We saw a promising beginning to the first day of trading for the week early this morning, when pre-market futures were riding in the green. However, most trading Monday fell back into the red. Heading into the close, we saw almost all major indexes finish in positive territory: the Dow +264 points or +0.76%, the S&P 500 +0.23%, and the small-cap Russell 2000 +0.59%. Only the Nasdaq, which almost fought back into the positive, was -0.07% on the day.
For the Dow and the S&P, they have each finally snapped a five-session losing streak. The Nasdaq currently has a four-day losing streak of its own. All major indexes raced toward session highs, which may be worth looking at come Tuesday morning — perhaps our near-term trough has been transcended, especially without economic catalysts weighing on results either way.
Energy was strong on the day, +2.8% on a big gain in Natural Gas, +5.3%. Partly, a note expecting airline travel to pickup in 2022 helped energy futures surge ahead today. Valero VLO and EOG Resources EOG were both +4.4% today. Financials also performed well, with American Express riding +1.7% higher. Movie theaters also had a strong trading day, with Cinemark CNK+8.6% on the day and AMC AMC+3.3%.
Supply chain issues continue to generate concern, especially in companies like Nike NKE, which dropped -2.5% today. Nike was one of the globally situated companies that moved manufacturing from China (during the trade war of the Trump administration) to Vietnam, which has endured an ugly Delta-variant Covid outbreak. Nike is still up nearly 14% year to date.
Oracle ORCLreported fiscal Q1 earnings after the closing bell today, beating on the bottom line (no surprise there; Oracle has not missed on earnings for exactly four years, with a trailing four-quarter average +9% beat): $1.03 per share versus 97 cents expected, +11% year over year. Cloud Services were basically in line with expectations, while licensing came in slightly short. The stock, which had gained +36.8% year to date, initially fell around -3.5% before settling at -2%.
The reason for the sell-off may have to do with disappointing revenues in the quarter: $9.73 billion vs. $9.77 billion expected, and only slightly up year over year. By comparison, earnings in the quarter rose by 11% from the year-ago quarter. The company’s board also declared a 32-cent quarterly cash dividend for shareholders as of October 12th. The conference call is about to be underway.
Tomorrow we’ll get a look at the Consumer Price Index (CPI) for August, which is expected to tick down 10 basis points from the previous month’s +0.5%. The core read is expected to remain constant at +0.3%. But if last week’s Producer Price Index (PPI) is any gauge, we may see a surprise to the upside on this metric. It will be only the latest report documenting the pace of inflation hitting the U.S. economy at present. Tech IPOs With Massive Profit Potential: Last years top IPOs surged as much as 299% within the first two months. With record amounts of cash flooding into IPOs and a record-setting stock market, this year could be even more lucrative