Campbell, Krispy Kreme and Retailers Earnings Preview
Stocks remain fundamentally overvalued and under a ValuEngine valuation warning with 75.9% of all stocks overvalued, 43% by 20% or move. The retail-wholesale sector is 24.7% overvalued with the consumer staples sector 18.6.
This morning the Conference Board releases it reading on Consumer Confidence for August and the consensus calls for steady print at 80.0. Given last Friday's disappointing new home sales and Monday's weak durable goods orders we would not be surprised by a weaker than expected confidence report. Keep in mind that the 90 to 110 is the neutral zone for this data release.
The technicals among the major equity averages remain mixed. The Dow Industrial Average continues to have a negative weekly chart profile with the five-week modified moving average at 15,248. The S&P 500 shows declining momentum and a weekly close below its five-week MMA at 1666.4 gives this average a negative weekly chart profile. The Nasdaq continues to be positive but overbought with the five-week MMA at 3591 and the Aug. 5 multi-year high in reach at 3694.18. The Dow transportation average is neutral with declining weekly momentum and the index above its five-week MMA at 6437. The Russell 2000 has a positive but overbought weekly chart profile with the five-week MMA at 1028.55 and the August 5 all time high at 1063.52.
One of the six stocks previewed today is undervalued and three of the other five are overvalued by more than 20%. One stock is down 16% over the last 12 months, while four have gained more than 16%. All six are trading above their 200-day SMAs, which reflects the risk of reversion to the mean.
Reading the Table
OV/UN Valued: Stocks with a red number are undervalued by this percentage. Those with a black number are overvalued by that percentage according to ValuEngine.