The bulls came into today’s action with a slight lead for the week but futures were lower by a half-percent before Europe’s open and didn’t improve much before Wall Street’s wakeup call. Some of the issues weighing on the overseas and the market here at home are being blamed on China after they missed their Trade Surplus numbers last night.
China Exports were up just 1% while estimates called for growth of 8%. Imports were up 4.7% which was also less-than-expected as the country’s trade surplus narrowed to $25 billion, or $10 billion less than what the zombies had penciled-in. New Loans in China also came in less than expected.
The economic numbers from China are slowing faster than the market realizes and sooner or later this will be factored into the market.
Manchester United (MANU, $14.02, up $0.02) become a publicly-traded company today after selling 16+ million shares at $14 which raised $234 million and gave the company a market cap of $2.3 billion. Shares will trade on the New York Stock Exchange (NYSE).
Historically, owning stock in a sports team hasn’t been the best investments and this deal looks like a deleveraging one. The capital raised won’t be used to pay down debt or sign new players, instead, the proceeds of $234 million will be split between the club and its owners, the Glazer family, who also own the NFL’s Tampa Bay Buccaneers.
The current 3-month trading range has been frustrating and we mentioned this morning the summer doldrums are certainly in place. While unlikely, we wouldn’t be surprised to see the market chop around and remain in a tight trading range until the Fed or the ECB speaks again which could be a week or two.
The Fed is meeting in Jackson Hole, Wyoming later this month and the ECB is still putting a plan together…
The recent rally to the top of the range has been based on more monetary easing but if the zombies don’t flood the market with new cash in a couple of weeks, the wind will come out of the market’s sails.
The levels to watch into the close are Dow 13,096; S&P 1,391; Nasdaq 2,968 and Russell (2000) 788. Anything above these numbers the bulls will get the win. Anything below, the bears get the victory.
As we head to press, the Dow is down 22 points to 13,143 while the S&P 500 is off 3 points to 1,400. The Nasdaq is lower by 8 points to 3,011 while the Russell is showing a decline of 3 points to 800.
We have a few last minutes updates for our current trades and we will review our Watch List over the weekend for new ideas. We will have the charts for you on Sunday night in our Weekly Wrap and again on Monday for the Daily.
Next week has the potential to be explosive and this week’s tight trading range is a sign a major move is coming. We hope so because our portfolio will be light and we plan to step on the gas once we get a clear signal on the market’s next TREND.
Until then, have a great weekend everyone!
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