EB Daily Market Report - Wednesday, July 29, 2020

Tom Bowley - July 29, 2020

Late DMR

Because of the technical issues at StockCharts.com today, our DMR is much later than usual. I apologize for any inconvenience.

Executive Market Summary

Futures were fractionally higher this morning as small caps ($SML) and mid caps ($MID) have shown relative strength
The FOMC meeting ended with no change in rates, as expected
Fed Chair Powell said that economic growth remains well below the pre-pandemic level
The 10 year treasury yield ($TNX) is nearly unchanged after the Fed announcement
The U.S. Dollar (UUP) is down again today, but has moved slightly higher since the FOMC 2pm announcement
Financials (XLF, +1.77%) are atop the sector leaderboard on Fed Day as all 11 sectors are up, at last check
Health care providers ($DJUSHP, +3.25%) are mostly higher

Market Outlook

While the overall market is trending higher currently, that's not the case with the Dow Jones. This index of conglomerates is weighed down by Boeing (BA, -2.66%), Raytheon (RTX, -2.44%), and Intel (INTC, -2.42%). Here's the 1 year chart that shows the Dow lagging the S&P 500, but still holding its 20 day EMA:

The top panel of the chart shows the Dow Jones in an uptrend. Those not paying attention to ALL happenings in the market might be perfectly content with the Dow's performance. But check out the bottom panel. The Dow has been badly lagging the broader S&P 500 and it's breaking to a new relative 52-week low.

Sector/Industry Focus

The Dow Jones U.S. Health Care Providers Index ($DJUSHP) hasn't been able to break above key price resistance, but it's currently on the move and this price level will be worth watching. The DJUSHP:SPX ratio is also on the improve and approaching a 6 week high:

An absolute and relative breakout would be very good news for the market in general and for the health care sector (XLV) more specifically. The XLV has already begun to benefit from recent strength in medical equipment ($DJUSAM), biotechs ($DJUSBT), and medical supplies ($DJUSMS), so adding yet another strengthening industry group to that list would be a bonus.

ChartLists

Sometimes, late in the day, I'll look at the "Summary" view of a ChartList and look to the worst performers to see if any high SCTR stocks is having a rough day. I'll also look at this summary on a weekly basis as well. The following is an example of the Strong AD ChartList and its worst 10 performers over the past week:

In an effort to save time, I'll ignore many of those biotech names, which can be extremely volatile and risky and focus on one that might make sense for some traders - AUDC:

A 20 day EMA test during a big rise in a stock can present a solid reward to risk entry - with a closing stop beneath that 20 day EMA. Or you could consider an intraday stop beneath today's low. AUDC is also volatile, but it's been a leader in its space, it just saw its AD line break to a new high and, at today's low, was slightly more than 20% off its high from just two days ago.

Earnings Reports

Here are the key earnings reports for today and tomorrow, featuring stocks with market caps of more than $10 billion. I also include a few select companies with market caps below $10 billion. Finally, any portfolio stocks (or active trade alerts) that will be reporting results are highlighted in BOLD. If you decide to hold a stock into earnings, please understand the significant short-term risk that you are taking. Please be sure to check for earnings dates for any companies you own or are considering owning:

Wednesday, July 29:

PYPL, SNY, SHOP, QCOM, BA, NOW, CCI, ANTM, EQIX, ENB, ADP, CME, GE, BSX, NSC, LRCX, SPOT, GD, EPD, GM, ETN, CTSH, ORLY, TROW, TEL, YUM, TT, ADM, CERN, AVB, ETR, YUMC, AMP, GRMN, AEM, GIB, ROL, HOLX, TDOC, HES, TYL, DRE, QRVO, MAA, ACGL, FICO, DT, URI, CGNX, AVTR, KGC, CXO, PTC, CONE, SMG, IPG, MKSI, APA, UTHR, CCJ, WING, ASGN, SAIA, WERN, AAN, AM, PS, MTSI, MMSI, R, CRTO

Thursday, July 30:

AAPL, AMZN, GOOGL, FB, PG, MA, CMCSA, LLY, AZN, LIN, RDS.A, AMT, BUD, UPS, GILD, SYK, VRTX, CI, MMC, SO, NEM, MCO, MELI, ICE, NOC, BAX, WM, TAL, KDP, COP, KHC, TRP, DD, DLR, EA, XEL, SGEN, F, WLTW, FMS, SIRI, XLNX, SWK, K, VLO, ALXN, CARR, TEAM, ODFL, MTD, APTV, AJG, FTS, TFX, PCG, BIO, MAS, HIG, ATUS, IP, EXAS, KL, XYL, GPC, TW, APO, EXPE, MT, ZEN, QDEL, MOH, DVA, CNHI, MPW, CG, GNRC, XPO, MGM, FND, RGEN, GRUB, TNDM, DECK, DNKN, RDFN, TPX, BAND, TMHC, TWOU, CROX, FORM, EGO, SHAK, X,

Economic Reports

June pending home sales: +16.6% (actual) vs. +5.2% (estimate)

Happy trading!

Tom