Market & Nasdaq KFTX Fintech Index Analysis (Week Ending 4/7/17)

Friday: Jobs, Bombs & Blahs....Week: The Bull Is Exhausted

Another try, another fail. Friday the markets kind of, sort of wanted to move higher but just could not. That big old muscular bull of a market is just flat exhausted. The bull needs a vacation and some “down time”.

Friday Close

What happened Friday? Well, March NFP’s came in way below expectations (98K vs 180K est & 215K down from 235K prior), the U.S. threw some Tomahawk cruise missiles at a Syrian base and the markets shrugged it all off. The major averages (DOW, S&P 500, NASDAQ Comp) tried (oh they tried so hard) to move higher but didn’t and all three finished with small losses on the day.

What SHOULD have happened Friday? Traders should have said “its the weather” and jobs and growth will pick up in the future….buy, buy buy. Ah, NO! Playing tough with Syria shows U.S. strength and leadership……, buy buy. Ah, NO!  Weak job growth will make the Fed hold off on rate increases and rates will move down………buy, buy buy. Ah, No & No! (rates actually moved up a small touch). Sentiment has changed and the bull is………….out of bull muscle.

On the fintech side, once again the KFTX fintech index settled lower to close at 1118.04, off 1.01 points (-0.09%). Within that 50 stock index there were 22 issues up and 28 down. Lets check the stocks that had a 2 point and/or 3% move today.

ADS  -2.32  (251.04)

Yeah, that pretty much sums it up. Only 1 stock moved around on this first Friday of the month.

Weekly Close

So, for the week it was a downer and a heart breaker (for the bulls) with strong initial rallies giving way to selling and lower closes. Blame the robots? Maybe, since more and more trading is being turned over to the AI (artificial intelligence) crowd and, to be real and frank, the AI is smarter and way ahead of most individuals (except for me of course). So, with all the major averages (DOW, S&P 500, NASDAQ Composite) all finishing lower on the week where are we headed? Short answer? LOWER.

Let’s be realistic and acknowledge that markets can go down. Let’s say the markets were almost ready to begin selling off when the election was held, and they rallied sharply (Trump rally?) with a pro-business President in office (lots of short covering too) and now reality is coming to the forefront. Maybe MAYBE the markets give back that “Trump rally” so we could look at a 10% +or- selloff. It will look nasty too since there is so much of new investment/trading money concentrated in just a few issues (Amazon, Facebook, Google, etc) and market tracking ETF’s. Be prepared and don’t be surprised since YOU HAVE BEEN WARNED.

Now, I digress and focus on the fintech sector (cause this IS FintekNews) which I cover via the KBW NASDAQ fintech index KFTX. For several weeks now this sector has been weaker than the overall market averages. No different this week. Since the KFTX is more of a “pure” fintech index as it doesn’t include those big ‘flashy’ headline stocks (Google, Tesla, etc) but rather more “nuts and bolts” type stocks this weakness should be expected. The KFTX finished the week down 17.62 points, off 1.6% to 1118.04. Advance/decline showed 10 stocks higher on the week, 39 lower and 1 unchanged. Not so good.

Lets see which of the index’s 50 stocks had a 3% change on the week;

BOFI  (24.15)  -6.52%
CATM  (44.55)  -4.42%
ENV  (33.65)  +4.02%
FDC  (15.00)  -3.78%
FDS  (159.91)  -3.18%
FLT  (146.27)  -3.41%
GPN  (77.93)  -3.24%
HAWK  (39.05)  -3.65%
MKTX  (182.73)  -3.37%
PAY  (17.90)  -4.58%
SQ  (16.69)  -3.47%
VIRT  (15.60)  -7.42%
WU  (19.36)  -4.86%

Now, here are we headed in the new week. Still a bit of time to do some adjusting and lightening up (if your long) and maybe place some shorts. Never hurts to have a few S&P futures sitting on the short side. Have a good rest of the weekend.