T3’s Take 3: Banks Lead the Way
1) Banks Rock
Following FOMC Chair Janet Yellen's hawkish-leaning speech in Jackson Hole on Friday, traders are increasingly certain that the Fed will raise interest rates this year.
That sent up bank stocks, which benefit from higher rates, up big today.
The S&P Financials ETF (XLF) rose 0.9% to $24.32, led by solid gains in Wells Fargo (WFC) and JP Morgan (JPM).
The strong bank action pushed the market well into positive territory, more than making up for Friday's small dip.
The S&P 500 rose 0.5% to 2180.38.
The Nasdaq underperformed due weakness in biotechnology and its smaller exposure to financials.
2) Why the USDJPY Will Drop
In today's Trade of the Week column, T3 Live's Kurt Capra suggested a short of USDJPY:
Entry Area: 101.80
Stop Price: 104.00
Target Area: 97.00-98.00
USDJPY has been in a downtrend on the daily chart for quite some time. Last month, it rallied and subsequently fell back to the prior low.
Recently, it has been consolidating within a range. It is now at the top of the range where we’ll look for sellers to reemerge.
By the way, I recommend you check out Kurt's forex trading webinar scheduled for after the close tomorrow.
3) Apple Drama?
Apple's (AAPL) had a beautiful rally off the May lows when Warren Buffett announced he took a position in the iPhone maker.
Apple shareholders are bound to see even more excitement over the next week.
First, Apple sent out invites to its September iPhone 7 unveiling.
And more immediately, Bloomberg reported that Apple could learn the outcome of its Irish tax case as early as tomorrow.
According to the European Commission, Ireland gave Apple illegal tax breaks, which could result in financial penalties.
Estimates of Apple's damage run anywhere from 100 million to as much as 19 billion euros in a worst-case scenario, so the possible outcome here truly seems like a total mystery.
Tuesday's Trading Calendar
US Economics (Time Zone: EDT)
09:00 S&P CoreLogic CS US HPI MoM SA (Jun): prior 0.19%
09:00 S&P CoreLogic CS 20-City NSA Index (Jun): prior 188.29
09:00 S&P CoreLogic CS 20-City MoM SA (Jun): exp. -0.10%, prior -0.05%
09:00 S&P CoreLogic CS 20-City YoY NSA (Jun): exp. 5.12%, prior 5.24%
09:00 S&P CoreLogic CS US HPI NSA Index (Jun): prior 180.7
09:00 S&P CoreLogic CS US HPI YoY NSA (Jun): prior 5.05%
10:00 Consumer Confidence Index (Aug): exp. 97, prior 97.3
Global Economics
03:00 EUR Spanish Flash CPI y/y
04:30 GBP Net Lending to Individuals m/m
08:30 CAD Current Account
21:00 AUD RBA Assist. Gov Debelle Speaks
21:00 AUD ANZ Business Confidence
Earnings
Before Open:
Abercrombie & Fitch (ANF)
DSW Inc (DSW)
After Close:
Bob Evans Farms (BOBE)