Headline News: The S&P 500 futures are down 13 points and are trading 0.3% below fair value, the NASDAQ 100 futures are down 56 points and are trading 0.3% below fair value, and the Dow Jones Industrial Average futures are down 61 points and are trading 0.2% below fair value. This holiday-shortened week is setting up to start on a lower note due in part to pre-open losses in some influential stocks. Rising market rates have also contributed to the negative bias this morning. The 10-year note yield is back above 4.00%, up six basis points from Friday at 4.01%. The 2-yr note yield is up six basis points from Friday at 4.21%. Geopolitical worries are still in play this week after a Houthi missile struck a U.S. commercial ship, according to The New York Times. Also, China is expected to increase coercive measures towards Taiwan, according to Axios, after Lai Ching-te won Taiwan’s presidential election. On a China-related note, the People’s Bank of China left its medium-term policy rate unchanged, but there was speculation about more stimulus in the near future. (Michael Gibbs, Managing Director, Lead Portfolio Manager) Markets: The S&P 500 closed at 4,793.30 and is now under… Read More
Headline News: Inflation and its impact on bond markets and the Federal Reserve’s monetary policy trajectory remain the primary focus for investors — at least until Friday when some of the big banks will kick off the fourth-quarter 2023 earnings season. The S&P 500 sits just 40 points, or 0.8%, shy of its record high of 4796.6 touched a little over two years ago, after rallying strongly in the last few months primarily on hopes easing inflation will allow the Fed to lower interest rates in 2024. Ten-year Treasury yields, the benchmark for borrowing costs, have fallen from 5% in October to the current 4.003%. For this bullish narrative to play out, inflation must be seen continuing to fall back to the central bank’s 2% target. Great importance is therefore being placed on the consumer price index for December, which will be published at 8:30 a.m. Eastern on Thursday. Economists forecast that annual headline CPI inflation will inch up from 3.1% in November to 3.2% last month. The core reading, which strips out more volatile items like food and energy, is expected to fall from 4% to 3.8%. (Jamie Chisholm Market Watch) Markets: The S&P 500 closed higher at 4,756.50 and… Read More
Headline News: The S&P 500 futures are flat and are trading roughly in line with fair value, the NASDAQ 100 futures are up nine points and are trading 0.1% above fair value, and the Dow Jones Industrial Average futures are down 160 points and are trading 0.4% below fair value. The Dow Jones Industrial Average is headed for a lower open due to a big loss in an aerospace company after the FAA grounded dozens of aircraft in response to an incident on a recent flight. The broader market, meanwhile, is little changed from Friday’s closing levels. The 2-yr note yield is down one basis point at 4.38%, and the 10-yr note yield is up one basis point to 4.05%. Dallas Fed President Logan (not a voting FOMC member) said in a speech that she does not want to take rate increase off the table just yet. In other news, lawmakers reached a $1.66 trillion budget deal. Congress must pass the bill by January 19 to avoid a government shutdown, according to The New York Times. (Michael Gibbs, Managing Director, Lead Portfolio Manager) Markets: The S&P 500 opened sharply lower, rallied above resistance, traded below resistance, and closed at 4697.24… Read More
Headline News: U.S. equity and fixed-income markets aren’t loving Friday’s hotter-than-expected jobs report. The final jobs report for 2023 showed the U.S. labor market continued to expand at a robust pace last month, with 216,000 new positions created, according to a report from the Labor Department. That is greater than the 170,000 economists polled by The Wall Street Journal had expected. U.S. stock futures immediately jerked lower after the report’s release, while the 10-year Treasury yield pushed higher. It was up 9.6 basis points at 4.086% in recent trade. S&P 500 futures, meanwhile, fell 0.5% to 4,704, and Nasdaq-100 futures were down 0.6% at 16,351. Dow Jones Industrial Average futures were off by 194 points, or 0.5%, to 37,525. (Joseph Adinolfi Market Watch) Markets: The S&P 500 closed lower for the fifth day and under support at 4697.82. The selling was not intense, as the down volume was 51% of the overall volume. The index is also below the 20-day moving average at 4705.29, which was strong support, so more selling could be coming into markets today. The 10-year Treasury is currently at a yield of 4.07%, which could also see more sellers come into equity markets. The next potential… Read More
Headline News: The S&P 500 futures are down 20 points and are trading 0.8% below fair value, the NASDAQ 100 futures are down 114 points and are trading 0.6% below fair value, and the Dow Jones Industrial Average futures are down 124 points and are trading 0.3% below fair value. Equity futures indicate another lower open for the stock market. There is a continued inclination to take profits after the big run to end 2023, helped by rising Treasury yields. The 2-yr note yield is up two basis points to 4.35%, and the 10-yr note yield is just below 4.00%, up three basis points from yesterday at 3.98%. (Michael Gibbs, Managing Director, Lead Portfolio Manager) Markets: The S&P closed lower for the third day and is now at 4,742.83. The index traded as low as 4,722.67, but buyers came in late to rally the index into the close. The RSI index also continues to move lower in support of the selling, and the breadth indicators remain in the overbought zone. So, caution is still warranted for new buys for today’s trading session. We still believe the support at 4,697.82 could be tested this week. We are currently Intermediate-term bullish and short-term… Read More
Headline News: The S&P 500 futures are down 40 points and are trading 0.8% below fair value, the NASDAQ 100 futures are down 202 points and are trading 1.2% below fair value, and the Dow Jones Industrial Average futures are down 240 points and are trading 0.6% below fair value. Stock futures indicate a lower open on the first session of the new year following big gains for the market in 2023. A loss in a large tech company has contributed to the negative bias after the stock was downgraded. Rising rates are another factor driving the downbeat price action. The 2-yr note yield is up seven basis points to 4.32% and the 10-yr note yield is up seven basis points to 3.95%. Geopolitical worries are also in play after Iran sent a warship to the Red Sea after the U.S. destroyed three Houthi boats, according to Bloomberg. Also, Israel Prime Minister Benjamin Netanyahu has rejected international pressure to stop the war, saying the war will continue until “absolute victory,” which will take “many more months,” according to The New York Times. WTI crude oil futures are up 2.2% to $73.17/bbl, likely tied to the geopolitical angst. Manufacturing PMI readings… Read More
Headline News: The S&P 500 futures are flat and are trading roughly in line with fair value, the Nasdaq 100 futures are up 35 points and are trading 0.2% above fair value, and the Dow Jones Industrial Average futures are down 67 points and are trading 0.2% below fair value. Stock futures indicate a mixed open. Participation will be light again, with only two trading days left in 2023. Market participants are waiting to see if the S&P 500 will close above its previous record high before the end of the year, which is only 0.3% higher than yesterday’s close. The Dow Jones Industrial Average, for its part, set a new all-time closing high again yesterday. The 2-yr note yield is up two basis points from yesterday at 4.25%, and the 10-yr note yield is up three basis points to 3.82%. (Michael Gibbs, Managing Director, Lead Portfolio Manager) Markets: The S&P 500 achieved a new 52-week high at 4,785.39 and is now just below the all-time high of 4,818.82. We believe the index will set a new all-time high by the end of the year. Although the RSI and the breadth indicators are still in the overbought zone, and the… Read More
Headline News: The S&P 500 futures are up one point and are trading roughly in line with fair value, the Nasdaq 100 futures are up seven points and are trading 0.1% above fair value, and the Dow Jones Industrial Average futures are down 25 points and are trading 0.1% below fair value. Stock futures indicate a flattish open without clear directional drivers this morning. Participation should be light again today and throughout the rest of the week/year. The market continues to weigh geopolitical worries after Israel reportedly pledged to continue fighting until Hamas is defeated. Also, Houthi rebels attacked an MSC United VIII container ship on Tuesday, according to Bloomberg, but shipping giant Maersk said it was resuming operations in the Red Sea after its recent pause. The 2-yr note yield is down five basis points from yesterday at 4.30%. The 10-year note yield is down two basis points to 3.87%. (Michael Gibbs, Managing Director, Lead Portfolio Manager) Markets: The S&P 500 rallied past the recent high of 4778.01, but selling came in, and the index closed at 4774.75. The RSI index remained in the overbought zone at 72.70, and the breadth indicators also remained overbought. The S&P 500 is… Read More
Headline News: The S&P 500 futures are up five points and are trading 0.1% above fair value, the Nasdaq 100 futures are up 43 points and are trading 0.2% above fair value, and the Dow Jones Industrial Average futures are up 71 points and are trading 0.2% above fair value. Stock futures are trading higher following yesterday’s positive finish for the market. The bias could shift, though, with the release of the November Consumer Price Index at 8:30 a.m. ET. Treasury yields are moving lower in front of that report. The 10-yr note yield is down five basis points to 4.19% and the 2-yr note yield is down five basis points to 4.68%. Earlier, the NFIB Small Business Optimism survey declined slightly to 90.6 in November from 90.7 in October. Notable data from overseas included Japan’s November Producer Price Index, which was up 0.3% year-over-year, and the UK’s employment data, which showed weaker-than-expected wage growth and a higher-than-expected claimant count. (Michael Gibbs, Managing Director, Lead Portfolio Manager) Markets: The S&P 500 rallied for the third day, closing higher at 4622.44 and above the resistance level at 4607.07. However, volume came in at only 2,410,460,672, and the up volume was only… Read More
Headline News: The S&P 500 futures are down 14 points and are trading 0.3% below fair value, the NASDAQ 100 futures are down 64 points and are trading 0.4% below fair value, and the Dow Jones Industrial Average futures are down 78 points and are trading 0.2% below fair value. Stock futures indicate a lower open, cooling off following big gains of late. Treasury yields are moving higher. The 2-yr note yield is up four basis points to 4.60% and the 10-yr note yield is up two basis points to 4.25%. WTI crude oil futures are down 0.8% to $73.45/bbl. Today’s economic data is limited to October Factory Orders at 10:00 ET. In other news, a US destroyer and several commercial ships were attacked in the Red Sea, according to The Wall Street Journal. (Michael Gibbs, Managing Director, Lead Portfolio Manager) Markets: The S&P 500 rallied sharply and closed higher at 4594.63 on Friday. The volume was above average, with 2,520,706,816 shares traded, and the up volume was 86%. However, the breadth indicators and the RSI index are now deeply overbought, and a move past potential resistance at 4607.07 remains unlikely. The S&P 500 did move out of a six-day… Read More
