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Market Recap August 30, 2017

August 30, 2017

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MR

 

MARKET SNAPSHOT
Dow21893.73+27.06(0.12%)
Nasdaq6368.29+66.42(1.05%)
SP 5002459.04+11.29(0.46%)
10-yr Note-2/322.138
NYSEAdv 1826Dec 1095Vol 646.3 mln
NasdaqAdv 1708Dec 1073Vol 1.7 bln

 

IN THE NEWS HIGHLIGHTS:

  • ADP Employment Change Report for August beats estimates (237K actual vs 180K Briefing.com consensus).
  • Second estimate of Q2 GDP comes in better than expected (+3.0% actual vs +2.7% Briefing.com consensus).
  • Buying momentum as the S&P 500 moves above its 50-day simple moving average (2,451).
  • Biotech & semiconductor stocks rally; underpin tech-heavy Nasdaq.
  • Crude oil continues to sell off despite positive EIA data; presses on $46 support.
  • US dollar very bullish following positive economic data.

 

RECAP– The markets roared back today following the open thanks in large part to some very positive economic data and boon to consumer spending. Crude oil continued to sell off today despite larger than expected decrease in supplies and close at its $46 support; a break below that would trigger us bearish in the short term. The US dollar rallied further today thanks in large part to positive economic data.

In-depth look of daily news at Briefing.com (CLICK HERE)

In-depth look at after hours movers (CLICK HERE)


Economic Calendar

Today

  • August 30: ADP Non-Farm Employment Change – Actual: 237K Forecast: 185K Previous: 201K
    • A precursor to Friday’s jobs report, today’s figure was a very optimistic sign.
  • August 30:  Prelim GDP q/q – Actual: 3.0% Forecast: 2.7% Previous: 2.6%
    • This is the second estimate of the quarter’s GDP growth, it came in significantly higher than expected and very bullish for this year’s GDP growth level.
  • August 30:  Crude Oil Inventories – Actual: -5.4M Forecast:  -1.8M Previous:  -3.3M
    • The larger than expected decrease in supply cause crude oil to initially rally on the news, before selling off further.

 

Upcoming Reports

  • August 31:  Unemployment Claims
  • September 1:  Average Hourly Earnings m/m
  • September 1:  Non-Farm Employment Change
  • September 1:  Unemployment Rate
  • September 1:  ISM Manufacturing PMI

 

FedWatch September 20 Rate Hike Probability for August 30: 1.4% (View the probability chart here)


A Look At The S&P 500 Chart – KEY Levels

  • RSI is at 50.
  • On Balance Volume is below its moving average.
  • The market continued to rally throughout the day due to positive economic data and closed near its high.

 


A Look Into the Heat Map

The market was broadly bullish on the day with a strong response from Technology companies.

 

(click on symbol for chart)
SPX – Neutral
DOWNeutral
NasdaqNeutral
Russell Neutral

VIX – 11.22

COMMODITIES

Oil (USO)Bullish – Crude oil is retracing following its previous rally as it has hit resistance of $50. A break under $46 could signify a reversal of trend.
Ag (DBA)Bearish
GLD Bullish 
SLVBearish

THE DOLLAR

UUP USD weighted ETF – Bearish

 


SOLON’S TRADING THOUGHTS

There is plenty of economic data to come out this week, including jobs numbers. As we saw from the previous several weeks, volatility is beginning to reenter the market and significant selloffs are becoming more common. The Trump honeymoon looks to be over, and such things such as poor economic data and geopolitical concerns will likely carry a greater impact in affecting the stock market, especially considering its current frothy valuations.

Seeing how easily the market is beginning to scare with the increased tensions with North Korea, it would be wise to protect your portfolio with buying puts. We’ve recently seen several selloffs which cause volatility to surge, which would make it wise to buy puts while they are cheap. Use the current rally as an entry point to buy puts and hedge, volatility is continuing to get lower in the short term.


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