It was a mixed week for US equity indexes, with net weekly changes ranging from -0.4% (Nasdaq comp'), -0.2% (Dow), -0.15% (NYSE comp'), -0.1% (SPX), +0.6% (R2K), to +1.2% (Trans). Near term outlook offers some cooling of 2-3%.
Lets take our regular look at six of the main US indexes
sp'500
Nasdaq comp'
Dow
R2K
NYSE comp'
Trans
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Summary
Four US equity indexes were net lower for the week, with two net higher.
The Nasdaq comp' was the weakest index, whilst the Transports was sig' higher.
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Looking ahead
A very busy week is ahead, with a monster truck load of earnings, and a fair amount of econ-data.
Earnings:
M - KO, PHG, BOH, DX, BMRC, FRC, CADE, CS, CLF, WHR, AGNC, NBR, RRC
T - VZ, UPS, HAL, GM, M, GE, DOW, MMM, PEP, SPOT, RTX, NEE, DHR, JBLU, MSFT, GOOGL, ENPH, V, CMG, TXN, JNPR, BYD, LRN, PACW
W - BA, HUM, HLT, HES, TECK, ADP, TMO, GD, BSX, CVE, META, ROKU, NOW, PXD, TDOC, ALGN, URI, KLAC, NLY, ENVX
T - AAL, CAT, LLY, VLO, LUV, M, CROX, MO, ABBV, MRK, AMZN, INTC, SNAP, NET, FSLR, X, PINS, PFG, GILD, AMGN
F - XOM, CVX, CCJ, CL
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Econ-data/events
M -
T - Case-Shiller HPI, FHFA HPI, new home sales, consumer con'
W - Durable goods orders, intl' trade, wholesale invent', EIA Pet'
T - GDP Q1 (print'1), Weekly jobs, pending home sales
F - Employment costs, pers' income/spending, PCE, consumer sent'
*As Friday is end month, I'd expect considerable chop on higher vol'.
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Final note
It was a pretty tedious week, but with OPEX out of the way, price action should become more dynamic. In theory, we should lean on the weaker side, as we're due a retrace of 3808>4169, at minimum... the 4030s.
As things are, the bulls are set for another net bullish month. Bears need to take out 3808 to start getting confident about far lower levels.
If there is one chart you should stare at for a good hour...
The US 10yr bond yield stands at 3.57%. Price structure is a multi-month bull flag, negated if <3.00%, confirmed if >4.10%.
Rate hike TEN is due May 3rd, and that will be 25bps to 5.00-5.25%
Whilst many of the 'smart guys' and mainstream cheerleaders are calling for rate cuts in the second half, what if they are (yet again) wrong? What if instead the Fed raises rates at each of the remaining six meetings this year? That'd be another 150bps, taking rates to 6.25-6.50%.
There is an even grander issue, would the Fed give a damn if the dollar collapsed? Publicly, they claim currency rates are not an issue for them, but the reality is clearly otherwise. Rate cuts aren't going to help the dollar.
Further, even if you assume US inflation broadly declines into year end, what about if other central banks - not least the BoE and ECB, continue to raise rates, as inflation is a far bigger problem over there?
If rates are cut in the US, whilst the rate hikes continue elsewhere, this isn't going to help the dollar stay above the key DXY 100 threshold.
Ohh, and any sustained dollar weakness would raise import prices, and be another inflationary pressure on both business and the consumer.
Some are arguing 'sell in May, and go away'. I'd certainly understand if many retail traders/investors quietly walk away, and don't return until mid/late October.
For details >>> https://www.tradingsunset.com
Have
a good weekend
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*the next post on this page will likely appear around 4.20pm EST on Monday.
