Bears Get Weekly Win With Encouraging Trade News With China

Bears Get Weekly Win

December 16, 2018 By: Todd Mitchell

U.S. markets opened Friday’s session lower with downside momentum into the closing bell despite encouraging trade news. China said it would suspend an additional tariff on U.S. autos while also confirming it would reduce a 40% charge on U.S. auto imports to 15% for 90 days.

Global growth concerns and slightly disappointing economic news overshadowed the positive development with the major indexes giving up their gains for the week. The pullback also pushed the overall market into correction territory for the first time since March 2016.The Dow tanked 2% following the pullback to 24,033. Upper support at 24,000-23,800 held with a move below the latter signaling additional weakness.The S&P 500 sank 1.9% after testing a 2,593. Fresh support is at 2,575-2,550 on the close below the 2,600 level with the recent monthly low at 2,583.For the week, the Dow and the S&P 500 fell 1.2%.The Nasdaq tumbled 2.3% following the backtest to 6,898. November and upper support at 6,900-6,850 held with a close below the latter likely leading to additional selling pressure.The Russell 2000 dropped 1.5% after testing a fresh 52-week low of 1,407. September 2017 support at 1,400 is now in play with a close below this level signaling additional weakness.The Russell 2000 stumbled 2.8% for the week while the Nasdaq was down 0.8%.There was no sectors that showed strength on Friday. Healthcare led sector weakness after declining 3.4% while Technology was down 2.5%.For the week, Utilities and Communication Services were higher by 0.6% and 0.5%, respectively. Financials and Energy were the weakest sector with declines of 3.5% and 3.1%, respectively.

ANALYST UPGRADES/DOWNGRADES

Bausch Health (BHC) upgraded to Buy from Neutral at H.C. WainwrightDollar Tree (DLTR) upgraded to Outperform from Market Perform at BernsteinRegeneron (REGN) upgraded to Conviction Buy from Neutral at Goldman SachsBeacon Roofing (BECN) downgraded to Neutral from Outperform at WedbushCisco (CSCO) downgraded to Neutral from Buy at Nomura InstinetWalgreens Boots Alliance (WBA) downgraded to Sell from Neutral at Goldman Sachs

EARNINGS

Monday’s earnings announcements (EST):

Before the open: China Online Education (COE)After the close: Champions Oncology (CSBR), Heico (HEI), Lakeland Industries (LAKE), Oracle (ORCL), Red Hat (RHT)