Premarket: Apple is red

From CNBC's "Stock futures fall on slowing China economy concern, following 4 straight weeks of S&P gains" posted early Monday:

U.S. equity futures were lower Monday, putting Wall Street on track to take a breather after another positive week, as traders braced for big retail earnings...

Monday’s moves come after disappointing economic data out of China overnight. The country’s central bank also cut rates unexpectedly, raising concern over China’s economic recovery.

Last week the S&P 500 advanced 3.25% to notch its fourth positive week in a row and its longest winning streak since 2021. The Nasdaq Composite ended the week 3.08% higher, also for its fourth straight week. The Dow added 2.9%.

The gains came after economic data showed inflation pressures could be easing a bit. The consumer price index was flat from June to July, the producer price index showed a surprise decline and import prices fell more than expected.

That helped relax investors that have been eager to call the mid-June lows the bottom of the cycle. Just as many have been quick to call out that the data from one month doesn’t necessarily make it a reliable trend.

“While bulls may be chalking this week up as another win for an equity rally that has remarkably lasted almost two months since June’s lows, bears continue to pound the table on risks to year-end earnings and margins that could spoil the party for those celebrating too early,” Morgan Stanley said Sunday.

Charts: Yahoo!Finance sees a bullish triple-moving-average-crossover pattern. Max pain may be broken. Starts the week at $160 (down $5) with a call mountain at $145 (down $27.50?)

4 Comments

  1. Jerry Doyle said:
    I have trepidation that China’s continued use of its misguided zero-tolerance COVID policy toward local cases only exacerbates the country’s economic woes and extends the virus throughout the country. How does one fight conclusively an unknown attacker in a populous of almost 1.5 billion people? The country can’t stamped out something it can’t control completely.

    Mass testing of an unwilling populous, targeted lockdowns by an opposed people, and travel restrictions on evasive crowds only serves to disrupt entire local economies. This asinine policy has not been and will not be successful in stamping out symptomatic infections in a nation almost five times the size of the US. Flare-ups will continue for months and onward. Geographical spreads among so many folk in such vast crowded areas only will perpetuate the spread of infections while placing severe mental, emotional, physical and financial constraints on China’s populous and economy.

    Commerce is impacted, indoor entertainment halted, cultural venues jettison; all delayed or canceled. Travelers entering the country are quarantined for weeks! There only will continue small clusters of new infections leading to continued backpedaling costing so much for so many for so little gained if only the country moved on with doing business.

    2
    August 15, 2022
    • Bart Yee said:
      @Jerry
      IMO, China could better spend money licensing or buying Moderna, Pfizer vaccines more effective against Covid and maybe targeted vaccines against Omicron variants. This would reduce the potential number of cases or at least their bad outcomes. However it doesn’t change the Chinese lockdown responses because that’s their policy. Buying foreign vaccines would lose face and be an admission of ChinaPharm failure to mitigate Covid and allow a more flexible and measured response like Western countries have been able to achieve.

      The World has been lucky that Omicron actually came into being because it’s more infectious yet much less virulent mature swamped out the much more dangerous delta variant infection cycle of autumn 2021. We have to be on guard against any new variant that combines Omicron’s infectivity with delta’s deadliness or worse, plus potentially not being sensitive to current vaccines’ effectiveness.

      Having just gone through an Omicron Covid bout and only testing negative recently after 12 days of illness, it’s no fun, even with full vaccinations and boosters. Woe to those unvaccinated who have worse courses.

      3
      August 15, 2022
      • Fred Stein said:
        Great insights Bart. Adding: China has a lower percent of high risk people, older and overweight, than the US. In addition, there are better therapies available now.

        I had a bout with Covid in Jan this year. Agree with your last para as well.

        1
        August 15, 2022

Leave a Reply