U.S. markets ended the week on a sour note despite a report showing Q2 GDP grew at its best quarterly pace since mid-2014 and the third fastest quarterly rate since 2008. The 4.1% growth rate was impressive but missed forecasts of a 4.2% clip, and below whisper rumors for a print north of 5%.The sell-the-news event picked up downside momentum by the afternoon as the major indexes stayed underwater into the closing bell. Prior support levels are back in play with volatility heightened after testing key resistance levels.
The Russell 2000 sank 1.9% after testing a midday low of 1,660. The close back below the 50-day moving average was a slightly bearish development with risk to 1,640-1,630 and late June lows on continued weakness.The Nasdaq tanked 1.5% following its backtest to 7,698 and close back below the 7,800 level. Fresh support at 7,725-7,700 held with a close below the latter likely leading to a retest of 7,650-7,600 and the 50-day moving average.For the week, the Russell 2000 tumbled 1.4% and the Nasdaq was down 1.1%.The S&P 500 fell 0.7% after failing resistance at 2,850 on morning strength. The fade to 2,808 held support at 2,800 and a level that has been holding for 9-straight sessions.The Dow dropped 0.3% after testing a low of 25,370. The index held 25,400 and prior March and June resistance with a close below this level signaling additional weakness.The blue-chips rose 1.6% for the week while the S&P 500 gained 0.6%.Financials gained 0.2% and Energy added 0.1%. Industrials edged up 0.01% to round out sector strength.Communications Services and Technology led sector laggards after sinking 1.9% and 1.7%, respectively. Real Estate was off 0.9%.For the week, Energy rose 2.3% while Financials and Industrials advanced 2.1%. Communications Services sank 3.9% while Technology gave back 1%.
Chesapeake (CHK) upgraded to Neutral from Underperform at BofA/MerrillMattel (MAT) upgraded to Neutral from Underperform at DA DavidsonPatterson-UTI (PTEN) upgraded to Outperform from Neutral at Credit SuisseFacebook (FB) downgraded to Hold from Buy at Edward JonesLogMeln (LOGM) downgraded to Neutral from Overweight at Piper JaffrayNielsen (NLSN) downgraded to Market Perform from Outperform at BMO Capital
Monday’s earnings announcements (EST):
Before the open: Affiliate Management Group (AMG), Bloomin’ Brands (BLMN), Caterpillar (CAT), First Data (FDC), KPR (KPR), Loews (L), Myers Industries (MYE), Seagate Technology (STX), Vermillion Energy (VET)After the close: AvalonBay Communities (AVB), Blackbaud (BLKB), Denny’s (DENN), Gladstone Commercial (GOOD), Illumina (ILMN), Knoll (KNL), NutriSystem (NTRI), Rambus (RMBS), Stifel Financial (SF), Texas Roadhouse (TXRH), Vornado Reality Trust (VNO), Woodward (WWD)
Monday’s economic reports (EST):
No major announcements
Gold closed at $1223.00 an ounce, down $2.70
Silver settled at $15.49 an ounce, unchanged
Copper finished at $2.80 a pound, down $0.02
Crude Oil is at $69.02 barrel, down $0.52
Bitcoin Investment Trust (GBTC) ended at $11.95 down $0.15
In the long put strategy, you are purchasing the right, but not the obligation, to sell the underlying stock at a specific price until the expiration date.
Make it a great day!
Todd Mitchell
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