Bears Back in Town

U.S. markets showed weakness for a 2nd-straight session and on the first trading day of December as both tariff concerns and disappointing economic news weighed on sentiment. The recent signing of the Hong Kong legislation seems to be a new sticking point with suggestions of a phase one agreement unlikely to happen by year-end at the earliest now a key concern.

President Trump also reinstated tariffs on steel and aluminum from Argentina and Brazil due to currency manipulation while Commerce Secretary Wilbur Ross said tariffs on China would be increased on December 15th if a deal with China is not reached. The pullback held near-term support levels but the action in volatility remains a heightened concern.

The Nasdaq sank 1.1% following the 1st half fade to 8,540. Near-term and upper support at 8,550-8,500 was breached but held with a move below the former signaling risk towards 8,450-8,400.

The Russell 2000 dropped 1% after testing a late day low of 1,606. Current and upper support at 1,600-1,585 was challenged and held with a close below the former getting 1,565-1,550 and the 50-day moving average in focus.

The Dow also declined 1% after tapping a late low of 27,782 while closing back below the 28,000 level. Prior and upper support from last week at 27,800-27,600 was tripped and also failed to hold with a close below the former getting 27,400-27,200 and the 50-day moving average back in play.

The S&P 500 gave back 0.9% on the morning pullback to 3,110. Fresh and upper support at 3,100-3,1075 held with a move below the latter signaling further risk towards 3,050-3,025 and the 50-day moving average.

Industrials and Technology were the weakest sectors after tanking 1.3% and 1.2%, respectively. Consumer Staples was the the only sector that showed strength after nudging up 0.1%.

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Altria Group (MO) upgraded to Buy from Neutral at Citi
Splunk (SPLK) upgraded to Buy from Neutral at Goldman Sachs
TreeHouse (THS) upgraded to Outperform from Market Perform at William Blair

Deere (DE) downgraded to Underperform from Neutral at BofA/Merrill
Philip Morris (PM) downgraded to Neutral from Buy at Citi
Roku (ROKU) downgraded to Underweight from Equal Weight at Morgan Stanley

Before the open: Bank of Montreal (BMO), Donaldson Company (DCI), Ferroglobe (GSM), Lands' End (LE), Qutoutiao (QTT)

After the close: AeroVironment (AVAV), HealthEquity (HQY), Marvell Technology (MRVL), Salesforce (CRM), Workday (WDAY), Zscaler (ZS)

Redbook - 8:55am

Gold closed at $1,469.20 an ounce, down $3.50
Silver settled at $16.97 an ounce,  down $0.14
Copper finished at $2.65 a pound, down $0.01
Crude Oil  was at $55.93 a barrel, down $0.76
Bitcoin Investment Trust (GBTC) ended at $8.99, down $0.58

I hope this helps you prepare for the trading day. Make it a great one!

   Todd Mitchell

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