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Stock Market Today: July 9th - 13th, 2018

Discussion in 'Stock Market Today' started by bigbear0083, Jul 6, 2018.

  1. bigbear0083

    bigbear0083 Content Manager
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    Welcome Stockaholics to the trading week of July 9th!


    This past week saw the following moves in the S&P:
    [​IMG]


    Major Indices End of Week:
    [​IMG]
    [​IMG]


    Bird's Eye view of the Major Futures Markets on Friday:
    [​IMG]


    Economic Calendar for the Week Ahead:
    [​IMG]


    Sector Performance WTD, MTD, YTD:
    [​IMG]
    [​IMG]
    [​IMG]
    [​IMG]
    [​IMG]
    [​IMG]


    What to Watch in the Week Ahead:

    T.B.A.
     
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  2. bigbear0083

    bigbear0083 Content Manager
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    'War With China' Sparks Surge In Stocks As Policy Uncertainty Hits 'Brexit' Highs
    Can't allow stocks to signal that starting a trade war is anything but 'making American great again'...


    First things first, today's actions by US, China, and Russia are not a positive and Economic Policy Uncertainty has exploded to its highest since Brexit...

    [​IMG]

    [​IMG]

    For now, it seems like China is suffering the most, Russia the least and US and Europe duking it out...

    [​IMG]

    If Small Caps are up 3% in a week when Trump unleashes $34 billion in tariffs on China, imagine how much it will be up when he brings the full weight of his planned $500 billion tariffs...


    [​IMG]

    S&P and Nasdaq best day since June 1st.

    Futures show the craziness best as we kneejerked on the US tariff hit, then tumbled when China actually responded, then was panic bid again on rising unemployment rate and disappointing earnings growth, then tumbled into the close on a big MOC for sale...

    [​IMG]



    Of course, it was a big fucking short-squeeze again..."most shorted" stocks up 4.5% from Monday's low open...the biggest 2-day short-squeeze in a month.

    [​IMG]



    And all you have to do is look at the bond market to know stocks are a farce...

    [​IMG]



    The S&P 500's monthly pattern continues to hold... The last two days are the biggest jump for the S&P in 2 months!

    [​IMG]

    h/t @NorthmanTrader

    And in case you're wondering what the driver of that is - it's a cyclical short-squeeze...

    [​IMG]



    The big banks surged early after trade war started but ended ugly...

    [​IMG]



    Of course, FANG stocks were panic bid the last two days back into the green for the week...

    [​IMG]



    While 2Y yields ended the week marginally higher, the rest of the curve fell notably (despite surging stocks)...

    [​IMG]



    10Y yield close today was the lowest since May 29th's plunge (and lowest weekly yield close since April)...

    [​IMG]



    Which sent 2s30s to 37bps at its intraday lows - a new low since August 2007

    [​IMG]



    10s30s tested single-digits...

    [​IMG]



    The Dollar Index suffered its biggest weekly loss since March, erasing all the post-Fed/ECB spike gains...

    [​IMG]



    Emerging Markets FX had their best week since February!!?? Because trade wars are great for developing nations...

    [​IMG]



    Offshore Yuan's freefall stalled as PBOC intervened midweek... (but this was the 4th weekly decline in a row - 10th week of last 12)

    [​IMG]



    Crytpos managed to end the week positive (for a change) - best week for Bitcoin in 3 months

    [​IMG]



    Ugly week for copper as PMs and crude were relatively unchanged on the week...

    [​IMG]



    Copper has plunged to its lowest since July 2017...

    [​IMG]



    Even CNBC anchors said "it's curious to me that stocks are up so much on this, the first day of the trade war."
     
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  3. bigbear0083

    bigbear0083 Content Manager
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    Authored by Lance Roberts via RealInvestmentAdvice.com,

    Last week, I discussed the ongoing debt issue in the U.S. with respect to the recent CBO report and the trajectory of debt growth over the next 30-years.

    The fiscal issues facing the U.S. are nothing new and have been a frequent discussion on this site. More importantly, I have discussed these issues directly with members of Congress, and especially with Congressman Kevin Brady, Chairman of the House Ways and Means Committee, who agree with my concerns yet have been unable, and unwilling, to tackle the “tough” issues. While conservatives in Congress talk a great game of fiscal responsibility, the reality is there is little “will” to actually be “fiscally responsible.”

    While the country today is more politically divided than at just about any other point in history, “spending money” is the one thing that all members of Congress willingly agree to.

    As I discussed previously, this is the same path Japan took previously.

    “Debt is a retardant to organic economic growth as it diverts dollars from productive investment to debt service.

    The problems that face Japan are similar to what we are currently witnessing in the U.S.:

    • A decline in savings rates to extremely low levels which depletes productive investments

    • An aging demographic that is top heavy and increasingly drawing on social benefits.

    • A heavily indebted economy with debt/GDP ratios above 100%.

    • A decline in exports due to a weak global economic environment.

    • Slowing domestic economic growth rates.

    • An underemployed younger demographic.

    • An inelastic supply-demand curve

    • Weak industrial production

    • Dependence on productivity increases to offset reduced employment
    The lynchpin to Japan, and the U.S., remains demographics and interest rates. As the aging population grows becoming a net drag on “savings,” the dependency on the “social welfare net” will continue to expand. The “pension problem” is only the tip of the iceberg.”

    [​IMG]

    “Japan, like the U.S., is caught in an on-going “liquidity trap” where maintaining ultra-low interest rates are the key to sustaining an economic pulse. The unintended consequence of such actions, as we are witnessing in the U.S. currently, is the ongoing battle with deflationary pressures. The lower interest rates go – the less economic return that can be generated. An ultra-low interest rate environment, contrary to mainstream thought, has a negative impact on making productive investments and risk begins to outweigh the potential return.”

    [​IMG]


    I was reminded of this previous discussion this past week when Tyler Durden discussed a new bill in Japan limiting overtime work to 99-hours a month to cure “Death by Overwork.”

    “Recently released government data revealed that Japan’s jobless rate touched 2.2% in May, the lowest level in 26 years. And as Japan’s working-age population dwindles, job openings have outpaced the number of workers available to fill them: As a reference, two months ago, there were 160 job offers available for every 100 workers seeking a job.”

    What got my attention was the similarity to an issue that has stumped economists over the last couple of years – surging job openings that go unfilled. We can restate quote above to apply to the U.S.:

    “Recently released government data revealed the U.S. jobless rate touched 3.8% in June, the lowest level in 48 years. And as Japan’s working-age population dwindles, job openings have outpaced the number of workers available to fill them: As a reference, two months ago, the ratio of offers to unemployed hit the highest level of this century.”

    [​IMG]

    Employment growth has essentially done little more than to absorb population growth over the last several years but has begun to deteriorate over the last few years. With net hires (hires less layoffs and quits) declining the ratio of job openings to hires is likely to rise further.

    [​IMG]

    While the surge in “job openings” has remained a conundrum for economists, the answer may not be so difficult as employers continue to report the problems with filling jobs as:

    1. unfit to do the job (too fat/unhealthy/old),

    2. lack of requisite skills (education/training), and;

    3. unwilling to accept the job for the rate of pay.
    This was noted in the recent FOMC minutes:

    Contacts in several Districts reported difficulties finding qualified workers, and, in some cases, firms were coping with labor shortages by increasing salaries and benefits in order to attract or retain workers. Other business contacts facing labor shortages were responding by increasing training for less-qualified workers or by investing in automation.”

    A recent job posting revealed what we already suspected about the “new economy.”

    View image on Twitter
    [​IMG]

    [​IMG]
    Jorge [email protected]_


    Compensation, $15 dollars per hour. PhD strongly preferred.

    4:26 PM - Jul 3, 2018
    Twitter Ads info and privacy


    While these are anecdotal examples, it potentially explains why labor force participation remains stuck at multi-decade lows as government benefits provide more income than working. Currently, social welfare makes up a record high of 22% of disposable incomes. The reality is that if the jobless rate was actually near 4%, job openings would be filled, wages would be surging for the bottom 80% of workers along with interest rates and economic growth. Instead, we see more evidence of economic stagflation than anything else.

    Despite many exuberant hopes of an “economic resurgence,” the vast majority of the data continues to point to a very late stage economic cycle. While I am not suggesting the U.S. actually IS Japan, I am suggesting we can look to Japan as “road map” as to the consequences of high debt levels, aging demographics, deflationary pressures and opting for “short-term fixes” rather than fiscal responsibility.

    Unfortunately, the Administration has chosen to follow the path of Japan which is unlikely to have a different outcome. There is no evidence that monetary interventions and government spending create organic, and sustainable, economic growth. Simply pulling forward future consumption through monetary policy continues to leave an ever-growing void in the future that must be filled. Eventually, the void will be too great to fill.

    There is certainly time to change our destination, but it will require a massive shift in perspective and desire to do so. With a rising number of Millennials starting to embrace socialism over capitalism, the future of the U.S. may be more like Japan than we readily wish to admit.

    Just something to think about as you catch up on your weekend reading list.

    Economy & Fed
    Markets
    Most Read On RIA
    Research / Interesting Reads
    “If you have large cap, mid cap, and small cap, and the market declines, you are going to have less cap” – Martin Truax
     
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  4. bigbear0083

    bigbear0083 Content Manager
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    Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD in 2018-
    [​IMG]
    [​IMG]

    S&P sectors for the past week-
    [​IMG]
     
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  5. bigbear0083

    bigbear0083 Content Manager
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    Typical July Trading: Strong First Half, Tepid Second Half
    [​IMG]
    July has gotten off to a rather typical start. After struggling much of yesterday’s trading session, the market did rally to finish the day positive, extending the first trading day of July’s bullish track record another year. Historically after the first trading day the market tends to take a bit of a breather with choppy, sideways trading from the second trading day through the seventh. This period surrounds the Fourth of July holiday where shortened trading days, road trips, BBQ’s and fireworks pull attention away from markets. Afterwards, usually around the eighth trading day of the month, markets begin to rally again. NASDAQ generally leads, contributing to its mid-year rally while Russell 2000 generally lags. From the fourteenth trading day until the end of the month the trend is lower to sideways.

    July Preview: Summer Bounce?
    Posted by lplresearch

    July is a month that usually doesn’t have a lot of news and many market participants are on vacation, but stocks tend to do well. “Wall Street might hit the beach, but stocks are going to work. In fact, over the past 10 years, only March has a better average return for the S&P 500 Index than July does,” explained LPL Research Senior Market Strategist Ryan Detrick.

    As our LPL Chart of the Day shows, on various time frames, the S&P 500 did quite well in July, as this month is known for a summer bounce.

    [​IMG]

    One constant each July is that second quarter earnings season kicks off. In a month without a lot of volume historically, earnings seem to have moved stocks higher in July. After S&P 500 earnings gained nearly 25% year over year in the first quarter, earnings, according to Factset, are expected to be up nearly 20% in the second quarter. Now the big wildcard with earnings is going to be how companies do factoring in the stronger U.S. dollar and any negatives regarding trade policy commentary. The good news is that all 11 sectors, via Factset, are expected to produce growth, with energy (141%), materials (33%), tech (25.5%), and financials (22%) leading the way.

    Other big events in the month include: monthly jobs data, inflation data, and the second quarter gross domestic product (GDP). The Atlanta Fed GDPNow forecast for growth is currently at 4.1% in the second quarter. Although there isn’t a set date, trade concerns are always lurking and could create some waves in July, but we continue to think that the benefits of fiscal policy outweigh the negatives of tariffs.

    To get ready for July, here is a calendar with all of the major market-moving events.[​IMG]

    Why Stocks Higher in May and June Is a Good Thing
    Posted by lplresearch

    May and June historically have tripped up stocks, which makes 2018 all the more interesting as both of those sometimes troublesome months were in the green. As LPL Research Senior Market Strategist Ryan Detrick explained, “When months that have been usually weak weren’t, that is a sign. In fact, when the S&P 500 Index has been up in both May and June, the rest of the year has been higher the past 11 times! Not to mention the full-year return has been lower only once (out of 22 times) going all the way back to 1950*.”

    As our LPL Chart of the Day shows, returns the rest of the year and for the full year have been quite impressive when May and June closed higher.

    A Sign of Better Times Ahead?

    [​IMG]

    Source: LPL Research, FactSet 06/29/18

    Last, although we would never invest based on this, the first trading day of July has been the second-most likely day of the year to be green. In fact, this day has closed higher 72.1% of the time since 1950, with only the 21st trading session of July more likely to be green.

    The First Trading Day of July Likes Green

    [​IMG]

    An Atypical Start to July
    Jul 2, 2018

    US equities are kicking off July on a decidedly weak note this morning, which is something investors have not been used to seeing over the years. The chart below shows the S&P 500’s historical performance on the first trading day of each month dating back to 1928. The only two months that have historically kicked off the month on a negative note are September (-0.09%) and December (-0.02%). Every other month has tended to see gains on an average basis, and the most positive of those months has been July with an average gain of 0.40%. That’s 0.16% more than the next closest month (November). In terms of consistency, July has also been, hands down, the leader with positive returns over 70% of the time.

    In recent history, July has also tended to follow the historical script. Over the last ten years, the first trading day of July has seen an average gain of 0.45% with positive returns in nine of the last ten years, including each of the last seven. There’s still time for the S&P to conform this year, but it’s not looking good this morning.
    [​IMG]
     
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  6. bigbear0083

    bigbear0083 Content Manager
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    Stock Market Analysis Video for July 6th 2018
    Video from AlphaTrends Brian Shannon


    ShadowTrader Video Weekly 7.8.18 - Upside breakout!
    Video from ShadowTrader Peter Reznicek
     
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  7. bigbear0083

    bigbear0083 Content Manager
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    Here are the current major indices pullback/correction levels from ATHs as of week ending 7.6.18-
    [​IMG]

    Here is also the pullback/correction levels from current prices-
    [​IMG]

    ...and here are the rally levels from current prices-
    [​IMG]
     
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  8. bigbear0083

    bigbear0083 Content Manager
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    [​IMG]

    Here are the most anticipated ERs for this upcoming week ahead (I'll also have the weekly earnings calendar posted in here as well once it's out)

    ***Check mark next to the stock symbols denotes confirmed earnings release date & time***

    Monday 7.9.18 Before Market Open:
    [​IMG]

    Monday 7.9.18 After Market Close:
    NONE.

    Tuesday 7.10.18 Before Market Open:
    [​IMG]

    Tuesday 7.10.18 After Market Close:
    [​IMG]

    Wednesday 7.11.18 Before Market Open:
    [​IMG]

    Wednesday 7.11.18 After Market Close:
    [​IMG]

    Thursday 7.12.18 Before Market Open:
    [​IMG]

    Thursday 7.12.18 After Market Close:
    [​IMG]

    Friday 7.13.18 Before Market Open:
    [​IMG]

    Friday 7.13.18 After Market Close:
    NONE.
     
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  9. bigbear0083

    bigbear0083 Content Manager
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    [​IMG]

    Here are the upcoming IPO's for this upcoming trading week-

    [​IMG]
     
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  10. bigbear0083

    bigbear0083 Content Manager
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    Stockaholics come join us on our stock market competitions for this upcoming trading week ahead!-

    ========================================================================================================
    ========================================================================================================

    It would be pretty sweet to see some of you join us and participate on these!

    I hope you all have a fantastic weekend ahead! :cool:
     
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  11. bigbear0083

    bigbear0083 Content Manager
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  12. Ken34

    Ken34 2017 Stock Picking Contest Winner

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    banks friday, that will be interesting.
     
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  13. bigbear0083

    bigbear0083 Content Manager
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    Here is a look at this upcoming week's Global Economic & Policy Calendar:

    [​IMG]
     
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  14. bigbear0083

    bigbear0083 Content Manager
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  15. AverageJoesTrades

    AverageJoesTrades Well-Known Member

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    another morning meeting. Algorithm shorted VXX at the open again. 904 shares @ 33.36.

    I had to get creative with my algorithm since tradestation buying power doesn't reset overnight. Now the algorithm only daytrades, which sometimes helps when Donny tweets overnight or tariff news hits overnight.
     
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  16. stock1234

    stock1234 2017 Stock Picking Contest Winner

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    After all of those trade tension headline, the SPX is just less than 4% from its ATH :eek: If we have a strong earnings season, I wouldn’t be surprised that we will see a new ATH next month :p
     
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  17. AverageJoesTrades

    AverageJoesTrades Well-Known Member

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    Covered @ 32.48 - nice gain again today! Hope everyone had a good day today!
     
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  18. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    TLT bonds turning away right at the down trend line. prices down = rates up
    [​IMG]
    Still to see if prices can go below 116.
     
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  19. stock1234

    stock1234 2017 Stock Picking Contest Winner

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    [​IMG]

    Yeah Utilities down over 3% today, which is pretty rare for a defensive sector and the market was deep in the green too :eek: Let's see if rates will go higher from here and if financials will begin to lead this market :D
     
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  20. bigbear0083

    bigbear0083 Content Manager
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