The indexes were looking a bit rocky the past few weeks, with a consolidation at lower levels with no real attempt at an upthrust — but the rally late in the week certainly helped prospects. The bulk of weekly gains came Wednesday and Thursday but Thursday’s move up helped change the complexion of the S&P 500 and Russell 2000 charts which we’ll show below. Trump made a speech “attacking” high drug prices Friday… but drug companies surged that day – so you can see how “biting” these proposals will be. Consider “the swamp” fully loaded.
“Overall, this is quite underwhelming in scope,” said Craig Garthwaite, director of the health-care program at Northwestern University’s Kellogg School of Management. “The proposal is vague on details and filled with more slogans than actual sound economic policies.”
“They’ve confirmed this administration was and will remain very pro-pharma,” said Sanford C. Bernstein & Co. analyst Ronny Gal in an interview. He said the proposals won’t put “any significant pressure on pharma pricing,” and that some would be positive for the industry, such as pushing other countries to pay more.
For the week the S&P 500 closed up 2.4% while the NASDAQ gained 2.7%.
The consumer-price index rose 0.2% in April, while core CPI, which strips out food and energy, rose 0.1%. Traders looking for the inflation ghost were put to ease.
For the FOURTH week in a row we will highlight the crude oil chart as it is doing very bullish things!
Here is the 5 day weekly “intraday” chart of the S&P 500 …via Jill Mislinski.
Very cool representation of U.S. states by GDP if they were their own countries – pretty staggering how powerful the U.S. economically is when you look at it this way.
California’s gross domestic product of $2.75 trillion in 2017 basically matches that of the U.K., and it achieves this with 19.3 million workers, vs. Great Britain’s 33.8 million. Texas…. produced nearly $1.7 trillion to match Canada. The Lone Star State accomplished this with 50% fewer workers. The U.S. produced 24.3% of world GDP in 2017, with only about 4.3% of the world’s population. California, Texas and New York — if they were their own countries — would have ranked in the world’s top 11 largest economies.
The week ahead…
Retail sales on Tuesday are expected to be up 0.6%. Pretty quiet elsewhere!
Short term: After a lot of consolidation at lower levels – which is a concern – we saw a reversal here late in the week.
The Russell 2000 – like the S&P 500 – broke a downtrend line (2 in fact)… but is near yearly highs already.
The NYSE McClellan Oscillator stayed in black all week after poking it’s head slightly over 0 the prior Friday.
Long term: Still very positive for the “buy and never sell” crowd.
Charts of interest / Big Movers:
Monday, Athenahealth (ATHN) jumped more than 16.4% after Elliott Management made a $7 billion bid for the company.
Tuesday, Hertz Global (HTZ) fell 18.7% after the car-rental company posted a wider-than-expected quarterly loss late Monday.
Also Tuesday, Dish Network (DISH) posted quarterly earnings that matched expectations. Shares slumped 12.1%. Having a very rough 2018.
Dean Foods (DF) jumped 17% after the company reported better-than-expected earnings.
Wednesday, TripAdvisor (TRIP) soared 23% after the online travel booking service late Tuesday released results that topped Wall Street estimates.
Friday, The Trade Desk (TTD) jumped 43.4% after the platform for managing digital-ad campaigns blew out earnings forecasts. It reported that streaming TV advertising surged nearly 2,000% over the year in the first quarter. Adjusted for one-time items, Trade Desk said it earned $15.3 million, or 34 cents a share, compared with $7.8 million, or 18 cents a share, a year ago. Revenue rose to $85.7 million, from $53.4 million a year ago. Analysts had expected adjusted earnings of 10 cents a share on sales of $73.2 million.
Oppenheimer’s Brian Schwartz wrote that the company managed to post better-than-expected “61% revenue growth against one of the most difficult comparisons in its history.”
Have a great week and we’ll see you back here Sunday!