Although Moody’s shined a light on the struggling, debt-laden financial yesterday it only temporarily reignited fears in the sector as traders quickly returned to buying adding another warning to the list of the things it chooses to ignore. Earnings continue to inspire buyers and with a slew of reports today I expect the push higher to continue testing recent resistance levels. Mortgage, Petroleum, and bond auctions on the economic calendar may also provide some temporary inspiration for the bulls or bears as we wait on the CPI figures Thursday morning. Plan for more volatility ahead with a likely morning gap Thursday to be considered in your risk calculations.
During the night China reported a consumer price drop for the first time in 2-years as their economy continues to weaken with indexes closing the session mixed. European markets trade decidedly bullish this morning as the government in Italy quickly moves to water down their bank windfall tax announced yesterday. U.S. futures point to bullish open with a light day of economic reports and another big day of earnings to inspire investors.
Rivian Automotive, a leading electric vehicle (EV) maker, announced its second-quarter financial results on Tuesday. The company reported a net loss of $995 million, which was lower than the $1.3 billion loss that analysts had expected. Rivian also raised its production guidance for 2023, saying that it plans to build about 52,000 vehicles, more than double the 25,000 vehicles it made in 2022. The company said that it had $10.2 billion in cash and cash equivalents at the end of June, which gives it enough liquidity to fund its growth and expansion plans. Rivian is preparing to launch its first two models, the R1T pickup truck and the R1S SUV, later this year.
David Portnoy, the founder and face of Barstool Sports, has regained full ownership of his media empire, after buying it back from Penn Entertainment. Portnoy announced the news in a blog post on Tuesday, saying that he and Penn had “gone our separate ways.” He did not disclose the terms of the deal but said that he was “very happy” with the outcome. Portnoy sold a 36% stake in Barstool to Penn in January 2020, valuing the company at $450 million. The deal gave Penn access to Barstool’s loyal fan base and online sports betting platform. However, Portnoy said that he and Penn had different visions for the future of Barstool and that he wanted to return to his “roots” as an independent media mogul. He thanked Penn for their partnership and wished them well. He also said that he was excited to take Barstool to the next level, with plans to launch new shows, podcasts, and events.
Kyle Bass, a well-known China hawk, and hedge fund manager, warned on Tuesday that he expects Chinese President Xi Jinping to launch a military invasion of Taiwan before the end of 2024. Bass, who is the founder and chief investment officer of Hayman Capital Management, told CNBC’s “Street Signs” that Xi is driven by his ambition to “bring war to the West,” and that he does not care about the economic consequences of such a move. Bass said that Xi is similar to Russian President Vladimir Putin, who annexed Crimea in 2014 despite international sanctions and condemnation. Bass said that he believes Xi will try to “reacquire Taiwan by force by the end of next year,” based on his speeches and actions. Bass said that Taiwan is a vital ally and partner of the United States and that its loss would be a “tragedy” for democracy and freedom. He urged the US and its allies to stand up to China and defend Taiwan’s sovereignty and security.
Several banks faced negative rating actions from Moody’s on Tuesday, dragging down the stock market. State Street and Bank of New York Mellon were put on review for a downgrade, while M&T and others were downgraded. Big banks like JPMorgan and Goldman Sachs also suffered losses of more than 0.5%. Moody’s banking downgrades and warnings only temporarily reignited fears about the debit-laden financial sector but the afternoon recovery suggests we can add that to the list of things the market chooses to ignore. Investors sought safety in Treasury bonds, pushing the 10-year yield below 4% briefly before hurrying back into stocks seemingly unconcern that consumer credit card debt topped 1 Trillion for the first time in history and defaults continue to rise. Global stocks also declined. Oil prices dipped in the morning after weak Chinese data, but also recovered later. The Chinese slowdown weighed on currencies like the Australian dollar, which weakened against the U.S. dollar. Today we only have Mortage Apps, Petroleum numbers, and bond auctions on the economic calendar. However, with a slew of earnings reports in the wings, the push upward continues to test recent resistance levels.
Markets gapped lower at the open Tuesday (down 0.58% in the SPY, down 0.60% in the DIA, and down 0.69% in the QQQ). This resulted from disappointing international trade data out of China, a surprise windfall profits tax on banks in Italy, and a Moody’s downgrade of 10 US banks (and others put on warning for downgrade). After the open, all three of the major index ETFs followed through until about 11 am. At that point, the Bulls stepped in and began a slow, steady rally that lasted right into the close. This action gave us gap-down, white-bodied Hammer candles in the SPY and DIA as well as a gap-down, black-bodied Hammer candle in the QQQ. Only DIA managed to make it up to its T-line (8ema) closing right up against the underside of that average.
On the day, six of the 10 sectors were in the red with Financial Services (-1.04%) and Technology (-1.02%) leading the way lower while Healthcare (+1.00%) held up much better than the other sectors. At the same time, the SPY lost 0.43%, DIA lost 0.45%, and QQQ lost 0.85%. The VXX gained 1.76% to 24.91 and T2122 fell but again but remains in the mid-range at 36.13. 10-year bond yields dropped back again but remain above 4% at 4.024% while Oil (WTI) gained 1.05% to close at $82.80 per barrel. This all took place on a bit below-average volume in all three major index ETFs. So, Bears gapped the market lower and had control in the morning. However, by late-morning the Bulls clocked in and led a slow comeback rally the rest of the day. Once again, this felt like a news-driven jolt and then a modest drift up on the day. It felt like the opposite of Monday, with the fall characterized more by a lack of conviction than a true change of direction.
The major economic news reported Tuesday included June Exports, which increased slightly to $247.50 billion (compared to the May value of $247.10 billion). We also got June Imports, which fell slightly to $313.00 billion (down from the May $316.10 billion). Together, these gave us a June Trade Balance of -$65.50 billion (a bit below the forecast of -$65.00 billion but better than the May deficit of $68.30 billion). Then, after the close, the API Weekly Crude Oil Stock report gave us an unexpected oil inventory build of 4.067 million barrels (versus a forecast calling for a drawdown of 0.233 million barrels and far better than the prior week’s 15.400-million-barrel drawdown.
In Fed-speak news, Philly Fed President Harker (voter) told an event that barring any abrupt change in the direction of recent economic data, the FOMC may be at a stage where it can leave rates where they are for some time. Harker said, “Absent any alarming new data between now and mid-September, I believe we may be at the point where we can be patient and hold rates steady and let the monetary policy actions we have taken do their work,” … “we will need to be there for a while.” Meanwhile, Atlanta Fed President Bostic (a non-voter and dove) again said he does not believe any more hikes will be needed. At the same time, NY Fed President Williams (voter) was quoted in a New York Times interview to say “I think we’re pretty close to what a peak rate would be.” (However, he did not go so far as to commit to one more hike or not.)
In stock news, AAPL and SSNLF (Samsung) will both become “anchor investors” in the IPO of chip designer Arm (which is being spun off by current owner SFTBY (Softbank). Arm is the chip platform that AAPL chose when dropping INTC chips and going with their so-called “AAPL chip” (Arm-based) chips for AAPL computing products. NVDA and AMZN are also in talks to become anchor investors but neither were announced Tuesday. Elsewhere, BA deliveries fell in July with the company supplying 43 aircraft (down from 60 in June and compared to Airbus delivering 65). At the same time, ADT announced it is selling its commercial security business unit to a private equity firm for $1.6 billion. Meanwhile, negotiations are getting contentious in the auto industry as the UAW threw the latest contract offer from STLA in the trash can after the company proposed cutting vacation days, cutting healthcare coverage, cutting 401(k) contributions, and lifting the cap on temporary workers. (Current UAW contracts with STLA, GM, and F all expire September 14.) After the close, DIS made an interesting and odd decision. The family-oriented entertainment company’s ESPN unit agreed to launch a sports betting service under the name “ESPN Bet” in partnership with PENN. (PENN will pay ESPN $1.5 billion in cash and offer $500 million in warrants to purchase PENN shares over a 10-year period.)
In stock legal, regulatory, and government news, UK media regulator Ofcom said on Tuesday that it has opened an investigation into SNAP for potentially not doing enough to remove underage users (under 13) from its platform. At the same time, NVO announced that a large study has found its wildly-popular obesity drug Wegovy has also been shown to have clear cardiovascular benefits. Elsewhere, US regulators fined nine companies a total of $549 million on Tuesday. WFC and BNPQY received the largest fines and have agreed to pay penalties for having brokerage employees who used off-record communications tools like WhatsApp. WFC paid $125 million and BNPQY (BNP Paribas) $35 million to the Commodity Futures Trading Commission. Other firms hit with fines include among others including BMO, MC, and HLI. Later, a US federal judge ruled against GOOGL, dismissing the company’s bid to have a privacy lawsuit thrown out. The $5 billion class action suit alleges GOOGL collected users browsing histories without obtaining user consent and without even explicitly telling users it would do so. At the same time, LUV announced it will appeal a fringe TX federal judge ruling that said three of the airline’s senior attorneys must attend “religious liberty training” held by a TX conservative Christian legal group. During the afternoon, the NHTSA announced it has opened an investigation into 1.1 million older STLA Dodge Ram 1500 pickup trucks over power steering loss issues. Near the close, a judge dismissed ABNB’s lawsuit against New York City for what the company had called a “de facto ban” on short-term rentals (because hosts were required to register with the city). The judge cited 12,000 complaints the city had received about short-term rentals in a 5-year period preceding the law. After the close, a US Appeals Court panel of judges in OH rejected an appeal by SBUX, ruling that the company must rehire seven employees fired in Memphis for supporting a union.
After the close, ACCO, AKAM, AMC, ARRY, BHF, CLOV, CPNG, DOOR, FG, FNV, GNW, GO, LYFT, OSCR, QGEN, QDEL, RXT, RIVN, SLF, SMCI, and TWLO all reported beats on both the revenue and earnings lines. At the same time, IOSP, LILA, and MODG missed on revenue while beating on earnings. On the other side, EDR, FLT, FNF, TTWO, and TOST beat on revenue while missing on earnings. However, DAR, IAC, and JXN missed on both the top and bottom lines. It is worth noting that SMCI, TOST, and LYFT raised their forward guidance.
Overnight, Asian stocks were mixed but leaned toward the green. South Korea (+1.21%), Malaysia (+0.76%), and Thailand (+0.65%) led the more plentiful gainers while Japan (-0.53%), Shenzhen (-0.53%), and Shanghai (-0.49%) paced the five down exchanges. Meanwhile, in Europe, we see green across the board at midday. The CAC (+1.17%), DAX (+1.03%), and FTSE (+0.78%) lead the region but the gains are broad-based in early afternoon trade. In the US, as of 7:30 am, Futures are pointing toward a start to the day just on the green side of flat. The DIA implies a +0.09% open, the SPY is implying a +0.13% open, and the QQQ implies a +0.09% open at this hour. At the same time, 10-year bond yields are up a bit to 4.036% and Oil (WTI) is up another percent to $83.78 per barrel in early trading.
The major economics news scheduled for Wednesday is limited to EIA Crude Oil Inventory (10:30 am). The major earnings reports scheduled for before the opening bell include BERY, BHG, BCO, BAM, CRL, GEO, HMC, NOMD, OGE, PENN, RBLX, SONY, SWX, SLVM, UWMC, VTNR, VSH, and WEN. Then, after the close, APP, CACI, CANO, CENX, CDE, CPA, CRGY, ENS, G, ILMN, JAZZ, MFC, NGL, PAAS, TTEK, VSAT, DIS, and WYNN report.
In economic news later this week, on Thursday, we get July CPI year-on-year, July CPI month-on-month, Weekly Initial Jobless Claims, July Federal Budget Balance, and the Fed Balance Sheet. Finally, on Friday, July PPI month-on-month, Preliminary Michigan Consumer Sentiment, Preliminary Michigan Consumer Expectations, Preliminary Michigan 5-year Inflation Expectations, and the WASDE Ag report are delivered.
In terms of earnings reports, on Thursday, we hear from AQN, BABA, AIT, AZUL, TAST, HBI, KELYA, EYE, NVO, ACDC, RL, USFD, WWW, ASTL, BAP, and NWSA. Finally, on Friday, ACDVF reports.
In miscellaneous news, President Biden designated almost 1 million acres near the Grand Canyon (AZ) as a national monument Tuesday. The purported reason was that the lands are sacred to Havasupai and Hopi Native American tribes. However, the land is also known to hold about one percent of US uranium reserves and this designation will prevent new mining leases on that land, potentially heading off environmental damage to the area. Elsewhere, Ag analysts expect the US corn crop to be the second-largest on record after rains in July helped a critical growing stage. The WASDE report comes out on Friday, but the USDA has already increased the percentage of corn cropland rated from good to excellent by four percent. (Corn prices are down 18% since the end of June.) Meanwhile, US credit card balances passed $1 trillion in Q2 according to data released by the NY Fed. This took them to a record $1.03 trillion as Household debt rose 0.1% to $17.06 trillion.
In late-breaking news, China fell into deflation registering a drop in its CPI for the first time in more than two years. Prices fell 0.3% in China during the month of July while PPI fell for a 10th consecutive month, contracting 4.4%. This adds to the pressure on Beijing to add more monetary and fiscal support to its economy. Elsewhere, US Mortgage demand fell again because interest rates climbed to a 21-year high during the week. The average 30-year, fixed-rate, conforming loan rate jumped to 7.09% (up from 6.93% the week prior). This led to a 3% decline in new purchase loan applications and a 4% decline in refinance mortgage applications.
So far this morning, ATS, CRL, EONGY, GEO, HMC, ICL, PENN, VSH, VWDRY, and WE all reported beats on both the revenue and earnings lines. (Oddly, after beating lowered estimates, WE also warned of possible bankruptcy after going public only in 2021. They cited the pandemic as hurting the company.) Meanwhile, ADRNY, NOMD, SONY, and WEN missed on revenue while beating on earnings. On the other side, VTNR and BCO beat on revenue while missing on earnings. Unfortunately, BAM and OGE missed on both the top and bottom lines. It is worth noting that GEO also lowered its forward guidance.
With that background, it looks like the Bulls are retesting their T-line (8ema) from below in the premarket this morning and QQQ is not that far below its own. However, we should also note that all three major index ETFs are giving us small, indecisive (Doji-like) candles in the early session. So, there is not a lot of conviction. The short-term trend is bearish and the longer-term trend remains Bullish. As far as extension goes, all of them are close to the T-line and the T2122 indicator remains in its mid-range. So, both sides of the market have plenty of room to run…if they can find momentum. We only have EIA Oil Inventory news scheduled during the day today. So, again, this should be a light news week overall until the CPI print on Thursday.
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 absolutely 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 money is 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
Monday saw a gap higher at the open. SPY gapped up 0.40%, DIA gapped up 0.38%, and QQQ gapped up 0.51%. From there, the DIA meandered sideways until shortly past 10 am, when it began a rally that lasted until 2 pm before modestly selling off the last two hours of the day. Meanwhile, SPY and QQQ meandered sideways until 11:30 am before modestly rallying the remainder of the day…even accelerating the last 15 minutes into the close. This action gave us white-bodied candles in all three major index ETFs. The SPY gave us a Bullish Harami that remained below its T-line (8ema). Meanwhile, QQQ printed a white-bodied, Hammer, Bullish Harami that also remained below its T-line. Finally, the DIA gave us a white-bodied, inside day that crossed back above its own T-line.
On the day, all 10 sectors were in the green with Financial Services (+1.00%) and Industrials (+0.95%) leading the way higher while Utilities (+0.03%) lagged behind the other sectors. At the same time, the SPY gained 0.87%, DIA gained 1.13%, and QQQ gained 0.85%. The VXX dropped 5.23% to 24.48 and T2122 climbed again but remains in the mid-range at 66.67. 10-year bond yields spiked (mostly prior to the open) to 4.101% while Oil (WTI) fell 0.37% to close at $82.51 per barrel. This all took place on well-below-average volume in all three major index ETFs. So, Bulls gapped the market higher and then modestly drift on up in light volume. This felt like a drifting day more characterized by a lack of Bears than strength from the Bulls.
There was no major economic news reported Monday. However, we did hear from three Fed members. New York Fed President Williams said “The debate is really about: Do we need to do another rate increase? Or not? … I think we’re pretty close to what a peak rate would be.” Williams later said “Assuming inflation continues to come down … then if we don’t cut interest rates at some point next year, then real interest rates will go up, and up, and up. And that won’t be consistent with our goals.” However, Fed Governor Bowman (a hawk) told an audience “I supported raising the federal funds rate at our July meeting, and I expect that additional increases will likely be needed to lower inflation to the goal.”
In stock news, SHW shut down production at its Garland, TX plant after an explosion and fire. No damage assessment or timeline for resumption is yet available. Later, CPB announced it has agreed to buy SOVO for $2.33 billion in cash. CPB will acquire the Michael Angelo’s and Rao brands from the deal. Elsewhere, Reuters reported that PBR has said it is planning to increase its capital investments by 10% in its new 5-year plan versus the previous one. The $86 billion 2024-2028 capital expense plan (specific projects) is set to be released before year-end. At the same time, TOSYY (Toshiba) announced a $14 billion tender offer to take the company private. The offer will be launched today agreeing to pay $32.44 per share. Two-thirds of shareholders need to accept the offer for it to take effect. (TOSYY closed at $16.47 after a 2.5% gain on the news.) Meanwhile, TSN announced it will close four chicken processing plants (3,000 jobs in AR, IN, and MO) sometime late in 2023 or early 2024. In the auto industry, STLA threw its hat into the electric vehicle ring saying that it will offer a Fiat brand low-cost ($27,000) EV July 2024. In the air industry, ERJ announced that the demand for executive jets has not softened and the company still has a two-year backlog of orders. At the same time, as reported here Monday, PARA announced that KKR has agreed to buy its Simon & Schuster unit for $1.62 billion. In news that may become legal, PYPL announced Monday that it has launched a US Dollar backed stablecoin to compete with Tether (which has 67% of that market) and USD Coin (which has a 21% share of the market). (The other US tech firm to try this was META, whose Libra stablecoin was killed by regulators.)
In stock legal, regulatory, and government news, the FTC agreed to dismiss its case that had been aimed at blocking the ICE $11.7 billion acquisition of BKI. This came as both sides remain in negotiation about potential asset sales of the combined entity that would make the FTC more comfortable with the purchase. Elsewhere, EU antitrust regulators formalized their opposition to the ADBE $20 billion purchase if Figma (a cloud-based design platform), which it said would remove an important rival to ADBE’s Photoshop. A formal, final decision is now scheduled for December 14. At the same time, the FDA approved a SAGE and BIIB partnership drug for postpartum depression but rejected it as a treatment for the broader-category “major depressive disorder.” The market had assumed it would receive approval for the broader condition ($1 billion market) as opposed to the narrow market ($250 – $500 million market). Meanwhile, Reuters reported that AMZN is preparing for a meeting with the FTC in an effort to head off portions or all of a long-awaited antitrust lawsuit against the e-commerce giant. At the close, a federal judge put a predatory lending (hiding the true cost of borrowing from the borrower) lawsuit brought by the US Consumer Financial Protection Bureau and the NY Attorney General against CACC on hold. The judge cited the US Supreme hearing a separate case brought by conservatives aimed at ruling the funding of the US CFPB is unconstitutional (and therefore the agency should not exist and should not be allowed to regulate or sue) as the reason. Finally, after the close, PTRA filed for Chapter 11 bankruptcy.
After the close, BKD, PLUS, JELD, KD, MTW, NNI, PARA, PLTR, PRIM, RNG, SWKS, STRL, TDC, and WMK all reported beats on both the revenue and earnings lines. Meanwhile, CTRA, CAPL, ICUI, KMPR, OKE, and PRI missed on revenue while beating on earnings. On the other side, ACM, AEL, and ARKO beat on revenue while missing on earnings. Unfortunately, CBT, CE, COMP, IFF, and MRC missed on both the top and bottom lines. It is worth noting that ACM, PLUS, PLTR, and STRL all raised their forward guidance. However, IFF lowered its forward guidance.
Overnight, Asian stocks were mixed but leaned red. Japan (+0.38%) and Malaysia (+0.36%) were the only two appreciable gainers while Hong Kong (-1.81%), Thailand (-0.92%), and New Zealand (-0.55%) paced the losses. Meanwhile, in Europe, with the lone exception of Denmark (+1.81%) the bourses are strongly red at midday. The CAC (-0.96%), DAX (-1.27%), and FTSE (-0.62%) are leading the region lower in early afternoon trade. In the US, as of 7:30 am, Futures are pointing toward a strong move lower at the open. The DIA implies a -0.62% open, the SPY is implying a -0.68% open, and the QQQ implies a -0.75% open at this hour. At the same time, 10-year bond yields are plummeting to 3.984%, and Oil (WTI) is down 1.55% to $80.67 per barrel in early trading.
At least part of the reason for global stock weakness was a fall in China’s July Trade data, which fell more than expected. The data showed Chinese exports were down 14.5% year-on-year in July while imports were down 12.5% versus July 2022. Meanwhile, in Europe, Italy surprised markets with a new 40% windfall profits tax on banks. (That one-off tax will figure out to be about 19% of banks’ net profits for the year according to analysts at C.) On this side of the pond, Moody’s cut the credit rating of 10 US banks and put 11 others on a “negative outlook” overnight. Those whose credit rating was cut include BK, USB, STT, TFC, CFR, NTRS, MTB, PNFP, BOKF, and WBS. Among those who saw a downgrade to a “negative outlook” were COF, CFG, and FITB.
The major economics news scheduled for Tuesday includes June Imports, June Exports, and June Trade Balance (all at 8:30 am), and API Weekly Crude Oil Stocks Report (4:30 pm). The major earnings reports scheduled for before the opening bell include AHCO, ADT, ARMK, ATKR, GOLD, BR, CPRI, CEIX, DDOG, DUK, LLY, ENR, FOXA, GFS, HNI, HZNP, INGR, LCII, LI, NFE, NYT, NXST, NRG, OGN, PRGO, PLTK, RPRX, QSR, SEE, SEAS, STGW, TDG, UAA, UPS, VRTV, WMG, and ZTS. Then, after the close, AKAM, AMC, BHF, CLOV, CPNG, DAR, EDR, FG, FLT, FNF, FNV, GNW, GO, IAC, IOSP, JXN, LILA, LYFT, DOOR, QGEN, QDEL, RXT, RIVN, SLF, SMCI, TTWO, TOST, MODG, and TWLO report.
In economic news later this week, on Wednesday, EIA Crude Oil Inventories are reported. On Thursday, we get July CPI year-on-year, July CPI month-on-month, Weekly Initial Jobless Claims, July Federal Budget Balance, and the Fed Balance Sheet. Finally, on Friday, July PPI month-on-month, Preliminary Michigan Consumer Sentiment, Preliminary Michigan Consumer Expectations, Preliminary Michigan 5-year Inflation Expectations, and the WASDE Ag report are delivered.
In terms of earnings reports, on Wednesday, BERY, BHG, BCO, BAM, CRL, GEO, HMC, NOMD, OGE, PENN, RBLX, SONY, SWX, SLVM, UWMC, VTNR, VSH, WEN, APP, CACI, CANO, CENX, CDE, CPA, CRGY, ENS, G, ILMN, JAZZ, MFC, NGL, PAAS, TTEK, VSAT, DIS, and WYNN report. On Thursday, we hear from AQN, BABA, AIT, AZUL, TAST, HBI, KELYA, EYE, NVO, ACDC, RL, USFD, WWW, ASTL, BAP, and NWSA. Finally, on Friday, ACDVF reports.
In miscellaneous news, BYND posted a 30% revenue decline last night and said there is falling demand for its artificial meat products. Elsewhere, a trade group representing airlines has asked the FAA to extend the deadline for airlines to fly a minimum number of flights from NYC airports in order to maintain their gates and flight slots. (Months ago, the FAA had given DAL until September 15 to comply with minimums unless they wanted to lose some NYC-originating routes. The group asked the FAA to extend this through the end of October.)
So far this morning, ALE, ARMK, DDOG, LLY, GFS, LI, OGN, PRGO, RPRX, QSR, TDG, UA, UAA, and ZTS all reported beats to both the revenue and earnings lines. Meanwhile, ATKR, GOLD, BR, INGR, NFE, PLTK, SEE, and UPS all missed on revenue while beating on earnings. On the other side, DUK, J, LCII, and NXST beat on revenue while missing on earnings. Unfortunately, ADT, ENR, and SEAS missed on both the top and bottom lines. It is worth noting that LI, LLY, and TDG raised forward guidance. However, UPS and PLTK both lowered their forward guidance.
With that background, it looks like the Bears woke up in the mood to push this morning. All three major index ETFs are giving us gap-down, black-bodied candles this morning. (Meaning they are near their pre-market lows.) So far, QQQ and DIA are still inside candles, but all three are moving lower as the premarket session moves along. However, at least as of now, none of the three has taken out recent lows. So, they remain in the trading range. All three remain below their T-line (8ema) and the short-term trend is bearish. However, the longer-term trend remains Bullish. As far as extension goes, all of them are close to the T-line and the T2122 indicator remains in its mid-range. So, both sides of the market have plenty of room to run…if they can find momentum. We only have Trade news scheduled during the day today. In fact, this should be a light news week overall until the CPI print on Thursday.
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 absolutely 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 money is 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
Monday’s price action relieved some of last week’s selling pressure as markets bounced back with the Dow leading the buying while the other indexes suffered from low volume. However, bad economic data from China overnight could reverse a significant portion of yesterday’s gains at the open. Investors will also have a slew of earnings reports and International Trade numbers to find inspiration as the looming inflation data looms on the horizon. With stocks priced near and even above perfection expect considerable volatility as weakening economic conditions bring a rise to a rapidly restricting liquidity condition.
Asian markets traded mixed overnight as China’s trade numbers fall more than expected as their economy continues to struggle with contraction. European markets trade bearishly this morning with worries of pending inflation data and sinking Italian banks. U.S. futures are under pressure this morning with banks seeing weakness, and bad Chinese trade data suggesting a gap down open ahead of earnings results.
United Parcel Service (UPS), the world’s largest package delivery company, has revised its revenue outlook for 2023, citing slower growth in e-commerce demand and a more generous labor contract for its workers. The company now expects to generate about $93 billion in consolidated revenue in 2023, down from its previous estimate of about $97 billion. The lower forecast reflects the challenges that UPS faces in maintaining its profitability and market share in the highly competitive and dynamic e-commerce sector.
Lucid Motors, a leading electric vehicle maker, reported disappointing financial results for the second quarter of 2023, missing both revenue and delivery targets. The company generated only $150 million in revenue, below the average analyst estimate of $170 million. It also delivered only 1,200 units of its flagship Air electric luxury sedan, falling short of the expected 1,500 units. The company blamed the lower-than-expected performance on supply chain disruptions and production challenges amid the global chip shortage and the COVID-19 pandemic. However, the company also announced that it had raised $3 billion in a private placement in May, which extended its cash runway by about a year, until 2025. The capital raise was seen as a positive sign by some investors, who believe that Lucid has strong growth potential and a competitive edge in the electric vehicle market.
China’s trade activity slowed down sharply in July, indicating a weakening of both domestic and global demand amid the ongoing COVID-19 pandemic and geopolitical tensions. The country’s exports fell by 8.1% year-on-year in July, while imports dropped by 11.2%. Both figures were worse than the market expectations of a 3.5% decline in exports and a 6.8% decrease in imports. The trade surplus also narrowed to $42.8 billion from $51.5 billion in June. The data showed that China’s trade with its major partners, such as the US, the EU, Japan, and ASEAN, all contracted in July. Among the few higher-value export categories that saw a significant increase in the first seven months of the year were cars and suitcases, which rose by 28.9% and 25.6% respectively. However, these gains were offset by the sharp declines in other sectors, such as textiles, garments, footwear, and furniture. The trade data suggested that China’s economic recovery from the pandemic was losing momentum and that the country faced increasing challenges from both external and internal factors.
Markets bounced back on Monday with the Dow leading the way although the SPY, QQQ & IWM delivered a lackluster performance on a choppy low volume day. Investors appear to be giving a nod to the uncertainty ahead in the U.S. inflation data that will be released on Thursday morning. Bond yields also edged up slightly, with the 10-year U.S. yield rising by about 0.03% to 4.09%, as the VIX pulled back relaxing some of last week’s market fears. Today investors face a big day of earnings as well as the International Trade numbers coming in before the bell.
The mixed bag of jobs data only inspired the bulls early on Friday with the hope the data will back off the Fed, however, the fact that the jobs market is beginning to reflect the slowing economy kept the bears active into the close. With the economic calendar light on data today the focus will likely turn back to earnings results for inspiration and a possible relief rally. However, be careful with the thought we will zoom back to new highs as we have entered a sessional period when the market struggles for liquidity not to mention that the bears have now woke up and smell blood in the air. They may not give up as easily as they have most of this summer.
Overnight Asian markets traded mixed but mostly lower with Chinese inflation data on the horizon. European markets trade decidedly bearish in a choppy morning session waiting also on inflation data. However, here in the U.S. futures seem to have fewer worries about inflation suggesting a bullish open ahead of the next round of earnings reports. Plan for price volatility with thoughts of CPI and PPI data later this week.
Siemens Energy, a leading global energy company, faced a major setback in its financial performance as it reported a net loss of around 4.5 billion euros for the year. The main reason for this loss was the 2.2 billion euro impairment charge related to its wind turbine subsidiary Siemens Gamesa, which suffered from quality problems and project delays. The CEO of Siemens Energy, Christian Bruch, admitted that the company had been too hasty in launching new platforms into the market, resulting in costly failures that could take years to resolve. He also said that the company was working hard to improve its quality standards and customer satisfaction. Siemens Energy’s shares dropped sharply after the announcement of the disappointing results.
Aramco, the world’s largest oil producer, saw its net profit plunge by nearly 40% in the second quarter of 2021, as the global oil demand was still recovering from the impact of the Covid-19 pandemic. The company reported a net profit of 112.81 billion riyals ($30.07 billion), down from 48.4 billion recorded in the same period last year. However, the profit was slightly higher than the analyst’s expectations of 29.8 billion riyals. Carole Nakhle, an energy expert, said that Aramco’s financial position was still strong, despite the lower results, and that it was in line with the overall industry trend. Aramco also announced that it would pay a dividend of $18.8 billion for the second quarter, in line with its commitment to pay $75 billion for the year.
Berkshire Hathaway, the diversified conglomerate led by billionaire investor Warren Buffett, reported a strong increase in its operating earnings and net income in the second quarter of 2021, as the economy rebounded from the effects of the Covid-19 pandemic. The company’s operating earnings, which reflect the performance of its core businesses, rose by 6.6% to $10.043 billion, compared with $9.42 billion in the same quarter last year. The company’s net income, which includes the changes in the value of its stock portfolio, surged to $35.91 billion, a sharp contrast to the $43.62 billion loss it suffered in the second quarter of 2020 when the stock market crashed due to the coronavirus outbreak. Berkshire also increased its cash pile to $147.377 billion at the end of June, near a record high and much higher than the $130.616 billion it had at the end of March. The company has been looking for attractive acquisition opportunities to deploy its cash but has faced stiff competition from private equity firms and other investors.
The U.S. credit-rating downgrade was the main topic of discussion for most of this week, but Friday the focus shifted back to the economy with the latest jobs data. Although the market was slightly up in early-Friday trading, investors interpret the employment figures as a mixed bag of results showing signs of slowing down. The bond market is reacting to the Fed policy implication, with 10-year yields falling near 4.1% after reaching 4.2% on Thursday. The T2122 shows it has relieved a significant amount of the short-term overbought condition however with the sharp rise in the VIX the emotion can create some big price whipsaws. With a light day on the economic calendar, earnings reports will take center stage and a possible relief rally but be careful because we are entering a typically difficult time for the market seasonally.
Markets opened modestly higher Friday, with the SPY gapping up 0.41%, DIA gapping up 0.32%, and QQQ gapping up 0.53%. At that point, all three major index ETFs gave us a 20-minute rally (follow through) followed by a 20-minute selloff to fade the gap, and then a steady rally that took us to the highs of the day at 12:45 pm. However, then the Bulls headed out the door and the Bears lead a stronger, steady selloff that drove all the way into the close. This action gave us large, black-bodied candles with sizable upper wicks in the SPY, DIA, and QQQ. It also produced Bearish Engulfing signals in the SPY and DIA. All three major index ETFs also retested and failed their T-line during the day as well as falling through a minor support level.
On the day, six of the 10 sectors were in the red with Utilities (-0.76%) again leading the way lower while Basic Materials (+0.20%) and Communications Services (+0.18%) were the only sectors appreciably in the green. At the same time, the SPY lost 0.45%, DIA lost 0.38%, and QQQ lost 0.47%. The VXX climbed 3.57% to 25.83 and T2122 again climbed toward the center of the mid-range to 48.25. 10-year bond yields fell to 4.042% while Oil (WTI) jumped 1.34% to close at $82.64 per barrel. This happened on slightly above average volume in the QQQ and DIA as well as average volume in the SPY. So, we ended the week on a fourth-straight down-day in the SPY and QQQ, resulting in the worst week since March.
The major economic news reported Friday included the July Average Hourly Earnings, which came in above expectations at +4.4% year-on-year (compared to a forecast of +4.2% but in line with the June reading of +4.4%). The July Average Hourly Earnings month-on-month was also a bit above what was anticipated at +0.4% (versus the June +0.3% but again right in line with the June value of +0.4%). At the same time, July Nonfarm Payrolls were reported below the predicted level at +187k (compared to a +200k forecast but just above the June reading of +185k). On the private side, July Private Nonfarm Payrolls were also light at +172k (versus a forecast of +179k but well above the June value of +128k). The July Participation Rate remained steady at 62.6% (with the forecast and June reading also being 62.6%). This all resulted in a July Unemployment rate that fell to 3.5% (compared to a forecast of 3.6% which was also the June value). What all of this Payroll data means is that a soft landing seems more likely as job addition is declining but remains positive even as recent data has shown inflation is falling. Apparently, the Fed has (at least so far) threaded the needle.
In stock news, shipping giant Maersk warned Friday, saying there has been a steep decline in demand for global sea shipping containers. This implies importers and exporters like LOW, WMT, TGT, HD, UL, ADM, QCOM, NKE, PG, etc. could also be suffering significant demand declines. Elsewhere, GOOGL said Friday that is has unloaded 90% of its position in HOOD, leaving the online ad giant with 612k shares. At the same time, Reuters reported YELL’s Friday bankruptcy filing is now considering a sale of assets and real estate as part of its reorganization. Meanwhile, AMZN announced it will dip into the finance market by offering a credit card in Brazil in partnership with MA. Then, after the close, GM said it will be adding headcount in 2024. Also after the close, AAPL, HPE, and SSGFF all halted shipments to India after PM Modi ordered all imports of electronics to require a license (in order to discourage foreign purchases instead of Indian-manufactured products).
In stock legal, regulatory, and government news, AMZN was cited again Friday by the Dept. of Labor OSHA agency for more hazardous conditions including unreasonable worker quotas and improper medical care. OSHA said it has recommended $15,615 in new penalties (maximum allowed by law) against the AMZN Logan Township, NJ warehouse. (AMZN has 15 days to pay or appeal the fines.) Elsewhere, COIN asked a federal judge to throw out the SEC’s lawsuit that accused it of violating securities laws by trading cryptocurrency the SEC classifies as securities. During the afternoon, the FDA approved the first oral postpartum depression treatment from SAGE and BIIB. (The injectable version required a two-day IV drip.) The condition affects 1 in 8 mothers and could become a major revenue generator based on convenience when the pills hit the US market by year-end. Meanwhile, after the close, the major banks released the amounts they expect to be charged as part of the “special assessment” to replenish the FDIC deposit insurance fund. JPM expects $3 billion, WFC projects $1.8 billion, BAC anticipates $1.9 billion, GS expects $400 million, PNC is planning on $468 million, MS expects $270 million, TFC projects $460 million, and C anticipates $1.5 billion. Finally, the antitrust case against GOOGL brought by the Dept. of Justice and 38 states was narrowed Friday as the judge threw out some claims. This was a significant win for GOOGL, with the case alleging the GOOGL search engine results favor GOOGL and disadvantage competitors like YELP and EXPE heading to trial on September 12.
So far this morning, DK, ELAN, KKR, THS, and VTRS all reported beats on both the revenue and earnings lines. Meanwhile, BRKB and CCO beat on revenue while missing on earnings. On the other side, HSIC missed on revenue while beating on earnings. It is worth noting that THS raised its forward guidance. It is also worth noting that BRKB missed on earnings while still reporting a record quarterly profit.
Overnight, Asian stocks were mixed in modest trading. South Korea (-0.85%), Shenzhen (-0.83%), and Shanghai (-0.59%) paced the six losing exchanges. On the other side, Taiwan (+0.90%), Singapore (+0.53%), and India (+0.41%) led the six gainers. Meanwhile, in Europe, the bourses are leaning heavily to the red side at midday. The CA (-0.48%), DAX (-0.65%), and FTSE (-0.65%) lead the region lower with only Russia (+1.47%) appreciably higher in early afternoon trade. In the US, as of 7:30 am, Futures are pointing toward an open on the green side of flat. The DIA implies a +0.14% open, the SPY is implying a +0.24% open, and the QQQ implies a +0.39% open at this hour. At the same time, 10-year bond yields are surging higher to 4.107% and Oil (WTI) is down one percent to $82.00 per barrel in early trading.
The major economics news scheduled for Monday is limited to two Fed speakers (Harker at 8:15 am and Bowman at 8:30 am). The major earnings reports scheduled for before the opening bell include BRKB, BTNX, CCO, DK, ELAN, HE, HSIC, KKR, THS, TSN, and VTRS. Then, after the close, ACM, AEL, ARKO, BKD, CBT, CE, COMP, CTRA, CAPL, PLUS, WTRG, ICUI, IFF, ITUB, JELD, KMPR, KD, MTW, MRC, OKE, PLTR, PARA, PRI, PRIM, RNG, SWKS, and STRL report.
In economic news later this week, on Tuesday we get June Imports, June Exports, June Trade Balance, and API Weekly Crude Oil Stocks Report. Then Wednesday, EIA Crude Oil Inventories are reported. On Thursday, we get July CPI year-on-year, July CPI month-on-month, Weekly Initial Jobless Claims, July Federal Budget Balance, and the Fed Balance Sheet. Finally, on Friday, July PPI month-on-month, Preliminary Michigan Consumer Sentiment, Preliminary Michigan Consumer Expectations, Preliminary Michigan 5-year Inflation Expectations, and the WASDE Ag report are delivered.
In miscellaneous weekend news, late Friday night META CEO Zuckerberg announced that the new Twitter competitor Threads will have new search and web features within a few weeks. Then on Saturday, Fed Governor (and voter) Bowman (a hawk) said she expects more rate hikes. Bowman went on to say, “We should remain willing to raise the federal funds rate at a future meeting if the incoming data indicate that progress on inflation has stalled.” Elsewhere Saturday, BRKB released record-breaking Q2 results, which showed a 6.6% increase in earnings (versus Q2 of 2022) to $10.043 billion and a $17 billion increase in cash on hand (to nearly $150 billion). Again, this was BRKB’s biggest quarterly profit ever. However, they missed on earnings. Meanwhile, WFC announced Saturday that its system glitch, which had caused many customers’ direct deposits to not be credited to their accounts, had been fixed and account balances were now corrected. (The issue had begun Thursday when WFC began getting social media backlash once again.)
With that background, it looks like markets are giving us a gap-up, black-bodied candle in all three major index ETFs this morning. (Meaning they are well off the pre-market highs.) Inside candles for sure, but trying a modest premarket move. The DIA retested (and failed) its T-line in the early session with the other two just hanging out inside Friday’s candle. All three remain below their T-line (8ema) and the short-term trend is bearish. However, the longer-term trend remains Bullish. As far as extension goes, all of them are close to T-line and T2122 is dead-center in its mid-range. So, both sides of the market have plenty of room to run…if they can find momentum. We only have Fed speakers in terms of scheduled news today. In fact, this should be a light news week until CPI on Thursday.
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 absolutely 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 money is 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
On Thursday, the Bears started off looking for follow-through to Wednesday’s black candle by opening lower (gapping down 0.47% in the SPY, gapping down 0.31% in the DIA, and gapping down 0.66% in the QQQ). However, the Bulls met the lower open with a slow, meandering rally that lasted until early afternoon when a modest selloff took over and drove into the close. This action gave us white-bodied candles in all three major index ETFs with the DIA and SPY both printing Spinning Top candles with a larger upper wick than lower wick. For its part, the QQQ printed a white-bodied Inverted Hammer-type candle with no lower wick. This happened on less-than-average volume in all three of the major index ETFs.
On the day, seven of the 10 sectors were in the red with Utilities (-2.14%) way, way out in front (by 1.5%) leading the way lower while Energy (+1.02%) held up far better (by almost three-quarters of a percent) than other sectors. At the same time, the SPY lost 0.29%, DIA lost 0.21%, and QQQ lost 0.16%. The VXX fell slightly to 24.96 and T2122 climbed toward the center but remains in the lower half of the mid-range at 41.32. 10-year bond yields spiked to 4.187% while Oil (WTI) jumped 2.84% to close at $81.78 per barrel. So, on Thursday we saw an opening gap follow through by the Bears, a “slow but steady” rebound rally by the Bulls that recrossed that gap, and then a “slow but steady” selloff that took us back down into the gap by the close. All three major index ETFs remain at minor potential support levels that were tested during the day.
The major economic news reported Thursday included Weekly Initial Jobless Claims, which came in exactly as predicted at 227k (compared to a forecast of 227k and higher than the prior week’s 221k). At the same time, Preliminary Q2 Nonfarm Productivity (quarter-on-quarter) came in much higher than expected at +3.7% (versus a forecast of +2.0% and a Q1 decline of 1.2%). Meanwhile, the Preliminary Q2 Unit Labor Cost was reported much lower than anticipated at +1.6% (compared to a forecast of +2.6% and less than half of the Q1 reading of +3.3%). Later, the July S&P Global Composite PMI was reported just as predicted at 52.0 (versus a 52.0 forecast and down a bit from the June value of 53.2). At the same time, the July S&P US Services PMI came in slightly low at 52.3 (compared to a forecast of 52.4 and the June reading of 54.4). After that, June Factory Orders were a bit better than expected at +2.3% (versus a forecast calling for +2.2% and far above the +0.4% in May). The July ISM Non-Mfg. Employment Index came in a bit low at 50.7 (compared to the 51.1 forecast and the June value of 53.1). Simultaneously, the July ISM Non-Mfg. PMI was also light at 52.7 (compared to a 53.0 forecast and a June reading of 53.9). Finally, after the close, the Fed’s Balance Sheet showed another reduction. The week ended at $8.207 trillion down $36 billion from the previous week’s $8.243 trillion.
In stock news, HAS announced plans to sell its eOne film and TV studio to LGF by the end of the year for about $500 million. Elsewhere, Reuters reported that two sources tell it TSLA executives met with India’s Commerce Minister to discuss plans to build a plant in India. At the same time, MRNA announced a forecast of as much as $4 billion in revenue in 2023 from its COVID-19 vaccine when sales shift from government to private markets and expects further growth in 2024. Meanwhile, Teamsters began the vote on their tentative deal with UPS. The 340,000 workers will continue voting until August 22 as union leaders are urging members to accept the deal. (Local Teamster leaders voted 161-1 to support and “sell” the deal to their union members.) After the close, JPM announced it is expecting to pay nearly $3 billion to replenish its share of the FDIC insurance deposit fund once FDIC rules are finalized. Also after the close, NKLA announced it has received enough shareholder support to allow it to increase the number of shares it can issue to raise much-needed capital. At the same time, Reuters reported that KKR is in advanced talks to buy Simon & Schuster from PARA for $1.65 billion.
In stock legal, REGN told Reuters it expects an approval decision from the FDA during Q3 related to a higher-dose version of its blockbuster Eylea drug. This comes after the FDA has completed an inspection of REGN’s contract manufacturer (CTLT) for the new dosage. Elsewhere, securities regulators in MA have opened an investigation into major financial firms using AI technology in interactions with customers. The investigation will include JPM and MS. Later, TEVA announced it has agreed to pay US hospitals $126 million (over 18 years) to settle claims that marketing of its opioid drugs raised the operating costs of hospitals. The agreement also includes TEVA supplying another $49 million of the overdose drug naloxone. At the same time, HYMLF (Hyundai) and KIMTF (Kia) recalled 91,000 2023-2024 cars over a fire risk. Simultaneously, a panel of US judges denied GOOGL’s request to pause a TX antitrust lawsuit against the online ad giant. This came after TX got the case transferred back from NY to a TX court known as “the rocket docket.”
After the close, ABNB, AMZN, AMGN, AAPL, ACA, ATSG, TEAM, SQ, BKNG, BWXT, COIN, DVA, DKNG, DBX, EOG, GEN, ICFI, LNT, MTZ, MODV, MSI, OPEN, PBA, POST, RKT, RYAN, SYK, and VTR all reported beats on both revenue and earnings. Meanwhile, AL, BGS, BIO, ED, CTVA, FND, FTNT, MCHP, MNST, ZEUS, and SWN all missed on revenue while beating on earnings. On the other side, AES, AGL, EXPI, GDDY, GILD, OTEX, TPC, and RBA all beat on revenue while missing on earnings. Unfortunately, COLD, REZI, RMD, and WERN missed on both the top and bottom lines. It is worth noting that ABNB, COLD, DVA, DKNG, DBX, MODV, MSI, and POST all raised their forward guidance. However, AMN, MTZ, and OPEN all lowered their guidance.
Overnight, Asian stocks leaned toward the green side on modest moves. India (+0.70%), Shenzhen (+0.67%), and Hong Kong (+0.61%) paced the gainers while Singapore (-0.35%), Taiwan (-0.21%), and South Korea (-0.10%) were the only losers in the region. Meanwhile, in Europe, the bourses are more mixed with eight markets in the red and seven in the green at midday. The CAC (+0.15%), DAX (-0.30%), and FTSE (-0.30%) lead on volume while Russia (+1.34%) is the only exchange to move more than a percent in either direction in early afternoon trade. In the US, as of 7:30 am, Futures are pointing toward a modestly higher start to the day. The DIA implies a flat open, the SPY is implying a +0.16% open, and the QQQ implies a +0.27% open at this hour. At the same time, 10-year bond yields are flat at 4.188% and Oil (WTI) is up another 0.28% to $81.78 per barrel in early trading.
The major economics news scheduled for Friday includes July Avg. Hourly Earnings, July Nonfarm Payrolls, July Participation Rate, July Private Nonfarm Payrolls, and July Unemployment Rate (all at 8:30 am). Major earnings reports scheduled for before the opening bell include ADV, AMR, AXL, AMRX, BSAC, BBU, BEPC, BEP, CLMT, CNK, CRBG, D, ENB, EVRG, FLR, FYBR, GTES, GLP, GTN, GPRE, LSXMK, LSXMA, LYB, MGA, OMI, PAA, PAGP, PPL, QRTEA, TU, TIXT, TNC, and XPO. There are no reports scheduled for after the close.
So far this morning, AMRX, CNK, CRARY, CRBG, ENB, FLR, FYBR, GTN, KUBTY, MGA, OMI, PNM, QRTEB, and WPP all reported beats on both the revenue and earnings lines. Meanwhile, EVGR, LYB, QRTEA, TIXT, and XPO reported misses on revenue while beating on earnings. On the other side, Unfortunately, ADV, BEP, PNM, and TU missed on both the top and bottom lines. It is worth noting that GTN also lowered its forward guidance.
In miscellaneous news, Bloomberg reported Thursday that S&P 500 companies may be tipping their hand on economic prospects. Their data shows that major companies have increased capital expenditures (expansion) by 15% in Q2 while buyback program spend is down. Elsewhere, Saudi Arabia announced it is extending its 1 million barrel per day oil production cut again, this time through the end of September. Finally, it is worth expanding on the two big reports from Thursday night. AMZN blew past analyst expectations reporting double-digit growth and gave rosy guidance. Meanwhile, AAPL beat analyst expectations but reported sales that were down one percent year-over-year. The company’s main product (iPhones) revenues are down from even earlier in the year (a third consecutive decline) while predicting similar results for the current quarter.
With that background, it looks like markets are trying a modest premarket move. However, the candles of all three major index ETFs are black-bodied, indicating we have fallen down off the premarket highs. All three may try to retest their T-line (8ema) from below today with DIA doing so now. Once again the large-cap indices (SPY and DIA) are also testing a support level. (QQQ’s premarket move higher has it up away from its support level.) As far as extension goes, all of them are close to T-line and T2122 is in the mid-range. So, both sides of the market have plenty of room to run…if they can find momentum. Don’t forget we get July Payrolls data before the opening bell. So volatility remains likely. Also, keep in mind that it’s Friday, Payday. So, take some money off the table to pay yourself and prepare your account for the weekend news cycle.
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 absolutely 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 money is 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
