Don’t fear September, this tech overlord has the rally in hand

Adios, August. Don’t let the door hit you on the way out.

“The summer break sees investors returning to markets not looking much different from when they left,” Mark Tinker, head of AXA IM Framlington Equities Asia, has been telling clients.

Look to the numbers for rationale behind a lack of cheering for this month. Closing in on a 0.5% drop for August, the S&P 500 is set snap a four-month winning streak, while the Dow industrials has been spinning its wheels.

The best August may have to offer is the tech-heavy Nasdaq Composite, which is set to gain an equally unimpressive 0.3%, after a 3.4% rally in July. But while some shine has come off the sector this month, it seems a spark may have been ignited in the waning days of summer.

Now that matters because the tech overlords have led the overall market higher this year.

So yesterday, Apple

AAPL, +0.27%

 closed up 0.3% higher (yawn), but did nail a fresh all-time high at $163.35, in its fourth-straight win. Microsoft

MSFT, +1.31%

 also got really to closing at a record.

On to our call of the day from Dana Lyons of J. Lyons Fund Management, who says another big tech name is primed to move higher and keep its leadership position in this rally.

He’s talking about Google parent Alphabet

GOOGL, +0.84%

GOOG, +0.90%

 , which has logged modest losses this month, versus those gains for Apple and Microsoft. Lyons has been tracking so-called trendlines — lines on a chart that connect either a rising series of lows (trendline up) or declining series of highs (trendline down).

What Alphabet’s chart below is now telling him is that the company is gearing up for another “successful test of its long-term up trendline.”

That trendline started at the July 2015 low, and has connected the dots to around a dozen lows since then, including Wednesday’s bounce off $905 a share, Lyons says. The corresponding trendline in GOOGL is around $920, as of Thursday.

Where now? “First off, as long as the trendline holds, expect GOOG to remain on the rise and a leader in this rally. Furthermore, as long as the rally leaders are still moving higher, a significant decline remains doubtful,” said Lyons. Read the full post here.

Key market gauges

August may end with a bang as Dow

YMU7, +0.23%

 , S&P

ESU7, +0.21%

 and Nasdaq

NQU7, +0.18%

  futures trek higher. Gold

GCU7, -0.14%

 is a bit softer and the ICE Dollar Index up some. European stocks

SXXP, +0.78%

 are up, but headed for a monthly loss.



 is rising, with gas futures

RBV7, +2.23%

 continuing to surge. Read about why September gasoline has been soaring. The dollar

DXY, +0.38%

  is on course for its first monthly gain since February.

See Market Snapshot for more.

The chart

Gold is set to finish the month 3% higher, having cruised to 11-month highs this week on North Korea and Texas-flood jitters. But maybe not everyone is convinced the only way is up from here.

The chart above shows what’s look like a mini-flash crash in the early Asian hours, which had gold barely hanging onto $1,300 before it climbed back up. (H/T to ZeroHedge, which said a seller tried to dump $1.1 billion into the Asia open.)

Note there has been some debate about whether gold can keep marking new highs.

Blogging for See It Market, portfolio manager Andrew Thrasher says we’ll need to see one thing before gold starts testing highs from 2016: That other haven favorite, the Japanese yen

USDJPY, +0.30%

 , has to bust higher as well.

That yen rush remains to be seen:

See It Market

Gold and the yen
The buzz

Explosions and black smoke have been reported at Arkema’s

AKE, -2.46%

plant in Crosby, Texas. The chemical company has been warning it was unable to prevent such an event due to flooding from Harvey, and warned everyone within 1 1/2 miles to get out.


DIS, +0.29%

 is planning layoffs at ABC and some of its cable networks, say sources.

Campbell Soup

CPB, -1.10%

 is down after earnings. Lululemon

LULU, -1.22%

 will report after the close.

Shoe Carnival

SCVL, +4.12%

 is surging after an earnings beat. Box

BOX, +1.87%

 is faring less well, even as it beat forecasts.

A couple says eclipse glasses they bought on Amazon

AMZN, +1.42%

have left them with eye damage. They say they never received a warning from Amazon about potentially fake glasses either.

Six big global banks, including Barclays

BCS, -0.30%

BARC, +0.79%

 and Credit Suisse

CS, -0.68%

CSGN, +0.50%

 , are teaming up on a blockchain project led by UBS

UBS, -0.24%


The quote
Bloomberg News

Uber’s ex-chief Travis Kalanick

“Their allegiance was met by this unholy alliance of perfidious greed devolving rapidly into the audacity of vituperative unparalleled predatory rapacity.” — That was Uber investor Shervin Pishevar, using the biggest words in the dictionary to defend ousted CEO Travis Kalanick.

The economy

Weekly jobless claims are due at 8:30 a.m. Eastern Time, as Friday’s jobs reports looms.

Consumer spending, personal spending and core inflation are due at the same time. That’s followed by Chicago PMI data at 9:45 a.m. and pending home sales at 10 a.m.

The stat

POTUS in storm-ravaged Texas this week

56% — That’s how many people polled by Fox News believe POTUS is “tearing the country apart.” Some 33% said they think he’s doing the opposite, and 58% think President Donald Trump will finish his term.

Random reads

Mortgage delinquencies could skyrocket among Harvey-area homeowners

Severe monsoon flooding leaves two-thirds of Bangladesh underwater

Mongolia’s child jockeys risk life and limb

Former talk show host Jerry Springer may run for Ohio governor

The Twitterverse weighs in on an all-female “Lord of the Flies” remake

Some tennis fans got lucky in New York yesterday:

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