Market Insights

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S&P 500 overview

• S&P 500 holding January high, 50DMA
• Bond selloff not bearish for stocks over longer term.
• Bad news of higher rates now priced in. Earnings less priced in than before. Calendar is therefore potentially bullish.
• New leadership emerging in industrials, financials.
• Odds may favor continued uptrend given momentum, technical patterns, economy, earnings calendar.

China Problems Increasingly Known:

• 10/4: Bloomberg reports possible espionage chips in iPhones, AWS.
• 10/4: JPMorgan cuts China to neutral (after going bullish on emerging 7/30)
• 10/4: VP Mike Pence accuses China of election meddling
• 10/5: IPG Photonics (IPGP) craters on weak China business.
• 10/7: China PBOC cuts RRR to spur growth
• 10/8: Stocks crash as market smells blood in water, Caixin says manufacturing weakest in a year.
• Much of this was covered in July on Market Insights.

Troubles in Tech:

• 10/1: SIA’s monthly chip sales for August show smallest gain since Jan 2017.
• 10/3: Tim Cook of AAPL bashes FB/GOOGL on privacy
• 10/4: Bloomberg reports possible chip espionage in iPhones, AWS.
• 10/4: Deutsche Bank warns of cyclical weakness in semiconductors
• 10/8: Raymond James sees chips slowing.
• 10/8: WSJ says GOOGL concealed security breach, fearing regulation.
• On top of these issues, interest rates are rising and other sectors offering growth.

Selected Posts from Market Insights:

• 10/3: Itau Unibanco (ITUB) Nov 14 calls sold
• 10/4: Breakdown of China-Brazil divergence
• 10/5: Petrobras (PBR) Oct 16-17 call spread
• Check out past earnings recaps for ideas into results.

Don’s Earnings Watch List:

• 10/11: Delta Air Lines (DAL): Nice pullback in cyclical name w/ strong earnings track record. Support / Resistance @ $51 / $58
• 10/11: Walgreen Boots (WBA): Hit by Amazon/Pillpack fears, yet lifted by buybacks, dividends. Attention to focus on guidance.
• 10/12: JPMorgan Chase (JPM): Will be closely watched as economy gains.
  Support / Resistance @ $112 / $118
• 10/12: Wells Fargo (WFC): Should benefit from steepening curve.
  Support / Resistance @ $52 / $55.50
• 10/12: Citigroup (C) still negative for year, with strong earnings history.
  Support / Resistance @ $69 / $75
• 10/12: PNC Financial (PNC): Rally potential on strong results, higher rates.

Russell’s Watch List:

• RRC, CHK may gain from natural-gas build.
• PRU, MET breaking 200DMA as curve steepens.
• XPO pullback w/continuation potential
• JWN coming off 50DMA after strong quarter.
• NKE, AMZN at bottom of ranges.
• JEC/FLR: Industrials w/continuation potential.
• Techs pullbacks to consider: SQ, CRM, TWLO, ETSY, OKTA