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Investors brace for a bleak start to the week as global equities and equity futures cast red ink. It was then that real estate concerns in China may have finally scared the markets, with giant Evergrande suffering a major spill.
Concerns about the Chinese contagion mount on a long list of reasons to worry this market: “The persistence of the Delta variant, high inflation, supply chain bottlenecks and increases in commodity prices are growing. combine to form a toxic cocktail that sees optimism evaporate, ”summarizes Richard Hunter, Head of Markets at Interactive Investor.
Investors were promised everything but roses for September, so they should be well prepared for the 5-10% drop in the coming months, which Wall Street analysts keep warning about.
Does that mean you have to have a shopping list handy? Check out these growth name ideas from our call of the day, by Larry Tentarelli, editor and publisher of the Blue Chip Daily Trend Report.
“Each of these stocks is in an uptrend of higher highs and higher lows, across all key moving averages. While the general direction of the market can have an impact on all stocks, these 4 high growth leaders are showing signs of outperforming, ”writes Tentarelli.
Tech-related companies are all 20% or more below historic highs, but managed to manage weekly gains last week, offsetting losses from SPY SPY,
and QQQ QQQ,
– two main exchange-traded funds that follow the S&P 500 SPX,
and the Nasdaq-100 NDX,
index – writes Tentarelli.
First, the Airbnb ABNB vacation rental group,
which is down 24.7% from its all-time highs reached in February, but still ended Friday at a four-month weekly closing high.
He notes improving price dynamics for AirBNB, which traded above the 20, 50, and 100-day moving averages. Airbnb shares are up 15% from their public debut in early December 2020.
Blue Chip Daily / Stockcharts.com
The next three choices are in the cloud software space, starting with Palantir PLTR,
which closed at a 7-month weekly closing high on Friday, but remains at 36.2% of its historic January highs. Palantir is trading above the four major daily moving averages, Tentarelli said, adding that “the 20 MA recently broke above the 50, 100 and 200 MA, indicating very strong price momentum in the near term.”
Blue Chip Daily / Stockcharts.com
Unity U software,
also finished at a 7-month weekly closing high on Friday, but remains at 21.8% from its all-time highs in December 2020. It is trading above the four key moving averages and recently recorded two bullish crosses.
The last one is Snowflake SNOW,
which hit a 10-month weekly close on Friday, its highest for the year so far, but remains 24.7% from December 2020 highs. Snow is trading above 20 , 50,100 and 200 DMA and has made 20-day / 200-day and 50-day / 200-day bullish crosses over the past 5 weeks, he said.
Evergrande deteriorates the mood and Yellen warns
Real estate stocks tumble in China, with Evergrande 3333,
down 14%. The real estate giant faces two crucial bond payment deadlines this week as default fears grow.
Chinese regulators met with Wall Street officials last week to defend their crackdown on the tech sector, sources say. Meanwhile, young fans of the Chinese version of the TikTok video app are facing screen time limits.
Treasury Secretary Janet Yellen urged Congress to raise or suspend the country’s debt ceiling or risk “widespread economic catastrophe,” in an editorial column in the Wall Street Journal. The Treasury could default on its bills by October if a divided Senate fails to reach a deal to raise the debt limit.
Pfizer PFE,
and German partner BioNTech said a phase 2/3 trial of their COVID-19 vaccine in children aged 5 to 11 has shown it to be safe and effective and produces an antibody response “robust” neutralizers.
Investors will be on the lookout for any talk about reducing the duration of a two-day federal open market committee that begins on Tuesday. A bunch of other global central banks will also be meeting.
Netflix NFLX,
and Apple AAPL,
were the big winners of Sunday’s Emmy Awards with “Ted Lasso” and “The Crown”. No big winners? Actors of color when it came to performance awards.
The steps
YM00 equity futures contracts,
ES00,
NQ00,
are in the red, with the European values SXXP,
also struggling as Hang Seng HSI from Hong Kong,
slipped 3.3% – China and other markets were closed for the holidays – on these Evergrande worries. Iron ore prices fell again as China tightened restrictions on industrial activity in some provinces. Other raw materials such as CL00 petroleum,
copper HGU21,
and palladium PLV21,
also fell.
Cryptocurrencies are also going through a rough patch, due to losses for the ether ETHUSD,
Random readings
A volcano on one of Spain’s Canary Islands erupted on Sunday, sending lava spitting out. Properties have been destroyed and thousands have had to flee.
Also in Spain, more than 25,000 students and other revelers organized a mega-party at a university in Madrid on Friday, with the last revelers leaving around 7 am on Saturday.
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