Market Moving News
Job growth screeches to a near halt in May, with private payrolls up just 27,000.
The ISM non-manufacturing data came in stronger than expected at 55.9% versus estimates of 55.5%: The service side of the U.S. economy that employs the vast majority of Americans grew faster in May and executives said they were “mostly optimistic” despite worries about trade tariffs and a shortage of skilled workers. However, this reading is still well below the 2018 average of 58.9%.
Oil sinks over 4% on the day as supplies jump the most in almost 30 years.
Macro Matters
The global economy is on track to grow at its slowest pace in 3 years. The global economy is expected to grow at a 2.6% rate this year, its weakest since 2016, the World Bank said in a report out Wednesday
The International Monetary Fund (IMF) trimmed its forecasts for economic growth in China, and said the trade war with the U.S. is tilting the balance of risks to the downside.IMF cuts China growth forecast citing trade war risks.
Trade Wars and More
$BA: Boeing Co. has been negotiating one of the largest orders ever of wide-body jetliners with Chinese airlines even as tensions between Washington and Beijing escalate, say people familiar with the talks.
Trump continues to threaten Mexican tariffs will proceed on June 10th despite concerns expressed by Republican lawmakers who are pressing for a deal, with some some members of the party questioning Trump’s use of the levies to force tougher border enforcement.
China continues to retaliate on the trade war front by taking targeted actions against US companies. First it was FedEx and now China fined Ford Motor Co.’s main joint venture in the country for antitrust violations, marking the latest action toward a U.S. company as tensions between the two nations escalate.
Samantha Says –
Market Commentary from Samantha’s Live Trading Room/StockTwits Chat Room
Good Morning! We may have that gap up/continuation challenged post ADP Data. It’s not NFP due Friday but it’s a Tell. It doesn’t usually move markets but the print is so horrific that Sentiment can slow the market advances in my opinion. MAY #ADP EMPLOYMENT CHANGE: +27K V +185KE (lowest in 9 yrs!) – Small businesses: -52K v +77K m/m – Goods-producing sector: -43K v +52K m/m A more important report is coming: Services ISM. Stay Tuned!
My ROKU post yesterday that I liked it long above $94 to PT $100 is halfway there plus it got an upgrade today $119. TSLA also ran $10 when I suggested a safe long around $185 to price target of $194.
AAPL CEO Tim Cook says he sees no risk of Apple in China and stock surges 2%. BAAHAAHAA Still, it works with our AAPL bounce idea from Monday at $173!
Jun. 5th, 9:01 am It’s more than possible… SPX. Careful with Longs
Jun. 5th, 9:43 am Hitting a lot of resistance out there. Big move y-day caused overbought status intraday.
Jun. 5th, 9:46 am $GLD dramatic gap up. Why? lack of market confidence. Weekly cup and handle playing out.
Jun. 5th, 9:50 am Expect oil to fall further, which will be a challenge to SPX gains.
Jun. 5th, 10:06 am $VIX if volatility set to increase watch for move above $19.61
STRONG: *U.S. MAY ISM NON-MANUFACTURING INDEX AT 56.9; EST. 55.4 – SO this may be enough to get over the hump (i.e. supply of sellers at 21D for most stocks/indices). If not, we will fade lower… as ADP did not motivate bears and ISM needs to embolden bulls. It’s a game of chicken! Side note: no volume on this move up… and Yen is strong and I contend getting stronger… Oil is weak and I contend getting weaker. With that SPX $2816 is Wk resistance < Bearish, > Bullish to $2856 gap fill potential but we are way overbought intraday with Semis, Banks soft so take care of longs as we need to stay >$2800 psychological level for advance to continue.
Here’s your FB intraday as I think you prefer tighter timeframes? Path of least resistance is down but it is in a channel intraday so levels are given in the chart: keep $163.50~ as intraday marginot line: bounce or trounce!
WEAK: *CRUDE OIL INVENTORIES ROSE 6.77 MLN BARRELS, EIA SAYS *DISTILLATE INVENTORIES ROSE 4.57 MLN BARRELS, EIA SAYS *GASOLINE INVENTORIES ROSE 3.21 MLN BARRELS, EIA SAYS
As I mentioned I am bearish Oil with swing short PT of: $WTIC ~$48 $XLE ~$54. This U.S. total #oil inventories (crude + products) build last week (+22.4 million barrels) was the largest weekly increase in data going back almost 30 years. See Charts!!
Boring Day! For the most part we haven’t moved since the open!! Negative Macro, Weakening Fundamentals, Stalled Momentum/Need Catalyst, Game of Chicken for Bulls + Bears (and CTAs) at $2800, Softness in Semis + Tech but all on decent daily support so bouncing. Extended Treasurys pulling back as Rates Bounce. Volatility Tame. Oil is the Big Risk Off + Wild Card.
FYI: May non-mfg ISM index rose to 56.9 from 55.5 in Apr (> 55.4 consensus but down from 58.9 avg in 2018); employment, new orders & business activity up, supplier deliveries & export orders down; prices paid slightly down (net is non-mfg less exposed to weaker foreign demand) H/T Liz Sonder so this was a strong showing but it is much more an internal/US economic indicator (hence the name Service) than Mfg which was more than weak. Just to help clarify!
Very few stocks of interest for me: SPOT I like higher if it can get/stay >$135.50 (+ should mkt want to really continue higher). Also like CRON if >$17. For UOA, I like the SQQQ Jul $55C for $1.30 as hedge on market dropping + DBX Jul 23C for $1.35 has huge size betting on a bottom for this unicorn. So as you can see, no conviction trades for me today.
Recommended Reading
- Here’s what might happen to financial markets if the U.S. and China decouple.
- The next round of trade tariffs could be the tipping point into crisis.
- Junk-bond, loan ETF outflows among biggest ever amid turmoil
- World Bank warns of downside global risks