Highlights:
Market Recap: The S&P 500 finished up 0.41% yesterday. Oil rallied on heightened tensions between Iran and Russia. West Texas Crude oil was up 2.23%. The benchmark 10 year yield dropped 3 basis points.
Economic Data: Retail sales came out this morning and were up 0.5% month over month. Expectations were for an increase of 0.6% month over month. Industrial production also comes out this morning at 9:15AM.
Lumber: Lumber rallied 5.36% yesterday and closed 2.5% above the 200 day moving average. After being in a negative trend since July 2018, it finally broke to a positive trend on the recent move. This is bullish for equities as lumber prices have been a leading indicator.
Market Internals: The index that tracks the percentage of stocks above the 50 day moving average in the NYSE, gave a double top buy signal on the point and figure chart yesterday. This is indicative of continued strength internally.
Advance-Decline: The cumulative advance-decline line broke to all-time highs yesterday for the S&P 500. This is typically a leading indicator to price itself. This indicates that prices could break to new highs as well.
Russell 2000: The Russell 2000 has been a clear laggard this year. It is well below its 2018 peak and has showed continued weakness relative to large caps. Yesterday, small cap stocks rallied against large caps and demonstrated strong relative strength. The Russell 2000 was up over 1% while the S&P 500 was only up 0.41%. If strength continues, and the Russell 2000 can move into a positive trend, this could push equity markets upward. This would also clear one of the major divergences urging caution.
Futures Summary:
News from Bloomberg:
American officials released a video they said shows Iran was involved in the attack on an oil tanker near the Persian Gulf yesterday. The images are of an Iranian boat removing an unexploded mine from one of the ships, U.S. Central Command said. Adding to the intrigue, the president of the tanker operator said his crew saw a projectile hit the ship and believed it was probably not a mine.
Hundreds of companies, including Walmart, Target and Macy's, urged President Trump not to impose extra levies on Chinese goods. More than 500 firms across a range of industries signed a letter expressing concern about an escalation of the trade war. They urged the president to return to the negotiating table.
Trade war concerns prompted Broadcom to cut its annual sales forecast. The spat between China and the U.S., including the Huawei ban, will probably wipe out a rebound in orders it had been predicting for the second half of the year. The company's shares tumbled in early trading.
Activist investor Dan Loeb disclosed a $1.5 billion stake in Sony, saying the shares trade at roughly half of their intrinsic value. His Third Point urged the company to sell its insurance unit, offload holdings like Spotify and spin off semiconductors. While that's a good idea, he failed to address what should come next, Bloomberg Opinion's Tim Culpan writes. Sony's shares climbed in Tokyo.
U.S. stock-index futures fell with global equities after Chinese data disappointed and Broadcom cut its forecast. Nasdaq contracts slid and tech companies tumbled in Europe. Treasuries rose, driving 10-year yields below 2.07%. Gold jumped and the yen outperformed. Oil fell with most industrial metals.
WealthShield is a division of Emerald Investment Partners, an SEC Registered Investment Advisor. Advisory services are only offered to clients or prospective clients where WealthShield and it’s representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by WealthShield unless a client service agreement is in place. Before investing, consider your investment objectives and WealthShield’s charges and expenses.
Recommended Content
Editors’ Picks
AUD/USD holds above 0.6500 in thin trading
The Australian Dollar managed to recover ground against its American rival after AUD/USD fell to 0.6484. The upbeat tone of Wall Street underpinned the Aussie despite broad US Dollar strength and tepid Australian data.
EUR/USD comfortable below 1.0800 lower lows at sight
The EUR/USD pair lost ground on Thursday and settled near a fresh March low of 1.0774. Strong US data and hawkish Fed speakers comments lead the way ahead of the release of the US PCE Price Index on Friday.
Gold pulls away from daily highs, holds above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Thursday. The benchmark 10-year US Treasury bond yield stays near 4.2% after upbeat US data and makes it difficult for XAU/USD to gather further bullish momentum.
Google starts indexing Bitcoin addresses
Bitcoin address data is live on Google search results after users realized on Thursday that the tech giant started indexing Bitcoin blockchain data. However, mixed reactions have followed the tech giant's reversed stance on the cryptocurrency.
A Hollywood ending for fourth quarter GDP
The latest revisions put Q4 GDP at 3.4%, the second fastest quarterly growth rate in two years. Much of the upside was attributable to stronger consumer spending, yet fresh profits data affirmed it was a good quarter for the bottom line as well with profits up by the most since the Q2-2022.