No Worries

No worries.  Hope continued to be the central theme on Friday as markets continued their climb for a fourth session in a row.  News of continued talks between the US and China fueled the risk-on sentiment in the markets as reports that China would ramp up its purchases of US products in order to narrow the trade deficit hit the tape. The news added to positive sentiment that carried over from Thursday which had all of the major indexes close above their 50 day simple moving averages.  While the 50 day SMA is not the bellwether for trend followers, closes above it are positive steps in a potential recovery.  For more information on moving averages see my note with details on the topic here:  https://www.siebertnet.com/blog/index.php/2018/10/24/anything-goes/ .  While we are on the topic of technicals, a quick fly through of the charts is in order as Friday’s closes warrant a closer look. The S&P500 closed above its 2643 Fibonacci resistance line, which will now serve as support for the index (see chart 4 in my attached daily chartbook).  In similar fashion, the Dow Jones Industrial Average closed above its 24332 Fibonacci resistance line.  The Dow is within striking distance of its 200 day simple moving average and a close above it would signal a re-trending (see chart 6 in my attached daily chartbook).  The Russell 2000 rose by +1.04% on Friday as it continues to climb out of its correction.  The index will get support from its 1448 Fibonacci line and will encounter resistance at 1500 (see chart 7 in my attached daily chartbook).  The ongoing recovery in the Russell is a good indicator of overall equity health as investors typically begin to search for buying opportunities in small caps first.  The NASDAQ 100 closed just below its 6797 resistance line and the index will get support from its 6584 Fibonacci line (see chart 8 in my attached daily chartbook).  Crude had a positive session on Friday as it surged by +3.32% to $53.80 / barrel, which is above a resistance line of 53.33 (see chart 11 in my attached daily chartbook).  The positive move in WTI Crude contributed to Friday’s rally, specifically the energy sector, which rose by around +2.0%.  As expected, bonds traded off on Friday leaving 10 year treasury yields higher by 3 basis points at 2.78%.  The 2/10 yield curve flattened to 16 basis points but was still slightly steeper than a week earlier.  The best value still remains in the 3 year maturity as evidenced by the shape of the yield curve, which dips from 3 to 7 years then offers very little yield pickup as maturities increase to 30 years (see chart 17 in my attached daily chartbook).

After a pause for the observance of Martin Luther King Jr. Day yesterday, we have a week of mixed economic releases that include housing numbers, retail, durable goods orders, trade balance, and PMI.  This week will also feature a pick up in earnings releases with 55 of the S&P500 companies reporting.  This morning we will get Existing Home Sales which is expected to show a month over month decrease of -1.5% versus last months +1.9%.  Also before the bell we will get a number of earnings releases including Black & Decker, Johnson & Johnson, and Halliburton.  Refer to the attached weekly earnings and economic calendars for time details and expectations.  Overnight WHILE YOU SLEPT reports of a global slowdown combined with some news that US – Chinese trade talks might be stalling caused futures to trade off in Asia and Europe.  A Presidential tweet and news that the US is pursuing the extradition of Huawei’s CFO from Canada didn’t help.  That said markets have most likely already factored in a positive outcome to the trade war and any negative news at this point will cause volatility.  Though the market has still largely ignored the government shutdown, it is bound to have some real economic impact at some point if not at least dampening investor sentiment.  Please call if you have any questions.

daily chartbook 2019-01-22

earnings releases 1_22

econ numbers 1_22

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Muriel Siebert & Co., LLC is an affiliated broker/dealer of the public holding company, Siebert Financial Corporation, which also owns Siebert AdvisorNXT, LLC. Siebert AdvisorNXT, LLC is a registered investments advisor (RIA) with the SEC and with state securities regulators. We may only transact business or render personal investment advice in states where we are registered, filed notice or otherwise excluded or exempted from registration requirements. Investment Advisor products are NOT insured by the FDIC, SIPC any federal government agency or Siebert’s parent company or affiliates.

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