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
Headline News: The S&P 500 futures are up 15 points and are trading 0.4% above fair value. The Nasdaq 100 futures are up 170 points and are trading 1.4% above fair value. The Dow Jones Industrial Average futures are down 147 points and are trading 0.4% below fair value. Equity futures are mixed largely due to mixed reactions to the latest slate of earnings news. A big gain in Meta Platforms (META), along with other mega cap stocks trading up in solidarity, helps to boost the Nasdaq 100 futures and S&P 500 futures while losses in Honeywell (HON) and Merck (MRK) weigh on the Dow Jones Industrial Average futures. Treasury yields are still moving lower after yesterday’s rally on the heels of Fed Chair Powell’s comments. The 2-yr note yield is down three basis points to 4.08%, and the 10-yr note yield is down two basis points to 3.38%. The Bank of England raised its bank rate by 50 bps to 4.00%, as expected. The central bank believes that inflation in the U.K. and other economies has already peaked. The ECB will announce its policy decision at 8:15 a.m. ET. House Speaker Kevin McCarthy was optimistic, following a meeting with… 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 50 points and are trading 0.4% below fair value. The Dow Jones Industrial Average futures are down 125 points and are trading 0.4% below fair value. The stock market is poised for a lower open, carrying over yesterday’s downside momentum. This morning’s weakness is partially due to a softer response to earnings news, along with a continued sense that the market got ahead of itself and is due for a pullback. Market participants are also staying cautious in front of Wednesday’s FOMC decision and key economic data and notable earnings reports later in the week. The IMF raised its global growth forecast for the year to 2.9% from 2.7%; however, that still reflects a decline from 3.4% growth in 2022. Separately, China’s Manufacturing and Non-Manufacturing PMI readings returned to expansionary territory (i.e., above 50 readings) for the first time since September. Treasury yields are moving lower this morning. The 2-yr note yield is down two basis points to 4.24%, and the 10-yr note yield is down three basis points to 3.52%. The U.S. Dollar Index is up… Read More
Headline News: The S&P 500 futures are down 37 points and are trading 1.0% below fair value. The Nasdaq 100 futures are down 152 points and are trading 1.3% below fair value. The Dow Jones Industrial Average futures are down 211 points and are trading 0.6% below fair value. The stock market is poised for a lower open today after a big run recently, driven by a sense that the market is due for a pullback. This is in front of a heavy slate of news this week, including earnings reports from over 100 S&P 500 companies headlined by Meta Platforms (META), Alphabet (GOOG), and Apple (AAPL). Some of the more notable data releases this week include the Q4 Employment Cost Index, ISM Manufacturing and Non-Manufacturing Indexes, and the Employment Situation Report for January. Market participants are also aware that several influential central banks are holding meetings this week, namely the Federal Reserve, the Bank of England, and the European Central Bank. Investors are likely worried about the Fed pushing back against the recent market rally. Adding fuel to that worry, a Wall Street Journal Article over the weekend by Nick Timiraos indicated that Fed officials are concerned that inflation… Read More
Headline News: The S&P 500 futures are up 19 points and are trading 0.5% above fair value. The Nasdaq 100 futures are up 111 points and are trading 0.9% above fair value. The Dow Jones Industrial Average futures are up 41 points and are trading 0.1% above fair value. Equity futures indicate a higher open following Tesla’s (TSLA) earnings report, which is driving a continued rebound effort in the mega cap space and bolstering the broader market on a busy earnings reporting day. Investors are also anticipating the potentially market-moving advanced Q4 GDP reading and weekly initial claims data at 8:30 a.m. ET, cognizant that they may have implications for the Fed’s rate hike path. Treasury yields are inching higher ahead of the release. The 2-yr note yield is up one basis point to 4.15% and the 10-yr note yield is up two basis points to 3.48%. The U.S. Dollar Index is up 0.1% to 101.75. Energy complex futures are mixed. WTI crude oil futures are up 1.3% to $81.16/bbl and natural gas futures are down 4.5% to $2.78/mmbtu. (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets: The S&P closed higher at 4016.22 after breaching the 200-day moving… Read More
Headline News: The S&P 500 futures are down 32 points and are trading 0.8% below fair value. The Nasdaq 100 futures are down 151 points and are trading 1.2% below fair value. The Dow Jones Industrial Average futures are down 213 points and are trading 0.6% below fair value. Equity futures indicate a lower open primarily driven by renewed valuation concerns following Microsoft’s (MSFT) disappointing cloud growth expectations and fiscal third-quarter guidance. An earnings miss by fellow Dow component Boeing (BA) has added to the weakness and the sense that the market might have gotten ahead of itself with the January rally. Treasury yields are moving lower, but that has not offered support to the equity market. The 2-yr note yield is down five basis points to 4.14%, and the 10-yr note yield is down five basis points to 3.42%. The U.S. Dollar Index is up 0.1% to 102.01. Energy complex futures trade in mixed fashion. WTI crude futures are flat at $80.14/bbl and natural gas futures are down 2.9% to $2.97/mmbtu. (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets: The S&P closed higher at 4016.95 and above the resistance level at 4015.39. The index is also testing… Read More
Headline News: The S&P 500 futures are up 3 points and are trading slightly 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 31 points and are trading 0.1% above fair value. There’s not a lot of conviction in the equity futures market as investors await earnings reports from influential names like Microsoft (MSFT) and Tesla (TSLA) later this week, along with key economic data that includes the advanced Q4 GDP reading and the Personal Income and Spending report for December. An article from Nick Timiraos in The Wall Street Journal over the weekend indicated that the Fed is likely to raise rates by 25 basis points at the next FOMC meeting and could begin debating when to pause rate increases. According to Reuters, the latest survey of businesses by the National Association of Business Economics (NABE) indicated a 56% possibility that the economy was in, or will be in, a recession this year versus a nearly two-thirds possibility at the time of the last survey. (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets: The S&P 500 rallied sharply on Friday,… Read More
Headline News: The S&P 500 futures are up 13 points and are trading 0.3% above fair value. The Nasdaq 100 futures are up 86 points and are trading 0.7% above fair value. The Dow Jones Industrial Average futures are up 18 points and are trading 0.1% above fair value. Equity futures are somewhat positive but little changed from their flat lines as investors digest the latest slate of earnings news. There’s likely some hesitation in play after several downbeat sessions had the main indices give back some of their 2023 gains. Treasury yields and the U.S. Dollar Index are moving higher this morning. The 2-yr note yield is up four basis points to 4.16%, and the 10-yr note yield is up three basis points to 3.43%. The U.S. Dollar Index is up 0.3% to 102.35, with USD/JPY +1.3% to 130.10. Energy complex futures are mixed. WTI crude oil futures are up 0.6% to $81.09/bbl, and natural gas futures are down 0.7% to $3.10/mmbtu. Economic data today is limited to the December Existing Home Sales (Briefing.com consensus 3.96 million; prior 4.09 million) at 10:00 a.m. ET. (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets: The S&P 500 traded down… Read More
