Wall Street Review, Stocks and Bonds Dive

Wall Street Review, Stocks and Bonds Dive

Wall Street Review, Stocks and Bonds Dive

$DIA, $SPY, $QQQ

The S&P 500 spent the 1st 4 days of the week ranged in quiet trade, but Friday’s Wall Street sell off pressured the index below its 50-Day MA at 2164.0 for the 1st time since early July. The benchmark index lost 2.4% for the week, narrowing its Q-3 gainer to 1.4%.

Thursday evening Wall Street and individual investors saw comments from DoubleLine Capital’s Jeffrey Gundlach, who said, “this is a Big, Big moment,” sharing his belief that interest rates have bottomed.

Mr. Gundlach’s forecast was put to a test immediately as North Korea conducted its 5th and largest nuclear test ever Friday. The development was met with condemnation from North Korea’s neighbors, but surprisingly, global bonds did not benefit from a risk-off bid.

Instead, selling in the Japanese, Italian, and German 10-yr Notes drove their respective yields up to -0.03%, 1.25%, and 0.01%. And the US 10-yr yield rose 8 bpts to 1.67% Friday, adding 6 bpts on the week.

Also, investors filtered Hawkish remarks from Boston Fed President Eric Rosengren, who said that a reasonable case can be made for continuing gradual tightening of policy. Mr. Rosengren, who is an FOMC voter, also said the labor market could exceed full employment next year, as it continues to “gradually tighten” despite headwinds from abroad

He said, “the combination of the relatively strong domestic demand and the restocking of inventories should provide a basis for growth to exceed 2% over the next 2 Quarters.”

Rate hike expectations edged up as compared to last Friday.

The implied likelihood of a rate hike in September inched up to 24.0% from last week’s 21.0%, and the implied probability of a December hike climbed to 58.4% from 54.2%.

The equities market broke support across the board Friday on high volume, and technically moved from Neutral-Bullish to Neutral-Bearish.

DJIA -394.46 at 18085.45, NAS Comp -133.57 at 5125.91, S&P 500 -53.49 at 2127.81

HeffX-LTN Analysis for DIA: Overall Short Intermediate Long
Neutral (-0.04) Bearish (-0.36) Neutral (-0.19) Bullish (0.42)
HeffX-LTN Analysis for SPY: Overall Short Intermediate Long
Neutral (-0.05) Bearish (-0.26) Neutral (-0.01) Neutral (0.12)
HeffX-LTN Analysis QQQ: Overall Short Intermediate Long
Neutral (-0.05) Bearish (-0.26) Neutral (-0.01) Neutral (0.12)

Have a terrific weekend

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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