Courtesy of Blain.
It was a slow and steady uphill climb Friday as the cool and calm rally continues. The S&P 500 popped 0.46% and the NASDAQ 0.52%. This is the fourth straight week of gains as the Brexit was clearly a devastating blow an overblown financial media event, as it related to markets. Data out of the UK showed a significant slowdown in the services sector. The services and manufacturing composite index in the U.K. fell to its weakest level since early 2009, to 47.7 from 52.4 in June.
“To me the macro picture is improving here and in Europe,” said Art Hogan, chief market strategist at Wunderlich Securities, adding that low global yields helped this week’s rally. “That whole conception that Brexit’s going to happen and we have to go into recession is disappearing.”
While earnings are deteriorating they are “better than expected”!
Second-quarter profits are on track to show a contraction of 4.2% with more than 100 companies in the S&P 500 already out with quarterly results. That compares with an expected fall in profit of 5.3% in the second quarter.
Fun fact: This 25 year old guy is making $500,000 a year posting random facts on the internet.
We are going to show a bit of a longer term chart of the index of the NASDAQ here for a while so you can see why we are at an important juncture. In blue we have a trendline that connects the highs of last summer and winter and this is the resistance the index has been facing this week.
The Russell 2000 is looking quite a bit like the S&P 500 technically in the short term, with a base building.
A little pop in the NYSE McClellan Oscillator today.
General Electric (GE), often looked at as a bellwether for the overall economy, posted earnings five cents a share above estimates and a 15% rise in second-quarter revenue but a 2% decrease in orders from a year ago. Earnings were helped by its aviation, health care and power businesses, GE said, but the current business environment is being affected by a “volatile and slow growth economy.” The stock fell to its 20 day moving average.
American Airlines (AAL) second-quarter per-share earnings met analyst expectations while revenue was slightly ahead of Wall Street’s estimate. Shares rose 4%.
Advanced Micro Devices (AMD) jumped 12% after the chip maker late Thursday swung to a quarterly profit and reported its first sales increase in almost two years. This has quietly been a heck of a chart in the last quarter!
Chipotle Mexican Grill (CMG) rose 5.8% after the company posted an 82% slide in quarterly profit. The restaurant chain enacted costly promotions to win back customers following outbreaks of foodborne illness last year.
Second quarter earnings per share came in at $0.87, below estimates for $0.90. Revenue of $998 million also missed expectations for $1.05 billion. he all-important comparable store sales (which looks at the sales of Chipotle locations open at least a year) fell 23.6%, which was worse than the 20% expected by analysts. Co-CEO Steve Ells said that trends have improved since the launch of the company’s rewards program—”Chiptopia”—on July 1. Customers participating in the program earn a free entree with their fourth, eighth and 11th visits in a given month.
The Pokemon craze in Nintendo finally seems to have cooled.
It’s going to be difficult to stay “frosty” this weekend but do make an attempt and we’ll see you back here Monday.
