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US stocks erase yesterday’s declines (and then some) and close with decent gains

  
Analysis, US Market
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Ignores the 2-10 going negative again

The US stocks erased the declines from yesterday (and then some). The gains also ignored what was a flattening of the yield curve to flat 2-10s again (although positive now by a basis point or two).
The final numbers are showing:
  • The S&P index +23.92 points or 0.82% at 2924.43
  • The NASDAQ index of 71.646 points or 0.90% at 8020.20
  • The Dow industrial average of 240.29 points or 0.93% at 26202.73.
Below is a summary of the % change high/% change low/% change close for the North American and European major indices.  Most European indices had an even better day.
Ignores the 2-10 going negative againBelow are the changes and ranges for the US debt curve (from 2-30 years).  The 2-10 spread is 1.53 bps currently, down from 4.32 bps at the close yesterday. The thing about today’s move is the yields are higher across the board with the shorter end up more due to the taking out more of the 50 BP cut idea.
US yields are higher with a flatter yield curve.

US stock indices go out near the lows for the day

  
Analysis, US Market
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  • The S&P index fell -23.11 points or 0.79% at 2900.53
  • The NASDAQ index fell -54.25 points or -0.68% at 7948.56
  • The Dow industrial average fell -173.35 points or -0.66% at 25962.42
Selling into the closeThe major indices open lower but did recover midday and traded marginally higher before reversing and moving back down.
The European indices were higher earlier in the day, but gave up those gains and also ended near low levels.
Winners on the day included:
  • Beyond Meat, +6.55%
  • Home Depot, +4.45%
  • LYFT, +3.81%
  • Qualcomm, +1.60%
  • Twitter, +1.44%
  • Broadcom, +0.57%
  • Square, +0.48%
  • Intuitive Surgical, +0.47%

Losers included:

  • Netflix, -3.36%
  • AMD, -2.41%
  • American Express, -2.38%
  • Bank of America, -2.02%
  • UnitedHealth, -1.90%
  • Micron, -1.73%
  • Nvidia, -1.70%
  • PNC financial, -1.68%
  • General Mills, -1.65%
  • Pfizer, -1.59%
  • Coca-Cola, -1.5%
  • IBM, -1.44%
  • Alphabet, -1.41%
  • Facebook, -1.39%

US State dept: Effort to assist Iranian tanker could be viewed as support to terrorist organization

  
Analysis, Crude
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Might be some oil impact from this:

A US State department official says any effort to assist Iranian tanker could be viewed as material support to a US-designated foreign terrorist organization

In reference to

  • US has conveyed its strong position to the Greek government about Iranian tanker it says is transporting illicit oil to Syria

Weekend HK press – China questions whether to continue trade talks with the US

  
  Analysis
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An opinion piece from an account associated with State media Economic Daily newspaper expressed pessimism about whether trade talks with the United States should continue

This in response to US President Trump’s new tariffs on China
  • It said Trump’s latest threats as “destructive”
  • “The US has again stepped back from their promises for two reasons: to pressure China into fulfilling [America’s] expectations in the deal, and to attain someone’s political aims by meddling in the Sino-US trade talks”
  • via South China Morning Post
Negatives build for  China proxy trades (such as AUD)
An opinion piece from an account associated with State media Economic Daily newspaper expressed pessimism about whether trade talks with the United States should continue 

Trump turned down idea from Mnuchin to warn the Chinese

  
  Analysis
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Headline says: “Pres. announced tariffs after tense oval office meeting”

There is a headline saying that the president announced tariffs after a tense oval office meeting. According to the report, the president ruled out Treasury Secretary’s Mnuchin’s proposal to warn China of potential new tariffs.

It does not say how Lighthizer sided, but got to think he and Navarro were a thumbs up.  Larry Kudlow was likely a thumbs down.  If Wibur Ross was in the room, he would be a thumbs up too.

US President Trump says Congress have reached a deal on debt limit suspension

  
  Analysis
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As if there was ever going to be any doubt the US would once again add to its gargantuan deficit

Trump says a deal has been reached between Congress and the White house
  • debt limit ratcheted higher
  • for the coming two years
For those with a stick up their you know what – this is not a real photo, K?
US once again add to its gargantuan deficit

US Indices opened down on day and remained negative for the entire day

  
Analysis, US Market
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Major indice trade in the black but close mid range.

The closes in the major stock indices was near the middle of the day’s high and low. However, the major indices opened down on the day and remained negative for the entire day.
The final numbers are showing:
  • S&P index is down -14.45 points or -0.48% at 2975.95. The high reached 2980.76. The low extended to 2970.09.
  • Nasdaq index closing down -63.408 points or -0.78% at 8098.38.  The high reached 8112.91. The low extended to 8078.39
  • Dow is closing down -115.98 points or -0.43% at 26806.14. The high reached 26839.14. The low extended to 26744.87.
Below is graphical view of the % high and  %low and %close of the NA and European major indices.
Major indice trade in the black but close mid range.

Russia says submersible that caught fire was nuclear powered

  
Analysis, Politics
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Russia has admitted a submersible involved in the country’s worst naval accident in more than a decade was nuclear powered, nearly three days after it caught fire during a top secret mission off the northern coast.

Defence minister Sergei Shoigu told president Vladimir Putin that the submersible’s nuclear reactor was “completely isolated and unmanned” and in full working condition, according to a transcript published on the Kremlin’s website on Thursday.

Mr Shoigu said the fire began in the submersible’s battery compartment, which then spread, killing 14 sailors from smoke inhalation and injuring an unspecified number of others. The sailors evacuated some of the people on board, then isolated the fire at the cost of their own lives, Mr Shoigu said.

The Kremlin has said it will not name the ship or clarify its mission. Russian media have reported that the fire broke out on an AS-31 submarine complex known as the Losharik, which normally travels under a larger submarine to avoid detection and can itself release another, smaller submersible.

One of the Russian navy’s most secret vessels, the Losharik is built to dive much deeper than an ordinary submarine and can survey the ocean floor.

The accident was Russia’s most fatal submarine tragedy since a fire killed 20 and injured 21 during sea trials of a nuclear-powered submarine in the Sea of Japan in 2008.

Oil stumbles in quiet trading as OPEC+ deal extension earlier this week fails to inspire

  
Analysis, Crude
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Oil is down by more than 1% on the day now

WTI 04-07

The ‘buy the rumour, sell the fact’ play is still very much in motion as oil is getting no reprieve at all from the fact that OPEC+ sealed a nine-month extension to the current output cuts deal, which was announced on Tuesday.
Oil fell hard on the day itself before a slight recovery amid risk-on sentiment overnight but the fall is resuming now with prices down by almost 1.3% currently.
The move higher in oil during June in anticipation of the OPEC+ decision failed to breach key resistance levels with the daily moving averages and the trendline resistance from April-May helping to limit gains and kept sellers in the game.
As such, we’re seeing sellers seize further control now and the fact that OPEC+ has done just a little above the bare minimum isn’t going to convince markets that the oversupply issue in 1H 2019 will go away in the 2H 2019.

(more…)

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