This was a typically quiet week within the senior indexes, consolidating among the prior week’s transfer up. That mentioned the Russell 2000 had some very good motion with a “breakout!”. In any other case fairly quiet on the information entrance aside from TRADE WARS!(tm):
On Thursday, a number of information retailers reported that China had made a proposal to chop its commerce surplus with the U.S. by $200 billion, however a China official on Friday denied that a proposal had been made.
For the week the S&P 500 closed down zero.5% whereas the NASDAQ fell zero.7%. The Russell 2000 diverged, gaining 1.three%.
The one main financial report this week was retail gross sales which gained zero.three% in April vs a revised zero.eight% acquire (up from zero.6%) in March.
Treasury yields have been again in focus as a transfer over three% occurred once more.
“The extra backup [in yields] seems to be pushed by stronger expectations for progress and inflation, and the potential for added Fed motion past September,” mentioned Lindsey Piegza, chief economist for Stifel.
That was accompanied by some power within the greenback chart.
Week FIVE of excellent motion within the crude oil chart.
Right here is the 5 day weekly “intraday” chart of the S&P 500 …by way of Jill Mislinski.
The week forward…
The Federal Reserve will launch the minutes from its Might 1-2 assembly, which might add to the greenback and Treasury yield climb ought to they sound a hawkish tone. Not an excessive amount of else on the docket that strikes the creativeness in the mean time.
Quick time period: The S&P 500 stays above this development line connecting highs of 2018.
The Russell 2000 = growth! This text states some reasoning for the divergence.
Small cap shares are typically extra U.S. centered by way of their geographic footprint and the place they derive their income. As such, they’re seen as insulated from all method of worldwide headwinds, together with commerce coverage and different geopolitical tensions. Moreover, they don’t seem to be affected by current power within the greenback, which generally emerges as a headwind for giant cap firms by eroding their abroad earnings.
In keeping with FactSet, U.S. income publicity for the elements of the Russell 2000 is 79.four%, nicely above the S&P’s 69.7% home publicity and the Dow’s 61.7%.
The NYSE McClellan Oscillator stays in a optimistic spot.
Long run: Nonetheless very optimistic for the “purchase and by no means promote” crowd.
Charts of curiosity / Large Movers:
Tuesday, Agilent Applied sciences (A) dropped 9.7% after the maker of medical devices and different gear posted quarterly earnings that matched forecasts late Monday.
Wednesday, Macy’s (M) jumped 10.eight% after the retailer reported upbeat gross sales and outlook.
Beneath Armour (UA) jumped 6% Wednesday, including to a yr so far surge. The inventory is up almost 40% because the begin of the yr.
Not as nice of a narrative at J.C. Penney (JCP) because it slumped 12.four% Thursday after reporting a drop in first-quarter gross sales and reducing its outlook.
Similar with Nordstrom (JWN) Friday, because it tumbled 10.9% after the retailer reported weaker same-store gross sales progress.
Minerva Neurosciences (NERV) rose by about 14% Thursday after reporting optimistic outcomes from a drug trial.
Friday, Campbell Soup (CPB) dropped 12.four% after the corporate minimize its full yr steerage. The corporate additionally mentioned Chief Govt Denise Morrison will retire, efficient Friday. With the drop in Phillip Morris (PM) mid April this has not been a great yr for among the low volatility “security shares”.
Utilized Supplies (AMAT) slid eight.three% after the chip maker on a weak gross sales outlook.
Not an enormous mover essentially however a “good chart” alert.
We highlighted Commerce Desk (TTD) final week – this transfer continues.
Have an excellent week and we’ll see you again right here Sunday!
Authentic article: Weekly Market Recap Might 20, 2018.