The Quiet Before the Storm
Stocks on Wall Street ended close to their daily low on Tuesday as traders distanced themselves from risky assets leading up to today’s far-reaching political and economic headlines. The general elections in Britain, amidst the country’s EU departure, along with the European Central Bank (ECB) policy meeting and the Senate testimony of former FBI chief, James Comey, are all likely to impact investor sentiment today.
At the time of his firing, Comey had been investigating whether Donald Trump’s 2016 election campaign had used Russian interference to sway the results. Comey’s testimony is likely to place a damper on Trump’s ability to execute his election campaign agenda; from cutting regulation to sweeping tax reform, the momentum on Trump’s side is already low.
Investors will also be carefully eyeing the British election, current PM, Theresa May, trying to enlarge her parliamentary majority to win a greater mandate for leaving the Euro zone after the British people voted in June of last year in favor of divorcing the continental bloc. Investors will also have their hands full with the ECB policy meeting.
There’s no doubt that for investors, today will be one of the most meaningful days of the week. If there were investors out there looking for volatility to rear its head in the marketplace, apparently, they’ll get their wish this Thursday and Friday.
In Summary for the Day: The Dow Jones fell 0.23%, the S&P 500 declining 0.28% and the NASDAQ retreating 0.33%.
Leading up to Thursday, investors have already adopted more defensive positions. Gold rose 1.1% to $1,293.47 per ounce, the precious metal having traded at its highest level since November ’16 in intraday trading.
One of the stocks standing out in yesterday’s trading was the department store chain, Macy’s (M), which fell 8.2% to the $21.90 level after warning investors that its profit margins could shrink even more. Macy’s warning hurt other department store chains as well, JCP falling 4.1%, SHLD shedding 2.5%, and JWN slipping 3.6%.
On the S&P 500, 28 stocks rose to new 52-week highs, 11 dipping to new yearly lows; on the NASDAQ, 82 stocks recorded new 52-week highs, 70 falling to new yearly lows.
About 6.42 billion shares changed hands on U.S. exchanges, compared to the 6.6 billion average over the last 20 trading days.
Wednesday: Traders will be focusing on tech stocks and crude prices today, in the vacuum between now and tomorrow’s event-packed trading. All of the tech stocks beloved by investors – AMZN, FB, and GOOGL – saw weakness in the the last trading hour yesterday. Traders will be waiting to see whether the weakness continues into today.
AMZN, FB and GOOGL are part of the stock grouping known as FANG, the stocks which succeeded in outperforming the market to the greatest extent year-to-date. NFLX is also a member of the elite club.
The 2,423 point level is a technical level on the S&P 500 which is set to be tested on Thursday, the 8-day EMA traversing this level. In the event this level holds its own, investors’ tendency to “buy the corrections” could still play out. Investors’ tendency to buy every weakness or market price corrections has kept stocks from experiencing a deeper price correction. In the event this level doesn’t hold its own and prop up the market, the S&P 500 is likely to test the 2,400 point level.
Crude trading today is also likely to see volatility. The Energy Information Administration (EIA) is expected to release petroleum and petroleum product reserves at 10:30 N.Y. time. Crude in fact rallied yesterday, rising 1.7% and closing at the $48.19 barrel level. After trading concluded yesterday, the American Petroleum Institute (API) report featured an inventory decline of 4.6 million barrels. A key psychological level for crude traders now is $47.
Wednesday’s Hot Stocks: PLAY, UNFI, AMBA, PRGO, BF.B
Have a great trading day!
|Tuesday||10:00||JOLTS – Job Openings||–||Medium|
|Wednesday||10:30||Crude Oil Inventories||Low|
|CASY||Casey’s General Stores, Inc.||PM||Monday|
|THO||Thor Industries, Inc.||PM||Monday|
|PLAY||Dave & Buster’s Entertainment, Inc.||PM||Tuesday|
|UNFI||United Natural Foods, Inc.||PM||Tuesday|
|NAV||Navistar International Corporation||AM||Thursday|
|DVMT||Dell Technologies Inc.||AM||Thursday|
|SJM||The J. M. Smucker Company||PM||Thursday|
Today’s Picks – Day Trading!
New York Strategy Swing
Today’s Picks – Swing “New-York Strategy
No.1 – LULU
|Sector||Consumer Goods | Textile – Apparel Clothing|
No.2 – RH
|Sector||Services | Home Furnishing Stores|