Headline News: The S&P 500 futures are up 25 points and are trading 0.7% above fair value. The NASDAQ 100 futures are up 102 points and are trading 0.8% above fair value. The Dow Jones Industrial Average futures are up 187 points and are trading 0.5% above fair value. The stock market is poised for a higher open, attempting to bounce after the S&P 500 entered correction territory with Friday’s close. This week’s calendar features another heavy batch of earnings, including Apple’s report after Thursday’s close, the FOMC decision on Wednesday, policy meetings from the BOJ and BOE, the Treasury’s quarterly refunding announcement, and the October ISM and employment reports. Israeli forces entered the Gaza Strip, beginning “the second stage of the war.” Prime Minister Benjamin Netanyahu warned Israelis to expect a “long and difficult” war, according to The New York Times. Treasury yields are showing a little agitation ahead of the refunding estimates. The 2-yr note yield is up one basis point to 5.03%, and the 10-yr note yield is up four basis points to 4.89%. (Michael Gibbs, Managing Director, Lead Portfolio Manager) Markets: The S&P 500 traded down to support at 4103.98 and then had a slight rally… Read More
Headline News: The U.S. economy grew even faster than expected in the third quarter, buoyed by a strong consumer in spite of higher interest rates, ongoing inflation pressures, and a variety of other domestic and global headwinds. Gross domestic product, a measure of all goods and services produced in the U.S., rose at a 4.9% annualized pace in the July-through-September period, up from the 2.1% pace in the second quarter. Economists surveyed by Dow Jones had been looking for a 4.7% acceleration. The sharp increase came due to contributions from consumer spending, increased inventories, exports, residential investment, and government spending. (Jeff Cox CNBC) Markets: The S&P 500 made a new low on Wednesday, closing at 4186.77. So, the threat of a new downtrend is now back in place. The RSI index did not make a new low, which is the only positive sign for the market now. The selling was intense, with 2,619,896,576 shares traded, and 77% of that was downside volume. So far this morning, the impressive Q3 GDP report has not brought buyers into pre-market trading, so the potential support at 4166.15 could be tested early in today’s trading. We are currently Intermediate-term bullish and short-term bearish. … Read More
Headline News: The S&P 500 futures are down 10 points and are trading 0.2% below fair value. The NASDAQ 100 futures are down 69 points and are trading 0.5% below fair value. The Dow Jones Industrial Average futures are up 84 points and are trading 0.2% above fair value. Earnings results since yesterday’s close have garnered mixed reactions, setting the major indices up for a mixed open. The 2-yr note yield is down one basis point to 5.09%, and the 10-yr note yield is up two basis points to 4.86%. Republicans nominate Mike Johnson (R-LA) for Speaker. Republicans are planning full floor vote today at 12:00 ET. He appears close to getting enough votes to get elected, according to The New York Times. The weekly MBA Mortgage Applications Index fell 1.0% following last week’s 6.9% decline. (Michael Gibbs, Managing Director, Lead Portfolio Manager) Markets: The S&P 500 rallied again, closing higher at 4247.68 and above the critical 200-day moving average at 4236.94. The RSI index also moved higher and has now made a higher low, while the S&P 500 made a lower low. This is a significant development that could see more buyers come in at this level. However, the… Read More
Headline News: The S&P 500 futures are up 20 points and are trading 0.6% above fair value. The NASDAQ 100 futures are up 74 points and are trading 0.5% above fair value. The Dow Jones Industrial Average futures are up 132 points and are trading 0.5% above fair value. Stock futures are up nicely this morning following five straight losing sessions for the S&P 500, which have left it below its 200-day moving average (4,236). That price action has fostered expectations for a rebound effort. The 10-yr note yield is up two basis points to 4.86%, and the 2-yr note yield is up two basis points to 5.08%. There will be a $51 billion 2-yr note auction today. Results will be released at 1:00 p.m. ET. Flash October Manufacturing and Services PMI readings from France, Germany, and the U.K. remained in contractionary territory, reflecting a continuation of weak activity in the region. U.S. economic data today is limited to the preliminary October S&P Global US Manufacturing PMI and Services PMI at 9:45 a.m. ET. (Michael Gibbs, Managing Director, Lead Portfolio Manager) Markets: The S&P 500 traded in a wide range but only managed to close marginally higher at 4217.04. The… Read More
Headline News: The S&P 500 futures are down 21 points and are trading 0.4% below fair value. The NASDAQ 100 futures are down 75 points and are trading 0.4% below fair value. The Dow Jones Industrial Average futures are down 183 points and are trading 0.4% below fair value. Stock futures indicate a lower open after the S&P 500 closed below its 200-day moving average on Friday. Action in the Treasury market is keeping the stock market in check after the 10-year yield passed 5.00% again. It is currently up seven basis points from Friday’s settlement at 4.99%. The 2-year note yield is up three basis points to 5.11%. Relatively weak mega caps in pre-open trading are having a disproportionate influence on the broader market. On a related note, earnings reporting season picks up this week, highlighted by some mega-cap tech companies. Rising geopolitical tensions in the Middle East are another limiting factor this morning. Israel is stepping up its airstrikes against Hamas; meanwhile, Israel’s military is contending with increasing attacks from Hezbollah, which is based in Lebanon, according to The New York Times, indicating an increased potential for a wider regional conflict. The House of Representatives is still without… Read More
Headline News: The S&P 500 futures are down 9 points and are trading 0.2% below fair value. The NASDAQ 100 futures are down 39 points and are trading 0.2% below fair value. The Dow Jones Industrial Average futures are down 69 points and are trading 0.2% below fair value. Equity futures indicate a lower open after the 10-year note yield crossed 5.0% for the first time since 2007 overnight. It has since declined to 4.93%. The 2-yr note yield is down three basis points to 5.14%. Geopolitical uncertainty remains top of mind for investors. In a speech last night, President Biden, citing national security interests, made the case for more aid for Israel and Ukraine. Reports suggest he will ask Congress for approximately $100 billion in emergency aid. The business of Congress, however, remains stymied by the House’s inability to elect a new Speaker. The geopolitical uncertainty, particularly the Israel-Hamas conflict, has contributed to risk aversion ahead of the weekend. The People’s Bank of China left its one- and five-year loan prime rates at their respective 3.45% and 4.20%, as expected. (Michael Gibbs, Managing Director, Lead Portfolio Manager) Markets: The S&P 500 sold off sharply, closing at 4278, and had… Read More
Headline News: The S&P 500 futures are down 18 points and are trading 0.4% below fair value. The Nasdaq 100 futures are down 90 points and are trading 0.6% below fair value. The Dow Jones Industrial Average futures are down 69 points and are trading 0.2% below fair value. Stocks futures indicate a lower open as participants digest another batch of earnings news that featured better than expected results from a Dow and a Q4 profit warning from a major airline. Geopolitical angst, however, appears to be at the heart of today’s weakness after the summit between President Biden and Arab leaders was called off following the Gaza hospital bombing yesterday. WTI crude oil futures are up 2.3% to $88.69/bbl while Brent crude futures are up 2.2% to $91.86/bbl. The 2-yr note yield is down two basis points to 5.18% and the 10-yr note yield is down four basis points to 4.81%. China’s Q3 GDP grew by 4.9% versus an expected 4.4%. Industrial production and retail sales were both better than expected in September. The U.S. economic calendar features September housing starts and building permits at 8:30 a.m. ET. Separately, the House will hold another vote for Speaker today at… Read More
Headline News: The S&P 500 futures are up 14 points and are trading 0.4% above fair value. The NASDAQ 100 futures are up 21 points and are trading 0.2% above fair value. The Dow Jones Industrial Average futures are up 158 points and are trading 0.5% above fair value. Equity futures are positive, reflecting some relief that the weekend did not produce a widening of the Israel-Hamas conflict. A potential escalation is still top of mind for participants, though, as Israel prepares to invade Gaza in a few days with tens of thousands of soldiers, according to The New York Times. Iran’s foreign minister, Hossein Amirabdollahian warned Israel that Hezbollah might join the conflict and that it could suffer a “large earthquake” if it doesn’t stop its attacks on Gaza, according to ABC News. WTI crude oil futures are down 0.2% to $87.54/bbl, and Brent Crude futures are down 0.3% to $90.60/bbl. The 2-yr note yield is up one basis point to 5.06%, and the 10-yr note yield is up six basis points to 4.69%. Separately, the People’s Bank of China injected liquidity through the medium-term lending facility in a bid to support economic growth but left the medium-term lending… Read More
Headline News: The S&P 500 futures are up 17 points and are trading 0.4% above fair value. The NASDAQ 100 futures are up 57 points and are trading 0.3% fair value. The Dow Jones Industrial Average futures are up 126 points and are trading 0.4% above fair value. Equity futures indicate a higher open as participants wait on the September Consumer Price Index at 8:30 a.m. ET. Treasury yields are lower currently, but investors will be focused on how rates react to the data. The 2-yr note yield is down one basis point to 4.99% and the 10-yr note yield is down three basis points to 4.56%. Israel said that the siege of Gaza will not end until all the hostages have been released, according to Reuters. Rep. Steve Scalise (R-LA) prevailed in the GOP conference vote, but House Republicans have doubts on whether Rep. Steve Scalise (R-LA) has enough votes to get elected Speaker, according to Politico. He needs 217 votes to win the Speaker position. (Michael Gibbs, Managing Director, Lead Portfolio Manager) Markets: The S&P 500 rallied for a fourth day, closing at 4376.95, and is now well beyond the 20-day moving average at 4339.88. The September consumer… Read More
Headline News: The S&P 500 futures are flat and are trading in line with fair value. The NASDAQ 100 futures are down 2 points and are trading roughly in line with fair value. The Dow Jones Industrial Average futures are up 29 points and are trading 0.1% above fair value. The stock market is poised for a higher open following yesterday’s afternoon rally. A drop in market rates has contributed to the positive bias despite ongoing geopolitical uncertainty around the situation in Israel and Gaza. The 2-yr note yield is down six basis points to 5.00%, and the 10-yr note yield is down eight basis points to 4.70%. WTI crude oil futures are down 0.6% to $85.95/bbl after climbing 4.0% yesterday. In other news, the IMF lowered its 2024 global growth outlook to 2.9% from 3.0%. China’s troubled property developer Country Garden missed another bond payment and warned of liquidity pressures, stoking concerns that it may end up announcing a restructuring of its offshore debt, according to Reuters. (Michael Gibbs, Managing Director, Lead Portfolio Manager) Markets: The S&P 500 rallied sharply past resistance at 4355.31 and closed higher at 4335.66, while the RSI also closed much higher at 47.26 in… Read More
