It was generally a quiet week as not much progress or rumor on the “Chinese – U.S. trade deal” happened. Four days of consolidation followed by a gap up Friday on strong bank earnings pre market (along with Disney news). Markets also got a lift Friday from trade data released by China that showed March exports rose 14.2% from a year earlier versus forecasts calling for a rise of 8.7% and after a sharp drop in February. That said, imports were flagging, reflecting soft domestic demand and the growth spurt in exports may not be sustained.
On Wednesday the minutes of the last Federal Reserve meeting were released and it was dovish of course:
The Federal Reserve’s decision in March to cease raising interest rates this year was driven by unease over the U.S. and global economies and surprisingly subdued inflation, according to minutes of the pivotal central bank meeting.
“A majority of participants expected that the evolution of the economic outlook and risks to the outlook would likely warrant leaving the target range unchanged for the remainder of the year,” the minutes said.
Willie Delwiche, investment strategist with R.W. Baird said: “The Fed is trying to be transparent and say ‘we’re going to be on hold right now and we are going to give what we’ve done over the past two years time to settle and see what happens. The market seems to think that if you are tilting toward a ‘wait and see policy’ you are actually preparing for rate cuts this year.”
For the week, the S&P 500 gained 0.5% and the NASDAQ 0.6%.
Here is the 5 day weekly intraday chart of the S&P 500 … not via Jill Mislinski.
The week ahead…
Earnings get into full swing! “S&P 500 earnings are expected to post a 4% year-over-year decline for the quarter. This would be the first quarterly year over year decline in earnings since second quarter 2016,” said Bill Stone, chief investment officer at Avalon Advisors LLC, in a note.
Short term: Improvement here as the S&P 500 finally cleared our long term trendline and didn’t immediately suffer a setback. The NASDAQ looks very strong now as well.
The Russell 2000 finally is over the 200 day moving average… but just.
The NYSE McClellan Oscillator is comfortably back in the black.
Long term: Things are definitely looking up again.
Charts of interest / Big Movers:
Lyft (LYFT) had another rough week especially Wednesday as it sank 11% as investors focused on Uber Inc.’s plans for its own initial public offering. The stock has fallen more than 19% since Lyft’s March 28 IPO. Uber is set to kick off its IPO market campaign, selling $10 billion in stock, according to a number of reports. That public debut is slated to take place as early as May. Meanwhile, Pininterest is set to IPO this coming week.
Bed Bath and Beyond (BBBY) slumped 8.8% Thursday after it reported a big drop in sales, triggering concerns about the retailer’s efforts to improve its profitability. The chart looks really strong still.
Walt Disney (DIS) surged 12% Friday after the entertainment giant said it would launch its Disney+ video-streaming business on Nov. 12 for $6.99 a month or $69 a year. Here is both the short term chart as well as a longer term chart showing Disney launching out of a 3 year base.
Netflix (NFLX) took a hit Friday on the news.
JPMorgan (JPM) rose 4.7% Friday for their best earnings day since the release of second quarter 2012 results.
Chevron said it planned to purchase Andarko Petroleum (APC) in a cash-and-stock tie-up valued at $33 billion or $65 a share. Shares of Dow-component Chevron declined 4.9%, while Anadarko shares surged 32% on the takeover bid.
Have a great week and we’ll see you back here Sunday!