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Equity futures fell sharply on Friday, mirroring global trade action, as markets moved towards the last trading session in July. The earnings news prompted dramatic first moves from Amazon.com, Atlassian, Dexcom, and KLA. Biotech testing leader Qiagen has set itself up for a possible early breakout. Meanwhile, Chevron was leading as Caterpillar trailed the Dow Jones today, following their quarterly reports.
X
Futures contracts on Dow Jones expected losses to 0.3% as Procter & Gamble (PG) and Chevron (CLC) both jumped after their Friday morning reports. Futures contracts on the S&P 500 fell 0.5% below fair value. Futures on the Nasdaq 100 fell 1.2%, as Amazon.com (AMZN) and Skyworks Solutions (SWKS) faded to the bottom of the Nasdaq 100. A handful of China-based names were also near the bottom of the list, falling after Chinese regulators put more rules in place binding big names in tech.
At the top of the Nasdaq, Atlassian (TEAM) and Dexcom (DXCM) rose 13% and 3.8%, respectively, as a result of their quarterly reports. Atlassian may present an opportunity to buy breakout spread, as it clears a brief consolidation.
Chip Equipment Manufacturer COMPLAIN (KLAC) climbed nearly 5%, leading the S&P 500, after an earnings report late Thursday. Deutsche Bank raised its share price target to 400, more than 25% above Thursday’s closing price. Qiagen (QGEN) climbed 2% on its earnings report, positioning for a possible move above an early alternate entry at 52.94.
Outdoor Deckers (DECK) was the big forerunner among IBD 50 stocks, up 3% after reporting beaten fiscal first quarter revenue and earnings on Thursday night. Shares are extended after a breakout in mid-June. At the bottom of the IBD 50, social media site Pinterest (PINS) slumped 19% after its second-quarter user growth disappointed analysts.
Liquidity services (LQDT) increased by 15%, Real Real (REAL) jumped 10% and New Fortress Energy (NFE) rose 9% – with no obvious news behind the moves.
The Commerce Department said wage costs rose 0.78%, less than expected, in the second quarter. Personal income rose 0.1% better than expected in June. Personal spending rose 1%, compared to an expected 0.6% increase.
Track this week’s stocks to watch, Pool (BOWL), Icici Bank (IBN), Discover financial services (DFS) and CarMax (KMX) all remained close to the points of purchase.
Dow Jones Today: Chevron up, CAT down
Chevron and Procter & Gamble fought for the lead, while caterpillar (CAT) fell behind the Dow Jones today, as reports from the three blue chips closed the index’s heaviest week of action during the June quarterly reporting season.
Chevron rose 2% after posting earnings and revenue well above analysts’ targets in the second quarter. The company has also initiated share buybacks targeting between $ 2 billion and $ 3 billion per year. Chevron finished Thursday with a 3.8% gain for the week, in its second week of rebound after a 40-week test of support.
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Procter & Gamble gained 1.2% after fiscal fourth quarter results beat expectations. PG stock closed Thursday at the lowest in a buy range, above a flat base buy point at 13.20.
CAT stock fell 1.7%, despite second-quarter sales and earnings expectations. The company’s construction equipment segment jumped 40%, not quite enough to meet analysts’ forecasts. Stocks are trying to break their 40-week moving average, down about 14% from the June high.
Amazon earnings
Amazon’s profits have exceeded views, but the revenue has come to light. The e-commerce and cloud computing giant also saw lower sales in the second quarter. The stocks, which were in a range from a cup-with-handle buy point of 3,524.96, were down 6.6% at the start of trading. A fall below 3,242.96 would trigger the automatic sell rule.
China’s volatility, global markets
China-based stocks remained volatile, as Asian markets retreated further on Friday. Hong Kong’s Hang Seng Index fell 1.35%. The Shanghai Composite lost 0.4%. That left the Hang Seng 5% lower for the week, and with a loss of 9.9% for July – its worst month since October 2018.
Chinese regulators continued to step up reform efforts on Friday, Bloomberg reporting that the Ministry of Industry and Information Technology has ordered 25 of the country’s largest internet and hardware companies, including Alibaba and Tencent , “To conduct internal reviews and rectify issues ranging from data security. protections of consumer rights.
Chinese markets began to sell aggressively a week ago, as authorities rolled out a series of reforms reframing regulations for education companies, food delivery operations, and publicly traded businesses outside of China. China.
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In the United States, the iShares MSCI China ETF (MCHI) hit a low on Tuesday and by Thursday it had reduced its loss for the week to 4.2%. The Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR) fell back to a 4.6% loss on Thursday and lost 0.5% in pre-market trading on Friday.
KraneShares CSI China Internet ETF technology tracker (KWEB) ended Thursday down 6.3%, down from 17.2%. The ETF fell another 1.8% in pre-market trading on Friday.
Tokyo’s Nikkei 225 fell 1.8% on Friday, ending just under 1% on the week. Markets fell in Europe, with the Frankfurt DAX and London’s FTSE 100 falling 0.9% around noon. The CAC-40 in Paris remained at a loss of 0.3%. The SPDR Portfolio Europe ETF (SPEU) had advanced 1.5% for the week through Thursday, breaking above its 10-week moving average and moving up the right side of a possible cut base.
Vital signs: oil prices, bond yields, Bitcoin
Oil prices have eased, having jumped nearly 3% in the past two sessions. West Texas Intermediate crude futures fell 0.4%, remaining above $ 73 a barrel. Oil prices rose nearly 2% for the week and rebounded 12% from a July 20 low. WTI climbed to $ 76.98 on July 6, its highest level since November 2014.
Bond yields fell to 1.24% Friday morning, after stabilizing just below 1.27% on Thursday. Yields are heading for their 10th drop in the past 11 weeks, after peaking above 1.76% in April.
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Bitcoin has fallen sharply, down more than 3% to less than $ 39,000. The cryptocurrency had traded above $ 40,600 on Wednesday – its highest mark in more than two months. Bitcoin traded generally below $ 34,000 in July, after hitting a record high of nearly $ 65,000 in April.
Stocks to watch: Pool, Icici, Discover, CarMax
Following the four names identified as stocks to watch this week by IBD’s investment action plan, three out of four have stayed close to their buying points.
The pool is now extended, ending Thursday more than 6% above a buy point of 449.54. The leader in pool services and supplies resumed entry a week ago, after pulling out to test support at its 50-day moving average. The buy zone expanded to 472.02. The pool’s shares were stable on Friday morning.
Indian bank Icici Bank is climbing higher in its buying range, after resuming its 18.27-cup buy point with a handle with a powerful 2.3% lead on Wednesday. The move increased trade volume which was 40% above average, qualifying the breakout. The purchase range extends until 19.18. Shares slipped 1.5% on Friday morning.
Discover Financial gained 2% for the week through Thursday, closing just a dime above a flat base buy point of 125.48. The stock has seen a few steep declines recently below its 50-day line. But his relative strength rating remains high at 93 and his relative strength line is hovering near new highs.
Auto retailer CarMax effectively traded flat for the week, standing just below a mug base with handle with a buy point of 137.63. The shares fell 2.8% in early morning trading on Friday.
S&P 500, Nasdaq, Dow Jones today: August surprises
The Dow Jones is now approaching the opening with a gain of less than 0.1% over the week. It has a 1.7% gain for the month through Thursday, just behind the 2% gain it has averaged in July since 2010. The Nasdaq is down 0.4% for the week, bringing its gain so far for the month to 1.9%. That’s well below its average 3.3% gain in July.
The S&P 500 is another story. It recovered to a gain of 0.2% for the week. That brings its July lead to 2.8%, exceeding its average increase of 2.5% in July since 2010.
The Dow and S&P 500 hit record intraday highs on Thursday, but failed to hit new closing highs, although the Dow held steady above 35,000. The Nasdaq on Thursday closed below 1% of his record.
For a more detailed analysis of the current stock market and its state, study the big picture.
Historically, August has been considered a sleepy month for the market. But this was less true in the recent past, with the month of the start of the school year which gave its share of fireworks. The Dow Jones posted losses for the month of more than 4% in 2010, 2011, 2013 and 2015. The three major benchmarks plunged more than 6% in 2015.
The Nasdaq dominated the August rallies with a 4.8% gain in 2014, a 5.7% lead in 2018 and the 9.9% scorcher in August of last year. Extremes lead to trivial averages. The Nasdaq has recorded an average gain of 0.37% in August since 2010. The S&P 500 has recorded an average decline of 0.53% and the Dow has an average loss of 0.68% in August.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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