Weekly Market View November 7 to November 11

 

If there were any doubts that last week’s market weakness was attributable to election jitters, those doubts were pretty well eliminated when the markets gapped up strongly this morning on the news that the new Clinton emails had been examined by the FBI and that their position of last summer was unchanged — that no prosecutor would find the contents sufficient to prosecute Clinton.  We will see in the coming days if this was a relief rally, or whether the indices can reclaim their 50-day moving averages and trend higher.  Of course, we have our national elections tomorrow, so there is definitely the possibility of further market turmoil in the coming days.

The election has overshadowed other news that is of usual economic import, such as the monthly jobs number of last Friday, which continued the long streak of jobs growth.

Market Indices

The S&P closed Friday below its 200-day moving average (shown) but rebounded sharply today as can be seen in the weekly chart below where the index has bounced back above the 200 day line.

spy-weekly

The daily chart of the SPY shows that this key market average continues to trade below its 50-day moving average as it has for the better part of the past two months.  The 50-day moving average is where we like to see support in up-trending markets.  With today’s strong market, we are seeing the SPY make an attempt at regaining its 50 day MA.

spy-daily

The NASDAQ was down sharply last week, but it is also attempting to reclaim its 50 day MA Monday.

qqq-daily

The volatility index (VIX), or “fear index,” bounced on last week’s weakness, but retreated today on the market’s strength.  The volatility index measures how much investors are willing to pay for options on the S&P 500.  Investors can buy “put” options on the S&P as a type of insurance on their portfolios if they are concerned that the market is going to go down.

vxx

Focus on…Mexico and Latin America

The Mexican stock market, as represented by the ETF for Mexico, was up 5% together with other Latin American markets including Brazil.  With the cloud lifted over the prospect of a further investigation into Clinton, the diminishment of worries over “build that wall” and worries over the  erosion of the NAFTA trade agreements, our southern neighbors took heart by rising sharply.  These markets had been strong until the FBI’s announcement about the new emails, which had led to heavy selling of these markets in the past week.
The chart below shows the sharp bounce back in the Mexico ETF today.

mexico-1130-am-mon

Upcoming Earnings

Earnings continue hot and heavy this week with a focus on retailers including Macy’s, Kohl’s, Michael Kors, Nordstrom, etc. Companies of interest reporting this week include:

  • Mon:
    • Sysco (SYY), MGM Resorts (MGM), Dean Foods (DF), Cognizant (CTSH), Marriott (MAR)
  • Tues:
    • Momo (MOMO), DR Horton (DHI), CVS Health (CVS)
  • Wed:
    • Wendy’s (WEN), Dish Network (DISH), Viacom (VIAB)
  • Thurs:
    • Macy’s (M), Kohls (KSS), Astrazeneca (AZN), Nvidia (NVDA), Acacia Communications (ACIA), Microsemi (MSCC), Michael Kors (KORS), Nordstrom (JWN), Disney (DIS)
  • Fri:
    • Tyco International (TYC), Whitewave Foods (WWAV), JC Penny (JCP), Berry Plastics (BERY), Atwood (ATW)

Upcoming Economic Reports

  • Mon: Consumer credit
  • Tues: JOLTS Job Openings
  • Wed: Wholesale inventories
  • Thurs: Initial and continuing claims, Treasury budget
  • Fri: Michigan consumer sentiment

 

Strongest Sectors for past trading MONTH (including today)

The list of sectors showing relative strength over the past trading month (including today’s strong day) are:

  • Transportation including airlines
  • Steel
  • Networkers
  • Coal
  • Broker Dealers
  • Metals and mining
  • Industrials
  • Financials including regional and money center banks
  • Mexico
  • Agribusiness
  • Cybersecurity
  • Materials
  • Latin America, Mexico and Brazil

Weakest Sectors for past trading MONTH (including today)

Many sectors which were weak have rebounded today.  Among those showing weakness for the past trading month are:

  • Solar
  • Healthcare and biotech
  • Telecom
  • Goldminers
  • Internet
  • Interest related sectors such as REITs, real estate
  • Retail
  • Oil services and oil exploration

Strongest Sectors for past trading WEEK (including today)

Including today’s bounce, sectors which have been strongest include:

  • Transportation including airlines
  • Networkers
  • Steel
  • Brokerage firms
  • Industrials
  • Metals and Mining
  • Coal
  • Financials including regional and money center banks
  • Mexico
  • Medical devices
  • Cybersecurity
  • Singapore

Weakest Sectors for past trading WEEK (including today)

Even after today’s rebound, the following sectors look weak for the past week:

  • Hong Kong
  • Gold and gold miners including junior gold miners
  • Telecom
  • Master Limited Partnerships
  • Solar
  • Silver
  • Internet

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