U.S. markets showed continued momentum on Tuesday with the Dow and S&P 500 trading to fresh all-time highs. Some of the enthusiasm came from the debut of Apple’s new iPhone and its initial starting price of $999. The Nasdaq also posted a slight gain to clear near-term resistance while the Russell 2000 showed the most strength.
The Financial sector led the way higher for the second-straight session. Utilities and Real Estate were the only laggards, falling 1.7% and 1.1%, respectively.
Global Economy – European markets showed continued strength with the Stoxx Europe 600 adding 0.5% after trading higher for the fifth-straight session. The DAX 30 and the Belgium20 gained 0.4% while France’s CAC 40 index advanced 0.6%. The FTSE 100 slipped 0.2%.
UK core August CPI rose a more-than-expected 2.9% year-over-year, a 5-1/2 year high.
Asian markets traded slightly higher following upbeat comments on China’s economy. Japan’s Nikkei jumped 1.2% and Australia’s S&P/ASX 200 rallied 0.6%. South Korea’s Kospi climbed 0.3% while China’s Shanghai index and Hong Kong’s Hang Seng Index advanced 0.1%.
Premier Li Keqiang said that China’s economy will maintain its momentum and that the leverage ratio has somewhat decreased. Li Keqiang also added that cuts to excess capacity are exceeding expectations and that new growth drivers are replacing old ones in China’s economy at a faster pace.
U.S. JOLTS report showed job openings rose 54,000 to 6,170,000 in July, a new record high, and ahead of expectations for 6,010,000 job openings. The rate was unchanged at 4.0% for a second straight month.
For the week of 9/9, Redbook Store Sales were up 4.5% for the year.
U.S. chain store sales fell 3.0% in the week ending September 9th, after edging up 0.6% in the first week of September. The decline breaks a string of three-straight weekly gains. However, the annual pace jumped to 2.3% year-over-year from 0.7%.
Market Sentiment – The iShares 20+ Year Treasury Bond ETF (TLT) showed continued weakness after testing a low of $126.52 while closing below upper support at $127-$126.50.
A move below the latter opens up risk to $125.25-$125 and the 50-day moving average. Lowered resistance is at $127.25-$127.50.
Market Analysis- The Russell 2000 ETF (IWM) cleared its 50-day moving average to start the week with today’s follow through reaching a high of $141.69.
Fresh resistance is at $142-$142.25 with a move above the latter signaling a possible run at all-time highs. Rising support at $141-$140.50.
The Utilities Select Sector Spider (XLU) opened lower at $55.79 while trading down to $54.60 intraday. Support at $54.50 held with risk to $54-$53.50 and the 50-day moving average on a move below this level. Resistance is at $55-$55.25.
All the best,
Roger Scott