While mixed signals continue to be sent by the market, there were some positive developments Friday. News premarket that the CEO of Microsoft was quitting in a year sent the stagnant stock soaring 7%+. This is a big component in many indexes so helped the overall market. There was a bad economic data point with new home sales as it appears higher mortgage rates are finally starting to affect the housing market, but some people saw that as “good” because bad news means more Federal Reserve support. And maybe precious metals are telling us there is no end to quantitative easing anytime soon. The S&P 500 gained 0.39% and the NASDAQ 0.52%.
Sales of new single family homes fell by 13.4 percent in July to an annual rate of 394,000 units, well below expectations of 490,000 units.
The S&P 500 got back over the key 50 day moving average – if it can retain this next week, bulls have a feather in their cap.
The NASDAQ, as we have noted has been much stronger than the S&P 500 of late, and is back over its 20 day moving average. It is coming up to the resistance formed by a long term uptrend line but the NASDAQ sometimes moves to its own beat and we can see that line has not meant much a few times in April and June, so we’ll see if it poses a threat.
The NYSE McClellan Oscillator has had a huge move from -100 to nearly 0 in just a few days. You wouldn’t think that from the rather modest moves in the indexes.
The bad news in the housing market actually helped the “risk on” trade as perversely bad news = good news. The 10 year yield dropped moderately today.
Here is that move in Microsoft…
That is old school. The new school leaders? One of them is Facebook which has been gangbusters since the last earnings report showed it has life in the mobile space. Today JPMorgan mentioned business momentum:
…a JP Morgan note that cited “solid trends in overall engagement” among both mobile and desktop users. In a note, J.P. Morgan analyst Doug Anmuth, citing new data from comScore, said, “We continue to believe that Facebook’s strong mobile usage is offsetting desktop declines and that competing services are having only a modest impact on Facebook.” J.P. Morgan has an overweight rating on Facebook with a price target of $44.
Lots of our readers like precious metals; after being dogs all year they have constructive technical patterns for the first time in a long time. Both had very good days today.