Headline News: Equity futures point to a higher opening this morning, with mega-cap and semiconductor stocks leading the early advance following yesterday’s post-FOMC retreat. Crude oil is moving lower for the second consecutive session, with WTI crude down $2.47 (-2.4%) to $99.96 per barrel. The decline comes as Axios reports that President Trump is expected to meet with Gulf leaders next week to discuss the next steps in the conflict with Iran. Stocks finished mostly lower yesterday after an initially positive session reversed during Fed Chair Kevin Warsh’s press conference. The FOMC’s widely anticipated 25-basis-point rate hike generated little immediate reaction, but stocks turned lower and Treasury yields rose as Mr. Warsh emphasized that inflation remains too high, reinforcing expectations that additional policy tightening could follow. (Michael Gibbs, Managing Director, Lead Portfolio Manager ) Markets: The S&P 500 sold off to the support level at 7,517.12, where buyers stepped in and helped the index recover to close at 7,551.81. Earlier in the session, the index tested the 50-day moving average at 7,612.00, but sellers emerged at that level. This morning, S&P 500 futures are higher by 1.25%, suggesting investors were encouraged by the Federal Reserve’s 25-basis-point interest-rate increase and its… Read More
Headline News: Equity futures are pointing to a higher open as investors await the afternoon FOMC decision. The CME FedWatch Tool currently assigns a 92.7% probability to a 25-basis-point rate hike this afternoon, with many analysts arguing that the Fed deciding to hold rates could damage its credibility given the current inflation backdrop. As always, Fed Chair Kevin Warsh’s press conference portion of the meeting will be closely watched for any signals on the expected policy path going forward, especially since Warsh himself is an advocate of a “quieter Fed,” and today’s implied hike could be the beginning of a broader tightening cycle rather than an isolated policy adjustment. Oil prices are moving lower this morning, providing some support for equity futures, with WTI crude trading around $103 per barrel after settling above $105 yesterday. Stocks finished broadly lower on Tuesday as another surge in crude oil and elevated Treasury yields weighed on the market. The S&P 500 (-0.45%), Nasdaq Composite (-0.78%), and DJIA (-0.63%) logged their second consecutive declines to start the week, with the energy sector standing out as one of the few areas of strength. (Michael Gibbs, Managing Director, Lead Portfolio Manager ) Markets: The S&P 500… Read More
Headline News: Equity futures point to a lower opening this morning amid pronounced weakness in semiconductor stocks and another increase in crude oil prices. Stocks are coming off a losing holiday-shortened week, although strength across technology stocks on Friday helped the major averages snap a four-session losing streak and recover a portion of their earlier losses. Chip stocks are facing particularly heavy pressure following weakness in overseas trading, as recent comments from several AI executives and developers calling for a slower pace of AI development on safety grounds have weighed on the group. Oil prices are also moving higher, adding another headwind after last week’s sharp advance. The latest increase follows the shutdown of Saudi Arabia’s East-West pipeline, while a planned meeting between Gulf Cooperation Council members and Iran to discuss establishing a temporary shipping corridor through the Strait of Hormuz has been postponed. There are no notable economic releases on this morning’s calendar, leaving attention focused on Wednesday’s FOMC decision. The CME FedWatch Tool currently assigns an 88.5% probability to a 25-basis-point rate hike. (Michael Gibbs, Managing Director, Lead Portfolio Manager ) Markets: S&P 500 futures are lower by 0.66% this morning after falling as much as 1% overnight. The… Read More
Headline News: U.S. wholesale prices rose in August, according to a report Thursday that could play a key role in the Federal Reserve’s upcoming interest rate decision. The Producer Price Index, a measure of final-demand costs for goods and services, increased a seasonally adjusted 0.4% for the month, in line with the Dow Jones consensus, the Bureau of Labor Statistics reported Thursday. On an annual basis, that put PPI at 5.4%, still well above the Fed’s 2% inflation target and 0.1 percentage point higher than expected. PPI rose 0.1% in July, a slight upward revision from the original estimate of no change. Excluding food and energy, core PPI accelerated by 0.2%, against the forecast for a 0.3% increase. Core less trade services, another volatile category, was up 0.3%. (Jeff Cox, CNBC) Markets: The S&P 500 closed lower at 7,636.36 and once again finished just above the potential support level at 7,620.90. The 50-day moving average continues to move higher and may provide additional support at 7,602.02. So far this morning, S&P 500 futures are lower by 0.46%, indicating an opening below 7,620.90. The weakness is being driven by Brent crude oil trading at $105.50 per barrel and the U.S.… Read More
Headline News: Equity futures point to a lower opening this morning as crude oil prices climb following an exchange of strikes between the U.S. and Iran over the weekend. The modest pressure comes after the major averages finished slightly higher last week despite considerable volatility surrounding oil prices, Treasury yields, and monetary policy expectations. Attention this week will turn to the August Producer Price Index on Thursday and Consumer Price Index on Friday, both of which have the potential to shift expectations ahead of next week’s FOMC meeting. The market currently assigns roughly a 60% probability to a 25-basis point rate hike, according to the CME FedWatch tool. (Michael Gibbs, Managing Director, Lead Portfolio Manager) Markets: The S&P 500 closed lower at 7,718.60 but remained above its 20-day moving average at 7,708.70. The RSI and Advance/Decline line remain in downtrends, which will need to be reversed before the index can make a sustained move higher. However, the S&P 500 has now formed a 23-day base, which is a positive sign for the continuation of the recent uptrend. This week’s PPI and CPI inflation reports could be significant market-moving events. Until those reports are released, we expect the S&P 500 to… Read More
Headline News: Equity futures point to a modestly lower opening this morning following a broad rebound effort from stocks yesterday. Crude oil is moving higher this morning, near $93 per barrel as hostilities continue in and around the Strait of Hormuz. However, U.S. Treasury yields are easing slightly, extending the stabilization seen yesterday after the recent surge in rates had emerged as a significant headwind for equities. That moderation helped provide some relief for stocks in Wednesday’s session and could help offset some of the renewed pressure from rising oil prices this morning. Investors had several notable tech earnings reports to assess after the bell yesterday, with a large semiconductor company moving lower despite a solid report and other semiconductor stocks following suit. However, there is some early momentum across software names after the latest round of earnings and pronounced weakness across the group yesterday. (Michael Gibbs, Managing Director, Lead Portfolio Manager) Markets: The S&P 500 tested and held the possible support level at 7,620.90 before rallying to close higher at 7,666.60. The RSI moved back above the 50 level, while the Advance/Decline line also turned higher, indicating improving market breadth. Holding support is a bullish development, and S&P 500… Read More
Headline News: Private U.S. companies added jobs at a slightly slower-than-expected pace in August, with gains concentrated heavily in health care and a few other industries, ADP reported Wednesday. The payrolls processing firm said firms added 38,000 workers, fewer than the upwardly revised 46,000 in July and below the Dow Jones consensus estimate for 47,000. Though job creation held positive, August was the smallest gain since January and reflective of a broader slowdown in the labor market. Moreover, most of the jobs came from three sectors, with multiple others showing declines. Education and health services added 45,000 to lead all categories, with the latter group being at the forefront of employment growth. Leisure and hospitality added 16,000 positions an construction was up 12,000. Outside of that, though, there were few growth areas. Manufacturing lost 17,000 jobs, professional and business services was off 16,000 and both the natural resources and mining as well as trade, transportation and utilities reported declines of 5,000. (Jeff cox, CNBC) Markets: The S&P 500 gapped lower at the open, and sellers remained in control throughout the session as the index closed sharply lower at 7,631.47. The index is now just above potential support at… Read More
Headline News: Equity futures point to a lower open this morning as the market navigates rising global bond yields and another spike in oil prices. The upward pressure on yields has resulted in broad weakness across overseas equity markets. Another increase in the price of oil has contributed to the selling after reports of cargo ships being attacked in the Strait of Hormuz, as crude oil climbs $2.03 (+2.4%) to $87.79 per barrel. The major averages finished August with solid gains, though action was choppy as geopolitical developments and sharp swings in technology stocks repeatedly influenced market direction. Those same themes remain in focus to September begins, with renewed tensions surrounding the Strait of Hormuz pushing oil prices higher while rising global bond yields provide an additional headwind for equities. On the data front, the August ISM Manufacturing Index and July JOLTS report are due at 10:00 a.m. ET, along with July construction spending, and should help shape the market’s view of economic growth and labor demand. (Michael Gibbs, Managing Director, Lead Portfolio Manager) Markets: The S&P 500 closed lower at 7,686.14 and is now solidly below its 20-day moving average at 7,716.86. The next potential support level remains… Read More
Headline News: Equity futures point to a higher opening this morning as stocks look to bounce back from a mostly lower finish yesterday, as semiconductor stocks once again weighed against relative strength in the broader market. The momentum trade is showing signs of improvement in the premarket this morning despite a lack of notable catalysts, as the world’s largest semiconductor company’s earnings loom after the close tomorrow. On the macro front, oil is moving firmly lower again today after yesterday’s sanction announcement against Iran, while Treasury yields also continue to move lower following the U.S. Treasury’s announcement of increased buybacks. The market is set to receive the August consumer confidence reading and July new home sales data at 10:00 a.m. ET. (Michael Gibbs, Managing Director, Lead Portfolio Manager ) Markets: The S&P 500 closed lower at 7,652.86 after trading in a tight range and is now slightly below the 20-day moving average at 7,656.41. The index remained above potential support at 7,620.70, while the RSI is threatening to move below the key 50 level, suggesting that short-term momentum has weakened. However, S&P 500 futures are higher by 0.45% this morning, indicating buyers may regain some control at the open. Investors are… Read More
Headline News: Equity futures point to a lower opening as the market navigates several notable developments this morning. Oil is moving lower after last week’s surge, providing some reprieve to the broader market ahead of Treasury Secretary Scott Bessent’s 1:00 p.m. ET press conference, at which he will reveal economic sanctions against Iran. On a related note, CNN reports the U.S. Navy is escorting ships through the Strait of Hormuz at night with their transponders off, and Oil traffic could be double what Wall Street analysts and tracking sites suggest. Treasury yields are moving modestly lower with oil this morning, though elevated yields, particularly in longer-dated Treasuries, continue to be a headwind for the market. CNBC reports that Treasury Secretary Scott Bessent could tap into Treasury’s $1 trillion General Account to buy back bonds. Meanwhile, weakness across semiconductor components continues to limit growth at the index level, with the world’s largest semiconductor company set to release its earnings Wednesday after the close. There is no economic data of note on the calendar today, but the market will receive an important inflation reading with the July Personal Income and Spending Report on Wednesday. (Michael Gibbs, Managing Director, Lead Portfolio Manager ) Markets:… Read More
