Small-Caps Clear 50-Day Moving Average

U.S. markets were sluggish throughout the 1st half of Tuesday’s action before showing some midday strength on news China may offer to buy more U.S. goods in trade talks. According to reports, China is expected to agree to purchase more U.S. agricultural goods in hopes of reaching a better trade agreement as the two sides prepare for a meeting between their top negotiators in October.

The choppy resumed shortly afterwards and once the news faded with the major indexes closing mostly higher for session and Tech lagging. The small-caps showed continued strength as its largest sector, Financials, remained strong and have been one of the factors holding them back over the past few months.The Russell 2000 was up for the 2nd-straight session after jumping 1.2% while tapping a late day high of 1,543. Lower resistance at 1,545-1,560 held on the close above the 50-day moving average with a move above the latter getting 1,575-1,590 in play.

The Dow extended its winning streak to 5-straight after adding 0.3% and closing on its session high of 26,909. Near-term and lower resistance at 27,00-27,250 held with the July all-time high at 27,398.

The S&P 500 added a point, or 0.03%, following the late day run to 2,979 and closing high. Lower resistance at 3,000-3,025 held with the all-time peak at 3,027, also set in July.

The Nasdaq fell 3 points, or 0.04%, after trading in the red throughout the day while bottoming at 8,001. Upper support at 8,050-8,000 and the 50-day moving average held for the 2nd-straight session with a close below the latter getting 7,900-7,850 in focus.

Energy led sector strength after soaring 1.2% while Materials and Industrials advanced 1% and 0.9%, respectively. Real Estate sank 1.5% to lead sector laggards while Consumer Staples and Technology fell 0.6% and 0.5%.

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ANALYST UPGRADES/DOWNGRADES

Boston Properties (BXP) upgraded to Equal Weight from Underweight at Morgan Stanley
Heartland Express (HTLD) upgraded to Overweight from Sector Weight at KeyBanc
Schlumberger (SLB) upgraded to Overweight from Equal Weight at Morgan Stanley

Dollar General (DG) downgraded to Market Perform from Outperform at Bernstein
Wells Fargo (WFC) downgraded to Neutral from Buy at UBS
Wendy's (WEN) downgraded to Neutral from Buy at Guggenheim

WEDNESDAY'S EARNINGS ANNOUNCEMENTS  
Before the open: China Online Education (COE), General Finance (GFN), Lovesac (LOVE)

After the close: Aurora Cannabis (ACB), Oxford Industries (OXM), Streamline Health Solutions (STRM), Tailored Brands (TLRD)

UPCOMING ECONOMIC NEWS
Wednesday’s economic reports (EST): 
MBA Mortgage Applications - 7:00am
PPI-FD - 8:30am
Atlanta Fed Business Inflation Expectations - 10:00am
Wholesale Trade - 10:00am

METALS / OIL
Gold closed at $1,499.20 an ounce, down $11.90
Silver settled at $18.19 an ounce, up $0.02
Copper finished at $2.63 a pound, unchanged
Crude Oil was at $57.92 a barrel, down $0.10
Bitcoin Investment Trust (GBTC) ended at $12.05, down $0.24


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


   Todd Mitchell


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