Headline News: The S&P 500 futures are down 6 points and are trading 0.2% below fair value. The Nasdaq 100 futures are down 8 points and are trading slightly below fair value. The Dow Jones Industrial Average futures are down 95 points and are trading 0.3% below fair value. Equity futures are weaker this morning as investors take some money off the table following midterm election results and ahead of the October Consumer Price index on Thursday. Some races are still too close to call, yet reports indicate the market’s expectation of a split Congress leading to a legislative gridlock environment is still the likely outcome. The cryptocurrency market continues to suffer sharp losses, fueling concerns about margin calls contributing to some de-risking efforts. Bitcoin is down 5.3%, and Ethereum is down 8.2%. Treasury yields are little changed this morning. The 2-yr note yield is up one basis point to 4.67%, and the 10-yr note yield is up one basis point to 4.13%. Energy complex futures are trending lower. WTI crude oil futures are down 1.6% to $87.52/bbl, and natural gas futures are down 3.2% to $6.31/mmbtu. The weekly MBA Mortgage Applications Index fell 0.1% following last week’s 0.5%… Read More
Headline News: The S&P 500 futures are up 5 points and are trading 0.1% above fair value. The Nasdaq 100 futures are up 43 points and are trading 0.4% above fair value. The Dow Jones Industrial Average futures are up 50 points and are trading 0.2% above fair value. Equity futures trade with a positive bias as market participants turn their attention to the midterm elections and previews, highlighting a typically positive bias for the market in the 12-month period following a midterm election. The U.S. Dollar Index is modestly higher, up 0.3% to 110.47. Treasury yields are holding steady this morning. The 10-yr note yield is unchanged at 4.21%, and the 2-yr note yield is down one basis point to 4.71%. Energy complex futures are moving lower this morning. WTI crude oil futures are down 0.6% to $91.20/bbl, and natural gas futures are down 5.1% to $6.88/mmbtu. Economic data today was limited to the October NFIB Small Business Optimism Index, which came in at 91.3 after the prior reading of 92.1 (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets: The S&P 500 closed at 3806.80, which was above the 50-day moving average, and RSI moved above the… 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 36 points and are trading 0.3% above fair value. The Dow Jones Industrial Average futures are up 142 points and are trading 0.5% above fair value. Equity futures are moving higher this morning after Friday’s upbeat finish. There is still a growing hope that China will loosen zero-covid related restrictions despite the spokesman for China’s Health Commission saying that no changes are being made to the country’s coronavirus protocols. The Biden administration privately asked Ukraine to show it is open to negotiations with Russia, according to the Washington Post. Apple (AAPL) is trading down in premarket action following its production warning, while Meta Platforms (META) traded up after The Wall Street Journal reported the company is planning large layoffs. Treasury yields are mixed this morning. The 2-yr note yield is up two basis points to 4.69%, while the 10-yr note yield is down two basis points to 4.13%. The U.S. Dollar Index is pulling back, down 0.3% to 110.55. Economic data today is limited to the September Consumer Credit report (prior $23.80 bln) at 3:00 p.m. ET.… Read More
Headline News: The S&P 500 futures are down 31 points and are trading 0.8% below fair value. The Nasdaq 100 futures are down 120 points and are trading 1.1% below fair value. The Dow Jones Industrial Average futures are down 200 points and are trading 0.6% below fair value. Equity futures are trading with carryover momentum from yesterday’s disappointing finish. Market participants continue to deal with the reality that the Fed is apt to take rates higher than expected for longer than expected. Treasury yields are markedly higher this morning. The 2-yr note yield is up 15 basis points to 4.70% and the 10-yr note yield is up 13 basis points to 4.18%. Following the FOMC policy decision yesterday, focus is again on central banks tightening policy. The Norges Bank raised its key rate by 25 bps to 2.50% while the Bank of England is expected to announce a 75-bps rate hike to 3.00% at 8:00 ET. In other news, China has reaffirmed its zero COVID policy, according to Bloomberg. Market participants will receive the following economic data today: 8:30 ET: Weekly Initial Claims (Briefing.com consensus 222,000; prior 217,000), Continuing Claims (prior 1.438 mln), September trade balance (Briefing.com consensus -$71.00… Read More
Headline News: The S&P 500 futures are up 2 points and are trading roughly in line with fair value. The Nasdaq 100 futures are up 18 points and are trading 0.2% above fair value. The Dow Jones Industrial Average futures are down 11 points and are trading slightly below fair value. Equity futures are mixed and little changed from the flat line. There is not a lot of conviction this morning ahead of the FOMC rate hike decision at 2:00 p.m. ET followed by Fed Chair Powell’s press conference at 2:30 p.m. ET. In overseas news, South Korea’s CPI increased at its fastest yr/yr pace (+5.7%) since December 2008 in the October reading. China has implemented a 7-day lockdown of the area around the Foxconn iPhone manufacturing plant in Zhengzhou, according to Reuters. Shipping giant Maersk, seen as a gauge for global trade, beat Q3 expectations but warned of “dark clouds on the horizon” as demand slows, according to CNBC. The weekly MBA Mortgage Application Index fell 0.5% with purchase applications falling 1.0% and refinancing applications rising 0.2%. Other data to expect today include: 8:15 ET: October ADP Employment Change (Briefing.com consensus 198,000; prior 208,000) 10:30 ET: Weekly crude oil… Read More
Headline News: The S&P 500 futures are up 36 points and are trading 1.0% above fair value. The Nasdaq 100 futures are up 135 points and are trading 1.2% above fair value. The Dow Jones Industrial Average futures are up 201 points and are trading 0.6% above fair value. Equity futures are higher this morning after yesterday’s modest retreat. First-of-the-month inflows, falling Treasury yields, and speculation that China could soon exit its zero-Covid policy are among the early support factors, along with some M&A buzz that has followed reports of Johnson & Johnson (JNJ) acquiring Abiomed (ABMD) for $16.6 billion in cash. Earnings news has generally been better than expected, and Treasury yields are declining, which is helping to boost sentiment in the market. The 10-yr note yield dropped back below 4.00%, down 13 basis points to 3.94%. The 2-yr note yield is down six basis points to 4.43%. There has been a relief rally in Chinese stocks, and U.S. stocks with high exposure to the Chinese market, after speculation circulated on social media that China is preparing to gradually exit its zero COVID-19 policy, according to Bloomberg. This is unconfirmed by Chinese authorities. In other news, the Reserve Bank… Read More
Headline News: The S&P 500 futures are down 12 points and are trading 0.3% below fair value. The Nasdaq 100 futures are down 52 points and are trading 0.5% below fair value. The Dow Jones Industrial Average futures are down 83 points and are trading 0.2% below fair value. Equity futures are somewhat weak this morning following the recent rally as some profit-taking efforts kick in at month’s end. Market participants are digesting worse-than-expected economic data from the eurozone, which saw CPI hit an all-time high in October of 10.7% year-over-year. Also, China’s Manufacturing PMI for October fell to its lowest level since July, slipping back into contraction with a sub-50 reading (49.2). New COVID cases in parts of China are prompting new lockdown measures. Disney’s Shanghai theme park suspended operations Monday, according to CNBC, and iPhone production could reportedly be at risk due to COVID cases at the Foxconn manufacturing facility. Treasury yields are inching higher this morning. The 10-yr note yield is up three basis points to 4.04%, and the 2-yr note yield is up six basis points to 4.48%. Economic data today is limited to the October Chicago PMI reading (Briefing.com consensus 46.0; prior 45.7), which is… Read More
Headline News: The S&P 500 futures are down 17 points and are trading 0.4% below fair value. The Nasdaq 100 futures are down 100 points and are trading 0.8% below fair value. The Dow Jones Industrial Average futures are down 8 points and are trading roughly in line with fair value. Equity futures are lower this morning as market participants digest the disappointing guidance from Amazon (AMZN) accompanying their earnings report after yesterday’s close. There may also be a feeling of trepidation in play ahead of the latest inflation reading. The September Personal Income and Spending report, which includes the PCE Price Index, is out at 8:30 a.m. ET. Treasury yields are inching higher as the 10-yr note yield breaches the 4.00% level. The 10-yr note yield is up six basis points to 4.01%, and the 2-yr note yield is up two basis points to 4.36%. The Biden administration is reportedly considering additional restrictions on exports of advanced technology to China, according to The New York Times. Also, the Bank of Japan maintained its ultra-loose policy stance and raised its inflation forecast for 2022 to 2.9% from 2.3%. (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets: The S&P… Read More
Headline News: The U.S. economy posted its first period of positive growth for 2022 in the third quarter, at least temporarily easing inflation fears, the Bureau of Economic Analysis reported Thursday. GDP, a sum of all the goods and services produced from July through September, increased at a 2.6% annualized pace for the period, against the Dow Jones estimate for 2.3%. That reading follows consecutive negative quarters to start the year, meeting a commonly accepted definition of recession, though the National Bureau of Economic Research is generally considered the arbiter of downturns and expansions. The growth came in large part due to a narrowing trade deficit, which economists expected and considered to be a one-off occurrence that won’t be repeated in future quarters. GDP gains also came from increases in consumer spending, nonresidential fixed investment, and government spending. Declines in residential fixed investment and private inventories offset the gains, the BEA said. The report comes as policymakers fight a pitched battle against inflation, which is running around its highest levels in more than 40 years. Price surges have come due a number of factors, many related to the pandemic but also pushed by the unprecedented fiscal and monetary stimulus that… Read More
Headline News: The S&P 500 futures are down 28 points and are trading 0.7% below fair value. The Nasdaq 100 futures are down 198 points and are trading 1.7% below fair value. The Dow Jones Industrial Average futures are down 30 points and are trading 0.1% below fair value. The Nasdaq 100 futures suffer heavy losses, weighed down by Alphabet (GOOG) and Microsoft (MSFT). Things are holding up relatively better for the Dow and S&P 500 futures, which are drawing a measure of support from the notion that the Fed will take a less aggressive rate hike approach after the November meeting due to the emerging signs of an economic slowdown. Treasury yields are moving lower. The 2-yr note yield is down two basis points to 4.45%, and the 10-yr note yield is down five basis points to 4.05%. New lockdown measures have reportedly been implemented in Wuhan amid rising Covid cases. In other developments, UK Prime Minister Sunak has delayed the release of the government’s fiscal plan to Nov. 17. The weekly MBA Mortgage Applications Index was down 1.7%, with purchase applications down 2.0% and refinancing applications down 0.1%. (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets:… Read More
