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S&P 500 overview:
- Fills January gap, holds key 2800 level
- August 2 outside day was key session for chart watchers
- Quiet calendar favors drift higher, but is a breakout possible in late August?
Bonds and the Fed:
- Treasury auctions this Wednesday (10-yr) and Thursday (30-yr)
- PPI on Thursday, CPI on Friday.
- U.S. dollar (@DX) has rallied amid geopolitical risk and weaker data overseas.
- Flashback 7/10: El-Erian sees only 3 rate hikes this year.
Groups in focus:
- China (FXI), China Tech (KWEB) slide down rankings.
- Hospitals, drug makers, health insurers climb rankings.
- Watch Johnson & Johnson (JNJ) for 200DMA breakout. Good for options.
- Small-caps (IWM) hold 50DMA moving average.
- Energy sector (XLE) forming triangle.
- Software (IGV) holding up-trend line.
- Salesforce.com (CRM) near 50DMA good for options.
- Retail pushing highs as earnings approach.
- RH (RH) holding 50DMA
- Target (TGT), EPS 8/22. Good for options. 24-Aug 84 calls for earnings meltup?
Recent data mixed:
- July non-farm payrolls miss but shows deeper strength in manufacturing. But ADP beats.
- ISM manufacturing & services indexes miss. But trade gap, initial jobless claims beat.
- Trade anxieties squeeze China PMIs, confidence. Euro zone GDP misses estimates.
- Viva Goldilocks?
Bullish & Bearish analyst calls
- Square (SQ): Buckingham neutral → buy, TP $65 → $85
- Follows JPMorgan, Needham, RBC earlier in month.
- Parker Hannefin (PH): Evercore ISI Inline → Outperform
- Credit Suisse, Wells Fargo less bullish earlier in month.
- Paccar (PCAR): Evercore ISI Inline → Outperform
- Tesaro (TSRO): Barclays cuts → Neutral, TP $60 → $56.
- Acadia Pharma (ACAD): Piper Overweight → Neutral. TP = $19
- Barrick Gold (ABX) Jefferies Buy → Hold, TP $17 → $11.
Options activity:
- 8/3: Mylan (MYL) Jan 35p-40c-50c bullish 3-way.
- 8/2: PowerShares Trust (QQQ) 10-August 173.50 – 10-August 172 put spread.
- 8/1: Pfizer (PFE): August 37 calls bought, December 40 covered call roll → December 41.
- 8/1: Apple (AAPL): Diagonal spread.
