US STOCKS: Equity Roundup, Not Taking Hawkish Tone Kindly
Stocks not taking kindly to the double-tap of hawkish policy headlines from the ECB contemplating a 75bp move next month underscoring Fed Chairman Powell higher rates for longer/restrictive stance. Communication Services, IT and Consumer Discretionary sectors underperforming.
- Incidentally, SPX traded mildly higher early that US/China regulators were near agreement on audit inspections -- forestalling concerns some 200 China firms could be delisted - unsure where that leaves the half-dozen that said they would voluntarily delist themselves last week.
- Currently, SPX eminis trade -83.5 (-1.99%) at 4119.25; DJIA -534.85 (-1.61%) at 32767.79; Nasdaq -315.1 (-2.5%) at 12327.71.
- Technicals for SPX Sep futures: S&P E-Minis reversed off the day’s high of 4217.25 Friday, slipping to new weekly lows in the process. The impulsive sell-off following Powell’s speech highlights the downside risk, and increases focus on the 50-day EMA, at 4089.67 - a key pivot support. Key resistance and the bull trigger is at 4327.50, Aug 16 high. Initial resistance to watch remains 4221.50, Monday’s high. A break would ease the bearish threat.
- SPX leading/lagging sectors: Utilities (-0.54%), Energy (-0.98%) and Consumer Staples (-1.13%) weathered the sell-off the most. Laggers: Communication Services (-2.84%) as media and entertainment reversed the prior session gains w/Google -4.51%, Dish Network (DISH) -3.11%.
- Dow Industrials Leaders/Laggers: Merck (MRK) +0.05at 90.32, Verizon (VZ) -0.44 at 43.30, Walgreens Boots (WBA) -0.65 at 36.15. Laggers: Home Depot -7.64 to 302.14, Goldman Sachs (GS) -6.87 to 339.62, Microsoft (MSFT) -6.42 at 272.43.
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Historical bullets
GBPUSD TECHS: Holding On To Recent Gains
- RES 4: 1.2332 High Jun 27
- RES 3: 1.2213 High Jun 29 / 50-day EMA
- RES 2: 1.2125 High Jul 5
- RES 1: 1.2090 High Jul 26
- PRICE: 1.2049 @ 16:16 BST Jul 27
- SUP 1: 1.1890/1760 Low Jul 21 / Low Jul 14 and the bear trigger
- SUP 2: 1.1673 1.00 proj of the May 27 - Jun 14 - 16 price swing
- SUP 3: 1.1640 Low Mar 25 2020
- SUP 4: 1.1503 Low Mar 24 2020
GBPUSD is trading closer to its most recent highs and the pair remains in a short-term corrective bull cycle. Recent gains signal scope for a stronger short-term correction and attention is on the 50-day EMA at 1.2213 - a key resistance point. The primary trend direction is down. A resumption of weakness would refocus attention on 1.1673 next, a Fibonacci projection. The key support to watch is at 1.1760, the Jul 14 low and bear trigger.
STIR: BLOCK, SOFR Options
- 5,000 SFRZ2 96.00/96.25 put spds, 7.0 vs. 96.59/0.10% at 1131:50ET
EURUSD TECHS: Short-Term Resistance Intact
- RES 4: 1.0441 Bull channel resistance drawn from the Feb 10 high
- RES 3: 1.0393 50-day EMA
- RES 2: 1.0359 Low Jun 15
- RES 1: 1.0229/78 20-day EMA / High Jul 21
- PRICE: 1.0127 @ 16:13 BST Jul 27
- SUP 1: 1.0108 Low Jul 26
- SUP 2: 1.0064/0.9952 Low Jul 18 / 14 and the bear trigger
- SUP 3: 0.9944 1.618 projection of the Jun 9 - 15 - 27 price swing
- SUP 4: 0.9883 1.764 projection of the Jun 9 - 15 - 27 price swing
EURUSD traded just through the Tuesday lows ahead of the close, keeping price below immediate resistance at 1.0278, the Jul 21 high. This week’s move lower raises the risk of a return back toward recent lows below parity, at 0.9952 (Jul 14). To the upside, a break above 1.0278 would once again resume short-term bullish conditions and signal scope for an extension higher within the bull channel - the top intersects at 1.0441.
