Morning Minutes 11/13/2018

Stocks Stuck Between Technology and Retail News Send Mixed Signals

November 13, 2018
8:45 am EDT

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Market Commentary By:
Colin Cieszynski, CFA, CMT
Chief Market Strategist
ccieszynski@siawm.com
+1 (647) 282-4428

We’re getting a lot of mixed signals from the markets this morning. Dow futures are up 100 points which sounds encouraging but looks feeble after yesterday’s 602-point or 2.3% selloff. The big question for US markets today is whether Apple in particular and technology stocks in general can regain their footing after speculation that iPhone sales may be slowing rocked the sector to its core. We also could see some positioning in retail stocks with US monthly retail sales due Thursday. Earnings from major retailers set to start coming out this week as well, led by Macy’s on Wednesday and Wal-Mart on Thursday. Tomorrow is also a big day for earnings from Canada with results due from Cineplex, Canada Goose and Loblaws.

Overseas trading has been mixed, the Nikkei fell 2.0% overnight, but the Hang Seng bounced back 0.6% on reports of more trade talks between the US and China; we’ll see if anything actually comes of that or not. In Europe, the Dax has rebounded 0.7% while the FTSE is flat as Italy’s showdown with the EU and ongoing Brexit talks still dominate the headlines.

Crude Oil’s rebound was short-lived as WTI and Brent have both dropped about 1.5%, sliding back under $60.00/bbl and $70.00/bbl respectively. Natural Gas is still on fire, soaring another 6.8% and blasting through the $4.00/mmbtu level as winter arrives early in many parts of North America.

Technical market signals are mixed. The VIX has dropped back under 20, a sign of receding fear, while Gold, which also has been easing back, has bounced up off of $1,200/oz. The Dow continues to hold above its 200-day average while the S&P 500 has dipped back under it. A Death Cross (50-day average falling below the 200-day average) for the Russell 2000 suggests small cap stocks remain under pressure and some investors remain defensive.

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