plan that would end tens of thousands of lawsuits. (JNJ says that 83% of lawsuit claimants have accepted the settlement offer. JNJ is hoping that the bankruptcy judge will order the settlement to apply to all plaintiffs, instead of just the 83%.) After the close, the SEC approved options trading on BLK’s Bitcoin spot-price ETF.
In miscellaneous news, on Friday, the Biden Administration announced it is preparing a new $375 million military aid package for Ukraine. This package will include HIMARS missiles (made by LMT), as well as 155mm and 105mm artillery shells (made by BAESF). Elsewhere, in government shutdown news, on Sunday afternoon Speaker of the House Johnson decided to remove the MAGA voter suppression amendment from the government funding continuing resolution. The revised bill only funds government operations until December 20 (9 weeks) as the GOP hopes to get past this, its SEVENTH shutdown fiasco since taking power in January 2023 (with an eighth cliff-edge then scheduled the week before Christmas). The Speaker indicated in a letter to his caucus that he would bring a vote on the measure this week, with details still unknown.
In geopolitical news, Israel ramped up regional tensions with more bombing attacks Friday, Saturday and Sunday. Initially, Lebanon’s Hezbollah group initially responded with rhetoric, but as Israeli attacks continued the group conducted missile attacks further into Israel than has been seen for a long time, with rockets landing near Haifa (on the Mediterranean coast). Meanwhile in Russia, Ukrainian drone attacks destroyed three armament depots in the Moscow region on Saturday and Sunday. These attacks blew up 60,000 tons of armaments ranging from artillery shells, to rockets, to bombs, to cruise missiles. This included shipments from North Korea. (The value of the destroyed munitions is very likely in the range of many billions of dollars.)
Overnight, Asian markets were mixed with five red exchanges and seven green ones. Japan (+1.53%) led the gains while Australia (-0.69%) paced the losses. In Europe, we see a similar picture taking shape as there are six red bourses and eight green ones at midday. The CAC (-0.321%), DAX (+0.48%), and FTSE (-0.20%) lead the region on volume as always. In the US, as of 7:30 a.m., Futures are pointing toward a start modestly on the green side of flat. The DIA implies a +0.06% open, the SPY is implying a +0.14% open, and the QQQ implies a +0.22% open at this hour. At the same time, 10-Year bond yields are up t o3.751% and Oil (WTI) is up half a percent to $71.32 per barrel in early trading.
The major economic news scheduled for Monday is limited to S&P Global Mfg. PMI, S&P Global Services PMI, and S&P Global Composite PMI (all at 9:45 a.m.). However, we also hear from Fed members Bostic (8 a.m.) and Kashkari (1 p.m.). There are no major earnings reports scheduled for before the open. However, after the close, AIR reports.
In economic news later this week, on Tuesday, we get Conference Board Consumer Confidence and Weekly API Crude Oil Stocks. Then Wednesday, August Building Permits, August New Home Sales, and Weekly EIA Crude Oil Inventories are reported. On Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, August Core Durable Goods Orders, August Durable Goods Orders, Q2 Core PCE Prices, Q2 GDP, Q2 GDP Price Index, August Pending Home Sales, and the Fed Balance Sheet. We also hear from Fed Chair Powell, Fed member Williams, Fed Vice Chair Barr, Treasury Sec. Yellen, Fed Vice Chair Barr, and Fed member Kashkari. Finally, on Friday, August Core PCE Price Index, August PCE Price Index, August Personal Spending, August Goods Trade Balance, August Retail Inventories, Michigan Consumer Sentiment, Michigan Consumer Expectations, Michigan 1-Year Inflation Expectations, and Michigan 5-Year Inflation Expectations are reported.
In terms of earnings reports later this week, on Tuesday, we hear from AZO, THO, KGH, and WOR. Then Wednesday, CTAS, CNXC, FUL, JEF, MU, and WS report. On Thursday, we hear from CAN, KMX, JBL, SNX, BB, COST, and SCHL. Finally, on Friday, there are no earnings reports scheduled.
In last minute news, APO (Apollo Global Mgmt.) offered to make a $5 billion “equity-like” investment into INTC. This is both a vote of confidence in INTC, but depending on the board mindset may also offer an alternative to the friendly take-over offer from QCOM. Either way, INTC shares spiked in premarket on the news.
With that background, it looks like the market is indecisive and just on the plus side of break-even in the early session. All three major index ETFs have printed more wick than body, with QQQ having the only appreciable body among those candles. All three remain above their T-line (8ema). So, the short-term trend is still bullish. The mid-term trend is now also bullish with QQQ the laggard but now well over its downtrend line going back to the July all-time high. In the longer-term we still have a strong Bull trend all three major index ETFs and remain near all-time highs. With regard to extension, none of the three major index ETFs are too far extended above their T-lines. In addition, the T2122 indicator has dropped out of its overbought range, but sits in the top of its mid-range. So, markets may have room to run either direction, but the Bears still have more slack to work with today. With regard to those 10 big dog tickers, six of the 10 are in the green with INTC (+4.01%) way, way out in front leading gains. However, that biggest dog, NVDA (-0.09%) is among the laggards.
As always, be deliberate and disciplined…but don’t be stubborn. If you have a loss, admit you were wrong and take that loss before it gets out of hand. And when the price does move in your direction, always move your stops in your favor and take a little profit off the table. You have to keep the “Legend of the Man in the Green Bathrobe” in mind. In a winning situation, it is NOT HOUSE MONEY you’re betting, it’s YOUR MONEY! There is no reason to keep raising your bet (risk) size just because you’ve had a win. Finally, remember that trading is not a hobby, it’s a job. The gains are real and so is the risk. So, treat it that way. Do the work and follow the process. Stick to your trading rules, trade with the trend, and take those profits when you have them. Do the work!
See you in the trading room.
Ed
🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.
🎯 DickCarp: the scanner paid for the year with HES-thank you
🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.
🎯 Bob S: LTA is incredible…. I use it … would not trade without it
🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade: PYPL, TGT, and ZS. Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.
🎯 Friday 6/21/19 (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.
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