It’s been a rough retreat for stocks over the past two weeks.
The S&P 500
now is lying 2.4% below this year’s closing high at 2,102, which it reached back on April 20.
Even so, market pundits aren’t throwing in the towel quite yet.
The state of affairs isn’t bullish, but it also isn’t clearly bearish, argues S&P Global Market Intelligence’s Sam Stovall.
Traders are “buying when the S&P 500
threatens its 200-day moving average, yet selling when the P/E on estimated EPS approaches 18X,” the equity strategist says in a note.
There might even be a record high coming soon, he suggests.
“This sideways action may serve a correction in time, allowing the market to build a base from which to challenge the old high,” he says. More from Stovall in our call of the day.
On the other hand, today’s chart is decidedly downbeat, illustrating the biotech sector’s recent pain.
And watch for more moves today by the Sohn Investment Conference’s punching bags, which have grabbed the spotlight a bit as everyone waits for tomorrow’s big event — the monthly U.S. jobs report.
ICYMI, David Einhorn took shots at Caterpillar
, Carson Block dissed Ozarkian banking
and Stan Druckenmiller blasted the entire stock market and the Fed, recycling his November warning about chickens coming home to roost.
Key market gauges
It’s mostly a sea of green in the early going. S&P futures
are pointing higher, putting stocks on track to erase part of this week’s drop. Oil
is gaining as a massive Canadian wildfire threatens crude output up north. European stocks are up, though Asian trading was lackluster, with a few markets closed for holidays. A key dollar index
are both gaining.
While Stovall suggests the S&P could jump to a new high soon, he offers a measured take overall.
On the plus side, he stresses major benchmarks haven’t undercut key chart levels. What’s he watching for the S&P?
“A move above 2,092 or below 2,041 would signal a shift to favor either the bulls or bears. While between these two extremes, the bias remains for rotational price action,” he says.
Stovall says the back-and-forth moves are coming because no one can become too optimistic.
“A true contrarian today might be dubbed a Pollyanna, as their forecast would require a reversal of fundamental fortunes: a gradual recovery in U.S. economic growth, a second-half rebound in S&P 500 EPS estimates, an emerging leadership role of international markets and a reversion to the mean for value over growth,” he says.
“The absence of such encouragement, however, has caused investors to maintain a rotational mindset.”
It’s been rough lately for biotech stocks, which are often not a bad gauge of investors’ overall appetite for risk.
“The technicals are not looking good lately,” says a blog post over at TalkMarkets penned by Rod Raynovich.
The SPDR S&P Biotech ETF
had a recent peak last month around $58, but it’s now down 5.7% in a month and suffering a year-to-date loss that’s nearing 30%, he notes. A related play, the iShares Nasdaq Biotech ETF
is showing similar poor action, Raynovich adds.
The chart features XBI, which is back to wallowing below its 50-day moving average after living above that chart level (shown in red) throughout April.
“Hedge funds are thus the perfect investment vehicle in the age of Trump — selling ‘luxury’ to people with no concept of value.” —Bob Seawright, in his 1,000th blog post at Above the Market, describes hedge funds as “financial gaslighting.”
Read more: Donald Trump won’t self-finance his presidential campaign
is up premarket after boss Elon Musk ramped up an already aggressive production schedule. He promised to manufacture at an annual rate of 500,000 cars in 2018, as the company posted quarterly results late Wednesday.
YouTube unit is reportedly planning a streaming TV service, while Yahoo
has been hit by AT&T
end a 15-year partnership.
are among the companies on the earnings docket ahead of the open.
437 days — That was the duration of the “worst bear market that nobody ever talks about,” writes Michael Batnick over at The Irrelevant Investor. Forget for a moment about 1929 and our most recent financial crisis, and instead learn a bit about the market collapse of 1973-74, he suggests.
A reading on weekly jobless claims is due at 8:30 a.m. Eastern Time, but it might not get much attention given the monthly jobs report comes tomorrow.
On the Fed front, San Francisco Fed President John Williams is expected to appear on CNBC this morning, and St. Louis Fed President James Bullard is due to give a speech on the economy at 11:50 a.m. Eastern at UCSB.
“While cats have generally fascinated the Internet, a show devoted to watching them eat is unusual.”
Newark joins Flint as a city in the middle of a lead poisoning crisis.
A poem about Silicon Valley, made from Quora questions.
Romanian hacker “Guccifer” claims “it was easy” to breach Clinton’s server.
Cyndi Lauper has gone all country and western.
“The purpose wasn’t to replace surgeons.” A robot can stitch tissue by itself.
[email protected] is giving away its old artwork at an ‘anti-art’ show in NYC: https://t.co/4V2ggp5Di0 pic.twitter.com/8cgBaxRZ9I
— Adweek (@Adweek) May 5, 2016
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