Monday, May 17, 2021 – DIA 343.65 -.18%, QQQ 324.41 -.61%, SPY 415.52 -.25%
No high-impact data was released on the day. The S&P 500 and the DJIA both were in consolidation mode for most of the day, while the NASDAQ was slightly weaker. WTI crude traded in pandemic high territory $66.67 +1.55%, which fueled the Energy sector (XLE) 54.73 +2.32%; Occidental (OXY) 26.39 +5.14% was upgraded to “Buy” by Societe Generale, Marathon (MRO) 12.25 +3.81% moved higher with the group. Basic Materials (XLB) 88.68 +.88% also outperformed. Nucor Corporation (NUE) 106.32 +3.72% advanced as the board approved a $3 billion buyback. Newmont Corporation (NEM) 74.00 +4.59% completed the acquisition of GT Gold. Technology (XLK) 134.98 -.74% may have been weak on the day, but data storage manufacturers continued higher from the prior week, Seagate Technology (STX) 104.23 +6.39%, Western Digital (WDC) 76.42 +6.33%. On the downside, cable and entertainment companies moved lower on the AT&T (T) 31.37 -2.70% and Discovery (DISCA) 33.85 -5.05% merger of assets, Comcast (CMCSA) 55.45 -5.50% and Charter (CHTR) 686.85 -3.32%
Tuesday, May 18, 2021 – DIA 341.11 -.74%, QQQ 322.22 -.68%, SPY 411.94 -3.58%
Building Permits were in line with expectations, 1.76M v. 1.77M, but Housing Starts were weaker 1.569M v. 1.71M expected. The markets continued in consolidation mode for most of the day but developed selling pressure in the last 90 minutes of the session. Volatility, as measured by the VIX index, spiked (VIX) 21.34 +8.22%. Energy (XLE) 53.46 -2.32% reversed the previous day’s outperformance. Disk drive maker Western Digital (WDC) 73.21 -4.20% came under profit-taking. CVS Health (CVS) 88.61 +4.79% hit a new pandemic high as the new CFO affirmed company guidance on earnings. China-based NetEase (NTES) 108.61 +3.54% reported 18% revenue growth and a music distribution deal with Sony. ViacomCBS (VIAC) 40.16 +4.56% appeared to be stabilizing after the Archegos related selloff.
Wednesday, May 19, 2021 – DIA 339.34 -.52%, QQQ 322.59 +.11%, SPY 410.74 -.28%
No high-impact data released. The markets gapped down on the opening with follow on selling on news that China had moved to crack down on financial institutions dealing in cryptocurrencies, and some speculation ahead of the Fed minutes at 2 pm that the Federal Reserve might move to taper its asset purchase program sooner rather than later. But by mid to late morning rallies took hold and continued until the close. The 10-Year interest rate index (TNX) 16.83 +.41 held below the 17.00 level. Technology (XLK) 134.21 +.35% was the best sector on the day with Salesforce.com (CRM) 221.34 +3.27% leading the DJIA after being upgraded to Overweight by Morgan Stanley. Analog Devices (ADI) 153.12 +4.96% beat earnings expectations on strong chip demand. After a significant pullback in the shares, game maker Take-Two Interactive (TTWO) 179.35 +6.95% rallied sharply after beating on earnings. On the downside Western Digital (WDC) 71.26 -2.66% continued its pullback. The day's disaster was Iovance Biotherapeutics (IOVA) 16.33 -39.45%, which announced a delay in an FDA application for a key drug and the resignation of the CEO.
Thursday, May 20, 2021 – DIA 341.52 +.61%, QQQ 328.83 +1.93%, SPY 415.28
The Philly Fed Manufacturing Survey was weaker than expected coming in at 31.5 v. 43. Initial Jobless claims were better than expected 444K (a pandemic low) v. 450K. In a quiet session, markets were higher from the open in a follow-through from the previous day's rally. The volatility index (VIX) 20.67 -6.81% declined, while the 10-year interest rate index did as well (TNX) 16.34 -.49, which spurred risk-on trades. Technology (XLK) 136.94 +1.91% was the best sector on the day followed by Communications (XLC) 77.12. Apple (AAPL) 127.31 +2.10% led the DJIA and NetEase (NTES) 119.07 +7.99% led the NASDAQ 100. The NetEase chart looks like acceleration from a breakout above a descending triangle. Hormel Foods (HRL) 49.36 +7.37% reported inline earnings and affirmed guidance. HRL chart also had a breakout from a descending trendline. On the downside, Ralph Lauren (RL) 121.87 -7.00% beat on earnings, but missed on revenues and gave conservative guidance that COVID-19 is still a factor. The day's big plunge in price went to Black Diamond Therapeutics (BDTX) 13.93 -37.34% which announced Phase 1 dose-escalation data on a key drug, BDTX-189, which was in line with the company’s pretrial expectations.
Friday, May 21, 2021 – DIA 342.04 +.36%, QQQ 327.01 -.55%, SPY 414.94 -.08%
Existing Home Sales came in weaker than expected 5.85M v. 6.09M. Existing Home Sales Change was negative -2.7% v. a positive +2.0% expectation. (This data confirms the trend of higher prices and fewer homes for sale.) It was a quiet session with the NASDAQ 100 showing pockets of weakness on the day. Financials (XLF) 37.58 +.99% was the lead sector on the day; State Street (STT) 86.25 +2.42%, Goldman Sachs (GS) 366.26 +1.8%, and JPMorgan (JPM) 162.66 +1.14% all moving higher. Technology (XLK) 136.19 -.55% was the weakest sector. Apple (AAPL) 125.43 -1.48% CEO Tim Cook was testified in the company’s lawsuit with Fortnight developer Epic Games. AAPL shares have found resistance at the overhead 50 day MA recently. Semiconductor equipment manufacturer Lam Research (LRCX) 614.10 -2.01% pulled back after breaking above both the 20 and 50 moving day averages. The semiconductor industry has been benefiting from the worldwide chip shortage amid rising costs & rumors that Taiwan chip-making output is being constrained by covid-19 outbreaks. Apparel manufacturer (The North Face, and Timberland) VF Corp (VFC) 77.24 -8.94% revenue grew 22% but missed on earnings expectations.
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