Oh dear, markets surprised bulls with real selling.
For some major sectors this type of move puts us back in trading ranges once again.
Funny how the other day we had an image of a bear trap and this could very well come true for those who jump the gun with shorting in mind.
The catalyst for the selling had to do with an accumulation of poor earnings reports from Amazon (AMZN), Visa (V), Starbucks (SBUX), Boeing (BA), Texas Instruments (TXN), KLA-Tencor (KLAC), Pandora (P) and others including some major companies that reported earnings earlier in the week.
Were markets overbought? Sure, many indicators suggest that was the case. But Fed policies have forced investors to either stretch for yield or buy growth since the only other choice was under the mattress money.
Durable Goods Orders improved on the month to 0.7% vs 0.5% expected & prior -1.00% while ex-Transportation 0.8% vs 0.7% expected & prior -0.1%. Year of Year Durable Goods Orders declined -1.6% but of greater importance is core capex shipments fell 1.00%. This could theoretically reduce future GDP data.
Despite the sell-off the S&P 500 Index closed flat on the week while the NASDAQ 100 Index posted a slight gain. The same couldn’t be said for the Dow (DIA) and Small Caps (IWM).
Leading market sectors higher included: Gold Miners (GDX), Silver Miners (SIL), China (PEK), Turkey (TUR), Dollar (UUP), Gold (GLD), Silver (SLV) and Bonds (TLT).
Leading market sectors lower included: Dow (DIA), Small Caps (IWM), Financials (XLF), Energy (XLE), Transports (IYT), Industrials (XLI), REITs (IYR), Homebuilders (ITB), Consumer Discretionary (XLY), Retail (XRT), Semiconductor (SOXX), Utilities (XLU), Russia (RSX), India (EPI), Indonesia (IDX), Germany (EWG), Taiwan (EWT), Greece (GREK) and Natural Gas (UNG) among many others.
The top 20 market movers by percentage change in volume whether rising or falling is available daily.
Volume increased modestly from most trading days this week. Breadths per the WSJ was negative and please note Money Flow sectors below.
That was not a good close to week certainly. And, many believe earnings news have been positive but this week’s reports were quite disappointing.
July ends at the end of next week. Friday will present the Employment Report for June. This should provide more volatility.
Let’s see what happens.
Dave Fry is founder and publisher of ETF Digest and has been covering U.S. and global ETFs since 2001.
He is the author of "Create Your own ETF Hedge Fund: A Do-It-Yourself Strategy for Private Wealth Management" published by Wiley Finance and "The Best ETFs: U.S. Equities, A Companion Guide to Building Your ETF Portfolio".