D&D Note (8.2.2022) ~ China Tensions and FED Speak on Investors Minds ~ #stockmarket

D&D Note (8.2.2022) ~ China Tensions and FED Speak on Investors Minds ~

Markets swung from gains and losses today as investors digest House Speaker Nancy Pelosi’s trip to Taiwan and what various FED members had to say in interviews today.

Stock futures last night on the S&P 500 slipped below 4100 and in todays trading the index couldn’t break above the 100 day moving average which has been key resistance for stocks going higher and closed the day below 4100.

In terms of support 3815 on the S&P 500 is a key level which is about 5% lower from today.

San Francisco FED President Mary Daly says “our work is far from done” in regards to raising interest rates to bring down inflation.

Cleveland FED President Loretta Mester said there’s “more work to do” on inflation and needs to see “compelling evidence” that inflation is slowing.

Treasury yields moved higher as Pelosi landed in Taiwan with the 10 Year Yield surging 2.68%.

China increases military and economic pressure on Taiwan with live fire military exercises just 80 miles from Taiwan and levied new import bans on more than 100 Taiwanese products.

TSMC warns a Taiwan-China war would make everybody a loser and if China invades Taiwan the TSMC factory, which is the most-advanced chip factory in the world, would be rendered “not operable.”

Job openings fell in June as labor markets shows signs of slowing with the lowest level since September 2021.

Stock Specific News:

Advanced Micros Devices reported after the bell and fell over 4% after revenue forecast goes in below estimates.

Airbnb reported earnings after the bell and fell over 8% in after-hours after an EPS beat but a sales miss.

Uber rose 17.6% after reporting revenue that beat expectations.

Molson Coors fell 10% after reporting earnings in line with expectations but said many beer-drinking customers are trading down to cheaper options.

Pinterest gained 12% after posting better-than-expected earnings last night and Elliot Management confirmed they are the largest shareholder.

Marathon Petroleum rose 4% after reporting earnings that exceeded estimates.

Caterpillar fell 3.5% after missing on revenue expectations saying the company was hurt by its exit from Russia and supply chain issues.

Closing Markets (as of 1:15pm PST)

DOW down -1.23%

S&P 500 down -0.67% (4,091.19)

NASDAQ down -0.16%

VIX up 4.77% to 23.93

2 Year Note up 18.99bp to 3.06%

10 Year Note up 17.15bp to 2.75%

Oil up 0.043% to $93.93 a barrel.

Gold down -0.503% to $178.70 an ounce.

Bitcoin down -0.17% to $23,025.82

Ethereum up 1.26% to $1,652.64

~ Dave James / Principal Trader and Market Strategist