Monday 4/18/2022 – DIA 344.10 -.06%, QQQ 338.69 +.08, SPY 437.97 +.04%, IWM 197.62 -.67% CNN Fear & Greed Index @ 39 (Fear) -Tax Day
No high-impact economic data was released. Equity markets moved down from the open to test the lows of April 12th, rallied, and moved down for a second test in the afternoon, closing mixed up off the lows. Interest rates climbed as demonstrated by the (TNX) 10-Year Note (yield) Index closing at 28.62 +.34, a post-pandemic high. WTI crude oil closed higher at $106.89 +.51. Energy Services (XLE) 81.02 +1.47% was the clear outperformer in the S&P 500 11 economic sectors, followed by Financial Services (XLF) 37.11 +.60%. Healthcare Services (XLV) 137.11 -1.10% was the clear laggard. Goldman Sachs (GS) 329.88 +2.56% led the 30 stock DJIA. JPMorgan (JPM) 128.46 +1.86%, and American Express (AXP) 184.48 +1.83% also outperforming in the financials. Walt Disney (DIS) 127.77 -2.07% was the worst performer in the DJIA, coming under pressure from the potential loss of the company’s autonomy zone at its Florida theme park. In what appeared to be short covering/ bottom fishing buying interest, semiconductor-related stocks outperformed with Lam Research (LRCX) 470.55 +3.15%, Microchip (MCHP) 67.24 +3.10, Nvidia (NVDA) 217.83 +2.47%, and Analogue Devices (ADI) 160.34 +2.45% all outperforming while leading the NDX100. On the downside, under no discernable news, vaccine manufacturer Moderna (MRNA) 154.75 -6.49 was the worst performer in the NDX100. The stock remains well off its August 2020 all-time high of 497.49. When a stock declines as earnings go up, attention must be paid. In potential M&A, Twitter (TWTR) 48.45 +7.48% led the S&P 500 under a continuing prospect that Elon Musk might be able to buy the company.
Tuesday 4/19/2022 – DIA 349.12 +1.46%, QQQ 346.26 +2.24%, SPY 445.04 +1.61%, IWM 201.56 +1.99% CNN Fear & Greed Index @ 45 (Neutral)
Housing starts came in higher than expected at 1793K vs. 1745K, and Housing Permits did as well at 1873K vs. 1825K. Equity markets gapped higher and continued to rally throughout the session, closing near the highs. Interest rates continued to move higher, with the (TNX) 10-Year Note (yield) Index closing at 29.13 +.51. WTI crude oil dropped to $102.32 -5.29. Consumer Discretionary (XLY) 184.13 +2.90% was the best performing of the 11 S&P 500 economic sectors, followed by Real Estate (XLRE) 49.66 +2.10%. Nike (NKE) 137.05 +4.12% led the DJIA, followed by Boeing (BA) 185.98 +3.41%. Property & Casualty company The Travelers (TRV) 176.16 -4.89% beat estimates but fell on the news. With the weak oil prices, profit-taking hit Energy Services (XLE) 80.36 -.81%, with Chevron (CVX) 171.83 -1.18% and Valero (VLO) 107.74 -2.37% moving lower. Leading the NDX100, robotic surgical machine provider Intuitive Surgical (ISRG) 294.86 +6.70% beat on earnings as elective surgical procedures continued to rebound from pandemic lows. Johnson & Johnson (JNJ) 183.08 +3.05% had a good earnings report. Leading the S&P 500 Signature Bank (SBNY) 288.20 +8.10 reported better than expected earnings. On the downside, dental supplies company Dentsply Sirona (XRAY) 42.20 -13.38% declined on a bad earnings report and the termination of the CEO. The stock was downgraded by Robert w. Baird (Outperform to Neutral) and BofA Securities (Buy to Neutral).
Wednesday 4/20/2022 – DIA 351.53 +.69%, QQQ 341.21 -1.46%, SPY 444.71 -.07%, IWM 202.33 +.38% CNN Fear & Greed Index @ 40 (Fear)
No high-impact data was released. The day featured two Fed governor speakers, and the Fed Tan book was released. Interest rates declined after the 20 Year treasury auction was well received by investors. Equity markets fluctuated throughout the session, closing mixed. Real Estate (XLRE) 50.60 +1.89% led the 11 S&P 500 economic sectors, while Communication Services (XLC) 64.65 -4.34% was the clear laggard weighed down by Netflix (NFLX) 226.19 -35.12%, which reported the first subscriber decline in 10 years (-200K), but also guiding that the firm expected a decrease of 2 million subs over the next few months. Also sinking Match Group (MTCH) 84.62 -9.89%, the stock has been in decline since an October 2021 high of 182. The firm is scheduled to release earnings on May 3. Coming under continuing selling downside pressure, Twilio (TWLO) 130.36 -10.20%, the customer engagement technology firm saw its price target cut by Oppenheimer. Bucking the recent trend in technology, International Business Machines (IBM) 138.32 +7.10% beat on earnings and revenues with two notable segments, software, and consulting sales powered by the company’s hybrid cloud services. Showing great earnings in the banking sector M&T Bank (MTB) 176.34 +8.82% beat on its investor call but reported a decline in net interest income.
Thursday 4/21/2022 – DIA 347.71 -1.09%, QQQ 334.15 -2.07%, SPY 438.06 -1.50%, IWM 197.80 -2.24% CNN Fear & Greed Index @ 38 (Fear)
Initial Jobless Claims came in a little higher than expected but still at a historically low level of 184K vs. 180K. The Philadelphia Fed Manufacturing Survey was light of expectations coming in at 17.6 vs. 21. Equity markets exhibited a key reversal day, up in the morning, closing down and well off today’s highs, taking out the previous day’s trading range—a clear bearish signal. Fed Chairman Powell gave remarks that 50 basis points raise at next month’s FOMC was in the cards and that he had a view of a quicker pace for the balance sheet runoff, with an objective of a soft landing. Consumer Staples (XLP) 80.50 -.09% was the clear refuge in a bearish tape. Energy Services (XLE) 78.11 -3.17% fared the worst even with WTI crude oil up on the day (closing at $104.18 +1.99), a sign that the market had started to take down relative strength, thematic sectors, individual shares, and rotating into other names and sectors. There was a clear countertrend movement into travel & entertainment stocks, with United Airlines (UAL) 50.85 +9.31% topping the S&P 500 after earnings showing a narrower loss than expected and near-term brighter prospects. American Airlines (AAL) 20.22 +3.8% forecast near-term profitability as well. Delta Airlines (DAL) 44.73 +2.73% moved higher in sympathy. Names hit hard on earnings release were Alcoa (AA) 72.20 -16.94% (earnings beat, revenue missed, and a poor outlook). Joining Alcoa to the downside Freeport McMoRan (FCX) 44.95 -9.92%, which beat on earnings and revenues, giving the impression that natural resource stocks are a “crowded trade” at the moment. Also, on the downside, Xerox (XRX) 16.74 -15.67% reported a significant earnings miss.
Friday 4/22/2022 – DIA 338.27 -2.71%, QQQ 325.40 -2.62%, SPY 426.04 -2.74%, IWM 192.68 -2.59% CNN Fear & Greed Index @ 40 (Fear)
The S&P Global Manufacturing Purchasing Managers Index was lower than expected at 55.1 vs. 58.1. The S&P Global Services Index PMI was light as well, reporting at 54.7 vs. 58. Equity markets opened lower and kept going lower throughout the session, with nary a rally attempt on concerns about earnings season and interest rates moving higher. The 10-Year Note (yield) index (TNX) close at 29.06 -.11. Selling was broad and in most respects, orderly. Sector shifts were demonstrable of risk-off trading. Consumer Staples (XLP) 79.24 -1.57% was the least hit among the 11 S&P 500 sectors, while Basic Materials (XLB) 85.74 -3.74% was hit hardest, followed by Healthcare Services (XLV) 133.67 -3.65%. Intuitive Surgical (ISRG) 252.34 -14.34% beat on earnings but gave poor guidance. HCA Healthcare (HCA) 210.64 -21.82% dropped on increased labor costs and lowered guidance. Retailer The Gap (GPS) 11.72 -17.98 missed on sales and revenue and cutting guidance. The company also announced the departure of the head of the company’s Old Navy division. On the plus side, consumer household products company Kimberly-Clark (KMB) 138.51 +8.13% bolted higher on solid earnings and upbeat guidance.
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