D&D Note (7.8.2022) ~ Stocks Whipsaw Throughout Session with NASDAQ Notching 5-Day Win Streak ~
Markets struggled for direction today whipsawing between gains and losses. Declining Volume on the NYSE was 1,733,751,882 outpacing Advancing Volume of 1,337,514,584.
The DOW and S&P 500 finished slightly down with the NASDAQ closing in the green slightly, overall markets were flat on the day.
While the S&P 500 ended its winning streak the NASDAQ notched a 5th day of rising the longest streak since November 2021.
Payrolls in the US increased by 372,000 in June coming in higher than expected. The big jump in payrolls helped push recession fears to the side for at least todays trading.
Health care + social assistance jobs led with 77.8k, then Professional + business services with 74k, and Leisure + hospitality with 67k jobs created.
Health Care was the leading sector today with BioTech rallying.
Next week all eyes will be on the CPI Inflation Report out Wednesday with expectations of headline inflation rising above May’s 8.6% level to near 9%.
The start of Earnings Season begins next week and investors are looking to see if margin compression will lead to earnings estimates being revised down.
Bitcoin stabilizes with best week since October.
Former Prime Minister of Japan Shinzo Abe was assassinated at a campaign event by lone gunman who appears to have had “build your own” guns at his home.
Stock Specific News:
Devon Energy was one of D&D’s leading percentage gainers on the day confirming our buy from yesterday as correct with the chart retaking technical support.
Upstart falls 20% after issuing a profit warning and JMP downgraded the stock citing “limited revenue visibility” going forward.
Vita Coco gained 16% after being upgraded to buy at Bank of America citing a stabilizing ocean freight marketplace will help drive down costs and boost profits.
WD-40 fell 12% after reporting weaker-than-expected earnings citing a “challenging macroeconomic environment” and inflation pressuring gross margins.
Tesla gained today on a report the China Passenger Car Association showed a record number of China-made Tesla vehicles were sold with 78,906 in June.
GameStop fell 5% after the company fires the CFO.
Six Flags fell 6% after Citi downgraded to neutral and cut price target to $26 from $41 citing falling attendance numbers due to rising inflation.
Market Knowledge Tip:
Have an Adaptive Strategy.
As the facts change also your strategy needs to adapt to an ever changing economic environment.
D&D raised cash earlier this year in our Trading Portfolio around 4600 on the S&P 500. We split that principle of cash into three planned staged buying events.
The first we utilized 1/3 to buy more of our tech holdings. The second staged 1/3 buy we adapted to the changing economic outlook and instead invested new capital in Energy and CyberSecurity.
Today those three buys were are leading percentage gainers helping the D&D Trading Portfolio remain in the green all day and beat the markets.
CHKP up 1.74%
DVN up 1.51%
PANW up 1.35%
Our third and final staged 1/3 buy of cash principal raised we are still waiting to deploy. We do see an opportunity developing in the coming weeks/months for one last swoosh down where we’ll add more to our holdings adapted to which have the best outlook for the second half of the year.
(Note D&D also has a LongTerm Holding Portfolio which we don’t trade and only hold. Today that had our overall largest percentage gainers with COIN up 4.93% and TSLA up 2.54%)
D&D Trading Portfolio up today 0.27%
D&D LongTerm Holding Portfolio up today 0.32%
Closing Markets (as of 1:15pm PST)
DOW down -0.15%
S&P 500 down -0.08% (3,9899.38)
NASDAQ up 0.12%
VIX down -5.06% to 24.76
2 Year Note up 8.96bp to 3.10%
10 Year Note up 8.95bp to 3.09%
Oil up 1.82% to $104.60 a barrel.
Gold up 0.029% to $1740.20 an ounce.
Bitcoin down -0.22% to $21,766.78
Ethereum down -0.82% to $1,236.80
~ Dave James / Principal Trader and Market Strategist