US STOCKS: Remain Off Early Highs, Banks & Energy Shares Underperforming
Sep-05 18:33
- Major indexes retreated early Friday after climbing to new record highs following the lower than expected August employment data. While the soft data initially spurred buying on hopes of increased rate cuts by year end, focus quickly shifted back to the data being market negative.
- While effective funds did project a -25bp cut at the September 17 FOMC (and nearly -75bp by year end), officials are less convinced. Chicago Fed President Goolsbee stated on Bbg TV he is "undecided" on a rate cut at the September FOMC, saying he wants "to get more information" while playing down the signal from the recent nonfarm payrolls due to a potentially softer labor force growth dynamics.
- Currently, the DJIA trades down down 247.99 points (-0.54%) at 45372.09 (*45770.20 high), S&P E-Minis down 33 points (-0.51%) at 6478.0 (*6541.75 high), Nasdaq down 47.5 points (-0.2%) at 21660.14 (*21878.81 high).
- A combination of Financials, Energy and Industrials sector shares continued to lead decliners in the second half. Banks and services weighed on the former: Interactive Brokers Group -6.07%, Charles Schwab -5.82%, Ameriprise Financial -4.51% and Raymond James Financial -4.20%.
- Weaker Energy and Industrial sectors partially tied to a late week decline in crude (WTI -1.70 at 61.78) weighed down by: Diamondback Energy -3.57%, ConocoPhillips -3.49%, Fastenal -5.29%, GE Vernova -2.86% and CH Robinson Worldwide -2.80%.
- One negative standout that carried through to the second half: Lululemon fell appr 18.25% on downgrades and guidance cuts. Information Technology sector shares traded mixed: Broadcom +10.42%, Enphase Energy +7.17%, Micron Technology +3.60% and Oracle +3.40%. On the flipside: Advanced Micro Devices -6.45%, NVIDIA Corp -3.18% and Microsoft Corp -2.93%.
- On the positive side, Real Estate and Materials sectors outperformed in the first half, the former buoyed by: Weyerhaeuser +2.19%, SBA Communications +1.94%, American Tower Corp +1.90% and Public Storage +1.82%. Leading gainers in the Materials sector included: Albemarle Corp +2.56%, Sherwin-Williams +2.52%, Newmont Corp +2.27% and Steel Dynamics +1.94%.
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USDJPY TECHS: Cracks Support
Aug-06 18:30
- RES 4: 152.31 High Feb 19
- RES 3: 151.62 61.8% retracement of the Jan 10 - Apr 22 bear leg
- RES 2: 151.21 High Mar 28
- RES 1: 150.92 High Aug 1
- PRICE: 147.26 @ 16:11 BST Aug 6
- SUP 1: 146.67 1.0% 10-dma envelope
- SUP 2: 146.62 Low Aug 5
- SUP 3: 146.60 50-day EMA
- SUP 4: 145.86 Low Jul 24
USDJPY reversed sharply from Friday’s intraday high and this is allowing a short-term overbought condition to unwind. While the pullback in prices Friday may have been corrective, the break and close below 147.57, the 20-day EMA, is a concern. A clear break of this support zone would undermine the recent bull theme. A break of last week’s 150.92 high would resume the uptrend.
US STOCKS: Late Equities Roundup: IT & Consumer Sector Shares Outperform
Aug-06 18:30
- Stocks remain firm late Wednesday, fully recovering from the prior session's sell-off, tech-heavy Nasdaq outperforming. Currently, the DJIA trades up 150.26 points (0.34%) at 44263.27, S&P E-Minis up 48.75 points (0.77%) at 6373.75, Nasdaq up 245.7 points (1.2%) at 21162.15.
- Stocks started to pare losses after White House officials said Apple will announce a commitment to invest another $100B on US manufacturing today. Speculation over whether Pres Trump will announce new Russia sanctions or nominees for Fed governor or BLS head, however, tethered risk appetites somewhat.
- A mix of IT, Consumer Staples and Discretionary sector shares continued to lead gainers in the second half: Arista Networks +17.91%, Assurant +11.94%, Match Group +10.17%, Apple +5.75%, Walmart +4.13%, Target +3.69%, Amazon +3.64%, McDonald's +3.42%, Tesla +3.34%, Kroger +2.94%, Ross Stores +2.85% and Costco Wholesale +2.82%.
- A couple notable IT exceptions bucking the move: Super Micro Computer -19.24% after earning outlook disappoints, while Advanced Micro Devices declined -5.81%.
- Leading decliners included Health Care, Materials and Energy sector shares: NRG Energy -14.01%, Mosaic -12.14%, Bio-Techne -10.34%, Charles River Laboratories -8.10%, Rockwell Automation -7.47%, International Flavors & Fragrances -6.54%, Paramount Global -6.17%, Enphase Energy -5.30%, Amgen -5.16% and LyondellBasell Industries -5.06%.
- Companies expected to announce earnings after today's close include: Corteva, McKesson Corp, Occidental Petroleum, AIG, DoorDash, Fortinet, AppLovin, Lyft, Dutch Bros, Airbnb Inc, Zillow Group, Duolingo, MetLife, APA and DraftKings Inc.
US: Jobs Report Appears To Resonate w/Voters - Morning Consult
Aug-06 18:13
Morning Consult notes: “Economic buzz worsens: Friday’s disappointing jobs report, with major downward revisions to the data from May and June, appears to be resonating with Americans. By a 21-point margin, voters were more likely to say they’d heard something negative than positive about the economy in the past week — the largest gap since June.”
- Morning Consult adds: “Similarly, Friday’s jobs report appears to be undermining Americans’ trust in the president's stewardship of the economy. Voters are now 6 points more likely to disapprove than approve of Trump’s handling of the economy, his worst numbers since April.”
- Semafor reports: “Growth and inflation in the country have largely weathered its unpredictable tariffs and economic policies, but essential costs on housing, health care, and education are making up an ever-bigger share of household spending, credit card debt is at an all-time high, and even some higher earners are falling behind on their loan payments.”
Figure 1: US Consumer Confidence
Source: Semafor, Conference Board
