More Good Retail Earnings This Morning

Markets gapped higher Monday and then kept rallying until about 1 pm.  However, the rest of the day saw some persistent profit-taking that lasted into the close.  This left us with strong white candles with upper wicks in all 3 major indices.  On the say, SPY gained 0.87% (to a new all-time high close), DIA gained 0.64%, and QQQ gained 1.50% (to a new all-time high close).  The VXX fell 3.4% to 26.81 and T2122 remained in the mid-range at 55.65.  10-year bond yields were flat at 1.257% and Oil (WTI) spiked higher 5.3% to $65.44/barrel as commodities across the board showed very strong gains on a very weak dollar.

The FDA gave “Full Approval” (as opposed to “Emergency Use Approval”) to the PFE Covid vaccine on Monday.  President Biden then made a plea to those unvaccinated Americans, saying “Please get vaccinated now.”  He went on to stress that the vaccine has now proven to be 91% effective at preventing infection and once vaccinated, there is a very low statistical probability of having a severe infection. As of Sunday, only 51% of American adults were fully vaccinated. In somewhat related news, DIS reached a deal with unions to require all employees be vaccinated.

In earnings news, the retail sector continues to impress as BBY posted a beat on revenue and 58% obliteration of earnings estimates.  BBY stock was up 6% in pre-market trading on the news.  AAP also beat on both lines, but PDD missed on revenue from the retail sector this morning.  In other sectors, MDT and BNS beat on both lines as well.  In fact, for the earnings season, 90% of the S&P500 have reported an average earnings gain of 95% year over year.

Related to the virus, new US infections are continuing to rise, but with analysts saying we may have reached the peak of this Delta surge.  The totals rose to 38,814,596 confirmed cases and deaths are now at a total of 646,667.  Remember that these numbers are now under-reported as many (mostly Southern) states have decided to stop reporting data on a daily basis. Nonetheless, on the data we do have, the number of new cases is increasing at an average of 147,693 new cases per day.  Deaths, which lag, are also still rising and are now at 846 per day. 

Overnight, Asian markets were green across the board as Chinese tech stocks rallied hard.  Hong Kong (+2.46%) and Malaysia (+2.03%) were standouts.  However, the major exchanges all saw about a 1% gain.  In Europe, markets are mixed on modest moves so far today.  The FTSE (-0.16%), DAX (+0.32%), and CAC (-0.39%) are typical of the region at mid-day.  As of 7:30 am, US Futures are pointing to modest gaps higher at the open.  The DIA is implying a +0.14% open, the SPY implying a +0.18% open, and the QQQ implying a 0.26% open at this hour.  The dollar and 10-year bond yields are flat in early trading, but Oil (WTI) is showing another 1.8% gain to $66.84/barrel.

The major economic news scheduled for release on Tuesday is limited to July New Home Sales (10 am).  The major earnings reports scheduled for the day include AAP, BNS, BBY, HTHT, MDT, and PDD before the open.  Then after the close, VNET, HEI, INTU, JWN, SCSC, TOL, and URBN report.

In Asia, it seems the worries over Chinese Tech regulations and Covid have eased (China reported no cases for a second straight day after their draconian regional crackdown). Europe seems to also be in a better mood as the PFE-BNTX vaccine approval in the US eased some concerns and Fed tapering expectations have been calmed by recent statements. With breadth (T2101) up off its lows and back into the highs of the period since the Spring rally and stocks at all-time highs again, the bulls are looking for some follow-through this morning.

As always, manage your existing trades before you go chasing any new ones. Concentrate on the process and on managing those things you can control. Good trading rules and discipline is what separates long-term success from failure in trading. So, trade with the trend. If you miss a move, just admit it and move on to the next chart. Never chase price on an entry and remember to keep your losses small by using stops or hedges. And always consistently take profits when you have them.

Ed

Swing Trade Ideas for your consideration and watchlist: SPT, ARRY, DKNG, MS, AMRN, SWCH, GNOG You can find Rick's review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

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🎯 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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