U.S. markets showed some strength shortly after a lower open on Friday following news the trade front with the EU, Mexico and Canada is easing with the U.S. set to remove steel and aluminum tariffs on Canada and Mexico. However, weakness returned late in the session following reports of stalling trade negotiations with China with the major indexes making lower lows into the close.
The end result was a down for week for the market with volatility once again spiking towards key resistance levels. The technical outlook for the major indexes remain bullish but the upcoming week will be an important test if there is a return of weakness.
The Russell 2000 dropped 1.4% after tapping a low of 1,524 ahead of the closing bell. Near-term and upper support at 1,535-1,520 was breached but held with a close below the latter and last week’s low signaling additional weakness towards the 1,500 level.
The Nasdaq fell 1% following the late day pullback to 7,810 and close back below the 50-day moving average. Upper support at 7,800-7,750 held with risk towards 7,700-7,650 on a move below the latter.
The S&P 500 was lower by 0.6% after trading to an opening low of 2,854 while also closing back below its 50-day moving average. Crucial support at 2,850 held with a move below this level getting 2,825-2,800 back in play.
The Dow gave back 0.4% after trading to an intraday low of 25,657. Current and upper support at 25,650-25,400 was breached but held with a close below the latter and the 200-day moving average being a bearish development.
For the week, the Russell 2000 tanked 2.5% and the Nasdaq sank 1.3%. The S&P 500 declined 0.8% while the Dow was down 0.7%.
Utilities were the only sector that showed strength after rising 0.5%. Industrials and Energy paced sector laggards after sliding 1.1% and 1%, respectively. Consumer Discretionary and Technology fell 0.8%
The best performing sectors for the week included Real Estate (1.5%), Utilities (1.4%), Energy (1.5%) and Consumer Staples (0.8%). Financials (-2.2%) were easily the worst performing sector followed by Industrials (-1.9%) and Consumer Discretionary (-1.2%).
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Foot Locker (FL) upgraded to Buy from Neutral at B. Riley FBR
Under Armour (UA, UAA) upgraded to Overweight from Neutral at JPMorgan
Walmart (WMT) upgraded to Accumulate from Hold at Gordon Haskett
Baidu (BIDU) downgraded to Hold from Buy at Deutsche Bank
Camping World (CWH) downgraded to Sector Weight from Overweight at KeyBanc
Wolverine World Wide (WWW) downgraded to Hold from Buy at Argus
Before the open (EST):
Compugen (CGEN), International Game Technology (IGT), Pinduoduo (PDD), Qudian (QD), Spartan Nash (SPTN)
After the close(EST):
Atento (ATTO), iPic Entertainment (IPIC), Nordson (NDSN), Qutoutiao (QTT)
UPCOMING ECONOMIC NEWS
Monday's economic reports (EST):
Chicago Fed National Activity Index - 8:30am
METALS / OIL
Gold closed at $1,275.70 an ounce, down $10.50
Silver settled at $14.39 an ounce, down $0.15
Copper finished at $2.73 a pound, down $0.01
Crude Oil was at $63.06 a barrel, up $0.00
Bitcoin Investment Trust (GBTC) ended at $9.23 down $0.71
I hope this helps you prepare for the trading day. Make it a great one!
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