A good week for the bulls ended in quiet fashion as indexes tried to gap up once again, which finally led to some selling – but a last hour rally helped change that. The S&P 500 fell 0.01% while the NASDAQ gained 0.27%; the NASDAQ continues to take over leadership of late. Next week the Fed will be in focus, with meeting minutes out on Wednesday and a gathering of central bank leaders in Jackson Hole, Wyoming, on Thursday. However with much of the Fed’s playbook revealed there should not be many fireworks as there have been in other years at this meeting. Maybe Mario Draghi of the European Central Bank will say something interesting.
The NASDAQ more or less reversed at old highs. This is not surprising since pushing through such a level on the back of a sharp rally would be unlikely – you’d expect some digestion first. This coincided with a level on the S&P 500 we pointed to all week as a tell; if and when the index got back to old support, how it would act. Well that happened today as the S&P 500 surged into that upper purple line – which was multi month support until it broke a few weeks ago. This doesn’t mean it won’t jump back above it next week but it seems like a logical place to be rejected on its first attempt – again after a sharp move up with no rest this week. If we get above both these levels for the 2 indexes next week we should just return to our normally schedule bull market.
In the commodity space it is worth noting the selloff in silver – gold and silver have been very difficult places to be the past 18 months or so.
There was some interesting action in the Chinese internet stocks as Chinese media firm Sina (SINA) ended the week nearly 3 percent higher after reporting a jump in advertising sales and better-than-expected growth in both revenue and earnings, riding on a strong performance from its subsidiary, Weibo, China’s version of Twitter. That said, Sina has not been a good performer this year unlike a lot of its peers.
Weibo actually fell 7 percent after reports showed growth in daily active users slowed during the last quarter to 32 percent from 37 percent in the preceding period.
Speaking of Chinese internet stocks, Jumai (JMEI) flashed across our screens as a very strong stock – this company sells beauty products online and has a $5B market cap. It looks like it IPO’d in June and has nearly doubled from opening levels. Maybe this will be like VipShop (VIPS) which has been one of the more amazing stocks of the past 12+ months.
Major biotech company Gilead Sciences (GILD) said that an arbitration panel ruled in its favor and rejected a patent infringement claim brought by Roche Holding. This superstar stock has surged since the spring selloff in the sector.
Have a good weekend and we’ll see you back here Monday.