Accents from the American session today (22.08.2018)

These are the stocks that we expect to be the focus of the market:

Target - the chain store announced higher earnings and sales per store. It also raised its year-end forecast.

Lowe's - higher earnings and sales but also more pessimistic year-end forecast.

Urban Outfitters - The company achieved higher same-store sales for the last quarter; they also sold more items at a higher average price tag.

Pure Storage - Higher earnings than expected. The company also announced it is acquiring StorReduce.

Exact Sciences - The company announced a partnership with pharmaceutical giant Pfizer on Cologuard, a colorectal cancer home test.

Red Robin Gourmet Burgers - We expect the stock to open lower due to lower announced earnings, lower sales and lower sales per location.

Praxair - The company is facing more difficulties in its merger with Linde, with regulators demanding more divestitures from both sides. The company said that the required divestitures put the merger at risk.

Starbucks - Piper Jaffray lowered their rating on the stock from overweight to neutral.

AT&T - Wells Fargo lowered their target on the stock from $40 to $35. The bank expects the telecom giant to continue its growth in the long-term but expects the stock to remain range-bound as the acquisition of Time Warner is finalized.

Navigators - The specialized insurer agreed to being acquired by Hartford Financial for $2,1 billion in cash, or $70 per share. This is an 8,9% takeover premium over the share price yesterday.

Original post: CNBC

The biggest news of the day was the double whammy to President Trump: Paul Manafort was pronounced guilty by the jury over charges of tax fraud, campaign financing fraud and banking fraud; at the same time, Trump's former lawyer Michael Cohen admitted guilt on charges of tax fraud and financial fraud. This sparked speculation of impeachment for President Trump.

On a more positive note, the current bull market is the longest on record. The measure defines bull market as a period without a 20% correction.

From a fundamental standpoint the bull run seems justified. As the chart below shows, we cannot speak of irrational exuberance, as S&P500 earnings grew remarkably:

Technical picture: EUR/USD

The upwards trend in EUR/USD that began a week ago is facing significant resistance at the 23,6% Fibonacci level (which is also a previous peak and the 50-day MA). A breakout above the resistance would represent a significant reversal in trend. The next resistance would be the 38,2% level (also significant as it is a previous peak and the 100-day MA).

The oscillators DeMarker and RSI also point to the significance of this resistance level.

From a fundamental standpoint we don't see a significant change in fundamentals to warrant a trend reversal. Entering short positions right now, however, is too risky.

Sources: CNBC, Bloomberg Finance L.P.

Chart: Used with permission of Bloomberg Finance L.P.

Image: pixabay.com

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