Stock Market Update 6-29-2019 – The Empire Strikes Back!

The Red Empire Strikes Back..Again. First it was Soy Beans. Now its precious metals…Word is China is prepared to use it’s highly sought after rare earth metal resources to strike back in a trade war with the United States. Chinese newspapers have been putting it out there that the rare metals producer may use this card up their sleeve. 

“Rare earths” are a group of 17 chemical elements used in everything from flashy high tech goodies used for consumer electronics to expensive military equipment. It’s possible that their value may soar, and thus, manufacturing costs. In the end, the consumer ends up paying the bill. You might want to upgrade that phone you’re on now before the you know what hits the fan….

SPY drops below the 200 Daily Moving Average!! But the Bulls Catch the Knife!

The world’s largest ETF the SPDR S&P 500  (SPY) — valued at a whopping $241.61 Billion dropped below its 200 (D) Simple Moving Average. Stocks were dropping off the news that Huawei plans to legally challenge a U.S. defense bill as the sanctions fight heats up.

Spy Raindrop Chart

Today, Huawei made their move.The company filed a legal motion seeking to declare a U.S. defense law unconstitutional. This is the telecom tech maker’s latest counter attack in the fight against sanctions from the US Government that are negatively affecting Huawei’s business operations.

Facebook, Fidelity, and even Square are fueling the Bitcoin Rally 

BitPay’s chief commercial officer Sonny Singh has made a bold prediction that the price of Bitcoin is yet to hit a peak. Speaking on Bloomberg TV, Singh argued that institutional investors are getting into cryptocurrencies and they’re just getting started.

Singh Cited Facebook’s yet-to-be-launched crypto as well as Square’s and Fidelity expected crypto-related products. We think he may be right. Cryptocurrencies and blockchain technology is still very much in a wild west phase. But when billion dollar businesses start adopting it. You could see a flurry of investment flow into crypto that would make the 1840s gold rush look like a tea party.

Pot Stocks

Cara Therapeutics is a drug developer that isn’t entirely devoted to cannabinoid or endocannabinoid-mimetic drugs. But that didn’t stop cannabis traders from speculating on the companies long term success today. Shares of Cara Therapeutics Inc (CARA) got a pop on Wednesday morning. The bio-pharmaceutical company surged 13% after the announcement of positive results for a Phase 3 trial (typically a big deal for traders and investors) of a clinical study for its medication.  The drug, Korsuva, is an injection for patients with kidney disease. Korsuva showed statistically-significant improvement in patients who took the medication when compared to a placebo. 

Cara Stock

On The Lookout Tomorrow 

Quarterly GDP data and Jobless Claims at 8:30

Big data numbers today. Pay attention at 8:30 or markets to react as the US releases Last months numbers beat in a big way, coming in at 3.2% vs a 2.0 forecast. Are good numbers coming, just in time to save the market from dropping below their 200 Day Moving Averages? Would be nice for the bulls to get some good news. But the bears gotta eat too, right? 

Earnings

Dollar Tree (DLTR) – The money tree for investors?

Dollar Tree (DLTR) is set to report tomorrow. It’s not the most popular stock out there, but its a big one to watch regardless.The discount retailer’s stock chart is extremely oversold on the daily, which, in the past has been a good sign to enter. All the same, RSI should only be used for confirmation!

The stock is up 9% this year through last week but traded down Wednesday following most stocks. DLTR has been lagging behind the S&P 500 but beating the SPDR S&P Retail ETF (XRT), which is up 2% as of Friday’s close.

Shares have risen on hope that it can polish the Family Dollar up and finally turn a profit from it after buying the store in 2015. The Family Dollar has lagged behind, but Dollar Tree has expedited its turnaround plans.

But of course, like many businesses, Dollar Tree has also suffered because of rising tariffs. Like most retailers in the US, a lot of its imported goods are from China. Do you think that may change in your lifetime? Is it possible other nations, and perhaps, plants right here in the US might begin making the bulk of its goods somewhere else than China?

                            Everyone should own a dollar tree…

ECONOMY 

No Farms No Food. No Soy, No Joy? A U.S. banking regulator on Wednesday said more farmers fell behind on their loans early this year, not a good sign when international trade tensions are already weighing on the farm sector due to years of low commodity prices.

In a quarterly report on the health of U.S. banks, the FDIC did not directly refer to the trade war with China which began in 2018. But officials at the regulator noted some farm banks were reporting a deterioration in asset quality. Basically meaning they’re making less money and it’s affecting american farmers ability to meet their debt obligations. It’s only a couple percent now, but it is an anomaly to keep an eye on.

 China is a top buyer of U.S. soybeans, which is the nation’s most valuable agricultural export. Due to the trade war, China has dramatically reduced its purchases.

Soybean Farmers

Support your local farmers peeps. Buy American.

 Today’s Gossip 

Anyone got change for a buck? Former rap star 50 Cent is demanding Power co-star Rotimi pay back $300k as his Instagram debt collection soars again. The 43-year-old rapper took to the popular social media lifestyle platform, Instagram (FB) on Wednesday morning to call out fellow Power co-star Olurotimi ‘Rotimi’ Akinosho for allegedly owing him 300k.

After 50 Cent — who’s real name is Curtis James Jackson III — shared a bunch of photos of Rotimi and asked for his money back, the Walk With Me singer posted a video claiming he doesn’t owe anything to the rapper. Rotimi was recorded saying on Instagram “It’s crazy when you start to get to a level of success and people wanna start coming at you,”

The ex G-Unit leader stood by his words, saying he’s owed the loot now that Rotimi is with another record label. In recent years 50 has been famous for drama online.Seems the more things change, the more they stay the same. 

Instagram and it’s owner (FB) gets more views, clicks and thus sales when drama like this heats up its billion dollar business platform. Facebook, like many of its peers in the tech space (TWTR, MSFT) has been trending above its 50 Daily Moving Average to date. Will tech stocks rally into summer and save the market? They can’t do it on their own, but the longer they trend the better chance the bulls have at keeping the market a float until a trade deal comes along.

Stocks above their 50DMA:

$FB $TWTR $MSFT $AMD 

No watch list tomorrow: 

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