D&D Note (6.9.2022) ~ Markets Sell Off Over 2% Ahead of Tomorrows Inflation Report ~
The ECB European Central Bank announced they plan to raise interest rates in the EU by 25 basis points at its July Meeting. The ECB took down its forecast for growth and raised its projection for inflation.
The European news put pressure on US stocks from the opening bell. After the US bond auction at 1:00 EST the stock market began to precipitously fall into the close.
Tomorrow we get the CPI report on Inflation and all investors are bracing for the read. Hot we really sell off, cold we can hold flat to up, lukewarm we still sell off.
The S&P 500 today broke its near-term trading range with the 50day and 200day moving averages sloping down. This is a technical breakdown pointing to further declines (which we chart below).
Weekly jobless claims spiked most since January with totals of 229,000 compared to the estimated 210,000.
President Biden announces EV charging station standards for its program of building 500,000 charging stations in a nationwide network.
Stock Specific News:
Amazon rolls out their virtual shopping tool to let you digitally try on shoes via AR (augmented reality).
In another ding to the GameStop comeback, Microsoft announces the Xbox games will now be able to stream to smart TVs completely avoiding consoles.
Tesla got upgraded to buy from neutral by UBS sighting the recent pullback an “attractive entry point”.
Novavax fell -17.22% on news the decision by FDA could be postponed on their Covid-19 vaccine.
Stitch Fix announces they are laying off 15% of its salaried workforce, the stock fell -13.62%.
Market Knowledge Tip:
Charting the S&P 500. Below are a few charts showing how to draw trendiness to find trading ranges, channels, support, resistance.
- Trading Ranges of S&P 500 YTD: (Todays price action broke recent trend, sloping 50day (blue) and 200day (green) are both sloping down, this points to returning to lower end of larger trading range)
- S&P 500 Recent channels and breakdown in near-term trading range: (the grey candlestick at far right was todays trading range breaking through support)
- Todays S&P 500 chart showing the dip into the close after the bond auction: (Green line is 200day moving average and the blue line the 50day moving average)
Closing Markets (as of 1:15pm PST)
DOW down -1.94%
S&P 500 down -2.38% (4,017.82)
NASDAQ down -2.75%
VIX up 8.89% to 26.09
2 Year Note up 4.15bp to 2.82%
10 Year Note up 2.31bp to 3.05%
Oil down -0.721% to $121.23 a barrel.
Gold down -0.366% to $1849.70 an ounce.
Bitcoin down -0.21% to $30,116.16
Ethereum down -0.16% to $1,792.49
~ Dave James / Principal Trader and Market Strategist
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