Monday, August 10, 2020 - DIA 278.14 +1.28%, QQQ 270.73 -.43%, SPY 335.57 +.30%
In a sign of expansion, job openings increased to 5.9 million up a half million from the prior reading. Fed fund futures continued to improve from a prediction of negative rates starting in 2021, pushing out to 2022. The market rotation was evident throughout the day as Transports (XTN) gained +3.03%, and Industrials (XLI) +2.46. heavyweight FedEx (FDX) gained + 8.96% on the day and hit an 18 month high Caterpillar (CAT) hit a 6 month high as well. Conversely, technology (XLK) was the laggard on the day. Microsoft (MSFT) and PayPal (PYPL) gave ground from their recent streak of outperformance.
Tuesday, August 11, 2020 - DIA 277.19 -.34, QQQ 265.19 -1.89%, SPY 332.80 -.83%
Producer prices came in positive .6% double the .3% expectations. Russia announced in a press release that the country has developed the first effective COVID-19 vaccine, one of 6 to7 in contention. The markets reacted to both pieces of information. Fed fund futures which were predicting negative interest rates went positive off the inflation data and the possibility that a vaccine might work. That took pressure off financial stocks as (XLF) +1.16% was the best S&P sector on the day, followed by the economically sensitive Industrial stocks (XLI) 77.39 +.52%. Information Technology (XLK) sunk -1.8%. COVID-19 plays that were top performers came under selling pressure Biogen (BIIB) -3.44%, Netflix (NFLX) -3.40%, Apple (AAPL) -2.97%, and Gold proxy (GLD) -5.37%. Economic re-opening casino plays led, Wynn (WYNN) +8.3% and Las Vegas Sands (LVS) +7.32% were standouts.
Wednesday, August 12, 2020 – DIA 280.04 +1.02%, QQQ 271.86 +2.52%, SPY 337.44 + 1.37%
The consumer price index (CPI) came in +.6% above .4% consensus, more importantly, Core CPI came in +.6% above the expected .2%. The markets gapped up from the previous days close in response to these numbers as it pointed to a resurgence in the U.S. economy. Within the SP500 sectors, information technology (XLK) led the way with a 2.53% gain, while financials eased (XLF) down -.28%. Standouts on the upside included Advanced Micro (AMD) which reasserted after a 3-day pullback +7.45%, and Qualcomm (QCOM) which hit a new high after a 3-day pullback +6.4%. On the downside, FLIR slumped 4.67%, and Carnival Cruise Lines (CCL) gave up 3.98%. Gold, as measured by the proxy (GLD), continued its 2-day sell-off -.47%. Now down about 6% from the high.
Thursday, August 13, 2020 – DIA 279.42 -.22%, QQQ 272.48 +.23%, SPY 336.83 -.18%
Initial jobless claims came in much better than expected at 963K (regular state program) and 1.32MM (federal & state). Down significantly from prior readings. Continuing claims decreased markedly. 15.5MM (regular state program) and 28.3MM (federal & state). Cisco Systems (CSCO) down -11% on the day reported a 9% decline in revenue and a restructuring charge. Networking stocks took the news in stride. Apple (AAPL) hit a new high. Energy (XLE) was the hardest hit S&P 500 sector -1.94% End of the day the market was mixed.
Friday, August 14, 2020 – DIA 279.80 +.14, QQQ 272.16 -.12, SPY 336.84 flat
Retail sales came in 1.2% v. 2.0% expected, but ex-auto’s was better than expected 1.9% v. 1.1%. Productivity came in at 7.3% v. 1.4% expected. Industrial Production +3% v. 2.7%. It was a mixed quiet session. The best S&P sectors were energy (XLE) and financials (XLF). Cisco Systems (CSCO) down again -.5%.
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