To gain an edge, this is what you need to know today.
Data On Consumer
Please click here for an enlarged chart of Bank of America Corp (NYSE:BAC).
Note the following:
- This article is about the big picture, not an individual stock. The chart of BAC stock is being used to illustrate the point.
- The chart shows that the recent attempt from BAC stock to breakout failed.
- The chart shows BAC has pulled back.
- RSI on the chart shows that BAC stock is now oversold and has the potential to rally.
- Investors should watch the chart of BAC stock. If BAC stock rallies and breaks out, it will be a positive tell for the entire stock market.
- As full disclosure, BAC is in our ZYX Buy Core Model Portfolio, long from $7.69.
- Bank of America is important because it is the second largest bank in the U.S. Bank of America reported earnings better than the consensus and whisper numbers.
- The U.S. economy is 70% consumer based. Therefore, the status of the consumer is important for investors. We have been sharing with you several pieces of data that show the consumer is weakening, especially at the low end. The Bank of America is contradicting other data. CEO Brian Moynihan said, “consumers remained resilient, with healthy spending and asset quality, and commercial borrower utilization rates rose.”
- The just released Producer Price Index (PPI) shows inflation cooler than expected at the producer level. Here are the details:
- Headline PPI came at 0.0% vs. 0.2% consensus.
- Core PPI came at 0.0% vs. 0.2% consensus.
- Buying is coming into the stock market on cooler PPI data.
- Yesterday, the 30-year bond yield was hitting 5%. If the yield would have continued to rise this morning, it would have dampened the extreme bullishness in the stock market. However, the yield is pulling back on cooler PPI.
- The stock market is ignoring it for the time being but investors should pay attention to earnings from ASML Holding NV (ASML). In many ways, ASML, a Dutch company, is the most important semiconductor company. Without …