Mon, Nov. 1, 2021– DIA 359.13 +.25%, QQQ 387.43 +.34%, SPY 460.04 +.79 +.17%, IWM 233.96 +2.59% CNN Fear/Greed Index 77 Markit Manufacturing PMI (Oct.) came in weaker than expected at 58.5 v. 59.2. The ISM Manufacturing PMI came in slightly ahead for (Oct.) at 60.8 vs. 60.6. The ISM Manufacturing Employment Index (Oct.) came in at 52 vs. the anticipated 49.6. The ISM Manufacturing Prices Paid Index (Oct.) came much higher than anticipated at 85.7% vs. 78.4%. On the first day of the 4th quarter, major equity markets continued to hit new all-time highs. Small caps were a clear favorite of the day with strength across the board. Of the 12 S&P 500 sectors Consumer Discretionary (XLY) 204.84 +1.83% came in 1st place followed by Energy Services (XLE) 58.46 +1.72%. Tesla (TSLA) 1208.59 +8.49% continued to power higher. China-based internet technology and commerce companies were under accumulation on the day, JD.com (JD) 82.5 +5.39%, NetEase (NTES) 102.68 +5.22%, Pinduoduo (PDD) 93.48 +5.13%, Baidu (BIDU) 170.32 +4.98% all continued their move higher from the previous week. On the downside and pulling back the majority of the previous week's earnings-related price spike A10 Networks (ATEN) 15.355 -17.87 fell to the previous resistance level, now considered support.
Tues, Nov. 2, 2021 – DIA 360.57 +.40%, QQQ 389.05 +.42%, SPY 461.90 +.40%, IWM 234.45 +.21% CNN Fear/Greed Index 79
No high-impact data was released. The major equity indices were all positive on the day. Basic Materials (XLB) 86.29 +1.14% led the S&P 500 sectors. Energy (XLE) 57.91 -.94% lagged as profit-taking took hold in the new month. Cisco Systems (CSCO) 57.62 +2.71% led the DJIA, while Moderna (MRNA) 348.64 +3.40% led the NDX100 as the shares rebounded from selling related to a delay in the use of its vaccine among teenagers by the FDA related to rare side effects. In a spectacular short squeeze, auto rental provider Avis Budget (CAR) 357.17 +108% rocketed higher on earnings hitting a high on the day of 545.11 after releasing spectacular earnings and doubling revenues. Cloud networking and infrastructure provider, Arista Networks (ANET) 491.87 +20.39% bolted higher on stellar earnings, guidance, and a 1-billion-dollar addition to the buyback program in the face of acute supply chain shortages. Sportswear and athleisure lifestyle products provider Under Armour (UAA) 25.60 +16.47% beat on earnings adding to the previous days’ gains. Also, on the upside Cassava Sciences (SAVA) 58.07 +25.94% received positive internet investment board chatter concerning a potential approval of its compound for Alzheimer’s, simufilam. The big disappointment on the day was online education provider Chegg, Inc (CHGG) 32.12 -48.82% which was crushed on an earnings release that resulted from a decline in revenue and the downgrades by Morgan Stanley from overweight to equal weight and Raymond James from outperform to market perform.
Wed, Nov. 3, 2021 – DIA 361.56 +.27%, QQQ 393.18 +1.06%, SPY 464.72 +.61%, IWM 238.64 +1.79% CNN Fear/Greed Index 79 The ADP Employment Index came in far stronger than expected at 571K v. 400K. ISM Services New Orders exceeded expectations by a large margin coming in at 69.7 vs. 63.2. ISM Services PMI exceeded expectations as well by a large margin of 66.7 vs. 62. ISM Prices Paid came in much greater than expected at 82.9 vs. 76.9. Outside the day’s data, the FOMC meeting ended its two-day meeting with a statement saying that QE would be reduced by 15 billion a month as expected. The board still left the room to adjust that policy based on future economic conditions. The major equity indices all continued to fresh all-time highs. Consumer Discretionary (XLY) 207.79 +1.80% led the 12 S&P500 sectors, with drug and sundries store chain Walgreen’s Boots Alliance (WBA) 49.23 +3.10% leading the DJIA higher followed by athletic wear firm Nike (NKE) 172.5 +2.78%. The NDX was led to the upside by telecom services provider T-Mobile (TMUS) 121.94 +5.30% which beat earnings and demonstrated it was well on its way to recovering from the cyberattack the previous quarter. On the downside, video game and multi-media provider Activision-Blizzard disappointed on game delays and a more modest business outlook. The day’s extreme upside mover was iRhythm Technologies (IRTC) 122.12 +59.01% which bolted higher after the Centers for Medicare & Medicaid Services released its 2022 Medicare Physician Fee Schedule final rule on Tuesday which traders viewed positively for the company.
Thurs, Nov. 4, 2021 – DIA 361.35 -.06%, QQQ +1.28%, SPY 466.91 +.47%, IWM 238.55 -.04% CNN Fear/Greed Index 82
The Goods & Services Trade Balance came in showing stronger demand for foreign goods and potentially a stronger economy in the US with a deficit of -80.9B vs. -74.1B expected. Non-Farm Productivity showed a decline of -5% vs. -3%. Initial jobless claims came in at 269K vs. 277K expected, continuing a clear trend to the betterment of the economy. Adding to inflationary concerns, Unit Labor Costs for the 3rd quarter preliminary number came in at +8.3% vs. the 5.2% expectation. Interest rates declined on the day with the 10-Year Note Index (TNX) 15.24 -.55 moving lower. That gave a bid to Technology Services (XLY) 166.22 +1.56% and a reason for weakness in Financials (XLF) 40.00 -1.31%. Consumer Discretionary (XLK) led the S&P 500 sector with online arts & crafts internet marketplace retailer, Etsy, Inc. (ETSY) 271.27 +13.21% beating on earnings which featured higher revenue on a lower marketing expense. Topping the NDX100, QUALCOMM (QCOM) 156.11 +12.73% bolted higher on beating earnings and revenue, followed by Nvidia (NVDA) 298.01 +12.04% which jumped to new highs as investors focused on the company’s metaverse opportunities. In biotechnology, Cassava Sciences (SAVA) 84.40 +48.96% bolted higher as the company was informed by the Journal of Neuroscience that there was no evidence of data manipulation in an article the firm had published concerning a new approach to the treatment of Alzheimer’s disease. On the downside, COVID-19 vaccine provider Moderna (MRNA) 284.02 -17.89% was hit hard after disappointing revenue and earnings.
Fri, Nov. 5, 2021 – DIA 363.30 +.54%, QQQ 398.60 +.10%, SPY 468.53 +.35%, IWM 241.81+1.37% CNN Fear/Greed Index 85 Non-Farm payrolls came in very strong against expectations +531K vs. +425K. Average hourly earnings were slightly better than expected at +4.9% vs. +4.8%. The Labor Force Participation rate came in at a still depressed 61.6%. The Unemployment Rate (Oct.) came in a tick better than expected at 4.6%. The employment data got the market going, but data released on a new therapeutic compound for COVID-19 made by Pfizer (PFE) 48.61 +10.86% caught traders’ attention. The data was so strikingly positive that many stocks considered lockdown and reopening trades had outsized moves. COVID-19 vaccine manufacturer Moderna (MRNA) 236.99 -16.56% already hurt by poor earnings continued lower. Merck (MRK) 81.61 -9.86% which has a similar but less effective compound also came under selling pressure. Reopening stocks like Cruise ship companies all did well Royal Caribbean (RCL) 96.67 +8.95%, Carnival (CCL) 24.79 +8.35%, Norwegian Cruise (NCLH) 28.92 +7.83% all moved higher, along with airlines like Delta (DAL) 44.29 +8.05%, American 21.82 +5.77%, and internet travel firms like Expedia (EXPE) 182.17 +15.63% all did well. The day’s outstanding upside came from biotech firm Chinook Therapies (KDNY) 15.96 +30.39% which released data on a phase 3 trial for a kidney therapy compound BION-1301.
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