Chinese currency devaluation is clearly having global impacts on markets globally. That combined with FOMC July meeting minutes led to big swings in the broader markets. Initially, markets jumped after Wall Street interpreted Fed comments as meaning that there would be no interest rate increases in September. However, as the trading day wore on, the fearful sentiment took over as U.S. markets were weak into the close. Sitting in the middle of the range with no discernable trend, combining bearish uncertainty with bullish expiration week micro seasonality leaves the market posture short term as anyone’s guess. If you’re not trading options in this market, you’re missing out. To learn more about this, click here: http://www.optionsuniversity.com/oua-starter/
The CBOE Volatility Index (VIX) spiked intraday to nearly 16, almost matching the recent high of 16.28. Eventually the VIX settled closer to 15.25. Lower, but still much higher than the recent low of 10.88. Overall sentiment is fearful as we approach the fall. The Dow is showing relative weakness, and it is worth noting that September is the only negative month in the history of the Dow.
OVERSEAS: The bloodbath is on in overnight action. Literally every single major market is down in both Europe and Asia with no exceptions. This is highly unusual. Many are down by more than 1% in a single day, with certain Asian markets getting hit particularly hard. Shanghai and Shenzhen (which had shown strength earlier in the week) are both down over 3%.
OIL: An increase in oil inventories by 2.6 Million barrels in the last week has reversed the recent trend of small decreases. Imports are primarily to blame as gasoline demand remains high. Oil prices have dropped 4.3% to their lowest levels in 6 years, to $40.80 per barrel.
JOBS: New weekly initial jobless claims came in worse than expected at 277K new claims, compared to an expectation of only 270K claims. This is outside the consensus range, and the U.S. Market reaction to this figure will be interesting as joblessness is a key consideration for the Fed in its decision about interest rates.
HOUSING: The overall housing market remains strong, particularly in the area of new home construction. Many of the homebuilder stocks such as TOL, KBH, and DHI are surging to new recent highs. This action is also being mimicked by the major home improvement stores, Lowes and Home Depot, who are also forecasting strength in coming quarters.
BIOTECH INSIDER: The immunotherapy space – still on course to exceed $35 billion and become the “backbone” of treatment for up to 60% of cancers in the next 10 years – is still heating up faster than anticipated. Weeks after Merck invested in the next generation of therapies harnessing the body’s natural defenses, another round of deals showcases the popularity of using the immune system to attack cancer. Sanofi is partnering with Regeneron to develop and commercialize new cancer treatments. Merck is partnering with Ablynx and just bought cCam Biotherapeutics, giving it access to a monoclonal antibody that targets an immune checkpoint protein to treat advanced or recurrent cancers. And Five Prime Therapeutics has expanded its immune-oncology pipeline through collaboration and licensing agreements with Inhibrx, gaining access to a glucocorticoid-induced tumor necrosis factor receptor antibody program. To get access to expert opinions on awesome biotech opportunities, visit: http://optionswealthinsiders.com/biotechv2/
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