After last week’s late week theatrics Monday was a quiet day. Indexes gapped up a the open mildly but could do nothing with that. The S&P 500 ended up 0.46% and the NASDAQ 0.04%. Data today showed sales of previously owned homes fell more than forecast in August, representing a pause in momentum this year for residential real estate. Closings declined 4.8% to a 5.31 million annual rate from a revised 5.58 million pace that was the strongest since 2007. Prices climbed and the number of homes on the market decreased from the same time a year ago.Continue reading
While we had a decent rally in the indexes up thru Thursday this week the technical condition of the market had really not changed much. Further, the lack of serious retracement in the volatility index was a clue it was not time to expect yet another “V shaped” rally that has become the market’s calling card during this bull market. Today the market acted poorly all day, resulting in a 1.61% loss for the S&P 500 and 1.36% drop in the NASDAQ. The narrative today seemed to be “the Fed is so worried about the economy they cannot even find the courage to raise rates 25 basis points.” Odds have also risen that the Fed will now not hike rates until 2016, and RBS says the markets are currently pricing the first full rate rise for March but odds for December were still above 60%.
“The signaling by the Fed yesterday, (that it) doesn’t see confidence to pull the trigger to raise from zero to 25 basis points, I think is negative sentiment that’s hitting the market,” said Art Hogan, chief market strategist at Wunderlich Securities. “I think they’ve done more harm than good,” he said. “There’s some concern that the Fed sees something we’re not seeing in the data,” said Eric Green, director of research and senior managing partner at Penn Capital, which oversees $4 billion in Philadelphia. “Some investors wanted them to rip the Band-Aid off and get the first one done. Then we wouldn’t have to obsess about it for the two weeks before each meeting.”Continue reading
We had our normal very quiet session before the Fed announcement this afternoon, and then then the normal volatility. The Fed once again kept rates unchanged which the indexes initially rallied sharply on, but then faltered into the close. At the end the S&P 500 fell 0.26% while the NASDAQ added 0.10%. Going into the meeting, Wall Street was split over whether the Fed would move Thursday. Forty-nine percent of financial experts surveyed by CNBC expected the Fed to raise rates this month. A hike would have been the first one since 2006. “Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term,” the FOMC said in a statement released at the conclusion of its latest two-day meeting. Fed head Janet Yellen said most Fed officials still expect a rise in interest rates this year, and that the U.S. economy is performing well. She reinforced that the path of rate rises would be gradual.Continue reading
Wednesday began as carbon copy of Tuesday’s action with a big gap up at the open and looked very similar until up to 3 PM. But instead of falling off a cliff, buyers came in and there was another surge to close out the day in the last 90 minutes. The S&P 500 gained 3.90% and the NASDAQ 4.24%. It is feeling a lot like late 2007 thru early 2009 when 300-500 DOW swings were normal. The Federal Reserve did what it has done relentlessly since 2008 – try to boost the market with either actions or words.
New York Fed Bank President William Dudley said Wednesday the upheaval has reduced the case for raising rates in September, while cautioning it’s important not to overreact to short-term developments.Continue reading
Indexes opened with mild losses to start the day but buyers came in late which is usually what you like to see. The S&P 500 finished flat while the NASDAQ gained 0.33%. In economic news, U.S. gross domestic product came in at 2.3%, slightly below economists’ estimates. The department revised its first-quarter GDP reading to a 0.6% increase from a 0.2% contraction.
Both the indexes are at or near their big yellow blobs (long trading ranges). The NASDAQ is – once again – trying to escape. At this point trying to play an index breakout has led to failures so many times that traders will be reticent to believe the next one as they will just assume it will fail.Continue reading
Things were looking really bullish at the end of last week/early this week as both indexes had popped out of ranges and the NYSE McClellan Oscillator had confirmed the move. But something went amiss and we had a breakdown on the S&P 500 mid week and the NASDAQ today. The oscillator went negative earlier this week and did not bounce back quickly. So it’s another week in a very frustrating year with the U.S. market. The S&P 500 fell 1.07% and the NASDAQ 1.12% – this despite a huge move in Amazon which usually would life up a bunch of tech stocks with it. Some blamed contractionary manufacturing readings in China: the Caixin Markit flash general manufacturing PMI for July came in at 48.2, a 15 month low.
Meanwhile we have contrasting data on home sales. New home sales showed a decline of 6.8 percent to a seven-month low in June. On Wednesday, existing home sales hit a near 8-1/2-year high.Continue reading
A very frustrating year at the index level continues. Each time it looks like we are going to escape a range there is a failure. The S&P 500 fell 0.57% and the NASDAQ 0.49%. Weekly jobless claims came in at 255,000, their lowest level since 1973. While analysts said the low figure may keep a rate hike on the table for this year, they were cautious about reading too much into a figure that may be exaggerated by seasonal production changes.Continue reading
Another quiet session in a week full of them. The S&P 500 gained 0.23% and the NASDAQ 0.38% as morning weakness was bought. This is a good sign again, but these gains are of a grinding nature. Existing home sales for April fell 3.3%, missing an expected 1% gain to 5.24 million units. Earlier in the week, reports showed home builder sentiment fell in May, but housing starts for April came in much better than expected.Continue reading