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Bulls Keep the Party Going after Trump and Powell Speeches

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The Fed took a major shift in policy yesterday at Jackson Hole, moving to a focus on inflation vs the Phillips Curve. This inflation targeted policy will promise to keep rates low, even if inflation gets above 2%. This stance is good for stocks, gold and any hard asset so we are seeing a buying response this morning.

Trump spoke at the RNC last night promising an economic boom and jobs. The S&P futures reacted to the speech, moving through the 3500 level and making new all-time highs.

Prime Minister Abe of Japan is set the resign due to health concerns. The market friendly minister’s QE program, known as Abenomics, has brought Japan out of deflation. The Nikkei saw aggressive selling on the news and finished down 1.4%.

S&P Futures Trading Levels

The S&P futures currently sit at 3497, which is 12 handles off the overnight high.

Support levels for the day will be 3483 and 3468.

Upside resistance is 3502 and 3517.

The current S&P trading environment is trending upwards and attempting to break out above the 3500 level.

Three Stocks to Watch

WDAY- Big beat from Workday, with the company reporting $0.84 v the $0.65 expected. Revenues came in slightly above expectations and the company raised its FY21 subscription revenue guidance.The stock is trading up 11% in the premarket.

ULTA- Blowout numbers from Ulta last night has the stock trading higher by 15% in premarket trading.The company reported EPS of $0.73 vs the $0.10 expected. While SSS were down 26%, the company has managed the quarter well as it starts to reopen stores that were shuttered. By the end of June, more than 90% of Ulta stores were open.

TSLA/AAPL Stock Splits– The big boys are splitting. Apple and Tesla are set to split next week, which has both stocks trading higher premarket. While the splits create no value, the public perception has driven the stocks higher and investors expect that bullish view to remain when the stocks have a lower numerical value next week.

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