Fickle Investors Shift to Value On Fed Reserve’s Taper Pivot

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Commentary

  • Summary Analysis:
    • The market seems to be unable to decide on value or growth. Fickle investors once again sold technology stocks in favor of buying more cyclical plays, e.g. Citigroup (C), JPMorgan (JPM), Goldman Sachs (GS), American Express (AXP), Boeing (BA) and Copart (CPRT).
    • Economic data pointed to accelerating growth, especially in Services, as the economy gradually reopens. In spite of this, inflation expectations declined to a 2-week low and the 10-year Treasury rate was unchanged @ 1.63%. Bond prices were less volatile and continued to build support within their recent consolidation ranges.
    • Amongst the major currencies, the US Dollar (UUP) is attempting to form a triple bottom, which could position it for potentially higher advance.
    • The beatings in Cryptocurrencies appear to continue until morale improves. Ethereum (ETHE) violated support at its 50-day moving average, signalling further capitulation amongst institutional investors.
    • With respect to tangible assets, Commodities have demonstrated relative resilience vs Real Estate which is consolidating.
  • Equities:
    • US Markets: The major indexes were relatively unchanged with the Nasdaq-100 (QQQ) being the weakest amongst the four and declining once again below its 50-day moving average. Should the Nasdaq-100 price deteriorates any further, then it will ultimately influence the market direction for the Dow-30 Industrials (DIA), SP-500 (SPY) and Russell-2000 (IWM). Critical short-term support levels are 315, 307 and 298.
    • International: Leaders in Japan (EPJ); and EAFE Index (EFA). Laggards in Latin America 40 (ILF); Emerging Markets (EEM); and Brazil (EWZ).
    • ETF Sector Strength: Financials (XLF); Utilities (XLU); and Industrials (XLU).
    • ETF Sector Weakness: Technology (XLK); Consumer Discretionary (XLY); and Communications (XLC).
  • Large-Cap Volume Surgers:
    • VF Corp (VFC): -8.94% on 295% volume surge
    • Virgin Galactic Hldngs (SPCE): +6.36% on 260% volume surge
    • Iovance Biotherapeutics Inc (IOVA): -3.73% on 200% volume surge
    • Ford Motor Co (F): +6.73% on 194% volume surge
    • Nvidia Corp (NVDA): +2.60% on 128% volume surge
  • Small-Cap Volume Surgers:
    • Geo Group Inc (GEO): -7.78% on 122% volume surge
    • Amicus Therapeutics (FOLD): -2.08% on 88% volume surge
    • Dht Hldgs (DHT): +3.62% on 75% volume surge
    • Lendingclub Corp (LC): +9.69% on 63% volume surge
  • Market Moving Events:
    • Economy / US Manufacturing: May-2021 Manufacturing PMI @ 61.5 vs estimates @ 60.2 and prior @ 60.5; and Markit Composite PMI @ 68.1 vs prior @ 63.5.
    • Economy / US Services: May-2021 Services PMI @ 70.1 vs estimates @ 64.5 and prior @ 64.5.
    • Economy / Inflation: Expectations for US inflation have eased. The 10-year breakeven rate declined to @ 2.44%.
    • Real Estate / US Residential: Apr-2021 Existing Home Sales (m/m) @ -2.7% vs estimates @ 2.0% and prior @ -3.7%; Existing Home Sales @ 5.85mm vs estimates @ 6.09mm and prior @ 6.01mm.
    • Central Banks / US: Dallas Fed President Kaplan took hawkish stance on Fed monetary policy whereby he supports debating the unintended consequences of asset purchases.┬áTypically, whenever a Fed official issues a public statement, it is accompanied by one or two opposing views which tend to balance its bias and leave its policies open for investor interpretation. However, today was different as Philadelphia Fed President Harker also chimed in on the need to discuss tapering asset purchases “sooner rather than later.”
    • Earnings / Positive Surprises: n/a.
    • Earnings / Negative Surprises: n/a.

ETF Daily Market Performance Summary: 21-May-2021

etf daily market summary for stocks, bonds, currencies, cryptocurrencies, commodities, real estate, and equity sectors
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Market Diary: 21-May-2021

market diary summary for NYSE and Nasdaq exchanges: advancers, decliners, new highs and new lows, plus mega-cap market breadth
(Click table to enlarge)

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