Indexes spent the past week churning along as news flow was generally quiet…outside of Turkey and Russia that is. The NYSE McClellan Oscillator has been in the red for weeks, and breadth has remained pretty weak but the indexes continue to hold up! A conundrum indeed! That said keep an eye on foreign markets to see if any “contagion” happens – thus far, the U.S. markets have been acting impervious.
“Despite the gains in the averages last week, fewer stocks hit new 52-week highs and an increasing number of issues reached new lows for the year. Overall, the technical indicators argue on the side of caution,” said William Delwiche, an investment strategist at Baird, in a note.
Trade Wars!! ™ continued but without much affect on markets.
“Things are looking good in the U.S. in terms of earnings and data, but things aren’t as rosy if you look to China, emerging markets or Europe. Weakness in those regions could eventually become a headwind for the U.S.,” said Suzanne Hutchins, senior portfolio manager of the $1.5 billion Dreyfus Global Real Return Fund, which is run out of the investment boutique Newton.
The Turish lira took a hit late in the week (-17% Friday) as Trump and the ECB attacked… boosting the U.S. dollar… and bonds.
The steep decline in the Turkish currency came after the European Central Bank expressed concerns about potential contagion from Turkey’s problems, especially in the banking sector. The country is struggling with double digit inflation and its reliance on foreign funding. With much of its debt denominated in U.S. dollars, the stronger buck has added weight to its debt burden. Analysts and investors have also attributed the relentless pressure on the Turkish currency to a growing diplomatic spat between Washington and Ankara over the detention of a U.S. pastor in Turkey. The lira’s stumble prompted U.S. President Donald Trump to announce a doubling of U.S. tariffs on certain Turkish goods.
Turkey’s currency volatility has recently accelerated and now gotten to the point where it’s beginning to impact global markets as investors worry about European banking exposure,: said Alec Young, managing director of global markets research at FTSE Russell.
Russia also had a rough week as Trump attacked…
Newly announced U.S. sanctions—and the potential for a second round of actions in 90 days—roiled Russia’s currency and blue-chip stocks as the country braced for further economic pain amid uncertainties over the Trump administration’s commitment to enforcement.
Economic news was sparse and not market moving.
For the week the S&P 500 lost 0.3% while the NASDAQ added 0.4%.
Here is the 5 day weekly “intraday” chart of the S&P 500 … via Jill Mislinski.
Everyone thought Snapchat would be the new hip thing but it’s Instagram which is stealing the show! Another win for Facebook.
For large parts of the past two years, it seemed like Snapchat would be the next platform that no one could afford to ignore. Having quickly gained popularity it only seemed like a matter of time before it would break through to the mainstream and compete with the likes of Facebook, Twitter and Instagram. However, over the past 12 months Snapchat’s growth has slowed significantly and many people are beginning to ask whether the once innovative social media app was nothing more than a passing fad. In fact, it has been Instagram, not Snapchat, that really had its big breakthrough in the past year. Having implemented, or shamelessly copied as some would argue, Snapchat’s popular Stories feature, Instagram’s simple design appears to be more appealing to the broader public than Snapchat’s sometimes confusing user interface. The platform that Facebook acquired for $1 billion in 2012 recently passed the 1 billion active user mark.
Speaking of which…
Snap (SNAP) stock fell 6.8% Wednesday after the company issued quarterly guidance for the first time as well as reported a user decline.
The week ahead…
Retail sales hit Wednesday.
Will any of the “foreign weakness” matter?
The longest bull market on record hits in about a week!
Short term: The S&P 500 is holding its breakout – is that a double top in the NASDAQ??? Hmm – see the Russell 2000. 😀 A new high negates that thought in the NASDAQ.
This double top in the Russell 2000 continues to hold.
The NYSE McClellan Oscillator stayed in the red for a FOURTH week in a row (a full month). When this happens it is usually a good idea for short term traders to go cautious but in this case the indexes have held up quite well.
Long term: Still very positive for the “buy and never sell” crowd.
Charts of interest / Big Movers:
Monday, SeaWorld Entertainment (SEAS) surged on positive earnings.
Pain Thereapeutics (PAIN) plunged 48% after the drug company said the U.S. Food and Drug Administration rejected its non-opioid drug.
Tuesday, Elon Musk tweeted Tesla (TSLA) was going to go private @ $420 a share – a pretty interesting (but legal) way to announce corporate news!
Zillow (Z) sank 15% after the company late Monday posted earnings and announced its acquisition of a mortgage lender.
Rite Aid (RAD) sank 12% Thursday after a merger between the retailer and Albertsons Cos. was called off.
Yelp (YELP) surged 27% after the review website late Wednesday reported better-than-expected earnings and raised its full-year profit outlook.
Roku (ROKU) jumped 21% a day after it reported better-than-expected revenue and unexpectedly swung to a narrow profit.
Friday, Redfin (RDFN) tumbled 22.4% a day after it forecast slower revenue growth in the third quarter.
TradeDesk (TTD) for the win… that’s TWO massive gap ups the past 2 earnings seasons and well ove 100% GAINS since May!!!
The fast-growing provider of programmatic solutions is hitting new all-time highs after posting strong second-quarter results following Thursday’s market close. Revenue surged 54% to hit a record $112.3 million for the quarter. The Trade Desk’s own guidance three months ago was calling for just $103 million on the top line, 41% growth. Marketers are taking to The Trade Desk’s algorithmic solutions, and several of its categories including connected TV, audio, mobile video, and mobile in-app saw their numbers more than double. Advertisers that come to the company tend to stick around. Customer retention has now clocked in north of 95% for 19 consecutive quarters.
Have a great week and we’ll see you back here Sunday!