US Stock Market Overview – Stocks Whipsaw and Close Mixed Despite Mixed Economic Data

US stocks whipsawed between positive and negative territory ahead of the President’s press conference where he denounced Chinese actions. President Trump called COVID-19 the Wuhan virus, antagonizing the Chinese leadership. The Chicago PMI numbers came in worse than expected showing that manufacturing in the mid-west remains weak. The US personal savings rate hit a historic high, while spending tumbled. The Dow closed lower on the session while the S&P 500 and Nasdaq closed in the black. Sectors in the S&P 500 index were mixed, led higher by technology, real-estate was the worst-performing sector.

Total Energy Rigs Decline Buoying Oil

Oil prices rose into the close, climbing 5.6% for the week. Prices rose on Friday following a report from Baker Hughes which showed that the number of active U.S. rigs drilling for oil declined by 15 to 222 this week. The oil-rig count has now fallen for 11 weeks in a row, suggesting further declines in domestic natural gas output. The total active U.S. rig count, meanwhile, also fell by 17 to 301, according to Baker Hughes.

Manufacturing Declines

The Institute of Supply Management reported that the May Chicago PMI came in at 32.3 versus expectations it would rise to 40.0. This compares to 35.4 in April. That’s the weakest since 1982. Among the main five indicators, order backlogs and supplier deliveries saw the largest declines.

Personal Spending Falls while Savings Rise

The commerce department reported that the personal savings rate hit a historic 33% in April. The previous record savings rate was 17.3% in May 1975. U.S. consumer spending, the U.S. economy’s main engine, fell by a record 13.6% in April during coronavirus lockdowns, but there are signs that purchasing is slowly creeping up. Personal income, which includes wages, interest and dividends, increased 10.5% in April,. The jump reflected a sharp rise in government payments through federal rescue programs, primarily one-time household stimulus payments of $1,200.

For a look at all of today’s economic events, check out our economic calendar.

Natural Gas Price Prediction – Prices Hold Support as Rig Count Fales

Natural gas prices moved lower on Friday, despite a 2-rig drop during the current week. Prices pushed through support but rebounded to close above support levels. The weather is expected to be warmer than normal for the next 2-weeks throughout the middle of the United States. A weaker than expected Chicago PMI also weighed on natural gas prices.

Technical Analysis

Natural gas prices moved lower on Friday, initially breaking through support near an upward sloping trend line that comes in near 1.83. Resistance is seen near the 10-day moving average at 1.89. Short term support has turned positive as the fast stochastic generated a crossover buy signal in oversold territory. The current reading on the fast stochastic is 18, below the oversold trigger level of 20 which could foreshadow a correction. Medium-term momentum remains negative as the MACD (moving average convergence divergence) histogram prints in the red with a downward sloping trajectory which points to lower prices.

Rig Count Declines

Baker Hughes reported that the number of active U.S. rigs drilling for natural gas declined by 2 and oil declined by 15 to 222 this week. The oil-rig count has now fallen for 11 weeks in a row, suggesting further declines in domestic natural gas output. The total active U.S. rig count, meanwhile, also fell by 17 to 301, according to Baker Hughes.

Gold Price Prediction – Prices Rise on Weak Chicago PMI report

Gold prices rallied nearly 1% on Friday, following worse than expected personal spending and weak manufacturing figures. Concerns over the US and China’s locking heads are also helping to buoy the yellow metal. The dollar continued to move lower as yields edge slightly lower, which helped buoy the price of gold.

Technical Analysis

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Technical analysis

Gold prices moved higher recapturing resistance which is now support near the 5-day moving average at $1,720,  Target support is still an upward sloping trend line that comes in near $1,698. Below that level is support near the 50-day moving average at $1,684. Short-term momentum has turned positive as the fast stochastic recently generated a crossover buy signal. Medium-term momentum is negative but turning neutral as the MACD (moving average convergence divergence) histogram is printing in the red with a rising trajectory that points to consolidation.

The Institute of Supply Management reported that the May Chicago PMI came in at 32.3 versus expectations it would rise to 40.0. This compares to 35.4 in April. That’s the weakest since 1982. Among the main five indicators, order backlogs and supplier deliveries saw the largest declines.

For a look at all of today’s economic events, check out our economic calendar.

S&P 500 Earnings Preview – Retailers Continue to Headline a Busy Weeks

There is a mix of earnings releases next week, which continue to include some of the retailers which have proven to perform well despite the quarantine. Some of the discount giants such as Dollar Tree, Dollar General and Big Lots knocked the cover off the ball.

Monday

Autohome (ATHM) is expected to release earnings before the opening bell. Expectations are for the company to earn $0.75 per share on $216.89 million in revenue.

Tuesday

Build-a-Bear (BBW), this retailer generally generates revenue when there is mall traffic. Earnings forecasts continue to slide.

Dick’s Sporting Goods (DKS), sporting goods have been left behind as families focus on essentials. The relaxation of restriction should begin to help revenues at Dick’s.

Lands End (LE) Land’s End filed for Bankruptcy and is expected to provide weak earnings.

Wednesday

Canada Goose (GOOS) will likely provide earnings that are in line with some of the revised downward earnings forecasts.

Express (EXPR) This retailer also benefits from Mall traffic which has declined but will rebound with the relaxation of restrictions.

Thursday

Kirkland Brand (KIRK) is a discounter and probably performed better than expected.

Friday

Tiffany and Company (TIF), this retailer should have experienced tough times during the quarantine but should rebound sharply as restrictions get lifted.

US Stock Market Overview – Stocks Closed Lower as China Concerns Rise

US stocks moved lower Thursday as worse than expected economic data, reversed the trend in the S&P 500 index. President Trump announced that he planned to have a press conference on Friday that would discuss issues related to China. That took the wind out of the sales of investor sentiment. GDP contracted by more than expected, Durable Goods Orders tumbled as demand for transportation equipment collapsed. Initial jobless claims have decelerated but it still climbed by 2.1 million. Most sectors in the S&P 500 index were lower, despite the rally in the broader markets. Utilities were are defensive, were the best performing sector, cyclical bucked the trend. US yields were nearly unchanged on Thursday while oil prices rose following news that oil production continued to decline in the US. This helped buoy energy shares.

GDP Shrank More than Expected

GDP which is the broadest measure of economic health, fell at an annual rate of 5% in the Q1 a bigger decline than the 4.8% drop first estimated a month ago. It was the biggest quarterly decline since an 8.4% fall in the fourth quarter of 2008.

Durable Goods Orders Fell

US durable goods, plunged 17.2% in April after dropping 16.6% in March. Demand for transportation equipment collapsed by 47.3%. New orders of capital goods tumbled in April and shipments declined. Orders for non-defense capital goods excluding aircraft, which is a proxy for business spending, dropped 5.8% last month, according to the Commerce Department. Data for March was revised lower to show these so-called core capital goods orders falling 1.1% instead of dipping 0.1% as previously reported. Expectations had been for core capital goods orders diving 10.0% in April. Core capital goods orders dropped 1.3% year over year in April.

Jobless Claims Rise

Initial jobless claims totaled 2.1 million last week, the lowest total since the coronavirus crisis began. Expectations were for 2.05 million. The total represented a decrease of 323,000 from the previous week’s upwardly revised 2.438 million. Continuing claims, numbered 21.05 million, a clearer picture of how many workers are still sidelined. That number dropped sharply, falling 3.86 million from the previous week.

For a look at all of today’s economic events, check out our economic calendar.

Natural Gas Price Prediction – Prices Fall Following Larger than Expected Inventory Build

Natural gas prices dropped nearly 3% on Friday as inventories built more than expected. Strong production despite continued declines in rig count, has kept natural gas prices on their heels. The weather is expected to remain warmer than normal for most of the United States which should increase cooling demand. Softer than expected Durable goods order likely reduced natural gas demand. Orders for durable goods, plunged 17.2% in April after dropping 16.6% in March.

Technical Analysis

Natural gas prices dropped on Thursday declining nearly 3% but bouncing near support which is an upward sloping trend line that comes in near 1.82. A close below this level would likely see a decline to the June contract lows at 1.60. Resistance on natural gas is seen near the 10-day moving average of 1.89. The 10-day moving average recently crossed below the 50-day moving average which means that a short term downtrend is now in place. Short term momentum is negative as the fast stochastic generated a crossover sell signal. The current reading of the fast stochastic is 5, well below the oversold trigger level of 20 which could foreshadow a correction.

Inventories Rise More than Expected

Natural gas in storage was 2,612 Bcf as of Friday, May 22, 2020, according to the EIA. This represents a net increase of 109 Bcf from the previous week. Expectations were for a 107 Bcf build according to survey provider Estimize. Stocks were 778 Bcf higher than last year at this time and 423 Bcf above the five-year average of 2,189 Bcf. At 2,612 Bcf, total working gas is within the five-year historical range.

For a look at all of today’s economic events, check out our economic calendar.

Gold Price Prediction – Prices Edge Higher Following Weak US Data

Gold prices moved higher on Thursday following a slew of US economic data which came in worse than expected. GDP shrank by 5%, durable goods orders fell by 17% and jobless claims continued to rise climbing by 2.1-million. Despite a robust jobless claims headline number, this was the lowest total since the coronavirus crisis began. The dollar moved lower but failed to generate tailwinds for gold prices as US yields edged higher. Riskier assets continued to rally which capped any upward momentum in gold prices.

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Technical analysis

Gold prices moved higher but was unable to push through resistance near the 5-day moving average at $1,719,  Target support is still an upward sloping trend line that comes in near $1,693. Below that level is support near the 50-day moving average at $1,675. Short-term momentum has turned negative as the fast stochastic recently generated a crossover sell signal in overbought territory. Medium-term momentum has also turned negative as the MACD (moving average convergence divergence) index recently generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram has also generated a crossover sell signal. The histogram is printing in the red with a declining trajectory which points to lower prices.

US GDP Contracted More than Expected

GDP which is the broadest measure of economic health, fell at an annual rate of 5% in the Q1 a bigger decline than the 4.8% drop first estimated a month ago. It was the biggest quarterly decline since an 8.4% fall in the fourth quarter of 2008.

For a look at all of today’s economic events, check out our economic calendar.

US Stock Market Overview – Stock Rally Lead By Financials, Travel Shares Also Rise

US Stocks surged higher as traders rotated out of the high flying technology shares and into value share, pushing the S&P 500 index further above the 200-day moving average. The Dow Industrials was the best performing sector. All sectors in the S&P 500 index were higher, led by Financial and Cyclicals, Utilities were the worst-performing sector in an up tape. Energy shares also lagged, as oil prices eased. Additional stimulus from the European Union and the Japanese government helped buoy riskier assets. US Rates edged slightly lower, which continued to help buoy the US mortgage market. Mortgage applications continued to rise climbing 9% in the latest week. The rotation was out of some of the large-cap technology shares which took a breather as travel-related shares which have been pummeled, rebounded sharply.

More Stimulus

The EU and Japanese governments gave riskier assets a one-two punch, helping to lift global equity bourses. The European Union announced a $2 trillion coronavirus response plan, including a massive pooling of national financial resources that, would deepen the bloc’s economic union. The proposal composed of a $824 billion recovery plan and 1.4 trillion budget over the next seven years. This news followed the release of Japan’s new stimulus plan.

Japan announced a stimulus package totaling $1.1 trillion as economic woes and eroding support for Prime Minister Abe’s government, pushed the government for aggressive measures.  Capital will be used to helping companies that are in trouble as well as, rent subsidies, and healthcare assistance.  It will be funded by a second supplementary budget.

Mortgage Applications Rise

Mortgage applications for new homes rose 9% last week from the previous week according to the Mortgage Bankers Association’s index. It was the sixth straight week of gains and a 54% recovery since early April. The 30-year fixed-rate mortgage has dropped 75-basis points since January. Homebuyers are getting a great deal over 30-years, The gains mirror an unexpectedly strong sales pace just reported for newly built homes in April. They were forecast to fall by 22% but instead rose nearly 1% for the month.

Natural Gas Price Prediction – Prices Whipsaw and Drop as Momentum Remains Negative

Natural gas prices whipsawed initially moving higher but then reversing into the close of the trading session. The weather is expected to remain much warmer than normal throughout most of the mid-west for the next two weeks, and as the pattern moves west to east, the warm weather is expected to head toward the east coast. It appears that the slow drop in natural gas active rigs is making a dent in the volume of natural gas that is currently produced.

Technical Analysis

Natural gas prices made a higher high and then close near the lows, slicing through short term support, which is now resistance near the 10-day moving average at 1.90. Additional support is seen near the July contract lows at 1.84.

Short term momentum has turned negative after turning positive on Tuesday. The flip flop crossover signals generated by the fast stochastic is a sign of consolidation. Medium-term momentum is still negative but it’s decelerating. The MACD (moving average convergence divergence) histogram is printing in the red with a flattening trajectory which points to consolidation.

Natural Gas Production Slows

The supply of natural gas dropped as natural gas production falls, according to data from the EIA. The average total supply of natural gas fell by 1.9% compared with the previous report week. Dry natural gas production decreased by 2.1% compared with the previous report week. The average net imports from Canada increased by 1.0% from last week. The drop in natural gas rigs across the US is now putting a dent in supply.

For a look at all of today’s economic events, check out our economic calendar.

Gold Price Prediction – Prices Hold Support a Mortgage Demand Rises

Gold prices moved higher on Wednesday, finding support at an upward sloping trend line. This came as the dollar edged higher and US yields edged lower. Riskier assets saw an uptick in volatility which helped the yellow metal gain traction. Mortgage rates continued to remain at levels that are attracting new buyers. Mortgage applications to purchase a home rose 9% last week on a week over week basis.

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Technical analysis

Gold prices moved higher just holding support but continuing to remain rangebound. Target support is still an upward sloping trend line that comes in near $1,693. Below that level is support near the 50-day moving average at $1,675. Resistance is seen near the 5-day moving average at $1,723. Short-term momentum has turned negative as the fast stochastic recently generated a crossover sell signal in overbought territory. Medium-term momentum has also turned negative as the MACD (moving average convergence divergence) index recently generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram has also generated a crossover sell signal. The histogram is printing in the red with a declining trajectory which points to lower prices.

Mortgage Applications Rise

Mortgage applications rose 9% last week from the previous week according to the Mortgage Bankers Association’s index. It was the sixth straight week of gains and a 54% recovery since early April. The 30-year fixed-rate mortgage has dropped 75-basis points since January. Homebuyers are getting a great deal over 30-years, The gains mirror an unexpectedly strong sales pace just reported for newly built homes in April. They were forecast to fall by 22% but instead rose nearly 1% for the month.

For a look at all of today’s economic events, check out our economic calendar.

S&P 500 Preview – Costco Headlines Earnings Results

Retailers continue to report earnings on Thursday, May 28, 2020.

Costco Wholesale Corporation

Costco (COST) is scheduled to release financial results on Thursday, May 28, 2020. The company is expected to earn $2.04 per share on 37.52 billion in revenue. This compares to $2.06 per share in the prior quarter. Earnings forecasts have declined by $0.06 cents per share over the last 30-days down from $2.10 per share. Growth estimates for the quarter are expected to increase by 7.9%.

The stock prices have rebounded from its lows in late March, rising more than 20%. Costco has seen a surge in same-store sales and should continue to see further upside on a better than expected revenue and earnings results.

Dollar General Corporation

Dollar General (DG) is scheduled to report financial results on Thursday, May 28. The consumer staple is expected to report earnings of $1.70 on 7.4 billion in revenues. This compares to $2.01 per share in the prior quarter. Earning per share have increased by $0.06 per share over the past 30-days. Growth estimates are expected to climb by 15%.

The stock price has rebounded and is poised to test all-time highs. This company has experienced positive sales comps due to the demand during the quarantine in the US. The share price should continue to break out on better than expected financial results.

US Stock Market Overview – Stock Rally Led by Financials as Sentiment Continue to Rise

US stock prices surged higher on Tuesday following the long holiday weekend. Stocks were buoyed by news that another company was in Phase 1 trials of a COVID vaccine. The S&P 500 index closed above the 200-day moving average, which is a positive sign for the broader index.

US housing prices continued to rise in March according to a recent report from S&P Case-Shiller. The Chicago Fed national activity index moved lower in April. All sectors in the S&P 500 index were higher, led up by Financials and Industrials, Healthcare was the worst-performing sector in the broader index. The VIX volatility index moved lower but failed to close below the 200-day moving average which means that options traders are more cautious than stock traders. Crude oil prices moved higher on Tuesday, following another large drop in the rig count Friday. WTI closed above $34 per barrel for the first time since early March. This helped buoy energy shares.

US Housing Prices Continue to Rise

US home-price appreciation continued to rise in March. The S&P CoreLogic Case-Shiller 20-city price index posted a 3.9% year over year gain in March, up from 3.5% the previous month. On a monthly basis, the index increased by 0.5% between February and March.

Chicago Fed National Activity Index Dropped

The Chicago Fed’s national activity index came in lower dropping to negative 16.74 in April, down from a revised negative 4.97 in March. The index’s three-month moving average decreased to a negative 7.22 in April from negative 1.69 in the prior month. The contribution of production-related indicators declined to negative 5.63 to the index, down from negative 2.31 in March. Employment-related indicators contributed negative 9.06 to the index in April, down from negative 1.06 in the prior month.

For a look at all of today’s economic events, check out our economic calendar.

S&P 500 Index Overview – Campbell Soup and American Eagle Report on Wednesday

A consumer staples giant and a clothing retailer headline Wednesday’s earnings release.

American Eagle Outfitter

American Eagle (AEO) is scheduled to release financial results on Wednesday May 27, 2020. The company is expected to lose $-0.22 per share on 656.75 million in revenue. This compares to $0.26 per share in the prior quarter. Earnings forecasts have declined by $0.28 cents per share over the last 30-days down from $0.06 per share. Growth estimates for the quarter see a contraction of 191.70.

The stock prices surged into the results, rallying nearly 50% from its lows in late March. Despite the rebound, it will take a while before consumers return to the malls which will make the return to profitability a long slog for AEO.

Campbell Soup Inc.

Campbell Soup (CPB) is scheduled to report financial results on Wednesday May 27. The consumer staple is expected to report earnings of $0.71 on 2.17 billion in revenues. This compares to $0.66 per share in the prior quarter. ESP are expected to grow by 25% due to increased demand for retail food staples in the wake of the shelter in place mandates. Earning per share have increased by 25% over the past 30-days. Growth estimates are expected to climb by 27%.

The stock price has dropped 15% since hitting a high of $54 in mid-May. A better than expected results will likely buoy the stock price which should retest the most recent May highs.

Natural Gas Price Prediction – Prices Rebound but Remain Rangebound

Natural gas prices rose nearly 4%, ahead of Wednesday’s June contract expiration. This comes as demand declines in the latest week driven by soft commercial heating demand. Hedge funds added to long position in futures and options according to the CFTC. The increase was approximately 16K contracts, while nothing was added to short positions. Currently the open interest shows that managed money is 16K longer futures and options. The open interest is 216K long versus 200K short. The weather is expected to be cooler than normal on the east coast which is likely to reduce cooling demand.

Technical Analysis

Natural gas prices moved higher on Tuesday, ahead of Wednesday change of the prompt contract to July. Support is near the 10-day moving average at 1.73. Target support on natural gas is seen near the May lows at 1.60. Resistance is seen near the 50-day moving average seen near 1.84. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. This followed a recent sell signal which is likely a sign of consolidation. Medium-term momentum is negative to neutral as the MACD (moving average convergence divergence) histogram is printing in the red with a flat trajectory that points to consolidation.

Demand  is Down

Demand falls, driven by low heating demand in buildings. Total U.S. consumption of natural gas fell by 10.0% compared with the previous report week, according to the EIA. Gains in the electric power sector were more than offset by low demand for heating in buildings because of seasonal spring temperatures. In the residential and commercial sectors, consumption declined by 40.8% after a cold snap last week that increased heating demand. Industrial sector consumption decreased by 3.8% week over week. Natural gas consumed for power generation climbed by 11.3% week over week. Natural gas exports to Mexico increased 2.5%.

Gold Price Prediction – Prices Fall, as Riskier Asset Gain Traction

Gold prices moved lower on Tuesday, following a long holiday weekend in the US. As riskier assets like stocks gained traction, safe-haven gold seemed to ease. The dollar got hammered which failed to buoy gold prices as the uptick in the US 10 year yield seemed to weigh on the value of the yellow metal. Bank of England Chief Economist Haldane confirmed that the central bank is still reviewing negative rates.  The Peoples Bank of China continued to let the yuan drift falling to the weakest level since early 2008.

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Technical analysis

Gold prices moved lower, and continued to trade sideways unable to break down, after hitting a fresh 7.5-year high last week.  Prices fell below support near the 10-day moving average at $1732, which is now seen as resistance. Target support is an upward sloping trend line that comes in near $1,693. Short-term momentum has turned negative as the fast stochastic recently generated a crossover sell signal in overbought territory. Medium-term momentum has also turned negative as the MACD (moving average convergence divergence) index recently generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram has also generated a crossover sell signal. The histogram is printing in the red with a declining trajectory which points to lower prices.

US Housing Prices Continue to Rise

US home-price appreciation continued to rise in March. The S&P CoreLogic Case-Shiller 20-city price index posted a 3.9% year over year gain in March, up from 3.5% the previous month. On a monthly basis, the index increased by 0.5% between February and March.

For a look at all of today’s economic events, check out our economic calendar.

Natural Gas Price Prediction – Prices Edge Lower as Gas Rig Count is Steady

Natural gas prices were nearly unchanged on Friday following news that natural gas rigs were unchanged according to Baker Hughes. The oil service giant reports the rig count each week. This week Baker Hughes reported that the number of oil and gas rigs in the US fell again this week by 21 a than 68% drop off in a single year. The total number of active gas rigs in the United States held at 79 according to the report. This compares to 186 rigs a year ago. With oil rigs continuing to move offline, prices should eventually find a bottom. The weather in the US is expected to be normal for the next 2-weeks, with some portions of the south getting cooler than normal weather.

Technical Analysis

Natural gas prices were nearly unchanged on Friday and notched up a 5.3% gain for the week. The first 2-trading session of the week was positive, but they were offset by down days on Wednesday and Thursday. Support is near the 10-day moving average at 1.74. Target support on natural gas is seen near the May lows at 1.60. Resistance is seen near the 50-day moving average seen near 1.84. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Medium-term momentum is negative to neutral as the MACD (moving average convergence divergence) histogram is printing in the red with a flat trajectory that points to consolidation.

Gold Price Prediction – Prices Rise but Remain Range Bound Ahead of Long Weekend

Gold prices moved higher on Friday ahead of a long holiday weekend in the US. Prices are moving sideways, continuing to wait for an impetus. For the week, Gold was down slightly after hitting a fresh 7.5-year high. The US Department of Labor reported that the jobless rate rose in all 50 states and the District of Columbia last month, and 43 states recorded the highest level on record since 1976. The US dollar moved higher on Friday but that failed to generate headwinds for gold prices. The US yields were slightly lower on the session.

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Technical analysis

Gold prices moved higher, unable to break down, after hitting a fresh 7.5-year high on Wednesday.  Prices seemed to hold support near the 10-day moving average at $1727. Resistance is seen near the May highs at $1,765. Short-term momentum has turned negative as the fast stochastic recently generated a crossover sell signal in overbought territory. Medium-term momentum has also turned negative as the MACD (moving average convergence divergence) index recently generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line).

US Jobless Rate Surges

The Department of Labor reported its first breakdown of job losses per state. The jobless rate rose in all 50 states and the District of Columbia last month, and 43 states recorded the highest level on record since 1976. The rate in three states exceeded 20% in April, well above the national rate of 14.7%, which was the highest on record since 1948. Nevada registered the highest unemployment rate in the U.S. last month at 28.2%.

S&P 500 Preview – Earnings Resume on Tuesday May 25, After the Memorial Day Holiday

The US equity markets are closed on Monday, May 25 2020, in observance of the Memorial Day holiday. Traders will turn their eyes to earnings results on Tuesday May 25, as retail earings continue. The better than expected numbers release this week have lifted the entire sector as the US begins to relax some of its restrictions.

Dick’s Sporting Goods Inc.

Dick’s (DKS) is scheduled to release financial results on Tuesday May 25, after a long holiday weekend. Expectations are for the company to earn -$0.36 per share on 1.49-billion in revenues. This compares to $1.22 per share in the prior quarter. Earnings expectations have dropped 200% from $0.30 per share 30-days before to -$0.36 per share, which does not bode well for the share price. Growth estimates are expected to contract by 158%.

Sporting goods have underperformed as consumers have focused on items they can use currently since most sporting activities have been restricted. The stock price has rebounded 100% since hitting its lows and still have room to run if financial results beat expectations.

Cracker Barrel Old Country Store

Cracker Barrel (CRBL) is scheduled to release its earnings results on Tuesday May 25, 2020. Expectations are for the company to earn $0.07 per share on $599.3 in revenue. This compares to $2.58 per share in the quarter prior. Earnings estimates have tumbled from $1.14 per share 30-days ago to $0.07 per share. Growth estimates are expected to contract by 97%.

This company relies on in-store traffic which will likely be difficult to recover.

The US equity markets are closed on Monday, May 25 2020, in observance of the Memorial Day holiday. Traders will turn their eyes to earnings results on Tuesday May 25, as retail earings continue. The better than expected numbers release this week have lifted the entire sector as the US begins to relax some of its restrictions.

 

US Stock Market Overview – Stocks Slip on Weak Jobless Claims Data

US stocks were lower on Thursday as stocks took a break from their mid-week rally. Some of the drivers like Facebook and Amazon, which made fresh highs on Thursday, eased slightly into the close. Retail stocks were solid performers on Thursday as better than expected financial results buoyed the discretionary sector. Most sectors in the S&P 500 index were lower, led down by technology, cyclical bucked the trend. Initial jobless claims came out higher than expected while existing home sales tumbled in April. The Chinese tif with the United States continues to grow. Senators look to pass a bipartisan bill that would force Chinese firms to admit they are not controlled by the Chinese government for them to list their shares on a US exchange. The US pledge 1-billion dollars to AstraZeneca to help the company create a vaccine and distribute it.

Jobless Claims Rise

New Jobless Claims in the US  totaled 2.44 million last week according to the labor department. Expectations were for a rise of 2.4 million. Last week’s numbers were revised lower from 2.98 million to 2.69 million. In the nine weeks since the coronavirus-induced lockdown has closed large parts of the U.S. economy, some 38.6 million workers have filed claims.

Existing Home Sales Tumble

The US Existing home sales fell 17.8% month over month, and were down 17.2% year over year according to the National Association of Realtors. That puts the annualized pace at 4.33 million units, the slowest sales rate since September 2011. The supply of homes for sale fell 19.7% annually to 1.47 million units for sale at the end of April. That is the lowest April inventory figure ever.

Natural Gas Price Prediction – Prices Drop Despite Smaller than Expect Build in Inventories

 

Natural gas prices moved lower on Thursday despite a smaller than expected build in natural gas inventories. After two robust days where prices rallied, natural gas has given back most of its gains. The weather is expected to be warmer than normal over the next 2-weeks, but during the shoulder months, there is little impact on natural gas demand.

Technical Analysis

Natural gas prices moved lower on Thursday following the EIA inventory report. Prices dropped 3.3%, and slipped back through support near the 10-day moving average at 1.74 which is seen as short term resistance. Target support on natural gas is seen near the May lows at 1.60. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Medium-term momentum is negative to neutral as the MACD (moving average convergence divergence) histogram is printing in the red with a flat trajectory which points to consolidation.

Inventories Rise Less than Expected

The Energy Information Administration reported that natural gas in storage was 2,503 Bcf as of Friday, May 15, 2020. This represents a net increase of 81 Bcf from the previous week. This compares to expectations that natural gas stockpiles would rise by 98 Bcf. Stocks were 779 Bcf higher than last year at this time and 407 Bcf above the five-year average of 2,096 Bcf. At 2,503 Bcf, total working gas is within the five-year historical range.