Stocks Slump Following Huawei Ban, Retail Earnings and FOMC Minutes in Focus This Week
Tariff uncertainty grows
Major U.S. indices retreated on Monday as China-U.S. trade and tariff uncertainty grows.
Companies related to Huawei are facing sharp declines
Several tech, chipmaker, and communication companies are facing sharp declines following the Huawei ban signed into effect by the White House last week.
Sprint and T-Mobile merger approved, shares rally
Both Sprint and T-Mobile saw shares rally following today’s statement the two are still moving forward with their merger.
Retailers earnings this week in focus
Several big-name retailers are releasing earnings this week include Home Depot, Nordstrom, Kohl’s, Lowe’s, Target, and Best Buy.
FOMC minutes on Wednesday
On Wednesday, look for Federal Open Market Committee minutes from last month’s meeting to release.
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Market below its 50-days moving average
The market is currently trading below its 50-days moving average for the SPY, $286. Look for market bulls to lead if the market can close above 50-days moving average for a few days.
Consider buying market near $280
With the current market conditions, we expect the market to continue trading between $280-$294 for the SPY and encourage our readers to consider buying market near $280. Avert chasing the market near $290.
Further tariffs will have big impact on the market
Keep an eye out for further China-U.S. related news; if further tariffs are imposed, we expect more volatility and the market to break its 200-day moving average on SPY. For reference, the SPY Seasonal Chart is shown below:
Technology and communications services most affected by Huawei ban
The sectors currently experiencing the biggest selloffs following the Huawei ban include technology and communications services. Google, Intel, Qualcomm, and Broadcom are currently down over 2%. Also slumping today is the real estate sector.
Big-brand retail earnings this week
Today’s earnings load is light, however, tomorrow we will see the first batch of big-brand retail earnings with Home Depot, TJX Companies, Kohl’s, and Nordstrom reporting.
Other important to notice earnings for this week
Wednesday will feature Lowes and Target earnings, as well as L Brands, Tiffany & Co., and Kraft-Heinz. Finally, Thursday will feature Best Buy, Hewlett Packard, HP Inc., Ross Stores, and Nintendo.
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Manufacturing data on Thursday
Besides Wednesday’s FOMC minutes release, this week’s economic releases are light with manufacturing data on Thursday as well as housing reports later in the week.
FOMC members to speak today
Look for Federal Reserve Chair Powell to speak tonight, focusing on current risks to the financial system, while Vice Chair Clarida and New York Fed President John Williams to speak earlier in the day.
T-Mobile and Sprint shares rise after approved merger
Other major news to note includes the resurgence of T-Mobile and Sprint shares by the recent reassurance that their planned merger will move forward. Currently, Sprint is up over 20% while T-Mobile saw a nice 5% boost.
The U.K. pound is on the move up after trading mostly lower this past month behind Brexit uncertainty. Several U.S. tariffs on Mexican and Canadian metal imports have been lifted while Trump recently stated he is willing to hold off on auto tariffs for both Japan and Europe. Currently, Asian markets are mixed while European markets closed lower.
Using the “^GSPC” symbol to analyze the S&P 500, our 10-day prediction window shows negative signals. Today’s vector figure of -0.22% moves to -0.80% in five trading sessions. Prediction data is uploaded after the market close at 6pm, CST. Today’s data is based on market signals from the previous trading session.
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Highlight of a Recent Winning Trade
On May 15th, our ActiveTrader service produced a bullish recommendation for Whirlpool Corp (WHR). ActiveTrader is included in all paid Tradespoon membership plans and is designed for day trading.
Trade Breakdown
WHR entered its forecasted Strategy A Entry 1 price range $129.06 (± 0.82) in its first hour of trading and passed through its Target price $130.35 in the second hour of trading that day. The Stop Loss price was set at $127.77.
Tuesday Morning Featured Symbol
*Please note: Our featured stock is part of your free subscription service. It is not included in any paid Tradespoon subscription service. Vlad Karpel only trades his own personal money in paid subscription services. If you are a paid subscriber, please review your Premium Member Picks, ActiveTrader or MonthlyTrader recommendations. If you are interested in receiving Vlad’s personal picks, please click here.
Our featured symbol for Tuesday is Tyson Foods Inc (TSN). TSN is showing a confident vector trend in our Stock Forecast Toolbox’s 10-day forecast. This stock is assigned a Model Grade of (A) indicating it ranks in the top 10th percentile for accuracy for predicted support and resistance, relative to our entire data universe.
The stock is trading at $82.54 at the time of publication with a +1.07% vector figure.
Prediction data is uploaded after market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.
Note: The Vector column calculates the change of the Forecasted Average Price for the next trading session relative to the average of actual prices for the last trading session. The column shows expected average price movement “Up or Down”, in percent. Trend traders should trade along the predicted direction of the Vector. The higher the value of the Vector the higher its momentum.
Oil
West Texas Intermediate for June delivery (CLM9) is priced at $63.20 per barrel, up 0.70% from the open, at the time of publication.
Looking at USO, a crude oil tracker, our 10-day prediction model shows positive signals. The fund is trading at $13.11 at the time of publication. Vector figures show +0.12% today, which turns +2.06% in five trading sessions. Prediction data is uploaded after market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.
Gold
The price for June gold (GCM9) is up 0.10% at $1,277.00 at the time of publication.
Using SPDR GOLD TRUST (GLD) as a tracker in our Stock Forecast Tool, the 10-day prediction window shows positive signals. The gold proxy is trading at $120.55 at the time of publication. Vector signals show +0.03% for today. Prediction data is uploaded after market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.
Treasuries
The yield on the 10-year Treasury note is up 0.89% at 2.41% at the time of publication. The yield on the 30-year Treasury note is up 0.17% at 2.83% at the time of publication.
Using the iShares 20+ Year Treasury Bond ETF (TLT) as a proxy for bond prices in our Stock Forecast Tool, we see positive signals in our 10-day prediction window. Today’s vector of +0.10% moves to +0.46% in three sessions. Prediction data is uploaded after market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.
Volatility
The CBOE Volatility Index (^VIX) is up 2.57% at $16.37 at the time of publication, and our 10-day prediction window shows negative signals. The predicted close for tomorrow is $13.70 with a vector of -11.30%. Prediction data is uploaded after market close at 6 p.m., CST. Today’s data is based on market signals from the previous trading session.
