Further S&P 500 Lackluster Performance Leading To Deterioration

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S&P 500 fulfilled my overnight target of 4,149 at least, and had been having issues extending gains before the manufacturing data release. That figure grossly underperformed, and together with Bostic remarks and acknowledgement of still tough times ahead in banking (cascading rate hikes impact), is to duly keep a lid on stocks, and send S&P 500 to close well below 4,136 today.

S&P 500

See that for all the fleeting improvement in market breadth on Friday, the most robust metrics such as advance-decline volume and new highs new lows, continues having issues – and neither the advance decline-decline line is convincing (chart courtesy of www.stockcharts.com).

These technical factors will be increasingly more relevant this week when the (bearish) debt ceiling starts again taking center stage after a headlines-free today.

Some company earnings thought follow.

After correct predictions of Tesla (NASDAQ:TSLA), Apple (NASDAQ:AAPL) earnings (market impact), I was asked about Walmart (NYSE:WMT) and Target (NYSE:TGT) – on a company level, I of course expect WMT to do considerably better than TGT. Note though XRT weak chart posture, and how relatively well XLY is still doing.

Therefore, I‘m looking for especially WMT beat on profits, less so on revenue (if volume sales are taken into account) and darkening guidance – these earnings won‘t send S&P 500 lower while TGT effect would be more neutral.

As for HD, this one could be weaknest out of the three tickers mentioned, no matter how well XHB is doing. I‘m looking for the relative calm in real estate to go as it‘s impossible to the supply to be brought into the market when favorable mortgage rates had been locked years ago, and the short end of the curve is now disincentivizing the move.

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