Monday, Sept. 27, 2021 – DIA 348.61 +.21%, QQQ 370.35 -.80%, SPY 442.64 -.29%, IWM 226.44 +1.52
Durable Goods orders came in far better than expected at +1.8 vs. +.7%. Nondefense Capital Goods orders were up slightly from expectations at +.5% vs. +.4%. Interest rates rose on the day with the 10-Year index (TNX) 14.84 +.24 closing level after moving as high as 15.17 before settling lower. On the back of higher rates, large-cap technology came under selling pressure: (CRM) 279.68 -2.08% and Microsoft (MSFT) 294.17 -1.73% were the two big detractors in the DJIA. GPS instruments consumer products developer Garmin Ltd (GRMN) 162.61 -5.8% broke below its 50-Day Moving average on heavier volume. On the persistent worries of a colder winter and continued supply disruptions from hurricane Ida, and increasingly higher natural gas prices in Europe, Energy Services (XLE) 52.71 +3.56% was the top S&P 500 sector: Cabot Oil (COG) 22.06+8.46%, Diamondback (FANG) 95.48 +7.62%, Occidental (OXY) 30.19 +7.44%, Marathon (MRO) 13.66 +6.30%, APA corporation (APA) 23.30 +6.16%, and Devon (DVN) 35.00 +5.77% were the top six stocks in the S&P. As interest rates rose, Financial Services (XLF) 38.74 +1.36% had the second-best sector performance in the S&P 500: M&T Bank (MTB) 151.23 +5.56%, JPMorgan (JPM) 166.98 +2.42% and Goldman Sachs (GS) 399.81 +2.29% all moved higher. Healthcare Services (XLV) 130.10 -1.42% was notably weak: Diagnostics firm IQVIA Holdings (IQV) 229.00 -5.15% broke its 50-day moving average to the downside as several high-profile pharmaceutical CEOs pointed to a belief that the pandemic might end in 2022. Vaccine maker Moderna (MRNA) 408.84 -4.95% also broke down out of a triangle pattern and below its 50 DMA.

Tuesday, Sept. 28, 2021
– DIA 342.92 -1.63%, QQQ 359.87 -2.83%, SPY 433.72 -2.02%, IWM 221.29 -2.27%
The Housing Price Index reported in at +1.4% (MoM). The Case-Shiller Home Price index (YoY) for July came in a tick lower +19.9% vs. +20.0% expected. The Fed chair Jay Powell in testimony to Congress stated he expected inflation to run longer than originally anticipated by the FOMC. In response, bond prices fell and yields picked up. The 10-year note index (TNX) rallied to 15.34 +.50.  Equity markets were hit across the board, but one bright spot was Energy Services (XLE) 52.89 +.34% which continued its weeklong rally. Schlumberger (SLB) 30.91 +2.38% led the S&P 500. A notable outlier to the downside in energy was APA Corporation (APA) 21.69 -6.75% fell from what appeared to be resistance and a triple top. In response to the higher interest rates, Technology (XLK) 150.59 -2.96% was the weakest sector with Microsoft 283.52 -3.62% the poorest performer in the DJIA, followed by (CRM) 272.28 -2.65%. Semiconductor-related shares which had been a bright area came under selling pressure: Applied Materials (AMAT) 132.89 -6.90% Advanced Micro (AMD) 101.52 -6.14%, Xilinx (XLNX) 151.06 -5.39%, and KLA (KLAC) 347.03 -5.13% all were hit.

Wednesday, Sept. 29, 2021 – DIA 343.77 +.25%, QQQ 359.28 -.16%, SPY 434.45 +.17%, IWM 220.82 -.21%.
Pending Home Sales came in much stronger than expected +8.1% v. +1.4%.  Equity markets were mixed on the day, with the DJIA up slightly while being helped by Boeing (BA) 225.36 +3.18% as the stock was upgraded by Bernstein to ‘Outperform’ and target raised to $279 from $252. The company announced that a China test of the 737-Max “went off without a hitch” last month (which could signal a return to service of the plane). Utilities (XLU) 64.61 +1.31% was the top S&P500 sector after having a record number of negative closes over the prior two weeks as interest rates rose. Consumer Staples (XLP) 70.10 +.91% was the second-best performer. Discount consumer staples retailer Dollar Tree (DLTR) 100.51 +16.49% announced that it was changing its pricing model to accommodate for a ridged labor market, supply chain problems, and surging inflation. Healthcare (XLV) 128.88 +.79% came under buying as drugmakers Merck (MRK) 75.09 +2.41% and Eli Lilly (LLY) 230.36 +3.95% outperformed. Technology (XLK) 150.40 -.13% was off slightly, but there were names that were much weaker: HP Inc. (HPQ) 27.31 -4.44%, Twitter 60.07 -3.81% moved lower. Semiconductor related names also were quite weak: Applied Materials (AMAT) 128.27 -3.48%, KLA Corp. (KLAC) 335.30 -3.38%, Microchip (MCHP) 153.07 -3.33%, Lam Research (LRCX) 567.51 -3.15%. In biotech, Editas Medicine (EDIT) 42.5 -18.97% disappointed on a data release for its drug, EDIT-101, for a type of genetic blindness.

Thursday, Sept. 30, 2021 – DIA 338.29 -1.59%, QQQ 357.96 -.37%, SPY 429.14 -1.22%, IWM 218.75 -.94%
Gross Domestic Production (GDP) came in a tick better than expected at +6.7% vs. 6.6%. Initial Jobless Claims (Sep 24) posted higher than expected 362K vs. 335K. Late morning news hit the wires that the government of China ordered state-owned energy companies to secure energy supplies “at all cost”, which was interpreted by some that such potential shortages in power supplies would affect manufacturing and the supply chain. As a result, markets ended the 3rd quarter under selling pressure. Industrial (XLI) 97.84 -2.05% was the worst sector, with Boeing (BA) 219.94 -2.41% reversing much of Wednesday’s outperformance. Used car retailer CarMax (KMX) 127.96 -12.63% disappointed on its earnings release which had record sales revenue, but along with that much higher expenses than had been anticipated. Also in retail, Gap Stores (GPS) 22.70 -8.02% moved lower on supply chain concerns, which overshadowed the release of the much-awaited Kanye West $90 Yeezy hoodie. The stock has been in a decline since hitting a 52-week high on May 18th at 37.63.  On the upside, drug manufacturer Perrigo (PRGO) 47.33 +8.8% settled an Irish tax dispute.

Friday, October 1, 2021 – DIA 343.18 +1.45%, QQQ 360.18 +.62%, SPY 434.24 +1.19%, IWM 222.28 +1.61%  
ISM Manufacturing PMI came in stronger than expected 61.1 vs. 59.6 and the ISM Manufacturing Prices Paid Index was higher as well 81.2 vs. 78.5. Equity Markets gapped higher from the open on a news release by Merck (MRK) 81.40 +8.37% that it had developed a therapeutic in pill form, Molnupiravir, to treat mild to moderate COVId-19 that reduced hospitalizations and Mortality by 50% in a late-stage trial. Re-opening plays rallied on the news, while the major vaccine manufacturer Moderna (MRNA) 341.09 -11.37% came under selling pressure. Energy services (XLE) 53.84 +3.36% was the top sector. But standouts were in travel & entertainment: United Airlines (UAL) 51.34 +7.93%, Delta Airlines (DAL) 45.38 +6.60%, Marriot (MAR) 155.97 +5.32%, and Norwegian Cruise Lines (NCLH) 37.80 +5.99% all popping on the news. A day’s standout was Atea Pharmaceuticals (AVIR) 42.01 +19.82% moved higher in a sympathetic reaction to the Merck news. The company is involved in a trial of an oral therapeutic, AT-527, for COVID-19 that has a similar mechanism for stopping the replication of the virus.

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