Stocks were mixed on Thursday but mostly higher after a PPI report that came in cooler than expected. The corporate reaction to the tariffs was likely a catalyst last month but overall this seems to be taking inflation out of the equation. The Dow was up 272-points, and that was despite another big loss in UnitedHealth Group, which was the 3rd largest company in the Dow, but now is #7 after its recent losses. 22 of the 30 Dow stocks were up, pushing the index up nearly 300. Small caps were flat and the I-fund came back to life after a short pause.
The PPI (Producer Price Index) for April came out yesterday before the opening bell and the Producer Prices decreased in April. Again, it may have had an assist from corporate tariff preparations, and it could turn out to be an outlier report. Revisions for March weren't quite as friendly.
More data from briefing.com:
The Producer Price Index for final demand decreased 0.5% month-over month in April. That was the good news. The bad news is that the prior month was revised up to unchanged from a 0.4% decline.
The Producer Price Index for final demand, less foods and energy, decreased 0.4% month-over-month, again good news, but the bad news (again) is that the prior month was revised up to 0.4% from -0.1%.
On a year-over-year basis, the index for final demand was up 2.4%, versus an upwardly revised 3.4% (from 2.7%) in March, while the index for final demand, less foods and energy, was up 3.1%, versus an upwardly revised 4.0% (from 3.3%) in March.
The 10-Year Treasury Yield bought the story and fell enough to erase the prior two days' gains. This has been trading above the recent range, although we may have to widen that range after a couple of moves above 4.4% in recent weeks.
BND (F-fund) moves counter to yields so it rebounded nicely off the lower support area that we have been watching. Is this ready for another move toward the top of its recent range?
The GDPNow second quarter GDP estimate was increased from +2.3% to +2.5%, so that's moving in the right direction for now.
The S&P 500 (C-fund) took it all in and went for another ride higher on Thursday, keeping the April / May rally going, and after 15 positive days out of the last 18 trading days- with some of those daily gains having large crooked numbers, the index is back in the neighborhood of its all time highs. The March 3 high may be the next upside target on the radar.
The broader market has been less impressive. The Equal Weighted S&P 500 (same 500 stocks as the S&P 500 but not weighted by market cap) did just break above its descending resistance line - something the S&P 500 Index did a month ago. Along with the EW S&P, the small caps of the Russell 2000 remains below its descending resistance line and the 200-day moving average, so there's some technical roadblocks in the vicinity.
That leads us to the S-fund (DWCPF) which is above its 200-day average, but there is resistance about 100 points overhead. The bad news is that could push back on any attempt to make new highs. The good news is, it looks like a large inverted head and shoulders pattern that, once it completes a right shoulder, would breakout with a very healthy upside target.
I mentioned the longer term view of the DWCPF (S-fund) above. The shorter-term chart shows it remains in an ascending channel, with potential modest resistance near 2250, but a lot of support between 2100 and 2175.
ACWX (I-fund) is back climbing a narrow channel upward, and even though the support line broke last week, it is now riding up below that old support line with 57.60 to 57.00 looking like new potential support lines.
See the BND (bonds / F-fund) chart up top.
Thanks so much for reading! Have a great weekend!
Tom Crowley
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the TSP and ETF Systems. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php
Questions, comments, or issues with today's commentary? We can discuss it in the Forum.
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Posted daily at www.tsptalk.com/comments.php
The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We may use additional methods and strategies to determine fund positions.
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The PPI (Producer Price Index) for April came out yesterday before the opening bell and the Producer Prices decreased in April. Again, it may have had an assist from corporate tariff preparations, and it could turn out to be an outlier report. Revisions for March weren't quite as friendly.
More data from briefing.com:
The Producer Price Index for final demand decreased 0.5% month-over month in April. That was the good news. The bad news is that the prior month was revised up to unchanged from a 0.4% decline.
The Producer Price Index for final demand, less foods and energy, decreased 0.4% month-over-month, again good news, but the bad news (again) is that the prior month was revised up to 0.4% from -0.1%.
On a year-over-year basis, the index for final demand was up 2.4%, versus an upwardly revised 3.4% (from 2.7%) in March, while the index for final demand, less foods and energy, was up 3.1%, versus an upwardly revised 4.0% (from 3.3%) in March.
The 10-Year Treasury Yield bought the story and fell enough to erase the prior two days' gains. This has been trading above the recent range, although we may have to widen that range after a couple of moves above 4.4% in recent weeks.
BND (F-fund) moves counter to yields so it rebounded nicely off the lower support area that we have been watching. Is this ready for another move toward the top of its recent range?
The GDPNow second quarter GDP estimate was increased from +2.3% to +2.5%, so that's moving in the right direction for now.
The S&P 500 (C-fund) took it all in and went for another ride higher on Thursday, keeping the April / May rally going, and after 15 positive days out of the last 18 trading days- with some of those daily gains having large crooked numbers, the index is back in the neighborhood of its all time highs. The March 3 high may be the next upside target on the radar.
The broader market has been less impressive. The Equal Weighted S&P 500 (same 500 stocks as the S&P 500 but not weighted by market cap) did just break above its descending resistance line - something the S&P 500 Index did a month ago. Along with the EW S&P, the small caps of the Russell 2000 remains below its descending resistance line and the 200-day moving average, so there's some technical roadblocks in the vicinity.
That leads us to the S-fund (DWCPF) which is above its 200-day average, but there is resistance about 100 points overhead. The bad news is that could push back on any attempt to make new highs. The good news is, it looks like a large inverted head and shoulders pattern that, once it completes a right shoulder, would breakout with a very healthy upside target.
I mentioned the longer term view of the DWCPF (S-fund) above. The shorter-term chart shows it remains in an ascending channel, with potential modest resistance near 2250, but a lot of support between 2100 and 2175.
ACWX (I-fund) is back climbing a narrow channel upward, and even though the support line broke last week, it is now riding up below that old support line with 57.60 to 57.00 looking like new potential support lines.
See the BND (bonds / F-fund) chart up top.
Thanks so much for reading! Have a great weekend!
Tom Crowley
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the TSP and ETF Systems. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php
Questions, comments, or issues with today's commentary? We can discuss it in the Forum.
Daily Market Commentary Archives
For more info our other premium services, please go here... www.tsptalk.com/premiums.php
To get weekly or daily notifications when we post new commentary, sign up HERE.
Posted daily at www.tsptalk.com/comments.php
The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We may use additional methods and strategies to determine fund positions.
