Dow has a two day win streak two end the week
The US stocks are closing higher across the board with the Dow industrial average leading the way with a gain over 1%.
- S&P and NASDAQ end the week with a three day winning streak
- Dow ends with a two day winning streak
- Dow is less than 1% from its all-time high
- Dow has its best week since late June
- S&P has its best week since July 23
- NASDAQ and S&P close above its 50 day moving average
A look at the final numbers shows:
- Dow industrial average rose 382.2 points or 1.09% at 35294.75
- NASDAQ index rose 73.92 points or 0.5% at 14897.35
- S&P index rose 33.11 points or 0.75% 4471.37
For the week,
- Dow industrial average rose 1.58%
- S&P index rose 1.81%
- NASDAQ index rose 2.18%
It seems like only yesterday we had the last earnings cycle
Can it be?
Next week bank earnings will kickoff the quarterly earnings calendar. It seems like only yesterday that the last quarter was complete.
The thanks/financials traditionally are the first to report, but other names are in the mixed.
Some of the major releases include:
- J.P. Morgan
- Delta Airlines
- Domino’s pizza
- Bank of America
- Morgan Stanley
- Wells Fargo
- U.S. Bancorp
- UnitedHealth Group
- Goldman Sachs
- JB Hunt
That’s just the start, but it is the start.
NASDAQ recoups 1.25%
The NASDAQ index yesterday took on the chin with a decline of -2.14%. Today the index recouped 1.25% of that decline but it could’ve been better. The index was up as much as 1.78% intraday. It is closing up 1.25% on the day.
- Dow industrial average recouped all of the declines from Monday’s trade
- NASDAQ index has the best day since August 23
- NASDAQ is still 6.29% below the all-time high. At the low, reached yesterday, the price moved -7.93% from the high
- S&P index is 4.4% below the all-time high. At its low reached yesterday the index fell -5.87%
- The Dow industrial average is down -3.68% from its all-time high
A look at the final numbers shows:
- Dow industrial average rose 3 and 11.73 points or 0.92% at 34314.68
- S&P index +45.24 points or 1.05% at 4345.71
- NASDAQ index up 178.36 points or 1.25% at 14433.84
The major indices were buoyed by some short covering and dip buying. Having said that, the S&P index intraday moved back above its 100 day moving average at 4351.31. However the momentum could not be sustained, and the price moved back below that moving average level. For the NASDAQ index, it’s high price reached 14508.65. That was short of the 100 day moving average at 14521.12.
Bloomberg with the report on a missed payment by Fantasia Holdings.
The news was out overnight so it is not new news, posting as an ICYMI.
Says the Bloomberg report (more at that link above (may be gated) )
- Fantasia didn’t repay a $205.7 million bond that was due Monday, according to a company statement.
- Separately, property management company Country Garden Services Holdings Co. said that a unit of Fantasia didn’t repay a 700 million yuan ($108 million) loan that also came due on Monday and that a default was probable.
- Shenzhen-headquartered Fantasia’s management and board “will assess the potential impact on the financial condition and cash position of the Group” stemming from the skipped bond payment, it said.
Via a CNN report, citing two sources
Biden in a virtual meeting with a group of House progressives on Monday
- said the top line of the social safety net package needs to come down to somewhere between $1.9 trillion and $2.2 trillion
- Biden told the group, according to one of the sources, that was the range he felt Sens. Joe Manchin and Kyrsten Sinema would accept but did not specify further within that range.
Climbing down from higher numbers earlier. Less fiscal boost will not be as positive for markets looking for stimulus, but on the other hand getting the thing passed will be positive.
ASDAQ falls -0.52%. Dow posts a four day win streak
The major indices are ending the day with mixed results. The Dow is higher on the day and has posted a four day win streak. The the NASDAQ index is down for the second consecutive day. The S&P index snapped its three day win streak.
The final numbers are showing:
- Dow +71.37 points or 0.21% at 34,869.37
- NASDAQ felt -77.73 points or -0.52% at 14 969.98
- S&P fell -12.37 points or -0.28% at 4443.11
- Russell 2000 index rose 32.93 points or 1.46% at 2281.00
Some big winners today included:
- Alcoa, +6.43%
- Dow, +5.07%
- First Solar, +4.88%
- Schlumberger, +4.10%
- Nio, +3.9%
- Exxon Mobil, +3.76%
- Bed Bath and Beyond +3.74%
- Alibaba, +3.47%
- Tencent, +3.43%
- Beyond Meat, +3.25%
- PNC, +2.93%
- Ford, +2.3%
- Dollar Tree, +2.77%
- Bank of America, +2.66%
Losers today included:
- Novavax, -6.94%
- Moderna, -4.93%
- Roblox, -3.91%
- Palantir, -3.75%
- Snap, -3.63%
- Crowdstrike, -3.22%
- Adobe, -3.06%
- Goodrx, -2.9%
- Intuitive surgical, -2.89%
- Twitter, -2.76%
- Blackberry, -2.22%
- Salesforce, -2.08%
- Chipotle -2.02%
This from three members of the US Congress, who seem confused about the remit of a central bank:
Via a Politico report:
- Reps. Alexandria Ocasio-Cortez, Rashida Tlaib and Ayanna Pressley … called for Federal Reserve Chair Jerome Powell to be replaced
- “As news of the possible reappointment of Federal Reserve Chair Jerome Powell circulates, we urge President Biden to re-imagine a Federal Reserve focused on eliminating climate risk and advancing racial and economic justice”
Sounds great! I wonder should the Chair print more or less to hit these three added objectives though?
If Yellen was still Chair she’d know how to deal with these clowns.
Feds Powell to speak at 10 AM ET on Friday August 27
Next week’s key events and releases will be highlighted by the Jackson Hole symposium which will take place from August 26 through August 28. The main speech made by Fed chair Powell, will take place on August 27 at 10 AM ET/1400 GMT.
The market will be focused on any time one projections from the Fed chair for taper. There have been a number of Fed officials who have expressed the desire to begin the taper sooner rather than later. However, Feds Kaplan – one of the more hawkish Fed Presidents – dialed back a bit on concerns if the Delta variants starts to impact production.
Other key events include:
Monday, August 23:
- Australia flash manufacturing and services PMI 7 PM ET/2300 GMT
- France flash manufacturing and services PMI. 3:15 AM ET/715 GMT. Estimate 57.1 manufacturing. 56.2 services
- German flash manufacturing and service PMI, 3:30 AM ET/730 GMT. Estimate 65.1 manufacturing and 61.0 services
- UK flash manufacturing and services PMI. 4:30 AM ET/830 GMT. Estimate 59.5 manufacturing and 59.0 services
- US flash manufacturing and services PMI. 9:45 AM ET/1345 GMT. Estimate 62.8 manufacturing and 59.1 services
Tuesday, August 24
- New Zealand retail sales, 6:45 PM ET Monday/2245 GMT Monday. Estimate 2.0% versus 2.5% last month. Core retail sales 1.9% versus 3.2% last month
- US new home sales, 10 AM ET/1400 GMT. Estimate 698K versus 676K last month
- US Richard Fed manufacturing index. 10 AM ET/1400 GMT. Last month 27.0
Wednesday, August 25:
- German Ifo business climate. 4 AM ET/800 GMT. Estimate 100.6 versus 100.8 last month
- US durable goods orders. 8:30 AM ET/1230 GMT. Estimate -0.2% versus +0.9% last month. Core durable goods +0.4% estimate versus +0.5% last month
- Weekly crude oil inventories. 10:30 AM ET/1430 GMT. Crude oil has been down for seven consecutive days
Thursday, August 26.
- US preliminary GDP 3Q. 8:30 AM ET/1230 GMT. Estimate 6.6% versus 6.5% for the first cut
- US unemployment claims. 8:30 AM ET/1230 GMT. Estimate 355K versus 348K last week
- Start of Jackson Hole symposium
Friday, August 27
- Australian retail sales, 9:30 PM ET Thursday/1330 GMT. Estimate -2.0% versus -1.8% last month
- US Core PCE price index MoM, 8:30 AM ET. Estimate 0.3% versus 0.4% last month
- Fed chair Powell speaks at Jackson Hole symposium. 10 AM ET/1400 GMT
- US revised University of Michigan consumer sentiment. Estimate 10 AM ET/1400 GMT. Estimate 71.2 versus 70.2 preliminary
Saturday, August 28
The FOMC meeting minutes for the July 27-28, 2021 meeting
The FOMC meeting minutes for the July 27-28 meeting have been released. Since the minutes are not released ahead of time, the highlights will be trickling in.
You can find the minutes HERE
- Participants expressed a range of views on the appropriate pace of tapering asset purchases once economic conditions satisfied the criterion laid out in the Committee’s guidance.
- At the same time, participants indicated that the standards for raising the target range for the federal funds rate were distinct from those associated with tapering asset purchases and remarked that the timing of those actions would depend on the course of the economy.
- Several participants noted that an earlier start to tapering could be accompanied by more gradual reductions in the purchase pace and that such a combination could mitigate the risk of an excessive tightening in financial conditions in response to a tapering announcement.
- Most participants remarked that they saw benefits in reducing the pace of net purchases of Treasury securities and agency MBS proportionally in order to end both sets of purchases at the same time.
- Several participants commented on the benefits that they saw in reducing agency MBS purchases more quickly than Treasury securities purchases, noting that the housing sector was exceptionally strong and did not need either actual or perceived support from the Federal Reserve in the form of agency MBS purchases or that such purchases could be interpreted as a type of credit allocation.
- Many participants noted that, when a reduction in the pace of asset purchases became appropriate, it would be important that the Committee clearly reaffirm the absence of any mechanical link between the timing of tapering and that of an eventual increase in the target range for the federal funds rate.
- With respect to the effects of the pandemic, several participants indicated that they would adjust their views on the appropriate path of asset purchases if the economic effects of new strains of the virus turned out to be notably worse than currently anticipated and significantly hindered progress toward the Committee’s goals.
- The staff judged that asset valuation pressures were elevated. In particular, the forward price-to-earnings ratio for the S&P 500 index stood at the upper end of its historical distribution; high-yield corporate bond spreads tightened further and were near the low end of their historical range; and house prices continued to increase rapidly, leaving valuation measures stretched. That said, the staff did not see signs of loose mortgage underwriting standards or excessive credit growth that could potentially amplify a shock arising from falling house prices.
- The staff’s near-term outlook for inflation was revised up further in response to incoming data, but the staff continued to expect that this year’s rise in inflation would prove to be transitory.
- The staff expected the 12‑month change in PCE prices to move down gradually over the second part of 2021, reflecting an anticipated moderation in monthly inflation rates and the waning of base effects; even so, PCE price inflation was projected to be running well above 2 percent at the end of the year.
- Over the following year, the boost to consumer prices caused by supply issues was expected to partly reverse, and import prices were expected to decelerate sharply; as a result, PCE price inflation was expected to step down to a little below 2 percent in 2022 before additional increases in resource utilization raised it to 2 percent in 2023.
- The staff continued to judge that the risks to the baseline projection for economic activity were skewed to the downside and that the uncertainty around the forecast was elevated. In particular, the probability that the course of the pandemic would turn out to be more adverse than the staff’s baseline assumption was viewed to be higher than the probability that a more favorable outcome would occur.
- the staff judged that the risks around the inflation projection were now tilted to the upside, as recent data pointed to a greater risk that the upward pressure on inflation that had resulted from supply-related issues would unwind more slowly than the staff’s baseline projection assumed.
- A majority of participants noted that the spread of the Delta variant may temporary delay the full reopening of the economy and restraint hiring and labor supply
The WSJ said:
- Minutes show thinking on preparations to begin reducing Federal Reserve’s asset purchases later this year
- Federal Reserve preparing for taper this year, July minutes show
- central bankers want to be clear that the reduction of assets was not a precursor to and a minute rate hike
- Fed officials see inflation goal hit, divided on taper.