Some pretty salty losses on DJ30 and SP500 as their industrial, materials, and other issues relating to overseas development are getting whacked pretty hard. The rest of the market, while mostly lower, is showing relative strength that is more of a testing session than selling. Of course it can develop into more so we have to watch how they hold up, bur for now they are doing well. Indeed, there is a last hour bounce starting even in the NYSE large cap indices.
SP500 -30.25, -1.11%. 15 points off the recent low
NASDAQ -35.05, -0.47%
DJ30 -382.10, -1.54%, 130 pts off the low
SP400 -0.27%
RUTX -0.41%
SOX -0.67%
Volume is sharply higher, running 25% higher on NYSE, 15% on NASDAQ. Definitely some distribution in some areas.
The tape is mostly about Italy and by extension Europe. US 10 year is yielding 2.779%, a solid jump. Dollar remains strong against the euro.
Consumer Confidence: 128.0 as expected, up from April (125.6) that was reduced from 128.7. Present conditions are at a near 20 year high.
With the industrial side getting the hits we are watching BA, CAT, HON closely. If they can rebound late and hold well, okay. Right now they are on the bubble. Even GOOG, while the rest of FAANG looks fine, is struggling today.
Drug stocks are not bad and watching BCRX and CPRX as possible entries.
The market is waiting to see if the ECB steps in to 'save the day.' That would be quite European of course, but not sure if the ECB is willing to step in -- and if so, could the ECB do anything given the status of European paper and what it could buy. From bad to worse? Sounds like it. For now Europe is twisting in the wind as US bonds rally along with the dollar/euro pair.
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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