Monday, Oct. 25, 2021 – DIA 357.55 +.23%, QQQ 377.93 +1.02%, SPY 455.55 +.54%, IWM 229.57 +.95% CNN Fear/Greed Index at 72
Chicago Fed National Activity Index (Sept) came in at -.13 slightly negative. Interest rates stabilized with a slight decline in the 10-Year Note Index (TNX) 16.35 -.20. Consumer Discretionary (XLY) 197.53 +2.48% the lead sector on the day on the back of Tesla (TSLA) 1024.86 +12.66% hitting $1 Trillion in value after inking a deal to sell 100K cars to Hertz. Energy Services (XLE) 58.80 +1.47% continued to hit new highs, with Occidental (OXY) 35.22 +3.80% hitting new 52-week highs. On the healthcare front Moderna (MRNA) 349.56 +7.05% as the company released a positive study for its vaccine for children 5-11 years of age. In M&A activity PAE Incorporated (PAE) 9.88 +67.46% inked a deal to be acquired by Amentum. On the downside, Pinterest (PINS) 50.68 -12.71% failed to see an acquisition over the weekend. PayPal (PYPL) 246.88 +2.7% was said to have pulled out of discussions after being confronted with investor resistance.
Tuesday, Oct. 26, 2021 – DIA 357.5 -.05, QQQ 379.12 +.31%, SPY 455.96 +.09%, IWM 227.84 -.75% CNN Fear/Greed Index 70
The Housing Price index came in less than expected +1% vs. +1.3%. As well, the Case-Shiller Home Price Indices (YoY) for August came in less than anticipated +19.7% vs. 20.1%. New Home Sales were stronger than expected 800K vs. 760K. Equity markets opened strong but consolidated later in the day after the 2 year note auction. By the close, small caps were clearly laggard. Energy Services (XLE) 59.14 +.58% led the 12 S&P 500 sectors, while Communication Services (XLC) 80.01 -.89% was the laggard, with Facebook (FB) 315.81 -3.92% coming under selling pressure related to continued scrutiny of its business practices. China internet retail and technology firms came under selling once again as Pinduoduo (PDD) 93.19 -7.40%, Baidu (BIDU) 168.83 -3.78%, NetEase (NTES) 98.90 -3.49%, and JD.com (JD) 81.48 -3.29% all moved lower. All 4 stocks report EPS from November 11th to 18th. In a bright sign for supply chain concerns, United Parcel Service (UPS) 218.07 +6.95% posted better than expected earnings, as the firm continued to benefit from e-commerce. Graphics semiconductor manufacturer Nvidia Corporation (NVDA) 247.17 +6.70% responded to news that Facebook would increase capital spending on new products. Defense contractor Lockheed Martin (LMT) 331.90 -11.80% fell on a sales miss and supply chain problems predicted for the next quarter.
Wed., Oct. 27, 2021 – DIA 354.98 -.70%, QQQ 380.00 +.23%, SPY 453.94 -.44%, IWM 223.65 -1.84% CNN Fear/ Greed Index 63
Durable Goods Orders ex-Transportation came in as expected at +.4%. Ex-Defense disappointed coming in -2% vs. +.2%. Durable Goods Orders came in better than expected but still down. -.4% vs. -1.1%. Consumer Discretionary (XLY) 198.00 +.22% performed best on the day, eking out a slight win. Energy Services (XLE) 57.44 -2.87% responded to a higher than expected oil inventory level which dropped WTI crude by 3%. Interest rates declined and the yield curve flattened not only in the U.S. but around the world. The 10-Year interest rate index (TNX) 15.29 -.90 moved lower. Microsoft (MSFT) 323.17 +4.21% and Alphabet (GOOG) 2928.55 +4.84% both responded to good earnings and the lower interest rates. Semiconductor firm Xilinx (XLNX) 180.85 +5.22% beat on revenue and earnings leading the NDX 100. Twitter (TWTR) 54.81 -10.78% fell on an earnings miss and profitability concerns. Also, to the downside, payment and process servicing firm Fiserv (FISV) 98.83 -10.02% fell as the company pointed to tightening internal revenue growth rate, even as it beat on earnings and revenue for the quarter.
Thurs., Oct. 28, 2021 – DIA 357.30 +.65%, QQQ 384.22 +1.11%, SPY 458.385 +.98%, IWM 228.07 +1.98% CNN Fear/Greed Index 72
GDP came in at a disappointing +2.00% vs. the 2.7% anticipated. Pending Home Sales Declined -2.3% a drop from the flat 0.00% expected. Initial Jobless Claims came at 281K less than the 290K anticipated. Equity markets reversed the action from Wednesday as the poor growth in GDP was thought to result in less aggressive tightening by the Fed. Real Estate (XLRE) 48.40 +1.47% was the best S&P 500 sector on the day, followed by Industrials (XLI) 104.52 +1.31%. Pharmaceutical firm Merck (MRK) 86.55 +6.14% led the DJIA as it beat earnings and revenue expectations. Breaking out from a downtrend since June, heavy construction and farm manufacturer Caterpillar (CAT) 204.09 +4.06% beat earnings with revenue growth topping the prior year. Biotechnology firm Regeneron (REGN) 625.19 +6.04% continued an advance ahead of earnings on Nov. 4 BMO. Breaking out of a downtrend/ trading range since February, multi-industry test solutions product provider Teradyne (TER) 137.00 +11.32% reacted higher to a good earnings report. Lending services provider Lending Club (LC) 42.07 +33.05% beat on earnings and was upgraded by Compass Point from ‘Neutral’ to ‘Buy’ with a fresh price target of $55.00. On the downside, the day’s disaster was biotechnology firm Raphael Holdings Inc. (RFL) 8.09 -73.19% which provided a disappointing update on two key Phase 3 clinical trials: One for metastatic pancreatic cancer, and the other for refractory acute myeloid leukemia.
Friday, Oct. 29, 2021 – DIA 358.23 +.26%, QQQ 386.11 +.49, SPY 459.25 +.20%, IWM 228.05 -.03% CNN Fear/Greed Index 72
Special Note the last trading day of October is the end of many mutual funds' fiscal year. A period well known for window dressing and tax selling.
Personal Consumption Expenditure came in as expected +.2%. Personal Consumption Expenditure Price Index (YoY) reported in at an elevated level but below expectations at + 3.6% vs. +3.7%. Personal Income disappointed at -1% vs. -.2 expected. Healthcare (XLV) 133.82 +.97 % was the strongest S&P 500 sector on the day as Diagnostics company Dexcom (DXCM) 623.21 +9.27% beat on earnings and revenues, as the firm's diabetes monitoring business has shown explosive growth for the firm. Technology (XLK) was the second-best sector on the day, with Microsoft 331.62 +2.24% continuing to hit all-time highs post-earnings, followed by Intel (INTC) 49.00 +1.91% which recently had an earnings disappointment. In the NDX100, Australian cloud computing Atlassian (TEAM) 458.13 +9.78% had a huge beat on revenue and earnings and grew active clients handily. On the downside Starbucks (SBUX) 106.07 -6.30% disappointed on earnings release the company pointed to slowing sales in China and wage hikes, the stock has been a relative underperformer for the better part of a year. Home furnishing concern Mohawk Industries (MHK) 177.21 -10.98% declined on a sales beat and a revenue miss.
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