Headline News: The S&P 500 futures are down 24 points and are trading 0.6% below fair value. The Nasdaq 100 futures are down 98 points and are trading 0.8% below fair value. The Dow Jones Industrial Average futures are down points and are trading 0.4% below fair value. The stock market is poised for a lower open, following through with yesterday’s sell-off. Worries about the Fed raising rates more than expected are still driving price action, along with normal consolidation efforts following a big run in a short amount of time. The 10-yr Treasury note yield hit 3.92% overnight, but it pulled back to 3.88%. The 2-yr note yield is up seven basis points to 4.70%. The U.S. Dollar Index is up 0.7% to 104.58. WTI crude oil futures are down 3.0% to $76.13/bbl, and natural gas futures are down 2.3% to $2.33/mmbtu. (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets: The S&P 500 rallied early but moved below support at 4100.96 and closed at 4090.41. The RSI index also moved lower, closing at 53.48, suggesting more selling could be coming in today. The 20-day moving average is now the next potential support area, and we believe that… Read More
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 41 points and are trading 0.3% below fair value. The Dow Jones Industrial Average futures are down 83 points and are trading 0.2% below fair value. Equity futures are modestly lower as investors await some market-moving economic data this morning, including retail sales and industrial production from January. Treasury yields are little changed in front of this morning’s data releases, but the rise in rates recently has the market worried about valuation constraints and competition for stocks. The Biden Administration officially announced that Fed Vice Chair Brainard would lead the National Economic Council and Jared Bernstein will head the Council of Economic Advisors. The weekly MBA Mortgage Applications Index fell 7.7%, with purchase applications declining 6.0% while refinancing applications fell 13.0%. (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets: The S&P 500 traded below support at 4100.96 only to rally and close higher at 4136.13. The volume was once again low, with only 2,178,107,392 shares traded, and RSI was flat, closing at 59.58. Potential support at 4100.96 should hold again today while the 20-day moving… Read More
Headline News: Inflation turned higher to start 2023, as rising shelter, gas, and fuel prices took their toll on consumers, the Labor Department reported Tuesday. The consumer price index, which measures a broad basket of common goods and services, rose 0.5% for the month, which translated to an annual gain of 6.4%. Economists surveyed by Dow Jones had been looking for respective increases of 0.4% and 6.2%. Excluding volatile food and energy, core CPI increased 0.4% monthly and 5.6% from a year ago, against respective estimates of 0.3% and 5.5%. (Jeff Cox) Markets: The S&P 500 rallied past resistance at 4100.96 and closed higher at 4137.29, and RSI also turned higher in support of the rally. However, the volume over the two-day rally has been below average; up volume was only 75% yesterday. So far this morning, the S&P 500 futures are flat to start the day after January’s CPI report release. If selling should come in today, we feel the potential support at 4100.96 will hold, and if so, there could be a base-building phase at these levels that would be bullish. We are currently Intermediate-term bearish and short-term bullish. John N. Lilly III CPFA Accredited… Read More
Headline News: The S&P 500 futures are up 12 points and are trading 0.3% above fair value. The Nasdaq 100 futures are up 75 points and are trading 0.6% above fair value. The Dow Jones Industrial Average futures are up 52 points and are trading 0.2% above fair value. Equity futures indicate a higher open, with the Nasdaq 100 futures outperforming thanks to upside leadership from the mega-cap space. Moves are otherwise modest in scope as investors await key data releases next week, including the Consumer Price Index, Retail Sales, Industrial Production, Housing Starts, and Producer Price Index reports, all from January. The EU Commission’s winter forecast called for 0.9% growth in the eurozone versus 0.6% in the autumn forecast, while the outlook for 2024 remains unchanged at 1.5%. Geopolitical angst is also in play this morning after the U.S. shot down three flying objects over Alaska, Canada, and Michigan over the last three days. This follows the Chinese spy balloon that was shot down last week. The 2-yr Treasury note yield is up four basis points to 4.55%, and the 10-yr note yield is unchanged at 3.74%. The U.S. Dollar Index is down 0.1% to 103.52. Energy complex futures… Read More
Headline News: The S&P 500 futures are down 27 points and are trading 0.7% below fair value. The Nasdaq 100 futures are down 135 points and are trading 1.1% below fair value. The Dow Jones Industrial Average futures are down 162 points and are trading 0.4% below fair value. Equity futures indicate a lower open following yesterday’s reversal that took the S&P 500 below 4,100. Investors are still trading cautiously. Oil prices rose sharply overnight ($79.71/bbl, +1.65, +2.1%) following reports that Russia is aiming to lower its March oil output by 500,000 barrels, according to Bloomberg, in response to sanctions. Treasury yields remain elevated, keeping pressure on the equity market. The 2-yr note yield sits at 4.51%, and the 10-yr note yield is at 3.70%. The U.S. Dollar Index is up 0.3% to 103.48. Market participants will receive the following economic data today: 10:00 ET: February Preliminary the University of Michigan Consumer Sentiment (Briefing.com consensus 65.0; prior 64.9) 14:00 ET: January Treasury Budget (prior -$85.0B) (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets: The S&P 500 sold off below support at 4100.96 to close at 4081.50. The volume came in at 2,565,760,768, with down volume of 75%, showing… Read More
Headline News: The S&P 500 futures are up 29 points and are trading 0.8% above fair value. The Nasdaq 100 futures are up 136 points and are trading 1.1% above fair value. The Dow Jones Industrial Average futures are up 197 points and are trading 0.6% above fair value. Futures for the major indices are moving higher this morning as investors continue to show a willingness to buy on weakness. Sentiment is also boosted by a decidedly positive response to Disney’s earnings news. Investors are also reacting to relatively pleasing inflation data from Germany. Specifically, Germany’s preliminary January CPI was better than feared on a year-over-year basis and showed deceleration from peak inflation. A decent pullback in Treasury yields has been another supportive factor to the equity futures market this morning. The 2-yr note yield is down two basis points to 4.43% and the 10-yr note yield is down six basis points to 3.59%. The U.S. Dollar Index is down 0.5% to 102.88. (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets: The S&P 500 closed lower at 4117.86 but was able to hold at the support level of 4100.96. The RSI index closed at a new low for… Read More
Headline News: The S&P 500 futures are down 19 points and are trading 0.4% below fair value. The Nasdaq 100 futures are down 42 points and are trading 0.3% below fair value. The Dow Jones Industrial Average futures are down 140 points and are trading 0.3% below fair value. Equity futures indicate a lower open driven by a sense that the market got overextended and is due for some consolidation. Investors are still weighing Fed Chair Powell’s comments from yesterday, where he pointed to emerging signs of disinflation but reiterated that more rate hikes will probably be appropriate. The Reserve Bank of India raised its policy rate by 25 bps to 6.50%, as expected, and pointed to the prospect of additional rate hikes. The weekly MBA Mortgage Application Index rose 7.4%, with refinancing applications increasing by 18.0% and purchase applications rising by 3.0%. (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets: The S&P 500 rallied sharply to close higher at 4164.00 after bouncing off support at 4100.96. The volume came in at 2,590,563,328, but the up volume was only 63% showing the buying was moderate. The index is now positioned to test possible resistance at 4195.44; however, the internal… 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 36 points and are trading 0.3% above fair value. The Dow Jones Industrial Average futures are down 47 points and are trading 0.1% below fair value. The equity futures market is mixed as investors await Fed Chair Powell’s “Conversation with David Rubinstein” before the Economic Club of Washington D.C. at 12:40 p.m. ET. On a related note, Minneapolis Federal Reserve President Neel Kashkari (FOMC voter) said on CNBC, “Central banks have not made enough progress” and reaffirmed his Fed funds rate target of 5.4% following the surprising January jobs report. Investors continue to deal with a nagging sense that the Fed will raise rates more than expected and keep them there for longer than expected. Overseas, the Reserve Bank of Australia increased its cash rate by 25 bps to 3.35%, as expected, and noted that additional increases would be needed in the coming months. President Biden will deliver the State of the Union Address tonight at 9:00 p.m. ET. The 2-yr Treasury note yield is down four basis points to 4.42%, and the 10-yr note… Read More
Headline News: The S&P 500 futures are down 24 points and are trading 0.6% below fair value. The Nasdaq 100 futures are down 97 points and are trading 0.8% below fair value. The Dow Jones Industrial Average futures are down 153 points and are trading 0.4% below fair value. Equity futures indicate a lower open as investors continue to rethink the Fed’s path forward and the possibility that the Fed will keep rates higher for longer following Friday’s strong jobs report. There’s likely some profit-taking activity in play after the January rally. The 2-yr note yield is up 13 basis points to 4.41%, and the 10-yr note yield is up six basis points to 3.60%. The U.S. Dollar Index is up 0.2% to 103.14. Increased geopolitical angst is another factor behind this morning’s weakness after the U.S. shot down a suspected Chinese spy balloon off the coast of South Carolina. The Chinese foreign ministry declared its “strong discontent and protest,” according to NY Times. Energy complex futures are inching higher. WTI crude oil futures are up 0.8% to $73.96/bbl, and natural gas futures are up 1.4% to $2.44/mmbtu. There are no notable U.S. economic data today. (Michael Gibbs, Director of Equity… Read More
Headline News: The employment picture started off 2023 on a stunningly strong note, with nonfarm payrolls posting their strongest gain since July 2022. Nonfarm payrolls increased by 517,000 for January, above the Dow Jones estimate of 187,000. The unemployment rate fell to 3.4% vs. the estimate of 3.6%. That is the lowest jobless level since May 1969. Markets slumped following the report, with futures tied to the Dow Jones Industrial Average down about 200 points. Growth across a multitude of sectors helped propel the massive beat against the estimate. Leisure and hospitality added 128,000 jobs to lead all sectors. Other significant gainers were professional and business services (82,000), government (74,000), and health care (58,000). Wages also posted solid gains for the month. Average hourly earnings increased 0.3%, in line with the estimate, and 4.4% from a year ago, 0.1 percentage points higher than expectations. The surge in job creation comes despite the Federal Reserve’s effort to slow the economy and bring down inflation from its highest level since the early 1980s. The Fed has raised its benchmark interest rate eight times since March 2022. (Jeff Cox CNBC) Markets: The S&P staged another impressive rally closing higher at 4179.76 after testing… Read More
