General Market Update
Energy stocks led the market higher yesterday. Oil price got a spike based on the news that two tankers in the Gulf of Oman were attacked. Crude oil jumped 2.35% with July contract closing at $52.33 a barrel. Breadth was positive with advancing issues outpacing declining issues on both the NYESE and the NASDAQ. Initial jobless claims came in higher than expected, and some analysts believe that the likelihood of a rate cut later this year is now high.
QuanTimer market stance is bullish at present. Please review our market outlook in an earlier post here –
Tariff Pains
Broadcom (symbol: AVGO), a marquee name in the semiconductor space, reported earnings after the close. The stock tumbled more than 8% in after-hours trading. Broadcom has a huge exposure in China market with 49.43% of its revenue coming out of China (source: Factset). For the full fiscal year, the company cut its revenue outlook to $22.5 billion from $24.5 billion, and also reduced the outlook for capital spending. While wireless chip sales are soft, the company expects a double-digit growth in networking chip sales in 2019.
We expect the semiconductor sector to remain weak today. While we remain bullish in S&P500 and Nasdaq broad indices, we also try to protect ourselves with stop loss and tailing stop loss orders. In one of our base models that is based on QQQ, the current stop loss is set at 177.99. The position was opened on June 4th at 171.98, and QQQ closed yesterday at 183.55.
