U.S. markets continued their record setting run to start Tuesday’s trading before spending much of the session in a tight trading range.
Following yesterday’s deal with Mexico, the U.S. is speaking with Canada to hammer out a NAFTA replacement, but there were no new signs of progress regarding trade negotiations with China.
With volume light, the major indexes still manage small gains across the board. However, volatility stayed slightly elevated for the 2nd-straight session.
The Nasdaq climbed 0.2% while tapping a fresh all-time high of 8,046. Lower resistance at 8,050-8,150 held with a close below 8,000 being a slightly cautious development.
The Dow gained 0.1% after testing a morning peak of 26,122.
Fresh and lower resistance at 26,200-26,400 held with a close above the latter getting lifetime highs north of 26,600 in play.
The S&P 500 was up less than a point, or 0.03%, after trading to an early session and record high of 2,903. Lower resistance at 2,900-2,925 was breached but held into the closing bell.
The Russell 2000 edged higher by 0.02 points after trading to a lifetime high of 1,733 shortly after the open.
The backtest to 1,722 held near-term support at 1,720-1,700.
Real Estate led sector leaders after surging 1.2% while Technology and Consumer Discretionary added 0.2%
Materials, Energy and Communication Services paced sector laggards after declining 0.4%.
Global Economy – European markets were mixed. UK’s FTSE 100 rose 0.5% and France’s CAC 40 climbed 0.1%. The Belgium20 and Germany’s DAX 30 slipped 0.1%.
The Stoxx 600 Europe dipped a tenth-point, or 0.03%.
France August consumer confidence was unchanged at 97, matching expectations.
Eurozone July M3 money supply rose 4% year-over-year, weaker than forecasts of 4.3%.
Asian markets were mostly higher despite trade concerns after President Trump said it’s just not the right time for trade negotiations with China right now.
Australia’s S&P/ASX 200 rallied 0.6% and Hong Kong’s Hang Seng advanced 0.3%. South Korea’s Kospi gained 0.2% and Japan’s Nikkei was higher by 0.1%. China’s Shanghai was down 0.1%.
July International Trade in Goods was at a deficit of $72.2 billion, compared to estimates of $69.4 billion. Exports fell 1.7% to $140 billion while Imports rose 0.9% to $212.2 billion.
July Wholesale Inventories rose 0.7%, topping forecasts of 0.1% for the month. July Retail Inventories rose 0.4%.
Redbook Store Sales were up 5.1% for the year in the week ending August 25th.
June S&P Corelogic Case-Shiller rose 0.5% 213.07, slightly below expectations for a rise of 0.6% to 213.3. The 12-month pace slowed for a 3rd-straight month to 6.31% year-over-year versus 6.54% previously.
The 10-City index increased 0.43% on the month to 226.36. All 20 cities recorded annual gains, paced by Las Vegas (13.02% year-over-year), Seattle (12.81%) and San Francisco (10.66%).
August Consumer Confidence came in at 133.4, above estimates of 126.8.
Richmond Fed Manufacturing Index rose 4 points to 24, topping forecasts for a print of 19, while matching the February high for the year. The employment index rose to 25 from 22, a fifth straight monthly gain, with wages at 27 from 22.
New order volume increased 3 points to 25 from 22.
Capital expenditures fell to 21 from 25. Prices paid slipped to 3.31% from 3.54%, with prices received posting a 1.58% rate of change from 2.24%. The 6-month shipment activity gauge dipped to 42 from 44.
The future employment component rose to 28 from 26, with wages steady at 43, and new order volume at 40 from 39. Capital expenditure climbed to 37 from 30.
Prices paid jumped to a 3.24% from 2.84%, with prices received at 2.63% from 2.74%.
Market Sentiment – The iShares 20+ Year Treasury Bond ETF (TLT) traded in negative territory for the 2nd-straight session while bottoming at $120.68 intraday.
Support at $120.50-$120 and the 50-day moving average held. A close below the latter and the 200-day moving average would be a slightly bearish development.
Lowered resistance is at $121-$121.50.
Market Analysis – The Russell 3000 Index ($RUA) was up for the 3rd-straight session after trading to an all-time high of 1,726.
We mentioned a possible run towards 1,715-1,725 could come on continued strength with a close above the latter getting 1,740-1,750 in play.
Rising support is at 1,7 10-1,700 with a move below the latter signaling a possible near-term top.
RSI is approaching June and July resistance at 70.
A move above the latter would be a bullish signal for additional strength towards 75-80 and January peaks. Support is at 65-60.
The Consumer Discretionary Select Spiders (XLY) extended its winning streak to 3-straight after tapping an all-time high of $116.01. Fresh resistance is at $116-$116.50 held with blue-sky territory towards $118-$120 longer-term.
Near-term is support at $115-$114.50.
A close below $114 would signal a possible short-term peak with risk towards $113-$112 and the 50-day moving average.
RSI is pushing resistance at 70. A close above the latter would signal continued strength for a possible run towards 75-80 and June highs. Near-term support 65-60.
All the best,