The stock market ran into resistance near 8250 level for NASDAQ on Thursday. Support level at 8000 need to hold for the optimism over trade talk cease fire to hold.
Investors ignored the generally favorable earnings reports to fret over global economic concerns. China reported lower than forecast 6% GDP growth in Q3, the slowest pace in 27 years. Conference Board reported index of leading indicators lower for second -straight month, a worrisome sign. FED Vice Chairman, Mr. Clarinda, suggested that the FED is not ‘locked’ on a set policy path, adding uncertainty to the market.
EU and UK came to tentative agreement on terms of BREXIT last week. UK Parliament had some suggested amendments to those terms over this weekend. Negotiations will continue with EU in next two weeks as deadline approaches.
Let us watch how markets reacts to news and support levels here.
Recap of last week:
Economic Reports:
| Economy Indicator | Released Date | Period | Prior | Prior Revised | Consensus | Actual |
| Empire State Mfg. Survey | 10/14/2019 | October 2019 | 2 | 0.8 | 4.0 | |
| Store Sales Y/Y Change | 10/15/2019 | WK 10/12, 2019 | 5.7 % | 4.1 % | ||
| MBA Mortgage Applications W/W Change | 10/16/2019 | WK 10/11, 2019 | 5.2 % | 0.5 % | ||
| Retail Sales M/M change | 10/16/2019 | Sept 2019 | 0.4% | 0.6% | 0.3% | -0.3% |
| Retail Sales less autos M/M change | 10/16/2019 | Sept 2019 | 0.0% | 0.2 % | 0.2% | -0.1% |
| Business Inventories M/M Change | 10/16/2019 | August 2019 | 0.4% | 0.3 % | 0.3% | 0.0 % |
| Housing Market Index | 10/16/2019 | October 2019 | 68 | 68 | 71 | |
| Foreign Demand for LT US Securities | 10/16/2019 | August 2019 | $84.3 B | $100.6 B | $84.3 B | |
| Housing Starts | 10/17/2019 | Sept 2019 | 1.364 M | 1.386 M | 1.300 M | 1.256 M |
| Housing Permits | 10/17/2019 | Sept 2019 | 1.419 M | 1.425 M | 1.335 M | 1.387 M |
| Jobless New Claims | 10/17/2019 | WK 10/12, 2019 | 210 K | 214 K | ||
| Philadelphia FED Business Outlook | 10/17/2019 | October 2019 | 12.0 | 7.1 | 5.6 | |
| Industrial Production M/M Change | 10/17/2019 | Sept 2019 | 0.6% | 0.8% | -0.2% | -0.4% |
| Manufacturing M/M Change | 10/17/2019 | Sept 2019 | 0.5% | 0.6% | -0.3% | -0.5% |
| Capacity Utilization Rate Level | 10/17/2019 | Sept 2019 | 77.9% | 77.8% | 77.5% | |
| FED Balance Sheet | 10/17/2019 | WK 10/16, 2019 | $3.950 T | $3.966 T | ||
| Money Supply M2 Weekly Change | 10/17/2019 | WK 10/7, 2019 | $49.9 B | $47.8 B | $39.2 B | |
| Leading Indicators | 10/18/2019 | Sept 2019 | 0.0 % | -0.2 % | 0.2 % | -0.1 % |
| Baker-Hughes Rig Count | 10/18/2019 | WK 10/18, 2019 | 1002 | 994 |
This week’s major events:
| Monday | |||
| Tuesday | Redbook; Empire state mfg. Survey | ||
| Wednesday | MBA mortgage applications; FHA House price Index | ||
| Thursday | Durable Goods orders; Jobless Claims; PMI Composite; New Home sales; Kansas City FED mfg.; FED Balance sheet; Money supply | ||
| Friday | Consumer sentiment; Baker-Hughes Rig count |
Economy:
Retail sales were unexpectedly down. Manufacturing was lower than expected. Capacity utilization rate down to 77.5 %. Business outlook was down. Leading indicators were -0.1 % vs 0.2 % expected.
Sector performance:
Stock to Watch: None
Strongest groups are Mining-Gold/Silver, Insurance, Commercial services, Aerospace/Defense, Building Construction, Telecom
Weakest groups are Oil and Gas, Retail-Mall, Tobacco, Steel Producers, Food
Watch List: Our strong RS/Growth screen is showing following candidates.
CMG, PAGS, PCTY, TEAM, RNG, EPAM, FIVN, LULU, SEDG, NOC, IPHI, COST, CPRT, ESNT, KEYS
Summary:
All-clear signal is still missing for investors. Be cautious but get ready with your list of stocks with strong fundamentals and high relative strength to act upon.