The indices were mixed over the past week with Nasdaq and Russell 2000 moving higher while the S&P and Dow were both down on the week, at least through noon on Friday. Through that time, the Nasdaq had gained 1.1% and the Russell 2000 had gained 0.29%. The S&P lost 0.34% and the Dow lost 1.49%.
Central bank activity and trade were the driving forces over the past week. The Fed raised interest rates by 0.25% while the European Central Bank and the Bank of Japan left rates where they were.
[hana-code-insert name=’adsense-article’ /]We were seeing selling pressure on Friday after the U.S. enacted a 25% tariff on certain Chinese goods, escalating the trade battle that has given investors concerns since February.The sectors were mixed over the past week as well.
Of the ten main sectors, six moved higher and four moved lower.
The utilities sector led the way with a gain of 1.99% followed by the consumer discretionary sector with a gain of 1.9%.
The consumer staples sector gained 1.39% and that is good news for the sector that has been the worst performer so far in 2018.
As for the sectors in the red over the past week, the energy sector was the worst performer with a loss of 2.69% and it was followed by the financial sector with a loss of 2.34%. The industrial sector also logged a loss over two percent with a decline of 2.04%.
As far as the trade ideas from the past month plus, we had four trade ideas that were closed out over the past five days—two hit their target and two hit their stop. On the upside, both Zoetis and Yum China hit their 100% targets. In the meantime, JD.com and the Emerging Markets ETF got stopped out and the losses were 26.8% and 39.1%, respectively.
Looking at the trade ideas that are still open, WorldPay had a good week and is now at a gain of 76%. For this reason, I would suggest raising the stop price from $77.50 to $83 so as not to let the profits slip away. Archer Daniels and Johnson & Johnson are both at decent gains, but nowhere near hitting their target yet. All the others are at a loss at this time with Schwab being the closest to getting stopped out.
The coming week is pretty quiet in terms of economic reports and earnings reports, so look for the trade battle and talks to dominate the financial news.
— Rick Pendergraft
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