Courtesy of Blain.
Indexes started in the green yet again but finally a small amount of selling pressure hit around mid day. The S&P 500 fell 0.36% and the NASDAQ 0.31%. This is just normal behavior in an upward trend – small pullbacks or flat days.
“We always like to say the market needs to digest its gains, and we’ve been due for a bit of a pullback,” said Quincy Krosby, market strategist at Prudential Financial.
“I think the primary move is oil,” said Art Cashin, director of floor operations at UBS. “Oil started going down in mid-morning, and that started putting pressure on things.”
More easing on the way! The European Central Bank left key interest rates unchanged Thursday. The non-move was widely expected but further policy stimulus from global central banks is thought to be coming in the months following June’s Brexit vote. ECB President Mario Draghi said at a press conference that the central bank was ready to act if necessary but officials wanted to “reassess the underlying macroeconomic conditions” and data before making a decision.
For those with the shortest of timelines, watch to see if the S&P 500 holds this upper base marked on the chart just over 2150, and if the NASDAQ remains in this upward trending channel.
This type of day keeps the NYSE McClellan Oscillator nice and contained; it is now nowhere near overbought…but still positive.
Oil has been in a downtrend for over a month since breaking our upward channel. One can see the commodity keeps bouncing off a level just over $44. If that breaks there should be more downside realized ahead.
It was a quiet day for Amazon (AMZN) but if you recall in our recaps about 60 days ago we had about 3-4 weeks of continuous horrid earnings out of brick & mortar retail stocks. Bespoke put together an index of 50 brick & mortar dominant retailers in a “Death by Amazon” index in February 2012. Since then, that group has lagged the market, while Amazon has soared.
Among the worst performers were Conn’s, off 83 percent; Stage Stores, off 70 percent, and Sears Holdings, off 62 percent. Macy’s was down 38 percent, Nordstrom, off 32 percent, while Wal-Mart was down about 4 percent. “We’ve seen it in the retail sales data that comes out every month. First it was taking share from the electronics, and the electronics section of retail sales was losing share. Then we saw general merchandise start to lose share, and that started to lose when you saw the popularity of Amazon Prime increase,” Bespoke co-founder Paul Hickey said. “The next sector would be apparel … I think over time, that’s going to be another area where they’re going to start eating into share.”
While Intel (INTC) sunk today on last evening’s earnings release, chipmaker Qualcomm (QCOM) beat Wall Street expectations and issued strong forward guidance, sending the stock up nearly 7%.
Ebay (EBAY) spiked more than 10% for its best daily performance since October 2015, after posting earnings a penny per share above estimates and raising its full-year sales forecast. It is interesting to see the big volume pouring into Ebay in the days leading up to the earnings report – almost as if “someone knew something”.
Biogen (BIIB) rallied more than 7% after posting positive results.
Shares in mining gear maker Joy Global (JOY) soared 20% after Japanese construction machinery giant Komatsu said it has agreed to buy Joy for $2.89 billion. And with that goes one of the easier ticker symbols to remember!
