Stock futures edged higher on Monday as investors with all eyes on the presidential election and the potential volatility it may bring. Nvidia shares climbed 2% in premarket trading following the announcement by S&P Dow Jones Indices that the chipmaker would replace Intel in the 30-stock Dow. Meanwhile, Wall Street is on edge ahead of the Federal Reserve’s latest rate decision, expected on Thursday, with traders pricing in a 96% chance of a rate cut.
European markets saw an uptick on Monday following a sluggish start. Sectors such as oil and gas, autos, and banks each gained approximately 0.7%, while tech stocks experienced a slight decline of 0.2%. The rise in crude oil prices by over 2% provided a boost to oil stocks. Burberry’s shares surged by around 5% after reports emerged that Moncler might be considering a bid for the British luxury brand. Meanwhile, investors are keenly watching developments related to the upcoming U.S. presidential election.
Asia-Pacific markets experienced a positive trend as investors geared up for a busy week ahead. South Korea’s blue-chip Kospi led the gains with a 1.83% rise, while Hong Kong’s Hang Seng index saw a modest increase of 0.27%. Australia’s S&P/ASX 200 closed 0.56%, and the Taiwan Weighted Index advanced by 0.81%. Notably, Japan’s markets were closed for a holiday. Investors are also closely watching Australia, where the central bank is expected to announce its interest rate decision on Tuesday, with the Reserve Bank of Australia likely to maintain the official cash rate at 4.35%.
Economic Calendar
Earnings Calendar
Notable reports for Friday before the bell include AMG, BCRX, BNTX, CC, CHH, CAN, CEG, DOCN, ENTG, FIS, FOXA, BEN, FRPT, FTDR, IART, KNF, KRYS, MAR, MSSC, NYT, OMI, PEG, RVTY, TPG, TRS, TGI, YUMC, & ZTS.
Berkshire Hathaway’s cash reserves surged to a record $325.2 billion by the end of September, up from $276.9 billion in the second quarter, as revealed in its recent earnings report. Despite this increase, the company did not repurchase any shares during this period, continuing a trend of reduced buyback activity seen earlier in the year. This slowdown in repurchases coincided with Berkshire shares outperforming the broader market and reaching record highs. In the second quarter, Berkshire had repurchased only $345 million worth of stock, a significant drop from the $2 billion bought back in each of the previous two quarters. The company maintains that it will repurchase shares when Chairman Warren Buffett believes the price is below Berkshire’s intrinsic value, conservatively determined.
Nvidia shares rose by 2% in premarket trading after S&P Dow Jones Indices announced late Friday that the chipmaker would replace Intel in the 30-stock Dow, effective at the end of the week. This change reflects Nvidia’s impressive performance, with its stock up 173% year to date, driven by its strong position in the artificial intelligence sector. In contrast, Intel has struggled, losing more than half of its value over the same period as it falls behind in the AI race.
Tuesday’s election results could significantly influence the stock market’s performance for the remainder of the year. According to the latest NBC News poll, the race between former President Donald Trump and Vice President Kamala Harris is “deadlocked.” However, the market’s reaction may depend more on which party gains control of Congress. A divided control of the U.S. House of Representatives and Senate would likely maintain the status quo. In contrast, a sweep by either Republicans or Democrats, likely accompanied by a White House victory for the same party, could lead to new spending initiatives or a tax overhaul.
The bulls are trying to put on brave faces this morning but all eyes on the presidential election and the uncertainty that can create we could easily see very choppy light volume price action. We should also plan carefully the risk of election day when we have in the past seen some very big price swings setting up market gaps and reversals overnight. Besides that we have a busy week of earnings and an FOMC decision coming Thursday afternoon.
Markets opened higher on Friday after good earnings news and poor payroll data (that can be interpreted as a rationale for another or a bigger Fed rate cut). SPY gapped up 0.49%, DIA gapped up 0.50%, and QQQ opened up 0.31%. From there, all three major index ETFs followed-through with a strong rally for the first hour. At that point they all slowly meandered back toward their open. This action gave us Inverted Hammer type candles in all three major index ETFs. SPY printed a black-bodied Inverted Hammer. DIA gave us a gap-up white-bodied, Inverted Hammer that retested its T-line (8ema) from below and failed. However, DIA did recross its 50sma to the upside. Finally, QQQ printed a white-bodied, big Inverted Hammer Body candle that was also a Bullish Harami candle. This all happened on average volume int SPY and QQQ as well as above-average volume in the DIA.
On the day, six of the 10 sectors were in the green with Healthcare (+1.00%) well out in front leading the way higher. On the other side, Utilities (-1.85%) performed far, far worse (one percent worse) than the next worse sector, Energy (-0.86%). Meanwhile, SPY gained 0.42%, DIA gained 0.66%, and QQQ gained 0.74%. VXX fell 1.76% to close at 56.85 and T2122 fell slightly further into oversold territory, but remains in the top of that area at 16.44. At the same time, 10-Year bond yields spiked again all the way up to 4.386% while Oil (WTI) fell to close at $69.49 per barrel. So, Friday was the Bulls day early but then turned into a long, slow drift lower after the first hour. Among the big market-movers were the big dogs INTC (+7.81%) and AMZN (+6.19%) as well as earnings moves by CHTR (+11.87%), LULU (+7.81%), and CAH (+7.01%).
The major economic news scheduled for Friday included October Average Hourly Earnings, which was up more than expected at +0.4% (compared to a forecast and September value of +0.3%). At the same time, October Nonfarm Payrolls were FAR below expectations at +12k (versus a forecast of +106k and the September 223k reading). On the private side, October Private Nonfarm Payrolls actually fell at -28k (compared to a forecasted +90k and September’s +192k number). Meanwhile, the October Participation Rate fell a tick to 62.6% (versus the forecast and September 62.7% value). Together, this gave us an October Unemployment Rate that remained at 4.1% (in-line with the forecast and September reading of 4.1%). Later, October S&P Global Mfg. PMI was better than predicted at 48.5 (compared to a forecast and Sept. value of 47.8). Shortly after that, September Construction Spending was better than anticipated at +0.1% (versus a 0.0% forecast and in-line with August’s +0.1% reading). At the same time, October ISM Mfg. Employment was up less than expected to 44.4 (compared to a 45.0 forecast but up from September’s 43.9 value). In the meantime, October ISM Mfg. PMI was lower than predicted at 46.5 (versus a 47.6 forecast and a 47.2 September reading). This came on October ISM Mfg. Prices were up much more than anticipated at 54.8 (compared to a 49.9 forecast and September’s 48.3 value). It is worth noting that the weak October Payrolls growth was skewed by hurricanes and the impact of the BA strike, which also impacted BA suppliers.
In stock news, on Friday, WEN announced it is closing 140 restaurants (in addition to 100 closings announced in May) over the months ahead. (It is worth noting that the hamburger chain is opening 250-300 new location and has 6,000 stores in the US at the moment.) Later, in a regulatory filing showed that AAPL will invest $1.5 billion in GSAT which will give GSAT funds to expand its satellite coverage. This includes a 20% stake in GSAT for $400 million as well as $1.1 billion in cash. After the close, Bloomberg reported that SHOCF and their private-equity peer Silver Lake Mgmt. are in talk about combining their veterinary business units and adding $4 billion in new capital to the combined company.
Elsewhere, S&P announced that NVDA will replace INTC in the DJIA (DIA) as of November 8. On Saturday, BRKB announced they have now amassed a $325.2 billion cash stockpile through sales of AAPL and BAC. Warren Buffett said the company had sold another 100 million shares, which was about 25% of its holdings of AAPL during Q3 (600 million total to date for 2024). Interestingly, BRKB also did not buy back any of its own stock during the quarter, which suggests company executives do not feel it is a bargain now. On Sunday, Reuters reported that private equity firm Stonepeak is in advanced talks to acquire ATSG for about $3.1 billion or $22.50 per share (a 29% premium on Friday’s close of $17.40).
In stock legal and governmental news, on Friday, the NY State Supreme Court ruled in favor of PEP, dismissing the state’s case alleging the company of pollution for using plastic single-use plastic packaging. At the same time, the Federal Energy Regulatory Commission held a hearing on concerns generated by the recent trend of planning to build datacenters on the sites of US power plants. (The main focus was concerns over system-wide reliability as well as passing more cost onto public electric consumers in favor of the co-located datacenter.) Later, trade groups for the major airlines criticized the US Justice Dept. review of airline competition in America and demanded that public comment on the review be extended another 60 days beyond the Dec. 23 deadline (in hope a GOP administration could kill the antitrust review for them). At the same time, the Commerce Dept. imposed a $500k fine on GFS (third-largest chipmaker, with huge market share in lower-end chips) for selling semiconductors to blacklisted Chinese chipmaker SMIC. Later, COF disclosed (in and SEC filing) that it is being investigated and may face enforcement action from the Consumer Financial Protection Bureau for alleged misrepresentations related to savings accounts.
In miscellaneous news, on Friday, China loosened its foreign investment rules in an effort to increase the amount of foreign funds flowing into the country. Overseas investors are now allowed to take non-controlling “strategic stakes” in publicly-traded Chinese firms with a $300 million position. (The previous rule required foreigners to take at least a $500 million stake for a “strategic position” designation, but it was still non-controlling.) Elsewhere, remember that BA has a binary event Monday with a union vote on the tentative deal reached last week. (Results are not expected until at least the afternoon Monday and probably the evening.)
In Middle East news, over the weekend, Israel claimed it captured a “senior Hezbollah operative” in a raid in Northern Lebanon. Elsewhere, Israeli airstrikes continued with several dozen killed and hundreds injured in weekend bombings in Lebanon. In Gaza, at least 13 were killed and several dozen injured in an airstrike of two houses and the refugee camps located next to them. On the other side, Israel said 11 people were injured in the city of Tira (central Israel) when three Hezbollah rockets hit the city.
Overnight, Asian markets were mostly green with just two of the 12 exchanges in the region under water. Shenzhen (+1.99%), South Korea (+1.83%), and Shanghai (+1.17%) paced the gainers. Meanwhile, India (-1.27%) was the only appreciable loser for the day. (Japan was closed for holiday.) In Europe, we see a very similar picture taking shape with just two of 14 bourses showing red (barely) at midday. The CAC (+0.26%), DAX (+0.02%), and FTSE (+0.63%) lead the region higher in early afternoon trade. In the US, as of 7 a.m., Futures are pointing toward a modest green start to the day. The DIA implies a +0.10% open, the SPY is implying a +0.20% open, and the QQQ implies a +0.17% open at this hour. At the same time, 10-Year bond yields are down to 4.277% and Oil (WTI) has spiked 3.09% to $71.65 in early trading.
The major economic news scheduled for Monday is limited to September Factory Orders (11 a.m.). The major earnings reports scheduled for before the open include FOX, AMG, BRKB, BAM, CC, CNA, CEG, ENTG, FIS, BEN, FTDR, KNF, KOS, MAR, NYT, OMI, PEG, RVTY, YUMC, and ZTS. Then, after the close, ATUS, AIG, AVB, EQH, BCC, BFAM, BWXT, CBT, CE, CENX, CRUS, CLF, CRBG, CRGY, CWK, FANG, ES, FN, FWRD, GT, GXO, HOLX, HUN, ILMN, ITUB, JELD, NXPI, PLTR, PARR, PRIM, PGR, O, RRX, RHP, SANM, ST, SLF, VVX, VRTX, and WYNN report.
In economic news later this week, on Tuesday we get Sept. Exports, Sept. Imports, Sept. Trade Balance, Oct. S&P Global Services PMI, Oct. S&P Global Composite PMI, Oct. ISM Non-Mfg. PMI, Oct. ISM Non-Mfg. Employment, Oct. ISM Non-Mfg. Price Index, and API Weekly Crude Oil Stocks report. However, the main news of the day will be the US elections (although the results are not likely to be known that night and, if one side loses, turmoil may not end for months). Then Wednesday, EIA Crude Oil Inventories are reported. On Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, Preliminary Q3 Nonfarm Productivity, Preliminary Q3 Unit Labor Costs, Sept. Retail Inventories, Fed Interest Rate Decision, FOMC Statement, Fed Chair Press Conference, Sept. Consumer Credit, and Fed Balance Sheet. Finally, Friday brings Michigan November Consumer Sentiment, Michigan November Consumer Expectations, Michigan November 1-Year Inflation Expectations, and Michigan November 5-Year Inflation Expectations.
So far this morning, BNTX, CC, CNA, CEG, L, OMI, and RVTY all reported beats on both the revenue and earning lines. Meanwhile, BAM, KOS, and YUMC missed on revenue while beating on earnings. On the other side, BRKB came in in-line on revenue while missing on earnings. However, ENTG missed on both the top and bottom lines.
With that background, it looks like the market is modestly bullish again early Monday. The SPY and QQQ gapped up slightly to start the premarket while DIA opened the early session flat. All three major index ETFs have printed white-body candles, but only DIA is decisive with the two broader ETFs more wick than body so far. With all three below their T-line (8ema), the short-term trend is bearish. However, the mid-term trend is weakly bullish and the longer-term trend is still solidly Bullish in all three. (Again, despite the recent pullback, they all still sit not too far from all-time highs.) With regard to extension, none of the major index ETFs are too far extended from its T-line (8ema). In addition, the T2122 indicator remains just inside the oversold area. So, markets do have room to run either direction if traders can find momentum, but the Bulls have more slack to work with today. With regard to those 10 big dog tickers, six of the 10 are in the red this morning. TSLA (-2.17%) is by far the biggest loser while NVDA (+2.15%) is by far the biggest gainer. Once again, overall the premarket volume is light today. However , NVDA leads TSLA slightly in early dollar-volume traded (and those two are well out in front of all other tickers).
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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Thursday saw a significant gap lower in all three major index ETFs, perhaps mostly on warnings from META and MSFT that spiraling AI costs may impact earnings. SPY gapped down 0.74%, DIA gapped down 0.63%, and QQQ gapped down 0.84%. From there, SPY and QQQ immediately began following-through with a selloff, finding some support shortly after 11 a.m. and then meandering sideways until the end of the day. For its part, after the open, DIA chopped sideways along the open until 10:25 a.m. before beginning to selloff sharply until the low of the day at 11 a.m. At that point, DIA rallied back to its open by 1:30 p.m. and then meandered sideways until the end of the day. All three major index ETFs sold off sharply the last 10 minutes with SPY and QQQ going out very near the low of the day.
This action gave us gap-down, black-bodied candles in all three. SPY was a black Marubozu (shaved head) candle that gapped below its T-line (8ema) and closed right on its 50sma. DIA printed a gap-down, black-body Spinning Top candle that gapped down through its 50sma, retested from below and failed that test. Finally, QQQ gave us a black Marubozu (shaved head) candle that gapped below its T-line, printed a big black candle, but has not reached its 50sma yet. This happened on above-average volume in all three of the major index ETFs.
On the day, eight of the 10 sectors were in the red with Technology (-2.71%) way, way out in front (by 1.2%) leading the way lower. On the other side, Utilities (+0.64%) held up far better than most of the market. Meanwhile, SPY lost 1.98%, DIA lost 0.96%, and QQQ lost 2.52%. VXX spiked 7.65% higher to close at 57.87 (the highest it has been since early August) and T2122 fell just inside of the oversold territory at 17.55. At the same time, 10-Year bond yields climbed back up to close at 4.286% while Oil (WTI) jumped 2.92% to close at $70.61 per barrel. So, Thursday was a rough, rough day for the Bulls as Bears gapped us lower and then followed-through in the morning. We saw a midday sideways chop as the Bulls tried to find their footing. However, the dark pool came in to close out the day on a whoosh lower. The big losers on the day were the Tech giants, with MSFT (-6.03%), NVDA (-4.81%), and META (-4.09%) leading the parade lower. Of the 10 “Big Dogs,” only NFLX (+0.30%) was in the green.
The major economic news scheduled for Thursday included Weekly Initial Jobless Claims, which came in lower than expected at 216k (compared to a forecast of 229k and the prior week’s reading of 228k). In terms of ongoing claims, Weekly Continuing Jobless Claims were also well down to 1,862k (versus the 1,890k forecast and prior week’s 1,888k). At the same time, the September Core PCE Price Index came in as anticipated at a flat 2.7% (Year-on-Year), compared to the 2.6% forecast and August value of 2.7%). On the monthly side, the September Core PCE Price Index was as predicted at 0.3% (versus the 0.3% forecast but up a tick from August’s 0.2% value). For the headline numbers, the September PCE Price Index was down as predicted to 2.1% (compared to a 2.1% forecast and the August 2.3% reading). This made it the lowest PCE number since 2021. For the monthly value, the September PCE Price Index was 0.2% (versus a 0.2% forecast but up a tick from August’s 0.1% Month-on-Month value). At the same time, the Q3 Employment Cost Index was lower than expected at 0.8% (compared to a forecast and Q2 reading of 0.9%). Meanwhile, September Personal Spending, Month-on-Month, was up more than anticipated at +0.5% (versus a +0.4% forecast and August’s +0.3% number). Then, after the close, the Fed Balance Sheet showed a $16 billion decline to $7.013 trillion (from $7.029 trillion).
After the close, AMZN, AAPL, TEAM, CVCO, CNO, CPS, EMN, ERIE, JNPR, MERC, RGA, SEM, SKYW, X, and VICI all reported beats on both the revenue and earnings lines. Meanwhile, AES, AMCR, CON, DORM, ICFI, IR, MTZ, SM, and SON missed on revenue while beating on earnings. On the other side, INTC beat on revenue while missing on earnings. However, CAR and CTRA missed on both the top and bottom lines.
Drilling down, AMZN shares soared after-hours on huge beats with ad revenue up 19% year-on-year and cloud services posting the biggest profit in a decade. At the same time, INTC spiked 7% on an earnings miss that was less than feared and upbeat guidance. Not to be outdone, AAPL beat and announced that it is seeing early demand for the iPhone 16 (where AAPL is counting on AI revenue to generate future growth). So, despite the very down day for big tech, after-hours a sigh of relief seemed to be released by markets on the three big reports.
In stock news, on Thursday, SIEGY (Siemens) announced it had agreed to buy ALTR for $10.6 billion, strengthening its position in the industrial software market. This will raise SIEGY to number 2 (from number 4) in that market, behind just ANSS. At the same time, Korean Samsun Electronics announced it had made progress on new “high-bandwidth memory” products, which it said are advancing through qualification tests. (As a result, direct competitor MU, which has recently said it is still in “early days” on its own HBM products, stock fell 4.5%.) Later, GOOGL announced a set of AI features for map applications (such as Google Maps). At the same time, CMCSA said it is considering the spinoff of its cable TV networks, such as CNBC and MSNBC (but not including NBC or the Peacock streaming network). Later, PTON announced it has hired former AAPL exec Peter Stern as its new CEO effective January 1. Stern will be tasked with guiding a turnaround for PTON. At the same time, Reuters reported that sources indicate the F has told employees that the company will cut management bonuses by 65% if the company does not speed up the implementation of cost-cutting and quality improvement programs.
Later, OpenAI announced the release of ChatGPT search capability. The previously-announced tool increases competition for GOOGL’s primary search business. At the same time, COP raised its annual output forecast, citing improvements in operational efficiency. (COP output has increased 6% year-on-year to 1.92 million barrels per day. It now forecasts 1.94-1.95 million barrels per day for the 2024 average.) Later, F announced it will halt production of its F-150 Lightning from November 18 until January 6, 2025. (This includes previously-planned holiday plant shutdown weeks.) Although sales of the vehicle are up 86% year-on-year, they have not grown as much as the company anticipated. After the close, CNBC reported that BA and the Machinist Union reached a sweetened tentative agreement. (The new dela would provide a 38% pay increase, versus the previous 35% offer that was rejected, over four years. With compounding, it would be a 44% increase by the end of the agreement. It also offers a $12k ratification bonus…or employees could choose a $7k bonus with a $5k contribution to their 401k. However, the agreement does not include the return of a pension plan that was widely cited as the main reason for the two earlier rejections. The union urged member to accept the offer and the vote will be Monday.)
In stock legal and governmental news, on Thursday, the European Commission told NVDA that the company needs the approval of the EU Antitrust Regulator before it can close the $700 million purchase of Run:ai. The public statement said, “The transaction threatens to significantly affect competition in the markets where NVIDIA and Run:ai are active, which are likely to be at least European Economic Area-wide and therefore include the referring country Italy.” Later, the US 6th Circuit Court of Appeals heard arguments in a suit brought against the FCC. In the hearing, brought by the Telecom industry, the court questioned FCC authority to reinstate “Net Neutrality” rules. (This is pretty novel position, considering that the FCC was the agency that did away with the rules in the first place back in 2017.) The current situation allows US telecom providers to charge different rates and set different speeds for internet traffic from AMZN, MSFT, AAPL, GOOGL, and META (among others)…basically as a way to get the tech giants to pay more. There was no timeline provided for a ruling in the case.
Elsewhere, Russia fined GOOGL $20 decillion ($2 followed by 36 zeroes) which is 20 billion, trillion, trillion dollars. The fine was for not paying earlier fines for blocking pro-Russian propaganda channels on YouTube. After the close, a jury in a MO state court found that ABT and RBGLY (Reckitt Benckiser) were not responsible for debilitating intestinal disease for failing to warn the parents of the premature baby formula risks. (This is one of roughly 1,000 similar lawsuits in process in the US.) At the same time, the SEC announced that JPM has agreed to pay $100 million to settle charges the bank misled customers who invested in “conduit” products. (This includes a $10 million fine and $90 million to be distributed to conduit product customers. It also included a censure, but no admission of liability.) Meanwhile, a TX jury ordered TXT to pay $16 million to private CA company Rogerson Aircraft for giving the latter’s proprietary information to a rival parts supplier.
In miscellaneous news, on Thursday, oil spiked higher on an Axios report that Israeli intelligence had told it Iran is preparing to attack Israel from inside Iraqi territory. In other oil news, the US Energy Information Administration reported that US production rose 1.5% to hit another record high in August of 13.4 million barrels per day. (That topped the previous record of 13.31 million barrels per day in December 2023.) At the same time, US natural gas production slowed 0.6% to 115.9 billion cubic feet in August.
In Middle East news, on Thursday, multiple outlets reported the Israeli military leaders say the IDF have achieved all of its objectives in both Gaza and Lebanon. However, the reports also indicate that PM Netanyahu is unlikely to agree to end the campaigns and certainly not before the US election. Instead, on Thursday, Netanyahu again said the fighting will continue until “absolute victory” and announced that Israel’s “supreme objective” is stopping Iran from getting nuclear weapons. For its part, Hamas rejected the Egyptian-proposed 2-day ceasefire in exchange for an unspecified number of Israeli hostages. In northern Israel, seven people (four of which were foreign workers) were killed by a “direct hit.” It was not definitive, but assumed, this resulted from a Hezbollah rocket either direct or after interception. In Lebanon, Israeli strikes in the North and East of the country (near Baalbek) killed 45.
Overnight, Asian markets were mostly red with just three of the 12 exchanges above break-even. Japan (-2.63%) was by far the biggest loser, while Hong Kong (+0.93%) led the gainers. However, in Europe, we see green across the board at midday with all 14 bourses strongly green. The CAC (+0.71%), DAX (+0.60%), and FTSE (+0.78%) lead the region higher in early afternoon trade. In the US, as of 7:40 a.m., Futures are pointing toward a modest higher open. The DIA implies a +0.40% open, the SPY is implying a +0.40% open, and the QQQ implies a +0.47% open at this hour. At the same time, 10-Year bond yields are up to 4.295% and Oil (WTI) is up 1.89% to $70.57 per barrel in early trading.
The major economic news scheduled for Friday includes October Average Hourly Earnings, October Nonfarm Payrolls, October Private Nonfarm Payrolls, October Participation Rate, and October Unemployment Rate (all at 8:30 a.m.), October S&P Global Mfg. PMI (9:45 a.m.), September Construction Spending, October ISM Mfg. Employment, October ISM Mfg. PMI, October ISM Mfg. Employment, October ISM Mfg. Prices (all at 10 a.m.). The major earnings reports scheduled for before the open include AMR, ARCB, ARES, BTSG, CAH, CBOE, GTLS, CHTR, CVX, CHD, D, ENB, XOM, IMO, LYB, MGA, NVT, MD, PPL, SPG, TROW, TXNM, USM, WAT, and W. There are no earnings scheduled for after the close.
So far this morning, ACDVF, ARES, CAH, CBOE, CHTR, CHD, ENB, NMR, MD, SCGLY, TXNM, and WAT all reported beats on both the revenue and earnings lines. Meanwhile, CVX, D, XOM, NVT, PPL, TROW, and W missed on revenue while beating on earnings. On the other side, AMR, BTSG, and LYB beat on revenue while missing on earnings. However, ARCB, GTLS, and MGA missed on both the top and bottom lines.
With that background, it looks like the market is modestly bullish early this morning. All three major index ETFs have gapped higher and are printing white-body, inside candles against Thursday’s big black candles. All of them are mostly body at this point. So, indecision is not an issue at least yet (ahead of data). With all three below their T-line after the rough session Thursday, the short-term trend is now bearish. However, the mid-term and longer-term trends are obviously still strongly Bullish in all three, as they still sit not far from all-time highs. With regard to extension, none of the major index ETFs are too far extended from its T-line (8ema), but QQQ is pushing that limit. In addition, the T2122 indicator is now just inside the oversold area. So, markets do have room to run either direction if traders can find momentum, but the Bulls have more slack to work with today. With regard to those 10 big dog tickers, eight of the 10 are in the green again this morning. As mentioned, AMZN (+7.26%) and INTC (+5.34%) lead the gains in premarket with AAPL (-1.73%) the laggard. AMZN has traded enough stock to even be leading in dollar-volume sold, although normal leader NVDA is close behind it. Once again, overall the premarket volume is light today. Don’t forget it’s Friday, so pay yourself and prepare 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 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
Tuesday gave us some divergence between DIA and its broader index ETF peers. SPY opened down 0.14%, DIA gapped down 0.42%, and QQQ opened up 0.05%. At that point, SPY and QQQ started a long, slow, but steady rally that lasted until the end of the day. During that last 30 minutes SPY and QQQ saw some profit-taking. For its part, after the gap down, DIA rallied (more sharply than the others) to recross its gap by 10:15 a.m. and hitting the high of the day 15 minutes later. From there, DIA gave us a long, slow, but steady selloff the rest of the day that took it back down into its gap area. This action gave us white candles with significant wicks in all three major index ETFs. SPY printed a white, Piercing Arrow, Spinning Top that gapped below and then closed back above its T-line (8ema). DIA gave us a gap-down, white-bodied, Inverted Hammer candle that retested and failed its T-line from below. Finally, QQQ printed a large-body white candle with wicks on both ends which retested and passed the test of its T-line from above. This happened on below-average volume in all three of the major index ETFs.
On the day, nine of the 10 sectors were in the red with Utilities (-1.60%) well out in front leading the way lower. On the other side, Technology (+1.22%) was by far (by more than 1.4 percent) the strongest sector. Meanwhile, SPY gained 0.16%, DIA lost 0.37%, and QQQ gained 0.96%. VXX was down slightly to close at 52.48 and T2122 climbed just a little, but remains in the lower-end of its mid-range at 27.06. At the same time, 10-Year bond yields fell back to close at 4.256% while Oil (WTI) was just on the green side of flat to close at $67.49 per barrel. So, Tuesday was a divergent day where Tech drove the QQQ higher on the strength of AMD (+3.96%), META (+2.62%), and AVGO (+4.20%). Meanwhile, SPY was little changed and poor DIA was dragged lower by bluebloods like HD (-1.94%), KO (-1.66%), and TRV (-1.47%).
The major economic news scheduled for Tuesday included Preliminary September Goods Trade Balance, which came in worse than expected at -$108.23 billion (versus a forecast of -$95.90 billion and the August reading of -$94.22 billion). At the same time, Preliminary September Retail Inventories showed slower growth than the prior month at +0.1% (compared to August’s +0.5% value). Later, the October Conference Board Consumer Confidence was much stronger than anticipated at 108.7 (versus a forecast of 99.5 and a September reading of 99.2). Meanwhile, September JOLTS Job Openings were down (fewer open jobs) to 7.443 million (compared to a forecast of 7.980 million and August’s 7.861 million reading). Then, after the close, API Weekly Crude Oil Stocks showed an unexpected drawdown of 0.573 million barrels (versus a predicted inventory build of 2.300 million barrels and the prior week’s 1.643-million-barrel inventory increase.)
After the close, AMD, ALHC, ALSN, GOOGL, BMRN, BXC, BXP, EXE, EIX, EXEL, EXR, FMC, GOOG, IEX, LBTYA, LFUS, MCY, MTH, MOD, MDLZ, QRVO, RUSHA, SNAP, SYK, UMBF, and V all reported beats on both the revenue and earnings lines. Meanwhile, CAKE, CMG, CB, EQT, NGVT, NGD, PK, RSG, and UNM missed on the revenue line while beating on earnings. On the other side, DVA, FE, RYI, and UIS beat on revenue while missing on earnings. However, CZR, CHE, EA, FSLR, LSTR, OI, OKE, and WERN missed on both the top and bottom lines. (AMD disappointed with its forward guidance. However, GOOGL’s beat gave hope to all the big tech names as Ad revenue surged and the stock price went up almost 6% in after-hours trading.)
In stock news, on Tuesday, Reuters reported that VLKAF (Volkswagen) Audi division is in talks with a potential investor for its troubled Brussels plant. (VLKAF announced in July it is considering closing the plant and laying off the 3,000 employees that work at that facility.) At the same time, ADDYY (Adidas) announced that it saw strong growth in China during Q3 in contrast to rival brands. The company said that as a result of demand, they have opened 200 new stores in smaller Chinese cities with a goal of getting to 300 stores by the end of year. Later, Reuters reported that AVGO is working with OpenAI and TSM to create new AI chips. (This was a relief for AVGO supporters that had been under pressure from fear that OpenAI would create competition for AVGO chips.) At the same time, the Wall Street Journal reported that V is planning to lay off about 1,400 employees and contractors by the year end. Later, an SEC filing showed that Meme-stock influencer Keith Gill (Roaring Kitty) has liquidated his entire stake in CHWY. This comes after he took a 6.6% ownership stake of the company in July. (CHWY was down more than 10% in after-hours trading on the news.)
In stock legal and governmental news, on Tuesday, the news got worse for BA as the Dept. of Defense Office of Inspector General released a report alleging that the company overcharged the Air Force nearly 8,000% for soap dispensers and $1 million for a dozen spare parts. Later, the US State Dept. approved the sale of $744 million of RTX-made medium-range air-to-air missiles to Denmark. At the same time, MCD was sued in what is proposed to be a class-action lawsuit stemming from last week’s E.coli outbreak linked to onions on MCD’s Quarter Pounder burgers. After the close, Reuters reported that BAC is in talks with the CFPB in an effort to settle the agency’s charges related to fraud and scams on the bank-owned Zelle payment app. (The report said BAC is also considering litigation against the CFPB if a settlement can’t be reached.)
In miscellaneous news, on Tuesday, Reuters reported that sources tell it China is now considering approving $1.4 trillion in additional debt in the next few years, with money earmarked for reviving its economy. Other news out of the same Chinese government meetings said President Xi urged provincial officials to pursue the reform initiatives that were identified for them. Xi also “urged” those officials to meet their assigned social and economic targets. Elsewhere, in Canada, Canadian deputy foreign minister Morrison told Parliament that Indian Home Affairs Minister Shah was the one who authorized a wave of violence (including homicide) while attempting to suppress Sikh activists on US soil.
In Middle East news, on Tuesday, Hezbollah named cleric Naim Qassem as its new leader. The Israeli Defense Minister responded by saying that it was a “Temporary appointment…not for long.” In the streets, Isael conducted 150 airstrikes on Tuesday. To the north, Israeli strikes killed 82 and wounded many times that number in Lebanon. Further South, in Gaza, an IDF air attacks killed 110 with dozens more still missing as it collapsed a five-story residential building.
Overnight, Asian markets were almost red across the board. Only Japan (+0.96%) was in the green, while Hong Kong (-1.55%), South Korea (-0.92%), and Australia (-0.83%) led the region lower. In Europe, we see the same picture taking shape with only Norway (+0.46%) in the green at midday. The CAC (-1.39%), DAX (-0.84%), and FTSE (-0.26%) lead the region lower in early afternoon trade. In the US, as of 7:30 a.m., Futures are pointing toward a mixed open. The DIA implies a -0.20% open, the SPY is implying a +0.12% open, and the QQQ implies a +0.23% open at this hour. At the same time, 10-Year bond yields are down sharply to 4.218% and Oil (WTI) is up 1% to $67.89 per barrel in early trading.
So far this morning, AER, ADP, AXTA, BLCO, BIIB, EAT, BG, CRTO, EXC, GRMN, GEHC, HUM, JKS, KEX, LKNCY, OMF, OPCH, OSK, PSN, REYN, TEL, TEX, TT, UMC, UTHR, VRSK, and XPO all reported beats on both the revenue and earnings lines. Meanwhile, CHEF, KHC, and NI missed on revenue while beating on earnings. On the other side, ARCC, CWEN, GPN, GPI, NBIX, SITE, SW, and ZBH beat on revenue while missing on earnings. However, CAT, CDW, DAN, LLY, MLM, OTIS, and SLGN missed on both the top and bottom lines.
The major economic news scheduled for Wednesday include October ADP Nonfarm Employment Change (8:15 a.m.), Preliminary Q3 PCE Prices, Preliminary Q3 GDP, Preliminary Q3 Price Index (all at 8:30 a.m.), September Pending Home Sales (10 a.m.), and EIA Weekly Crude Oil Inventories (10:30 a.m.). The major earnings reports scheduled for before the open include ABBV, AER, ARCC, ADP, AVT, AXTA, SAN, BSAC, BLCO, BIIB, EAT, BG, CAT, CDW, CHEF, CLH, DAN, LLY, ENIC, EXC, FLEX, FTV, GRMN, GTES, GEHC, GSK, GPI, HES, HUM, ITW, JKS, KEX, KHC, DRS, MHO, MLM, NBIX, NI, OMF, OPCH, OSK, OTIS, PSN, REYN, SLGN, SITE, SW, SCL, TEL, TEX, TT, UMC, VRSK, VMC, XPO, and ZBH. Then, after the close, ACHC, AFL, AEM, ALGT, ALL, AWK, AMGN, AR, ACGL, ACA, AXS, BHC, BECN, BIO, BKNG, CHRW, CVNA, CF, CMPR, CLX, CTSH, COIN, COLM, CODI, COMP, CACC, CW, DASH, EBAY, NVST, EQIX, EQR, ETSY, EG, FND, GEN, GDDY, GRBK, THG, HLF, HLI, HUBG, INVH, KMPR, KLAC, LPLA, MTW, MATX, META, MET, MGM, MSFT, MAA, MPWR, MUSA, MYRG, NXT, PGRE, CNXN, PSMT, PRU, PSA, HOOD, ROKU, RYAN, SCI, SFM, APXC, SBUX, SUM, TDOC, TWI, RIG, TTMI, TWLO, VTR, WTS, and WSC report.
In economic news later this week, on Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, September Core PCE Price Index, September PCE Price Index, September Personal Spending, Q3 Employment Cost Index, October Chicago PMI, and the Fed Balance Sheet. Finally, on Friday, October Average Hourly Earnings, October Nonfarm Payrolls, October Private Nonfarm Payrolls, October Participation Rate, October Unemployment Rate, September Construction Spending, October ISM Mfg. Employment, October ISM Mfg. PMI, October ISM Mfg. Employment, October ISM Mfg. Prices, and October S&P Global Mfg. PMI are reported.
With that background, it looks like the market is undecided early this morning. QQQ gapped higher on the strength of GOOGL (+6.64%) earnings and despite the drag from AMD (-7.95%). However it has printed a Doji since that premarket gap. For their part, SPY and DIA opened closer to flat and have also printed indecisive candles in the early session. With QQQ and SPY above their T-line, the short-term trend remains tepidly bullish. The mid-term and longer-term trends are obviously still strongly Bullish in all three, as they all sit within striking distance of another all-time high. With regard to extension, none of the major index ETFs are too far extended from its T-line (8ema). In addition, the T2122 indicator remains at the bottom portion of its mid-range. So, markets do have room to run either direction if traders can find momentum, but the Bulls have just a little more slack to work with today. With regard to those 10 big dog tickers, six of the 10 are in the green again this morning. As mentioned, AMD is by far (by more than 7%) the anchor on that group while GOOGL is 4% out in front leading the gainers higher in premarket. GOOGL has also surpassed normal leader NVDA (-0.37%) in terms of leading dollar-volume trading. Once again, premarket volume is very light today.
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
Buoyed by robust earnings from Alphabet, traders are gearing up for more reports from major tech companies and a crucial update on U.S. economic growth. Meta Platforms and Microsoft are set to release their earnings on Wednesday, followed by Apple and Amazon on Thursday. Investors are also keenly awaiting the preliminary reading of the gross domestic product (GDP), expected to reveal a 3.1% annualized growth rate for the third quarter, according to the Dow Jones consensus forecast. This anticipation is driving significant market activity as stakeholders assess the broader economic landscape.
European markets saw a decline as investors evaluated a new wave of corporate earnings and regional growth data, while also anticipating the upcoming U.K. government budget announcement. The day was marked by a flurry of earnings reports and business updates from numerous companies. Despite the market downturn, the euro zone economy showed resilience, recording a 0.4% growth in the third quarter of 2024.
Asia-Pacific markets experienced a mixed performance as traders digested consumer price data from Australia, which showed a 2.8% year-on-year increase in headline inflation for the September quarter. Amidst this backdrop, China is contemplating the approval of over 10 trillion yuan in additional debt next week to boost its economy. The market reactions were varied: Australia’s S&P/ASX 200 declined by 0.83%, Hong Kong’s Hang Seng index dropped by 1.65%, and South Korea’s Kospi fell by 0.92%. In contrast, Japan’s Nikkei 225 bucked the trend, rising by 0.96%.
The euro area economy expanded by 0.4% in the third quarter, surpassing the anticipated 0.2% growth. Spain and Ireland led the way with the highest growth rates, while Germany, Europe’s largest economy, managed to avoid a recession. These positive readings come as the European Central Bank is expected to implement four interest rate cuts this year, aiming to further stimulate economic activity across the region.
Advanced Micro Devices (AMD) reported its third-quarter results on Tuesday, meeting earnings forecasts and slightly surpassing revenue expectations. The company highlighted a significant achievement in its data center business, which saw sales double for the second consecutive quarter. Despite this impressive growth, AMD’s overall revenue guidance for the fourth quarter remains aligned with consensus expectations, indicating steady performance in the upcoming period.
Volkswagen reported a decline in operating profit to 2.86 billion euros ($3.1 billion) for the third quarter, with sales revenues slipping 0.5% year-on-year to approximately 78.5 billion euros. These results follow the company’s decision last month to cut its 2024 annual outlook for the second time in a few months. Volkswagen has faced significant challenges recently, including warnings of potential plant closures in Germany and the cancellation of several labor agreements with local workers in September.
In a Tuesday interview with CNBC’s Jim Cramer, Pfizer CEO Albert Bourla expressed a positive outlook regarding activist investor Starboard Value, acknowledging some of its criticisms while affirming that the company is on a promising path. Bourla emphasized Pfizer’s openness to good ideas from Starboard or any other source, highlighting the company’s ongoing changes. On the financial front, Pfizer reported an earnings beat and raised its full-year outlook, driven by strong sales of its Covid vaccine and antiviral pill, Paxlovid.
With the market gearing up for more reports from the tech giants META and MSFT after the bell today traders will also need to digest GDP and ADP jobs data along with a huge slate of earnings. Bond yields have moderated slightly but the dollar is still amazingly strong and precious metals rising at the same time continue to show the overall uncertainty in the market. Expect considerable price volatility and watch for the possibility of big morning gaps with all the earnings results coming after the bell today.
U.S stock futures remained relatively unchanged as investors prepared for significant corporate earnings releases, particularly from prominent tech companies. The market seemed to react positively to a decline in oil prices, which followed weekend airstrikes by Israel on Iran that did not impact energy facilities. As the busiest week of the earnings season progresses, traders are closely monitoring reports from major firms. Pfizer and McDonald’s are set to release their results before the market opens, while Alphabet, Snap, Reddit, Chipotle, and Advanced Micro Devices will report after the closing bell.
European markets saw modest gains as investors processed the latest earnings reports. HSBC’s London-listed shares surged by 4.5% following a third-quarter earnings report that exceeded analyst expectations and the announcement of a $3 billion share repurchase plan. Conversely, shares of Novartis dropped by 3.5%, despite the pharmaceutical giant raising its full-year guidance after reporting increased third-quarter sales. This mixed performance highlights the varied investor reactions to corporate earnings and strategic announcements.
On Tuesday, Asia-Pacific markets experienced mixed movements, with most indices showing gains. Japan’s Nikkei 225 rose by 0.77%, despite the ruling Liberal Democratic Party losing its parliamentary majority, indicating investor confidence in the market’s resilience. South Korea’s Kospi managed to reverse earlier losses, ending the day up by 0.21%. Hong Kong’s Hang Seng Index also saw a modest increase of 0.35%. In contrast, China’s CSI 300 fell by 1%, reflecting some market challenges. Additionally, Japan’s jobless rate for September improved slightly to 2.4%, down from 2.5% in the previous month.
Ford has adjusted its 2024 earnings forecast to the lower end of its previously announced range, now expecting an adjusted EBIT of approximately $10 billion, down from the initial range of $10 billion to $12 billion. Despite this adjustment, the automaker slightly exceeded Wall Street’s third-quarter expectations. The company’s third-quarter performance was driven by strong results from its “Pro” commercial and fleet business, along with solid contributions from its traditional operations, known as “Ford Blue.”
BP reported an underlying replacement cost profit of $2.3 billion for the July-September period, surpassing analyst expectations of $2.1 billion according to an LSEG-compiled consensus. Despite this, the British oil major’s third-quarter net profit of $2.3 billion was a decline from the $2.8 billion reported in the second quarter and the $3.3 billion in the third quarter of 2023. This marks BP’s weakest quarterly performance since the fourth quarter of 2020, a period when industry profits were severely impacted by the coronavirus pandemic.
Delta Airlines is seeking over $500 million in damages, along with litigation costs and punitive damages, following an IT outage linked to CrowdStrike’s security software. The outage caused Delta to cancel thousands of flights and struggle with recovery, lagging its competitors. Delta claims that flaws in CrowdStrike’s software affected its computers despite having disabled automatic updates. In response, CrowdStrike has filed its own suit, arguing that the issues were due to “Delta’s own negligence.”
Microsoft has accused Google of orchestrating “shadow campaigns” to undermine its reputation with European regulators. According to a blog post by a Microsoft lawyer, Google is allegedly leading a coalition of cloud companies to sway policymakers and mislead the public. This accusation comes in the wake of Google’s announcement that it plans to file an antitrust complaint against Microsoft with the European Union’s executive body, criticizing Microsoft’s software licensing practices. The escalating tensions highlight the ongoing rivalry between the two tech giants in the competitive cloud services market.
Anticipation is high as we wait for significant corporate earnings that will include reports from the tech giants over the next three trading days. Expect significant price volatility that could create meaningful morning gaps in the index charts so plan your risk carefully. New record highs in the QQQ and SPY are very possible but if some earnings disappoint big declines are also possible as traders run for the door. Be prepared as all this pent-up emotion spills out over the market.
Markets opened higher across the major market index ETFs. SPY gapped up 0.60%, DIA gapped up 0.59%, and QQQ gapped up 0.63%. From there, ground sideways in the top half of its gap, DIA chopped sideways not too far above its opening level, and QQQ was a Bull Trap as it slowly and steadily sold back toward the prior close. This went on the rest of the day. This action gave us decidedly black-bodied candles in the SPY and QQQ but a white-bodied indecisive candle in the DIA. SPY gapped up and then printed a black-body candle that approached, but did not retest its T-line (8ema) from above. QQQ gapped up and then traded back toward its prior close on a large, black-body candle. Meanwhile, DIA printed a cap-up, white-bodied, Bullish Harami candle that is mostly upper wick. This happened on well-below-average volume in the SPY and QQQ, but just below-average volume in the DIA.
On the day, nine of the 10 sectors were in the green with Financial Services (+1.43%), Basic Materials (+1.07), and Consumer Cyclical (+1.01%) well out in front leading the way higher. On the other side, Energy (-0.85%) was by far (by more than 1.2 percent) the weakest sector. Meanwhile, SPY gained 0.31%, DIA gained 0.70%, and QQQ gained 0.02%. VXX plummeted 4.67% lower to close at 52.71 and T2122 was dead flat, just outside its oversold territory, to remain at the bottom of the mid-range at 21.14. At the same time, as mentioned, 10-Year bond yields jumped again to close at 4.28% while Oil (WTI) plunged 5.36% on to close at $71.65 per barrel. So, Monday was a blah day in the market where most of the action came at the open (from exuberance over the end of the current round of Israel-Iran direct conflict) but then it was a volatile in the SPY and QQQ, but really just a Bears’ paradise all day in the DIA.
There was no major economic news scheduled for Monday.
After the close, BRO, CDNS, CWH, CR, ESI, EHC, FFIV, F, QUAD, SKY, UCTT, WELL, and WM all reported beats on both the revenue and earnings lines. At the same time, SBAC and VFC both missed on revenue while beating on earnings. On the other side, AMKR and FLS beat on revenue while missing on earnings. However, CVI and LEG missed on both the top and bottom line.
In stock news, on Monday, T announced it had signed a $1 billion multi-year deal with GLW to buy fiber and other products. At the same time, TTE announced it had sold a 50% stake in its Iraqi 1.25-gigawatt solar project to QatarEnergy. (Financial terms of the deal were not disclosed.) Later, Bloomberg reported that RUN is in discussions with several datacenter developers to provide solar power. (RUN is currently strictly in the residential solar business and this would be its entry into the commercial market.) At the same time, Reuters reported that META is building its own AI-based search engine to compete with GOOGL, MSFT (Bing), and ChatGPT’s AI-search. Later, the head of the VLKAF (Volkswagen) labor union told Reuters Monday that the company has told the union it plans to close three German plants, lay off tens of thousands of workers, and shrink the size of other non-German European plants.
Meanwhile, MCD announced it has begun selling Quarter Pounder burgers again at more than 900 stores across 13 states where they had been pulled from the menu for a week. MCD says the burgers are now being sold without onions and the company has cut ties (at least temporarily) with the vendor of the contaminated onions. At the same time, AAPL released a new phone operating system, an update that includes its previously announced Apple Intelligence AI system. (This included versions for iPad, iPhone, and Mac.) At the same time, Reuters reported that RPD has now engaged investment bankers due to buyout talks with private equity firms that have advanced. The suitors of RPD include EQT, Advent, and BCSF. Later, WMT announced it is cutting in half the price (from $98 to $49) of its “Walmart Plus” subscription service in an attempt to make up ground on rival AMZN with their Prime service. After the close, NEE announced it will sell shares to raise $1.5 billion to fund new energy projects. At the same time, Japanese publication Nikkei reported that TM and NPPXF (Nippon Telegraph and Telephone) will jointly invest $3.26 billion in R&D toward AI software for self-driving cars.
In stock legal and governmental news, on Monday, Reuters reported that Indonesia has blocked the sale of AAPL’s iPhone 16 in the country. The reason is that Indonesia requires that smartphones sold in the fourth-largest population country must have at least 40% locally-manufactured parts. Later, JPM announced that it has begun suing customers for “check fraud,” alleging the customers improperly withdrew excessive funds to take advantage of a JPM system glitch that temporarily allowed ATM users to withdraw “infinite cash” regardless of account balance. So far, suits have been files against two individuals and two businesses across three cities. In other JPM news, JPM CEO Dimon blasted several financial regulatory agencies Monday. Dimon said, “It’s time to fight back.” He went on to say, “We are suing our regulators over and over and over because things are becoming unfair and unjust, and they are hurting companies.”
Elsewhere, after the close, the 5th Circuit Court of Appeals unanimously ruled (3-0) that LUV must face a lawsuit alleging the company illegally intimidated and disciplined pilots who were part of the 9,000-member pilot union. At the same time, the Dept. of Energy issued another solicitation, this time for another 3 million barrels of crude, to refill the Strategic Petroleum Reserve. Later, the Dept. of Treasury finalized rules that limit US investments into AI and other technologies in China. The new rules will replace President Biden’s executive orders on the issue as of January 2. At the same time, TPR and CPRI filed notices of a joint appeal of the US District ruling last week that killed their $8.5 billion merger by ruling in favor of the FTC.
In miscellaneous news, on Monday, Reuters reported that if North Korean forces enter into direct fighting against Ukrainians, there would be no new restrictions on the use of US weapons. Pentagon spokeswoman Sabrina Singh said, “A portion of those (North Korean) soldiers have already moved closer to Ukraine, and we are increasingly concerned that Russia intends to use these soldiers in combat or to support combat operations against Ukrainian forces in Russia’s Kursk Oblast near the border with Ukraine.” Elsewhere, BA announced it had raised $21 billion through the sale of 90 million common shares and $5 billion worth of stock warrants all on Monday as the company tries to improve its balance sheet and avoid a credit downgrade to junk status. Meanwhile, Bitcoin briefly traded above $71,000 Monday for the first time since June.
In Middle East news, on Monday Israel declared the UNWRA agency to be a terrorist organization and essentially threw the UN out of the country. Israel alleged hundreds (of the thousands) of UNWRA aid workers had ties to Hamas “terrorists” and also that Hamas had military assets in tunnels under UNWRA facilities. Since UNWRA is the group that distributes the vast majority of aid in Palestine and provides a large portion of medical assistance to Palestinians, the ties are inevitable and laws could be another crushing blow aimed at dislodging/ejecting Palestinians. However, the two laws were widely condemned by Western countries and they did not go into effect immediately. So, theoretically, the laws could be another bargaining ploy by Israel or they might be scrapped if other countries apply enough actual pressure on them. In addition, new milestones of 43,000 Palestinians and at least 2,500 Lebanese killed by Israel since October 7, 2023 were reached Monday. Elsewhere, Israeli air strikes killed 60 people in Lebanon and destroyed two more border crossings between Lebanon and Syria. After these (and previous) strikes, only three border crossings are still in place between those two countries.
In other war news, the US Dept. of Defense increased its estimate of the number of North Korean soldiers headed to the front lines in the Kursk region. DoD now estimate there are 10k North Korean troops, which is more in-line with foreign government estimates and most reporting. For its part, Ukraine reported Monday that it has intelligence indicating that 5,000 of those North Korean troops are already headed to the front line in Kursk.
Overnight, Asian markets were mostly in the green. Just four of the 12 exchanges in the region were below break-even. Japan (+0.77%), India (+0.52%), and Hong Kong (+0.49%) paced the gainers while Shenzhen (-1.33%), Taiwan (-1.17%), and Shanghai (-1.08%) led the losses. Meanwhile, in Europe, we see a similar picture with 11 of the 14 bourses in the green at midday. The CAC (+0.48%), DAX (+0.39%), and FTSE (+0.15%) lead the region higher in early afternoon trade. In the US, as of 7:15 a.m., Futures are pointing toward a flat start to the day. The DIA implies a -0.19%) open, the SPY is implying a -0.06% open, and the QQQ implies a +0.3% open at this hour. At the same time, 10-Year bond yields are up to 4.296% and Oil (WTI) has rebounded 1.01% overnight to $68.07 per barrel in early trading.
The major economic news scheduled for Tuesday includes Preliminary September Goods Trade Balance and Preliminary September Retail Inventories (both at 8:30 a.m.), October Conference Board Consumer Confidence and September JOLTS Job Openings (both at 10 a.m.), and API Weekly Crude Oil Stocks (4:30 p.m.). The major earnings reports scheduled for before the open include ATI, AMT, ABG, BP, CHKP, GLW, CROX, DHI, EXP, ECL, EPD, ESAB, FOR, FELE, ULCC, GPK, HNI, HSBC, HUBB, INCY, ITT, JBLU, LDOS, MAS, MCD, MSCI, NVS, PYPL, PAG, PFE, PSX, RITM, RCL, SOFI, SWK, SYY, THC, UFPI, XRX, and ZBRA. Then, after the close, AMD, ALHC, ALSN, GOOGL, BMRN, BXP, CZR, CAKE, CHE, CMG, BC, EXE, DVA, EIX, EA, EQT, EXR, FSLR, FE, FMC, GOOG, IEX, NGVT, LSTR, LFUS, MCY, MTH, MOD, MDLZ, NGD, OI, OKE, PK, QRVO, RSG, SNAP, SYK, UNM, V, and WERN report.
In economic news later this week, on Wednesday, October ADP Nonfarm Employment Change, Preliminary Q3 PCE Prices, Preliminary Q3 GDP, Preliminary Q3 Price Index, September Pending Home Sales, and EIA Weekly Crude Oil Inventories are reported. On Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, September Core PCE Price Index, September PCE Price Index, September Personal Spending, Q3 Employment Cost Index, October Chicago PMI, and the Fed Balance Sheet. Finally, on Friday, October Average Hourly Earnings, October Nonfarm Payrolls, October Private Nonfarm Payrolls, October Participation Rate, October Unemployment Rate, September Construction Spending, October ISM Mfg. Employment, October ISM Mfg. PMI, October ISM Mfg. Employment, October ISM Mfg. Prices, and October S&P Global Mfg. PMI are reported.
So far this morning, GLW, CROX, ESAB, FOR, ITT, JBLU, LDOS, MAS, MCD, MSCI, NVS, PFE, RCL, SOFI, THC, and ZBRA all reported beats on both the revenue and earnings lines. Meanwhile, AMT. BP, CHKP, HSBC, PYPL, PSX, RITM, and SWK missed on revenue while beating on earnings. On the other side, INCY beat on revenue while missing on earnings. However, ABG, DHI, EXP, EPD, GPK, PAG, and XRX missed on both the top and bottom lines. (It is worth noting the HSBC announced a new $3 billion share buyback program after their beat.)
With that background, it looks like the market is undecided early this morning, but is slightly leaning to the Bearish side. All three major index EFTs are not far from Monday’s closing price. DIA has given us the most body in the premarket but is only a quarter of a percent lower than its prior close. For its part, SPY is retesting its T-line (8ema) from above. Both SPY and QQQ are showing more wick than body, indicating indecision, at this point. With QQQ and SPY (barely) above their T-line, the short-term trend remains tepidly bullish. The mid-term and longer-term trends are obviously still strongly Bullish in all three, as they all sit within striking distance of another all-time high. With regard to extension, none of the major index ETFs are too far extended from its T-line (8ema). In addition, the T2122 indicator remains at the bottom of its mid-range, but not yet in the oversold area. So, markets do have room to run either direction if traders can find momentum, but the Bulls have just a little more slack to work with today. With regard to those 10 big dog tickers, six of the 10 are in the green this morning. AMD (+0.60%) is leading the gainers while AAPL (-0.52%) is the laggard. NVDA (-0.28%) and TSLA (+0.09%) are neck-and-neck in terms of leading dollar-volume trading. Regardless, it is worth nothing that premarket volume is very light today.
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
Markets opened higher to start the day Friday. SPY gapped up 0.41%, DIA gapped up 0.38%, and QQQ gapped up 0.58%. At that point, SPY and QQQ rallied higher for an hour as DIA chopped sideways for the same period. From there, all three major index ETFs sold off until 2:15 p.m. Then for the last hour and 45 minutes all three bounced and then fell back to close near the lows. This action gave us a gap-up, black-bodied, Spinning Top type candle with most of the wick on the top. It retested from below and failed the test of its T-line (8ema). At the same time, QQQ printed a gap-up Shooting Star type of candle that crossed back above its T-line. For its part, DIA gave us a gap-up, large black-bodied, outside day candle that retested the T-line from below and failed. This happened on average volume in the QQQ and above-below-average volume in SPY and DIA.
On the day, seven of the 10 sectors were again in the red with Utilities (-1.19%) and Financial Services (-1.11%) well out in front leading the way lower. On the other side, Technology (+0.56%) was by far the strongest sector. Meanwhile, SPY lost 0.03%, DIA lost 0.62%, and QQQ gained 0.61%. VXX spiked 4.70% higher to close at 55.29 and T2122 dropped to just outside its oversold territory to the bottom of the mid-range at 21.14. At the same time, as mentioned, 10-Year bond yields rose again to close at 4.24% while Oil (WTI) jumped 2.05% to close at $71.65 per barrel. So, it was a volatile in the SPY and QQQ, but really just a Bears’ paradise all day in the DIA.
The major economic news scheduled for Friday included the Preliminary Sept. Core Durable Goods Orders, which was up 0.4% (compared to a forecasted decline of 0.1% but down from August’s +0.6%). On the headline number, Preliminary Sept. Durable Goods was down 0.8% (versus a forecast of -1.1% and flat from August’s -0.8%). Later, Michigan Consumer Sentiment was up to 70.5 (compared to the forecast and Sept. reading of 68.9). At the same time, Michigan Consumer Expectations were up to 74.1 (versus a forecast and prior reading of 72.9). On the outlook side, Michigan 1-Year Inflation Expectations were DOWN significantly to 2.7% (compared to a previous value of 2.9%). Looking even further out, Michigan 5-Year Inflation Expectations stayed flat at 3.0% (with the same 3.0% forecast and prior value).
After the close, E reported misses on both the revenue and earnings lines.
In stock news, on Friday, the Wall Street Journal reported BA is weighing the sale of its space business as part of the process of streamlining and freeing up cash. At the same time, META announced it had signed a partnership with Reuters to use the company’s news content in its AI chatbot. (Financial terms of the deal were not disclosed.) Later, NVDA again briefly passed AAPL to become the world’s most valuable company. (Both companies ended the day with roughly a market capitalization around $3.5 trillion.) MSFT, which had taken that crown in June, closed the session with a $3.18 trillion cap. Late Friday afternoon, COST recalled private-label salmon products due to listeria risk after a recall from it private meat supplier Acme Smoked Fish Corp.
In stock legal and governmental news, on Friday, in the UK, London’s High Court ruled in favor of BCS, by reducing a shareholder lawsuit (over misleading investors about its private “dark pool” trading) by more than half. The ruling reduced the lawsuit amount by $428 million to just under $300 million. Later, a US District Judge blocked the pending $8.5 billion merger of TPR and CPRI, in a victory for the FTC. At the same time, a different US District Judge approved a $102 million settlement of the US Justice Dept. civil claim against the owner of the ship that struck the Baltimore Francis Scott Key Bridge, killing six people. (That amount covered the Federal costs to respond to the wreck and clear the bridge debris. Separately, the state of MD is suing the shipping company for the cost to replace the bridge.) Later, the Nuclear Regulatory Commission announced it has begun the long process of reviewing the restart of CEG’s Three-Mile Island nuclear power plant (after CEG signed a deal to sell the power it would produce to MSFT).
Elsewhere, LYFT agreed to pay $2.1 million to settle FTC charges that it misled prospective drivers about how much money they could earn. Later, a federal jury found that MASI had violated two AAPL patents with its smartwatches, but did not violate other patents as AAPL had claimed. The damages awarded were a paltry $250 (not $250k, or $2.50 million…just $250, which is an infinitely small portion of what AAPL spent on the suit). This was AAPL’s countersuit to MASI’s 2022 US Intl. Trade Commission complaint that had blocked the import of Apple watches and forced AAPL to remove certain technology before resuming import. After the close, DAL filed suit against CRWD in GA state court in relation to the global systems outage DAL had suffered in July.
In miscellaneous news, on Friday, there were separate reports the China had targeted the phones of senior members of Vice President Harris’ campaign and her opponent, in what was called a cyber-espionage attack. This was done by penetrating the VZ phone network. Elsewhere, the Panama Canal reported a 9.5% increase in annual profit to $3.45 billion despite a severe drought that reduce the number of vessels allowed to transit the canal. (The canal handled 423 million tons of cargo with an average of 27.3 ships per day transiting the canal. This was down from 36 ships per day the previous year. However, a 5% decrease in operating costs and price increases provided for a strong year.)
Meanwhile, the state of NM released a study on Friday regarding proposed “setback” regulations (which would prevent drilling within 2,250 feet from residential, educations, health or correctional institutions or within 650 feet of streams, lakes, ponds, wetlands, or irrigation infrastructure). The study indicated the proposed regulations would impact 15% of new wells. (NM is the second-largest oil producing state in the US. The study said this could eventually curtail up to 5.4% of the stats’s potential future oil output. This refers to a reduction of increases.) Finally, on Sunday, Japan’s Liberal Democratic Party (which had been in power since 2009) suffered major setbacks and lost its majority in Parliament during Sunday snap elections. (The LDP and its coalition partner only secured 215 seats, with 233 needed for a majority. Prior to Sunday, the LDP and its junior partner party had 279 seats.) This deals a major blow to PM Ishiba who was elected from withing the LDP and only took office on October 1st.
In other war news, South Korea increased its estimate of North Korean troops sent to Russia to fight against Ukraine to 12,000. (The US has said it has proof of 3,000 North Korean troops in training.) Meanwhile, on Saturday, Norway confirmed that 1,500 of the North Koreans have already been deployed to the lines in the Kursk region. Maybe buoyed by the new source of troops, on Sunday Russia’s Putin said “there would be no trade” to end the war. Most analysts say this means he isn’t interested in negotiations. Still, less than a week before, Putin said he’d consider any deal that acknowledged the situation on the ground (in other words, any deal that gives Russia all the land it has taken since 2014…there was no word whether that means he’s willing to give up the small area of Kursk now held by Ukraine).
Overnight, Asian markets were mixed but leaned toward the green side. Japan (+1.82%), South Korea (+1.13%), and Shanghai (+0.68%) led the gainers. Meanwhile, Thailand (-0.71%) and Taiwan (-0.64%) paced the losses. In Europe, the picture redder at midday with only three of the 14 exchanges in the green. The CAC (+0.18%), DAX (-0.20%), and FTSE (-0.31%) lead the region lower in early afternoon trade. In the US, as of 7:30 a.m., Futures point toward a gap higher to start the day. The DIA implies a +0.41% open, the SPY is implying a +0.49% open, and the QQQ implies a +0.63% open at this hour. At the same time, 10-Year bond yields are up to 4.258% and Oil (WTI) has plummeted 5.89% to $67.56 per barrel in early trading.
There is no major economic news scheduled for Monday. The major earnings reports scheduled for before the open include ARLP, CX, CNP, FMX, ON, and PHG. Then, after the close, AMKR, BRO, CDNS, CWH, CR, CVI, ESI, EHC, FFIV, FLS, F, LEG, QUAD, SBAC, SKY, UCTT, VFC, WELL, and WM report.
In economic news later this week, on Tuesday, we get Preliminary September Goods Trade Balance, Preliminary September Retail Inventories, October Conference Board Consumer Confidence, September JOLTS Job Openings, and API Weekly Crude Oil Stocks. Then Wednesday, October ADP Nonfarm Employment Change, Preliminary Q3 PCE Prices, Preliminary Q3 GDP, Preliminary Q3 Price Index, September Pending Home Sales, and EIA Weekly Crude Oil Inventories are reported. On Thursday, we get Weekly Initial Jobless Claims, Weekly Continuing Jobless Claims, September Core PCE Price Index, September PCE Price Index, September Personal Spending, Q3 Employment Cost Index, October Chicago PMI, and the Fed Balance Sheet. Finally, on Friday, October Average Hourly Earnings, October Nonfarm Payrolls, October Private Nonfarm Payrolls, October Participation Rate, October Unemployment Rate, September Construction Spending, October ISM Mfg. Employment, October ISM Mfg. PMI, October ISM Mfg. Employment, October ISM Mfg. Prices, and October S&P Global Mfg. PMI are reported.
So far this morning, CX and PHG missed on revenue while beating on earnings. However, ARLP and CNP missed on both the top and bottom lines.
With that background, it looks like the Bulls are indecisively in-charge early in all three major index ETFs. All three opened the premarket higher, but have printed indecisive candles (mostly wick) since that open. SPY is back above its T-line (8ema) leaving only DIA below its own T-line. With that said, two of the three major index ETFs above their T-line, the short-term trend remains tepidly bullish. The mid-term and longer-term trends are obviously still strongly Bullish in all three, as they all sit within striking distance of another all-time high. With regard to extension, none of the major index ETFs are too far extended from its T-line (8ema). In addition, the T2122 indicator is now back at the bottom of its mid-range, but not yet oversold. So, markets do have room to run either direction if traders can find momentum, but the Bulls have just a little more slack to work with today. With regard to those 10 big dog tickers, all 10 are in the red this morning. GOOGL (+2.17%) is leading the rally while TSLA (+0.79%) is the leading dollar-volume trader, nearly doubling the normal biggest dog, NVDA (+1.08%) in dollar-volume traded so far this morning.
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. equity futures surged on Monday as investors anticipated a series of mega-cap earnings reports from technology companies, expected to propel the Nasdaq Composite to new highs. The weekend airstrikes by Israel against Iran, which did not target oil or nuclear facilities as initially feared, led to a decline in oil futures during early trading. Wall Street is gearing up for a significant week, marked by the busiest period of third-quarter earnings reports and the final stretch before the U.S. Presidential election on November 5. Notably, five of the “Magnificent Seven” companies—Alphabet, Microsoft, Meta Platforms, Amazon, and Apple—are set to release their third-quarter earnings this week.
European markets opened higher on Monday, with media and construction and materials stocks each gaining over 1%. However, oil and gas stocks declined by approximately 2.3%. Shares of Dutch medical devices giant Philips plummeted by 16.8% after the company revised its full-year sales outlook downward due to weak demand from China. Additionally, oil prices dropped by 6% on Monday following news that Iranian energy facilities were not damaged during an Israeli attack over the weekend.
On Monday, Japan’s benchmark Nikkei 225 and Topix indices saw gains, buoyed by a weaker yen amidst political uncertainty following the ruling LDP’s loss of its parliamentary majority. Meanwhile, China’s CSI 300 edged up by 0.2% to close at 3,964.16, despite the country reporting its worst industrial profit figures since the pandemic, with a significant 27.1% year-on-year decline in September. In other markets, Australia’s S&P/ASX 200 rose by 0.12%, South Korea’s Kospi increased by 1.13%, and Hong Kong’s Hang Seng index reversed earlier losses to finish 0.18% higher.
Economic Calendar
Earnings Calendar
Notable reports for Thursday before the bell include ACAD, BOH, CNP, HOPE, ON, PRCT, & SJW. After the bell reports include AGYS, AMKR, AESI, BOOT, BRX, BRO, CDNS, CALK, CWH, CSWC, CCCS, CDP, CR, CVI, PLOW, ESI, EHC, FFIV, FLS, F, HILT, NARI, FRC, LEG, LTC, NEW, PCH, RMBS, REG, SAFE, SBAC, SKY, TMDX, TREX, UFPI, UCTT, VFC, WM, & WELL.
News & Technicals’
Volkswagen is contemplating significant pay cuts, layoffs, and the closure or downsizing of its plants in Germany, according to the company’s works council. Management recently proposed a plan that includes a 10% across-the-board pay reduction and wage freezes for 2025 and 2026. The works council estimates that these measures will result in an overall pay cut of approximately 18% for workers over the period. Additionally, Volkswagen plans to shut down three factories and reduce the size of all other plants in Germany.
China’s industrial profits experienced their sharpest decline since the pandemic in September, according to data from the National Bureau of Statistics. Following a 17.8% drop in August, industrial profits plummeted by 27.1% year-on-year in September, marking the steepest fall since March 2020, which saw a 34.9% decrease. In response, Chinese authorities have intensified efforts in recent weeks to stimulate economic growth.
Shares of Japanese camera giant Olympus Corp dropped on Monday following the announcement of CEO Stefan Kaufmann’s resignation amid a drug allegation. Olympus disclosed that it had received an allegation that Kaufmann, a German national, had purchased illegal drugs. The company, in consultation with outside legal counsel, promptly investigated the matter, reported it to the authorities, and fully cooperated with their investigation.
Robinhood announced on Monday the launch of U.S. presidential election event contracts, allowing customers to trade based on their predictions for the closely contested race between Vice President Kamala Harris and former President Donald Trump. Event derivatives involve buying and selling contracts that let traders speculate on the outcomes of specific events, such as elections, economic data releases, or policy decisions, without owning the underlying assets. These derivatives, which are relatively new and generally considered high-risk compared to traditional financial instruments, have gained popularity in recent years.
The market looks to reverse Friday bearishness with huge anticipation of the mega-cap tech reports throughout the week ahead. We are also seeming celebrating the Israel’s attack didn’t affect the oil infrastructure but strangely there seems to on concern about what Iran may do in response. Stay tuned as there may be more come on the geopolitical front. Remember we have a big week of jobs data along with the earnings and those pesky bonds continue to march higher suggested a possible problem with this bull run. Plan carefully this week as price volatility could be wild!
U.S. stocks are attempting to recover after a significant downturn, with the Dow experiencing its largest one-day loss since early December. Strong earnings from Tesla have provided a boost of confidence, encouraging bullish sentiment as SPY and QQQ aim for a premarket rebound. Meanwhile, the 10-year Treasury yield has been on an upward trajectory this week, surpassing the 4.25% mark during Wednesday’s session high. This increase in yields has exerted pressure on stocks recently, contributing to the market’s volatility.
Thursday, European stocks saw a modest rise, with most major bourses and sectors trading in positive territory. Renault’s shares surged over 7% following an unexpected increase in third-quarter revenue, showcasing the French carmaker’s resilience. Similarly, Barclays experienced a 4% boost in its share price after reporting better-than-expected third-quarter results, reflecting strong performance in the British banking sector.
Asia-Pacific markets experienced a general downturn. South Korea narrowly avoided a technical recession, with its third-quarter GDP growing by a modest 0.1% quarter-on-quarter. Despite this, South Korea’s benchmark Kospi fell by 0.72%. Australia’s S&P/ASX 200 also saw a slight decline of 0.12%. Hong Kong’s Hang Seng index dropped significantly by 1.35%, and mainland China’s CSI 300 experienced a larger loss of 1.12%. In contrast, Japan’s Nikkei 225 was the notable outlier, managing to reverse earlier losses and gain 0.1%.
On September 13, Boeing machinists initiated a strike after decisively rejecting a labor proposal, with 64% voting against it. The proposal included substantial benefits such as 35% raises, a $7,000 ratification bonus, and increased 401(k) contributions. Resolving this strike has become a top priority for Boeing’s new CEO, Kelly Ortberg, as the company faces ongoing financial strain and is projected to continue burning cash through 2025. Ending the strike is crucial for stabilizing Boeing’s operations and financial outlook.
United Parcel Service (UPS) reported an increase in third-quarter profit on Thursday, driven by a rebound in volume ahead of the holiday season, which boosted revenue. Cost-cutting measures also helped mitigate the impact on margins from consumers opting for cheaper delivery options. Notably, the growth has been largely fueled by new e-commerce players, specifically China-linked bargain retailers Shein and Temu. This shift has intensified the move from premium air services to more affordable ground services, and further to the even lower-profit SurePost services, reflecting changing consumer preferences in the delivery market.
IBM’s software division saw strong performance, driven by accelerated growth in its Red Hat business. However, the company’s consulting and infrastructure units fell short of revenue expectations. Looking ahead, IBM anticipates that fourth-quarter revenue growth, at constant currency, will match the 2% growth seen in the third quarter. This outlook reflects a balanced perspective on the company’s varied business segments and their contributions to overall growth.
Hyundai Motor issued a warning on Thursday about slowing demand and increasing competition yet maintained its 2024 earnings target despite a 7% decline in third-quarter operating profit. This announcement led to a more than 5% drop in its share price. During a conference call, CFO Lee Seung-jo highlighted the deteriorating business environment for the automotive industry, pointing to rising policy uncertainties and global geopolitical risks as significant challenges.
SPY and QQQ are attempting to recover on the back of the TSLA earnings, however, the disappointing results from IBM are keeping the DIA rather subdued in the premarket. That said, with a huge number of earnings reports today and some potential market moving economic reports anything is possible. Bond yields continue to apply significant pressure to the market as gold continues to surge will keep investors on edge despite the hype the earnings season creates.
