📈GDP wrecks Technology Stocks 🤖
GDP was released today and shrunk 1.6% vs the estimated -1.5%. Speaking to a European Central Bank forum in Portugal, Federal Reserve chairman Jerome Powell commented “Pre-pandemic world low inflation gone for time being” and the “Process in getting inflation down will involve some pain". Tomorrow marks the end of the 2nd quarter and there might be some window dressing in the best performing stocks of the quarter. This Friday we may see some repositioning in the sectors as funds do not have to report their moves for another 90 days. Tomorrow at 8:30 AM jobless claims data will be released. The current estimate is 228K. Core PCE price index is forecasted to rise .4% month over month and will be announced tomorrow at 8:30 AM. CORE Chicago PMI is released tomorrow at 9:45 AM and the forecast is 58 month over month. All indexes broke below their 5 day moving averages which is bearish. The treasury market rallied with the ten year closing around 3.1%. The high yield bond market sold off with junk bonds being sold the most out of any corporate debt. The spread widening in the 10 yr and high yield shows less risk appetite and therefore not bullish for equities. ISM manufacturing PMI is due out at 10 am on Friday. The estimate is 54.9. Energy was the weakest sector today with health care and consumer staples being the strongest . This usually shows risk aversion to equities. The EIA reported crude oil inventories fell by -2.75M barrels vs the 0.569M consensus. This news is positive for the oil sector but we sold off. Good news + lower prices = bearish sentiment. Overall, there is nothing technically bullish about the current stock market set up even though we are oversold and looking for a bounce we can sell down more. Watch tonight’s video I go over if we setting up for another leg down in the $SPY $QQQ. What indicators to use for signs of a possible crash. Let’s get to it.
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