US STOCKS: Equity Roundup: Energy Sector Buoys SPX
Stock indexes mixed ahead midday, strong Energy sector helping SPX stave off weaker Health Care, Real Estate and Utilities sectors., Nasdaq outpacing DJIA.
Currently, SPX eminis trade -8.25 (-0.2%) at 4133.5; DJIA -151.91 (-0.46%) at 32911.49; Nasdaq +4.6 (0%) at 12386.1.
- Technicals: A corrective cycle remains in play in the S&P E-Minis contract, signaling scope for a deeper pullback near-term. This is allowing an overbought reading in momentum studies to unwind. The 20-day EMA has been breached and attention turns to the 50-day EMA, at 4080.86. Key resistance and the bull trigger is at 4327.50, the Aug 16 high. Initial resistance is at 4221.50, Monday’s high.
- Notable earnings annc's yet this week: Salesforce.com (CRM $1.028 est and Nvidia (NVDA) $0.532 est late Wednesday, Dell late Thursday $1.636 est.
- SPX leading/lagging sectors: As noted Energy sector continues to outperform (+3.79%) buoyed by Haliburton (HAL) +7.91%, Occidental (OXY) +7.33%, Marathon (MRO) +6.09%, Schlumberger (SLB) +6.47% and Diamondback Energy (FANG) +5.15%. Materials (+0.74) and Consumer Discretionary follow (+0.31%). Laggers: Health Care (--1.34%) weighed by Medtronics (MDT) -3.36%, Real Estate (-1.27%) and Utilities (-0.68%).
- Dow Industrials Leaders/Laggers: Caterpillar (CAT) +5.07 at 196.83, Chevron (CVX) +4.70 at 161.60 and Boeing (BA) +1.35 at 160.33. Laggers: United Health (UNH) -8.57 at 536.00, Home Depot (HD) -5.84 at 306.41 and Amgen (AMGN) -3.12 at 243.78.
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Historical bullets
USDCAD TECHS: Takes Out 20-, 50-Day EMAs
- RES 4: 1.3300 High Nov 4 2020
- RES 3: 1.3272 2.0% 10-dma envelope
- RES 2: 1.3224 High Jul 14
- RES 1: 1.3166 3.0% Upper Bollinger Band
- PRICE: 1.2853 @ 16:25 BST Jul 22
- SUP 1: 1.2823 Low Jul 22
- SUP 2: 1.2819 Low Jun 28 and key support
- SUP 3: 1.2763 Low Jun 13
- SUP 4: 1.2701 2.0% 10-dma envelope
USDCAD dipped further Friday, narrowing the gap with intraday support at 1.2819 - the late June low. The pair has now traded below both the 20- and 50-day EMA, denting the outlook and turning the near-term outlook negative. A deeper pullback opens 1.2763 and the 2.0% 10-dma envelope of 1.2701.
US TSYS: Weak Global PMIs
Tsys finish the week with a risk-off tone after weak PMI services read, Tsy broadly higher, curves initially steeper as hawkish forward rate hike guidance for the latter half of the year cooled -- a 75bps hike is still expected next week Wednesday while a 50bps move at the Sep policy meeting looks more likely.
- Tsys surged in early London trade after France and Germany mfg PMIs both missed expectations overnight, contractionary sub-50 reads at 49.6 and 49.2 respectively (UK mfg PMI bucked trend, coming out at 52.2 vs. 52.0 est).
- Volumes spiked as Tsy futures furthered the rally (30YY 2.9477% low) after preliminary July reading of the SP Global mfg PMI of 52.3 vs. 52.0 exp (52.7 in June), service sector miss at 47.0 vs. 52.7 est (steady to June read).
- Heavy volumes by the close w/ TYU2>1.6M. Yield curves turned mixed amid some profit taking in the short end: 2s10s -0.212 at -21.661 vs. -17.316 high, 5s30s however, +7.060 at 12.689.
- Fed terminal rate now seen at 3.33%, from what had been seen at 3.69% after last week's US CPI beat.
- Cross assets: Spot gold firmer but well off highs +4.78 at 1723.59, crude sold off late: WTI -1.54 to 94.81.
AUDUSD TECHS: Pierces 50-Day EMA
- RES 4: 0.7141 76.4% retracement of the Jun 3 - Jul 14 downleg
- RES 3: 0.7069 High Jun 16
- RES 2: 0.6977 High Jul 22
- RES 1: 0.6957 50-day EMA
- PRICE: 0.6955 @ 16:19 BST Jul 22
- SUP 1: 0.6786/6682 Low Jul 18 / 14 and the bear trigger
- SUP 2: 0.6647 0.764 proj of the Apr 5 - May 12 - Jun 3 price swing
- SUP 3: 0.6588 Low May 28 2020
- SUP 4: 0.6538 Low May 26 2020
AUDUSD traded well into the Friday close, piercing the 50-day EMA on an intraday basis. This improves the near-term outlook and opens next resistance at the Jun 16 high crossing at 0.7069. A solid break and close above here would cement the next upleg, which targets 0.7141, the 76.4% retracement of the Jun 3 - Jul 14 downleg. Any reversal lower would refocus attention on the 0.6682 bear trigger where a break would confirm a resumption of the downtrend.
