I am on vacation this week so I'll post mostly abbreviated blog articles. There will be no blog article on Friday morning.
Market Recap for Friday, July 12, 2019
Industrials (XLI, +1.75%) powered our major indices to fresh new all-time highs. Transports ($TRAN) were particularly strong as truckers ($DJUSTK, +4.51%), airlines ($DJUSAR, +1.79%), and railroads ($DJUSRR, +1.58%) all had solid days. The DJUSAR broke to a new 2019 high:
Meanwhile, healthcare (XLV, -1.11%) lagged badly as both pharmaceuticals ($DJUSPR, -2.15%) and biotechs ($DJUSBT, -1.73%) stumbled on Friday. The latter group was hurt by Illumina (ILMN, -16.12%), which warned about its upcoming Q2 earnings and then lowered its outlook for the balance of the year. ILMN had been a leader among biotech stocks. Seeing a leader produce such a weak outlook is not what this group was looking for during its most bullish calendar month historically.
Much can change between this evening and tomorrow morning, but U.S. futures are pointing to a slightly lower open. Dow Jones futures are currently lower by 36 points with a bit less than 12 hours to tomorrow's opening bell.
The S&P 500 remains in the up channel that I illustrated last week. Here's a refresh of the chart included in Trading Places:
Transports ($TRAN) broke out from a bottoming reverse head & shoulders pattern on Friday:
That's good news as a strong transportation group usually coincides with a major stock market advance. One day of bullish behavior doesn't make a major trend, but given how weak this area has been, it's a very nice start.
The S&P 500 has produced the following annualized returns within the month of July since 1950:
July 1-17: +24.70%
July 18-24: -18.72%
July 25-31: +19.12%
Key Earnings Reports
(actual vs. estimate):
C: 1.78 - estimate
(reports after close, estimate provided):
Key Economic Reports
July empire state manufacturing survey to be released at 8:30am EST: +0.5% (estimate)