The Daily Breakdown looks at retailer earnings, as well as Bitcoin Cash, which enjoyed a huge rally on March 5th.
Thursday’s TLDR
- Retail earnings fail to “wow”
- BCH enjoys a strong rally
- Jobs report in focus
What’s happening?
The tone out of retail hasn’t been great.
Walmart didn’t give investors an encouraging view when it reported last week, while the reaction to earnings this week hasn’t been great either. That’s as Target, Best Buy, Abercrombie & Fitch and Victoria’s Secret have all reacted poorly.
Kroger and Macy’s were both slightly lower in pre-market trading after reporting their results this morning, while Gap and Costco will report tonight.
I want to be clear here: Investors want to see retailers doing well and telling a good story about the consumer. In the US, consumers are the lifeblood of the economy, accounting for two-thirds of GDP.
Zooming out, markets popped yesterday on the slightest glimmer of tariff relief.
The rally came on reports of Canada and the US discussing a trade deal along with the White House extending a one-month tariff reprieve for US automakers. This highlights investors’ willingness to take on risk if the trade-war situation de-escalates. Until there’s more traction in that regard, volatility is likely to remain.
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The setup — Bitcoin Cash
A few weeks ago, we talked about Bitcoin Cash coming into a key technical support area around $275. That area held up and BCH has subsequently enjoyed an upside breakout — rallying more than 20% on Wednesday.
Now though, it’s approaching another key area on the chart. This time, it’s potential resistance.
Stocks and crypto have struggled for traction in this environment, but BCH has enjoyed an opportunistic rally. The $400 area was a key support zone from early November until February, before it broke down and moved lower.
Now rallying back to this area, it will be interesting to see if prior support turns into current resistance.
If it does, then BCH could be vulnerable to a pullback. That’s especially true if Bitcoin, and Ethereum fail to rally, and if other risk-on assets — like stocks — take another leg lower.
However, if Bitcoin Cash can clear this area by getting above the ~$415 level, then more bullish momentum may come into play.
What Wall Street is watching
MDB – Shares of MongoDB are not reacting well to its quarterly earnings report, down almost 20% in pre-market trading. The decline has shares teetering on the lows from 2024, which may prove to be a key technical area. Check out the chart for MongoDB.
SPY – The S&P 500 ETF — SPY — enjoyed a nice rally on Wednesday, but is back under pressure in pre-market trading. Tomorrow’s monthly jobs report is going to be front and center for investors. Right now, investors’ biggest worry seems to be around the economy and the consumer, so a solid report would go a long way toward easing some of those concerns.
Disclaimer:
Please note that due to market volatility, some of the prices may have already been reached and scenarios played out.