Bears Get Overdue Weekly Win


U.S. markets closed higher on Friday as optimism over trade relations with China returned after President Trump said a trade agreement between the two sides is potentially very close. The back-and-forth rhetoric came after China had said earlier that it sought to work out an initial deal with the U.S. following reports that an agreement could be delayed into 2020.

The gains weren’t enough to offset weekly losses for the major indexes as multi-week winning streaks came to an end. However, the weekly pullback was a healthy sign of a much needed consolidation period as slightly overbought levels remain in play.

The Dow was up 0.4% after testing an intraday high of 27,898. Prior and lower resistance at 27,800-28,000 was cleared and held with continued closes above the latter and the all-time high at 28,090 leading to blue-sky territory towards 28,250-28,500.

The Russell 2000 traded in a 10-point range while advancing 0.3% with the morning high reaching 1,591. Near-term and lower resistance at 1,585-1,600 was recovered with a close above the latter getting 1,615-1,625 and the 52-week peak from May at 1,618 in play.

The S&P 500 nudged up 0.2% after trading in a 13-point range while trading up to 3,112. Key resistance at 3,125 easily held with a close above this level and the all-time high of 3,127 getting 3,150-3,175 in focus.

The Nasdaq also added 0.2% following opening pop to 8,535. Near-term and lower resistance at 8,550-8,600 was challenged but held with a close above the latter and last Tuesday’s all-time high of 8,589 signaling strength towards 8,650-8,700.

For the week, the Russell 2000 dropped 0.6% while the Dow was down 0.5% to end a 4-week winning streak. The Nasdaq and S&P 500 fell 0.3% to snap 7-week and 6-week winning streaks, respectively.

Financials and Consumer Discretionary were the strongest sectors on Friday after advancing 0.7%. Real Estate and Energy were down 0.6% and 0.3%, respectively, and were the weakest sectors.

For the week, the best performing sectors were Healthcare (2.6%), Communication Services (0.9%) and Energy (0.7%). Materials (-2%), Consumer Discretionary (-1.4%) and Industrials (-0.6%) were the leading sector laggards.

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Applied DNA Sciences (APDN) upgraded to Buy from Hold at Maxim
Duke Energy (DUK) double upgraded to Buy from Sell at Goldman Sachs
Site Centers (SITC) upgraded to Buy from Hold at Stifel

Cognizant (CTSH) downgraded to Underperform from Hold at Needham
TechnipFMC (FTI) downgraded to Hold from Buy at Berenberg
Universal Display (OLED) downgraded to Market Perform from Outperform at Cowen

Before the open: Brainsway (BWAY), Euroseas (ESEA), Jacobs Engineering (JEC), Nordic American Tankers (NAT), ReneSola (SOL),

After the close:  Ambarella (AMBA), Beacon Roofing Supply (BECN), Caleres (CAL), Golub Capital (GBDC), Hewlett Packard Enterprise (HPE), Mesoblast (MESO), Nutanix (NTNX), Palo Alto Networks (PANW), Spire (SR)

Chicago Fed National Activity Index - 8:30am
Dallas Fed Manufacturing Survey - 10:30am

Gold closed at $1,463.60 an ounce, unchanged
Silver settled at $17.00 an ounce,  down $0.07
Copper finished at $2.64 a pound, down $0.02
Crude Oil  was at $57.93 a barrel, down $0.46
Bitcoin Investment Trust (GBTC) ended at $9.27,  down $0.04

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

   Todd Mitchell

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