Don’s Notebook August 2, 2018

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President Trump proposed a higher 25 percent tariff yesterday on $200 billion in Chinese goods causing global markets to trade lower overnight bringing the Dow a triple-digit loss at the open. The index has failed for three of the past four trading days

On a positive note, today’s US Department of Labor’s Jobless Claims data offered another look at July’s labor market ahead of tomorrow’s report.

  • Strength for tomorrow’s Employment report is the indication from Jobless Claims data where initial claims for the July 28 week came in at 218,000.
    • The 4-week average is down 3,500 to 214,500 for the lowest showing since May and one of the lowest in the last 50 years.
  • In addition, the Challenger Job Cut Report was released pre-market and it underscores how strong demand for labor is.
    • Challenger’s layoff count totals only 27,122 in July, down from 37,202 in June for the lowest showing since November 2016.

Markets in Asia fell overnight, wiping more than $220 billion off the region’s stocks as a fresh round of trade war fears sent investors seeking cover.

  • MSCI Asia Pacific Index slid 1.3 percent
  • Japan’s Topix index closed 1 percent lower as trade fears again rattled equities in the region.
  • Turkey, meanwhile, is seeing its currency fall to a record low, stocks drop, and bond yields rise after the U.S., a NATO ally, imposed unprecedented sanctions over the continued detention of a pastor.

 

In Europe the Stoxx 600 Index was 0.9 percent lower at 5:45 a.m. as mining and auto shares were hit hardest, with Germany’s DAX Index the region’s biggest loser.

Corporate earnings out this morning include the latest numbers from Dow component Dow Dupont, Aetna and Blue Apron. Important earnings out after today’s closing bell include AIG, CBS, GoDaddy and GoPro.

Tesla’s stock was 7 percent higher in premarket after the automaker’s revenue beat estimates, and said it expects profitability on a GAAP basis during the second half of the year.

  • The company did lose $3.06 per share for its latest quarter, more than the loss of $2.92 per share that analysts had projected.
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Dr. Don Pratl is Director of Trader Development and Education for TradeStation. He joined TradeStation in 2016 after holding similar roles with other online brokerages. Don’s long career in the financial services industry reflects expertise in administering trading and investment strategy programs for retail investors as well as financial services professionals. Since the 1980s, he has held various positions in areas including CBOE trading floor order execution, marketing, sales, personnel management, training and customer service. Don holds series 3, 4, 7 and 63 FINRA licenses, earned his Ph.D. in Organization and Management, and his M.A. and B.A. in Political Science. He has been an occasional adjunct college instructor since 2004 at a range of institutions, teaching undergraduate, graduate and doctoral students using in-class and online formats.