Tech-Led Rally Lifts S&P 500 To Best Day Since Early August
Stocks and bonds rallied together Thursday after having fallen in unison the day before following a hawkish Fed decision, helped by oil prices easing back for a second day.
A Hawkish Fed Does Little To Soothe Markets
The S&P 500 falls for the 7th time in 8 sessions straining against key downside levels as a more hawkish than expected Fed does little to soften expectations for higher volatility in stock and bond markets.
A Thin Margin For Error Ahead of the FOMC
Equities fall for 6th time in 7 sessions bringing key downside levels closer as breadth deteriorates, oil approaches 4-year highs and long-term yields hit the highest in nearly two decades
Equities Remain Under Pressure As 10-Year Yield Hits 19-Year High
A bounce in AI names is helping offset pressure from a continued rise in bond yields and oil prices.
Equity Slide Resumes, Pressured by AI Concerns and Oil Prices
With an already “fragile” setup, equities are starting the week on the wrong foot.
Bessent’s Big ‘Bazooka’ Not Big Enough, Trump’s $5G Promise, Debt Woes
Let’s see why the $6B repurchase plan let down investors and bond traders, check the math on Trump’s $5G ‘dividend’ promise, and … a Nvidia probe.
AMD Is Still Going
Readers will see below that Advanced Micro Devices ($AMD) built a Rising Wedge pattern of bearish reversal while running into late June. The shares then caught a bid close to a 38.6% Fibonacci retracement of that entire rally in late July.
This past August the stock had flirted with taking back both its 21-day EMA and 50-day SMA, but failed to do so at that time, forming a Triangle pattern in the process.
This week, AMD has broken out of that pattern and taken back both of those key moving averages. This forces both swing traders and professional managers to play ball with each other.
Looking at the indicators, both Relative Strength and the stock’s daily MACD are suddenly looking much more bullish. The histogram of the 9-day EMA has now regained the zero-line while the 12-day EMA has overtaken the 26-day EMA. Should both of those lies go positive, this stock could very likely see an algorithmic boost on top of the current action.
Target Price: $700 (reiteration)
Pivot: Recent 50-day SMA ($499)
Add: Down to previously tested Fib level
Panic: Loss of said Fib level
Position: Long AMD equity
Is the ‘House’ on Solid Ground?
I saw a bit of myself in Sec. Scott Bessent’s ‘I am the house’ talk, and I didn’t like it. Let’s look a the yen, trade war with Canada, out of control AI.
That’s a Wrap!
Equities sold off to varying degrees on Tuesday to get a holiday-shortened a week off to a sloppy start. Throughout the day, there were reports of fighting in and around Iran’s Kharg Island. That forced oil prices higher. Front-month WTI Crude futures climbed in value for a sixth consecutive day. I now see the sweet stuff trading close to $94 per barrel. The S&P 500 gave up 0.58%, while the Nasdaq Composite surrendered 0.32% as both major U.S. equity indices notched back-to-back red-candle days.
Energy stocks ruled the session, but semiconductor stocks did well too. Intel ($INTC) led the group with a 9.1% gain on the day. Advanced Micro Devices ($AMD), another big Sarge name, ran 5.9%. Treasury yields rose and bond traders liquidated holdings. The benchmark U.S. 10-Year Note reached its highest yield since November 2023, while the 2-Year Note paid what amounted to a post-January high. Traders also had to deal with renewed trade tensions between the U.S. and Canada. Retaliatory tariffs from Canada on about $20 billion worth of U.S. goods took effect on Tuesday.
Have a good evening, gang. Tomorrow is Wednesday and Dougie is off again, so, God willing, you’ll be working with me again.
Always faithful.
Position: Long INTC and AMD equity
Reading Through Comments From Applied Material’s Investor Conference
Signs point to tight chip capacity remaining in play for some time leading to favorable pricing.