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To the greater readership, thanks for following along over the years and best wishes for success in the future!
A rather quiet week on the news front as the same daily rumblings and hopes about a U.S. – China trade deal that have gripped the market for over a year, continued yet again. A flock of Federal Reserve members came out to opine about the economy – some content with where rates are, while others wanting more cuts. The impeachment situation was more of a sideshow as a two thirds majority in the Senate to remove is never going to happen.
While this is probably a negotiating tactic on Friday it was reported the White House is considering limiting U.S. investment into China, including a possible delisting of Chinese companies from U.S. stock exchanges.
The “wrong” sectors continue to lead the market – this utility chart looks like something out of NASDAQ year 1999! These are “safety” sectors where money goes to hide.
Global economic news continues to worry. Germany’s manufacturing PMI gauge fell to 41.4 in September, its worst reading in a decade. A figure below 50 indicates contraction.
The Commerce Department estimated that consumer spending rose 0.1% in August, versus expectations of a 0.3% rise. Incomes rose 0.4%, also below forecasts of 0.5%
For the week the S&P 500 fell 1.0% while the NASDAQ sunk 2.2%.
Here is the 5 day weekly intraday chart of the S&P 500 …via Jill Mislinski.
The week ahead..
Big week ahead for economic data with ISM Manufacturing (Tuesday) and Non Manufacturing (Thursday) to be reported – recall the dark number in the manufacturing data last month. Employment data hits Friday; the U.S. is expected to have added 145,000 jobs, above the 130,000 last month, while the unemployment rate is expected to stay steady at 3.7%.
Short term: the S&P 500 was not able to get to new highs, in fact it is now closer to the breakout level over a double top that occurred in July. A move through either level will be interesting indeed. The NASDAQ never got to the same point the S&P 500 did.
The Russell 2000 remains in its very long term range (in yellow) – the trendline connecting recent highs remains a constraint.
The NYSE McClellan Oscillator has now turned negative – those with shorter term trading outlooks should look to be cautious.
Long term: decent conditions.
Charts of interest / Big Movers:
Tuesday, Netflix (NFLX) fell 4.3% on analysts’ concern about earnings, given the competition from Disney and other streaming video platforms.
Blackberry (BB) fell 22.6% Tuesday after posting weaker-than-expected numbers for its fiscal second quarter.
Shares of Nike (NKE) were up 4.16% Wednesday as the apparel and footwear maker on Tuesday reported first-quarter earnings and sales that topped Wall Street expectations, including a jump in China.
Hard to tell in the chart as the range is so massive in the 3 month period but Beyond Meat (BYND) surged Thursday after McDonald’s (MCD) said it would trial a plant-based burger made by the company at 28 restaurants in Canada.
Micron Technology (MU) ended 11.1% lower after the memory-chip maker reported another large earnings decline and predicted a disappointing holiday season.
Stay frosty my friends!