Dow: -219.21…
Nasdaq: -42.59… S&P: -19.82…
Stocks snapped a four-session winning streak on Wednesday as U.S.-China trade tensions retook center stage and as crude oil prices tumbled, weighing on energy shares. The S&P 500 dropped 0.7% to 2774, the Dow Jones was – 0.9%, and the Nasdaq slid 0.6% to 7717.
President Trump announced last night another $200 billion in potential tariffs on China and that upset things at the open and then through the rest of the day. Things also got a little pissy at today’s NATO get together.
Another fly in the ointment was oil, which dropped 4.8% and had one of its worst single days in a couple of years. It didn’t help that Libya re-opened their ports which had been bullish for oil. Trump is still talking down oil, the Saudis are starting to pump furiously again, so oil could back off hard here. We will see. As a result, SCO had a nice reversal for us today.
A 4.5% hit is dramatic for any sector, and I think a lot of crude players got caught leaning the wrong way here and were way too long.
Crude inventories saw a much bigger “draw” though, which is bullish for oil, so a weird day overall.
Heres a 15-minute chart of oil today.
What was really, really impressive to me today was the action in biotech (XBI). Talk about relative strength. It was actually green. This is usually the first sector to get thrown in the woodchipper when things go bad, but not today. This tells me that things aren’t that bad.
I added one stock today.
We made good loot in XNCR a few months back and it may be setting up for another run for the roses. It ran to all-time highs in early June when it tagged the 43 level and has since pulled back in an orderly fashion on lighter volume. I am looking for a move back to the highs then maybe mid-upper 40’s (biotech permitting).
