Indexes spent the past week churning along as news flow was generally quiet…outside of Turkey and Russia that is. The NYSE McClellan Oscillator has been in the red for weeks, and breadth has remained pretty weak but the indexes continue to hold up! A conundrum indeed! That said keep an eye on foreign markets to see if any “contagion” happens – thus far, the U.S. markets have been acting impervious.
“Despite the gains in the averages last week, fewer stocks hit new 52-week highs and an increasing number of issues reached new lows for the year. Overall, the technical indicators argue on the side of caution,” said William Delwiche, an investment strategist at Baird, in a note.
Trade Wars!! ™ continued but without much affect on markets.
“Things are looking good in the U.S. in terms of earnings and data, but things aren’t as rosy if you look to China, emerging markets or Europe. Weakness in those regions could eventually become a headwind for the U.S.,” said Suzanne Hutchins, senior portfolio manager of the $1.5 billion Dreyfus Global Real Return Fund, which is run out of the investment boutique Newton.
The Turish lira took a hit late in the week (-17% Friday) as Trump and the ECB attacked… boosting the U.S. dollar… and bonds.
The steep decline in the Turkish currency came after the European Central Bank expressed concerns about potential contagion from Turkey’s problems, especially in the banking sector. The country is struggling with double digit inflation and its reliance on foreign funding. With much of its debt denominated in U.S. dollars, the stronger buck has added weight to its debt burden. Analysts and investors have also attributed the relentless pressure on the Turkish currency to a growing diplomatic spat between Washington and Ankara over the detention of a U.S. pastor in Turkey. The lira’s stumble prompted U.S. President Donald Trump to announce a doubling of U.S. tariffs on certain Turkish goods.
Turkey’s currency volatility has recently accelerated and now gotten to the point where it’s beginning to impact global markets as investors worry about European banking exposure,: said Alec Young, managing director of global markets research at FTSE Russell.
Russia also had a rough week as Trump attacked…
Newly announced U.S. sanctions—and the potential for a second round of actions in 90 days—roiled Russia’s currency and blue-chip stocks as the country braced for further economic pain amid uncertainties over the Trump administration’s commitment to enforcement.
Economic news was sparse and not market moving.
For the week the S&P 500 lost 0.3% while the NASDAQ added 0.4%.
Here is the 5 day weekly “intraday” chart of the S&P 500 … via Jill Mislinski.
Everyone thought Snapchat would be the new hip thing but it’s Instagram which is stealing the show! Another win for Facebook.
For large parts of the past two years, it seemed like Snapchat would be the next platform that no one could afford to ignore. Having quickly gained popularity it only seemed like a matter of time before it would break through to the mainstream and compete with the likes of Facebook, Twitter and Instagram. However, over the past 12 months Snapchat’s growth has slowed significantly and many people are beginning to ask whether the once innovative social media app was nothing more than a passing fad. In fact, it has been Instagram, not Snapchat, that really had its big breakthrough in the past year. Having implemented, or shamelessly copied as some would argue, Snapchat’s popular Stories feature, Instagram’s simple design appears to be more appealing to the broader public than Snapchat’s sometimes confusing user interface. The platform that Facebook acquired for $1 billion in 2012 recently passed the 1 billion active user mark.
Speaking of which…
Snap (SNAP) stock fell 6.8% Wednesday after the company issued quarterly guidance for the first time as well as reported a user decline.
The week ahead…
Retail sales hit Wednesday.
Will any of the “foreign weakness” matter?
The longest bull market on record hits in about a week!
Short term: The S&P 500 is holding its breakout – is that a double top in the NASDAQ??? Hmm – see the Russell 2000.