Courtesy of Blain.
Indexes finished mixed in a rather benign session as most traders are probably still on an extended Memorial Day vacation. The S&P 500 fell 0.10% while the NASDAQ added 0.29%. Most of today’s economic data was “meh”:
- The Chicago PMI came in below expectations and in contraction territory at 49.3 in May.
- The Dallas Fed manufacturing index declined from minus 13.9 to minus 20.8 in May.
- Consumer confidence was 92.6 in May, down from 94.7 in April.
The exception was personal spending: Personal spending increased 1% in April, the biggest gain in more than six years. Personal income rose 0.4%.
“Markets are struggling to find a catalyst to move them definitively either higher or lower. Easy profits of 2012-2014 have already been earned and we reached limits of how much monetary policy can reflate prices,” said Jeff Greenberg, macro strategist at UBS Securities.
Societe Generale laid out some “black swans” (and some “white” ones) Friday – see chart below and click here for full story.
Risks to the world economy remain to the downside and include sharply weaker global growth and a sudden change to expectations regarding the U.S. Federal Reserve’s interest rate path, Societe Generale warned on Tuesday. The French bank also said there was still a 30% chance of an economic “hard landing” for China, in its quarterly economic outlook.
The S&P 500 is on day 4 of its breakout over our downtrend line, while the NASDAQ is on day 2. The S&P 500 is staring at those Nov 2015 highs dead ahead.
We’re obviously running into some technical resistance on the S&P 500. This market’s been following the technicals very closely for the last few months,” said Randy Frederick, managing director of trading and derivatives at Charles Schwab.
The Russell 2000 was the first to breakout over a downtrend line and is on day 6.
The NYSE McClellan Oscillator remains in positive territory so it’s not a time to be hiding in caves.
Amazon.com (AMZN) is at an all time high.
In merger news in the drug industry, Jazz Pharmaceuticals PLC agreed to buy Celator Pharmaceuticals (CPXX) in a $1.5 billion deal. Celator shares jumped 72%. This is the first time I’ve heard of Celator (this dicey biotech stuff is more Blain’s territory) but based on the chart if you are a lucky soul who owned it 6 months ago – congrats, drinks are on you!
News was not so great for StemCells (STEM) shares plunged 81% announcing plans to wind down operations.
The semiconductor sector (SMH) has had a sneaky good 2 weeks.
