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Market Brief – Thursday 8/8/19

After buying the dip in stock prices over the last two days, investors were rewarded with higher stock prices in early trading. Treasury yields also rose after a huge rally lower as sellers still believe higher interest rates and inflation are coming.

The S&P 500 had an unfilled gap at 2,932, not 2,914 as I mentioned in yesterday’s brief, and stock prices rose to fill this gap. While not all gaps are filled, for reasons I cannot explain, this computer-controlled market makes a point of filling gaps. For those who are bullish on stocks, there are quite a few unfilled gaps down below.

Wholesale sales fell for a second straight month as analysts looked for a rebound. Sales fell -0.3% MoM and the annualized rate fell to +0.36%. Wholesale inventories were unchanged, and the annualized rate held steady at +7.6%.

Today’s $19 billion 30-year Treasury saw strong demand, as investors were hoping for a poorly received auction to justify the resumption of the equity rally. Foreign bidders took 61.3% of the auction and domestic bidders took 12.5% of the auction, which left securities dealers with 26.1% of the auction. Yields quickly fell following the auction.

Everything was up today as the S&P 500 tagged its overhead resistance level from its October 2018 highs. Treasury yields completely reversed their overnight ramp and closed lower on the day. Gold rose over concerns in Europe. Agricultural commodities rose on decent volume as sellers disappeared. Crude oil rallied on hopes that Saudi Arabia will be able to cut production enough to push prices higher.