September 13 Market Update | Technical, Fundamental, News
Description:
An analysis for the week ahead.
Points of Interest:
Dull Participation; Poor Structure On Both Sides; Strong Names Break Trend.
Technical:
Broad-market equity indices ended the week lower with the S&P 500 correcting to $3,300.
Recapping last week’s action, on Tuesday, alongside Brexit news, on a second attempt, the S&P 500 broke through the $3,400 low-volume area, suggesting directional conviction changed. After spending much of the day trading neutral, the S&P extended lower, in-line with delta and away from value.
On news of AstraZeneca plc's (NYSE: AZN) suspended COVID-19 trial, selling continued overnight into a base of liquidity in the $3,290 region before buyers regained control and one-time framed the market higher, to and through prior value and the low-volume area broken the day prior.
On Thursday’s economic data, the S&P 500 liquidated after non-convicted buyers failed to take out the prior day's low-excess high. Selling intensified as the market ate into prior low-volume, before closing off on a weak low, in-line with the prior day's cash-session low. After tech shares led an overnight rally up to some low-volume areas from the prior day's session, machine-like selling appeared and pushed the market through the weak low’s, before buyer's regained strength to finish Friday off in-range.
Overall, the recent mechanical activity to and from key technical levels denotes the non-presence of larger other time frame (OTF) participants and conviction. Heavily weighted index constituents are breaking trend while the broad market’s failure to extend much lower into the poor structure below it, coupled with reduced volatility pressures, suggests immediate downside may be limited. As a result, it’s time to temper expectations and look to reposition in line with emerging macro-economic and geopolitical themes.
Scroll to bottom of document for non-profile charts.
Fundamental:
ARK Invest analyst Sam Korus suggested that the risks to auto loans, the securities supporting them, and underlying collateral may threaten the entire auto ecosystem.
“The percent of auto loans delinquent by 90 days or more has been rising for almost four years and is approaching levels last seen during the Global Financial Crisis (GFC) in 2009, as shown below. During the GFC, most consumers and businesses prioritized the servicing of auto loans over their mortgages because, in the absence of ride-hailing, they relied on vehicles to keep their jobs and businesses going. Now working from home, they seem to be prioritizing mortgages and home equity (HE) loans over auto and credit card debt.”
Korus also noted delinquencies may double while the underlying collateral will likely see a depression in residual value due to the mobility revolution. As a result, consumers, lenders, dealerships, and auto manufacturers may suffer financial damage as secular risks rebound in the tail-end of the COVID-19 recovery.
Source: ARK Investment Management @ bit.ly/3mqrXkb
Key Events:
Tuesday: Industrial Production.
Wednesday: MBA Mortgage Applications; Retail Sales; Business Inventories; NAHB Housing Market Index; EIA Stocks Change; FOMC Economic Projections; Fed Interest Rate Decision; Fed Press Conference; Foreign Bond Investment; Overall Net Capital Flows.
Thursday: Building Permits; Jobless Claims; Housing Starts; Philadelphia Fed Manufacturing Index.
Friday: Michigan Consumer Sentiment; CB Leading Index; Michigan Inflation Expectations.
Recent News:
White House eyes executive actions as virus-relief talks appear finished. wapo.st/33kodrw
Weekly jobless claims flatten as the labor market shows signs of fatigue. reut.rs/3hlVt6I
Bank of Canada head says too soon for exit from stimulus, will adjust QE. reut.rs/33skh7Y
Forecasters see a 69% chance of an accessible vaccine by March 2021. bit.ly/35tQXkp
New York office glut signals market downturn amid coronavirus recovery. reut.rs/2FCjoBx
Used cars drive U.S. consumer prices higher; inflation pressures firming. reut.rs/3kdAeWr
NYSE indicates that it will exit New Jersey if the state taxes stock trades. reut.rs/2ZveIV9
Equity market turmoil seen unlikely to provoke Federal Reserve response. reut.rs/3mhuWuS
U.S. proposes to waive minimum flight requirements for airlines until 2021. reut.rs/2FqYZj9
Tesla Inc (NASDAQ: TSLA) launches fast electric car charging in Berlin. reut.rs/2GY4E0L
Pandemic e-commerce surge spurs race for Tesla-like electric delivery vans. reut.rs/2GXQvAD
Return of rush hour traffic in Europe and Asia adds to mixed outlook for oil. bloom.bg/3istaoA
West Coast freight networks ‘bursting at the seams’ with surging imports. on.wsj.com/3miPdjS
Equity funds have seen net outflows every week for every month of 2020. bit.ly/33n0Ihr
Purchasing managers’ indexes from ISM and IHS Markit show recovery. bit.ly/33n0Ihr
Production problems spur FAA review of Boeing Co (NYSE: BA) 787. on.wsj.com/3bSupuG
Copper on the cusp of a historic supply squeeze as China ups demand. yhoo.it/2ZxIqZQ
New set of digitally influenced norms and behaviors born among consumers. bit.ly/2E03CQK
Second wave of COVID-19 confronts Western Europe, following a sharp fall. bit.ly/3iuYVNC
Small businesses exhausted federal funding and started to lay off workers. bit.ly/3is90Lr
Equity market volatility stemmed from risk of new, different tax frameworks. bit.ly/2FyNLJ4
August jobs stronger than anticipated but did not meaningfully change outlook. bit.ly/2FyNLJ4
European recovery is losing momentum as demand is soft, uncertainty remains. bit.ly/2FyNLJ4
Japan’s economy to mark sharp contraction as a second wave materializes. bit.ly/2FyNLJ4
Downtrend in credit quality slowed with upgrades outnumbering downgrades. bit.ly/2FyNLJ4
Simon Property, Brookfield Property to buy JCPenney Company Inc (OTC: JCPNQ). cnn.it/2RplOq1
Economic model reform hopes rise as China focuses on inward economic shifts. reut.rs/3mgx5Hp
Rise in remote, distributed workforces may drive new wave of venture deals. bit.ly/2FxV7wJ
World Agricultural Supply and Demand Estimates as of September 11, 2020. bit.ly/33q1UAH
The global energy transition is well under way and is accelerating rapidly. reut.rs/3hmYZxz
Walmart Inc (NYSE: WMT) to test drone delivery of grocery household items. reut.rs/2ZtvUdV
U.S. airlines warn on travel recovery while awaiting fresh recovery aid. reut.rs/2FgLh2x
U.S. utilities say Biden plan to cut C02 hinges on breakthroughs in clean tech. reut.rs/3ml2PuK
Key Metrics:
Sentiment: 23.7% Bullish, 27.8% Neutral, 48.5% Bearish as of 9/9/2020. bit.ly/330VhEp
Gamma Exposure: (Trending Lower) 1,970,983,599 as of 9/11/2020. bit.ly/2UpgtRE
Dark Pool Index: (Trending Lower) 42.1% as of 9/11/2020. bit.ly/2UpgtRE
Product Snapshot:
S&P 500 (ES):
SPY 
SPX
Nasdaq 100 (NQ):
QQQ 
NDX
Russell 2000 (RTY):
IWM 
RUT
Gold (GC):
GLD
Crude Oil (CL):
USO 
DBO USL
Treasury Bonds (ZB):
TLT
Disclaimer:
This is a page where I look to share knowledge and keep track of trades. If questions, concerns, or suggestions, feel free to comment. I think everyone can improve, especially me.
In no way should this post be construed as investment advice.
An analysis for the week ahead.
Points of Interest:
Dull Participation; Poor Structure On Both Sides; Strong Names Break Trend.
Technical:
Broad-market equity indices ended the week lower with the S&P 500 correcting to $3,300.
Recapping last week’s action, on Tuesday, alongside Brexit news, on a second attempt, the S&P 500 broke through the $3,400 low-volume area, suggesting directional conviction changed. After spending much of the day trading neutral, the S&P extended lower, in-line with delta and away from value.
On news of AstraZeneca plc's (NYSE: AZN) suspended COVID-19 trial, selling continued overnight into a base of liquidity in the $3,290 region before buyers regained control and one-time framed the market higher, to and through prior value and the low-volume area broken the day prior.
On Thursday’s economic data, the S&P 500 liquidated after non-convicted buyers failed to take out the prior day's low-excess high. Selling intensified as the market ate into prior low-volume, before closing off on a weak low, in-line with the prior day's cash-session low. After tech shares led an overnight rally up to some low-volume areas from the prior day's session, machine-like selling appeared and pushed the market through the weak low’s, before buyer's regained strength to finish Friday off in-range.
Overall, the recent mechanical activity to and from key technical levels denotes the non-presence of larger other time frame (OTF) participants and conviction. Heavily weighted index constituents are breaking trend while the broad market’s failure to extend much lower into the poor structure below it, coupled with reduced volatility pressures, suggests immediate downside may be limited. As a result, it’s time to temper expectations and look to reposition in line with emerging macro-economic and geopolitical themes.
Scroll to bottom of document for non-profile charts.
Fundamental:
ARK Invest analyst Sam Korus suggested that the risks to auto loans, the securities supporting them, and underlying collateral may threaten the entire auto ecosystem.
“The percent of auto loans delinquent by 90 days or more has been rising for almost four years and is approaching levels last seen during the Global Financial Crisis (GFC) in 2009, as shown below. During the GFC, most consumers and businesses prioritized the servicing of auto loans over their mortgages because, in the absence of ride-hailing, they relied on vehicles to keep their jobs and businesses going. Now working from home, they seem to be prioritizing mortgages and home equity (HE) loans over auto and credit card debt.”
Korus also noted delinquencies may double while the underlying collateral will likely see a depression in residual value due to the mobility revolution. As a result, consumers, lenders, dealerships, and auto manufacturers may suffer financial damage as secular risks rebound in the tail-end of the COVID-19 recovery.
Source: ARK Investment Management @ bit.ly/3mqrXkb
Key Events:
Tuesday: Industrial Production.
Wednesday: MBA Mortgage Applications; Retail Sales; Business Inventories; NAHB Housing Market Index; EIA Stocks Change; FOMC Economic Projections; Fed Interest Rate Decision; Fed Press Conference; Foreign Bond Investment; Overall Net Capital Flows.
Thursday: Building Permits; Jobless Claims; Housing Starts; Philadelphia Fed Manufacturing Index.
Friday: Michigan Consumer Sentiment; CB Leading Index; Michigan Inflation Expectations.
Recent News:
White House eyes executive actions as virus-relief talks appear finished. wapo.st/33kodrw
Weekly jobless claims flatten as the labor market shows signs of fatigue. reut.rs/3hlVt6I
Bank of Canada head says too soon for exit from stimulus, will adjust QE. reut.rs/33skh7Y
Forecasters see a 69% chance of an accessible vaccine by March 2021. bit.ly/35tQXkp
New York office glut signals market downturn amid coronavirus recovery. reut.rs/2FCjoBx
Used cars drive U.S. consumer prices higher; inflation pressures firming. reut.rs/3kdAeWr
NYSE indicates that it will exit New Jersey if the state taxes stock trades. reut.rs/2ZveIV9
Equity market turmoil seen unlikely to provoke Federal Reserve response. reut.rs/3mhuWuS
U.S. proposes to waive minimum flight requirements for airlines until 2021. reut.rs/2FqYZj9
Tesla Inc (NASDAQ: TSLA) launches fast electric car charging in Berlin. reut.rs/2GY4E0L
Pandemic e-commerce surge spurs race for Tesla-like electric delivery vans. reut.rs/2GXQvAD
Return of rush hour traffic in Europe and Asia adds to mixed outlook for oil. bloom.bg/3istaoA
West Coast freight networks ‘bursting at the seams’ with surging imports. on.wsj.com/3miPdjS
Equity funds have seen net outflows every week for every month of 2020. bit.ly/33n0Ihr
Purchasing managers’ indexes from ISM and IHS Markit show recovery. bit.ly/33n0Ihr
Production problems spur FAA review of Boeing Co (NYSE: BA) 787. on.wsj.com/3bSupuG
Copper on the cusp of a historic supply squeeze as China ups demand. yhoo.it/2ZxIqZQ
New set of digitally influenced norms and behaviors born among consumers. bit.ly/2E03CQK
Second wave of COVID-19 confronts Western Europe, following a sharp fall. bit.ly/3iuYVNC
Small businesses exhausted federal funding and started to lay off workers. bit.ly/3is90Lr
Equity market volatility stemmed from risk of new, different tax frameworks. bit.ly/2FyNLJ4
August jobs stronger than anticipated but did not meaningfully change outlook. bit.ly/2FyNLJ4
European recovery is losing momentum as demand is soft, uncertainty remains. bit.ly/2FyNLJ4
Japan’s economy to mark sharp contraction as a second wave materializes. bit.ly/2FyNLJ4
Downtrend in credit quality slowed with upgrades outnumbering downgrades. bit.ly/2FyNLJ4
Simon Property, Brookfield Property to buy JCPenney Company Inc (OTC: JCPNQ). cnn.it/2RplOq1
Economic model reform hopes rise as China focuses on inward economic shifts. reut.rs/3mgx5Hp
Rise in remote, distributed workforces may drive new wave of venture deals. bit.ly/2FxV7wJ
World Agricultural Supply and Demand Estimates as of September 11, 2020. bit.ly/33q1UAH
The global energy transition is well under way and is accelerating rapidly. reut.rs/3hmYZxz
Walmart Inc (NYSE: WMT) to test drone delivery of grocery household items. reut.rs/2ZtvUdV
U.S. airlines warn on travel recovery while awaiting fresh recovery aid. reut.rs/2FgLh2x
U.S. utilities say Biden plan to cut C02 hinges on breakthroughs in clean tech. reut.rs/3ml2PuK
Key Metrics:
Sentiment: 23.7% Bullish, 27.8% Neutral, 48.5% Bearish as of 9/9/2020. bit.ly/330VhEp
Gamma Exposure: (Trending Lower) 1,970,983,599 as of 9/11/2020. bit.ly/2UpgtRE
Dark Pool Index: (Trending Lower) 42.1% as of 9/11/2020. bit.ly/2UpgtRE
Product Snapshot:
S&P 500 (ES):
SPY SPX Nasdaq 100 (NQ):
QQQ NDX Russell 2000 (RTY):
IWM RUTGold (GC):
GLDCrude Oil (CL):
USO DBO USLTreasury Bonds (ZB):
TLTDisclaimer:
This is a page where I look to share knowledge and keep track of trades. If questions, concerns, or suggestions, feel free to comment. I think everyone can improve, especially me.
In no way should this post be construed as investment advice.
This is a page where I look to share knowledge and keep track of trades. If questions, concerns, or suggestions, feel free to comment. I think everyone can improve (myself especially), so if you see something wrong, speak up.
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