Headline News: Markets had nice gains on the day with advances of 1.34% on the Dow, 1.19% on the S&P, and 0.86% on the NASDAQ, but prices closed right at the short-term downtrend line on the S&P. 9 of 11 sectors were positive led by Health Care (+1.91%), Consumer Staples (+1.79%), and Tech (+1.38%). Despite the nice move higher, advancers only outpaced decliners by 1.36x to 1 on 53% up volume on the NYSE. Advancers barely led on the NASDAQ ad 1.04x to 1 on 51% up volume. Futures retreated from earlier gains as traders assessed a mixed bag of corporate earnings against the backdrop of the Federal Reserve’s ongoing rate-hike campaign. According to Bloomberg, about a fifth of S&P 500 companies had posted third-quarter earnings before today, with more than half outperforming estimates. Still, investors are concerned the effects of a slowing economy will be felt further down the line, with the Fed set to raise interest rates next week. (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets: The S&P 500 rallied past resistance at 3806.91, briefly touched the current downtrend line, and pulled back to close higher at 3797.34. RSI also continued to move higher, closing… Read More
Headline News: The S&P 500 futures are up 32 points and are trading 0.9% above fair value. The Nasdaq 100 futures are up 69 points and are trading 0.7% above fair value. The Dow Jones Industrial Average futures are up 285 points and are trading 0.9% above fair value. Equity futures are moving higher this morning, fueled by carryover upside momentum from last week’s turnaround effort. Global bond markets are also behaving better, acting as another upside-driving force. The UK gilt is down 26 basis points to 3.80% with growing expectations that Rishi Sunak will be elected Prime Minister and amid reports that Finance Minister Hunt is looking to potentially raise taxes. The 2-yr Treasury note yield is down four basis points to 4.46%, and the 10-yr note yield is down five basis points to 4.17%. Germany and the U.K. reported weaker-than-expected flash Manufacturing PMI readings for October, while Services readings from France and the U.K. also missed expectations. There is a notable weakness in Chinese stocks. Hong Kong’s Hang Seng dropped more than 6.0%. This comes after President Xi was elected to a third term, fueling worries about the state tightening control over the economy and carrying on with… Read More
Headline News: The S&P 500 futures are up 2 points and are trading 0.5% above fair value. The Nasdaq 100 futures are up 3 points and are trading 0.2% above fair value. The Dow Jones Industrial Average futures are up 113 points and are trading 0.4% above fair value. There’s a mostly positive disposition for equity futures this morning as Treasury yields pull back from overnight highs. The 10-yr note yield, which reached 4.18% earlier, sits at 4.13% now. The 2-yr note yield, which reached 4.62% overnight, sits at 4.58% now. Earnings news since yesterday’s close has generally been positive. Tesla (TSLA), however, has been a big exception with a disappointing miss on earnings and revenue estimates. It’s down roughly 5.0% in premarket action. Chinese authorities are debating shortening the coronavirus quarantine time for travelers, according to Bloomberg. Meanwhile, Beijing is locking down some residential compounds amid rise in coronavirus cases, according to Reuters. The yen is weakening, hitting 150.09 earlier, which marks its worst level since 1990. USD/JPY -0.1% to 149.79. (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets: The S&P 500 moved below support at 3712.00 and closed lower at 3695.16. The index is now back… Read More
Headline News: The S&P 500 futures are down 18 points and are trading 0.5% below fair value. The Nasdaq 100 futures are down 53 points and are trading 0.4% below fair value. The Dow Jones Industrial Average futures are down 117 points and are trading 0.3% below fair value. Equity futures reversed earlier gains as Treasury yields inched higher. Price action reflects skittishness about rates going even higher from here after Minneapolis Fed President Kashkari (2023 FOMC voter) said he believes the Fed might need to raise rates above 4.75% if there’s no improvement in core inflation, according to Reuters. The 10-yr note yield is up eight basis points to 4.08%, and the 2-yr note yield is up five basis points to 4.50%. Better-than-expected quarterly results from Netflix, Procter & Gamble, ASML, Travelers, and United Airlines have mitigated some selling interest. In overseas news, the Bank of England confirmed it would sell gilts in November but said it would hold off on selling longer-dated gilts this year. The UK’s September CPI jumped to 10.1% year-over-year, revisiting this year’s peak from July. President Biden announced the release of 15 million barrels of oil from the Strategic Petroleum Reserves to be delivered… Read More
Headline News: The S&P 500 futures are up 67 points and are trading 1.8% above fair value. The Nasdaq 100 futures are up 228 points and are trading 2.1% above fair value. The Dow Jones Industrial Average futures are up 475 points and are trading 1.6% above fair value. Equity futures are higher this morning thanks to carryover upside momentum from yesterday’s rebound. There’s some relief that bank earnings have been better than feared and a feeling the market was oversold on a short-term basis, which adds fuel to the rally effort. The BoA Fund Manager Survey showed cash allocation is at the highest level since 2001, acting as a contrarian rebound factor. UK Prime Minister Truss has apologized for recent market volatility but indicated she does not plan to step down. Meanwhile, the Bank of England refuted an FT report about a plan to delay quantitative tightening until the Gilt market calms. Secretary of State Anthony Blinken believes China will move to annex Taiwan on a “much faster timeline” than previously expected, according to Axios. White House will likely release 10-15 million barrels from the strategic petroleum reserve this week, but an export ban is not likely before the… Read More
Headline News: The S&P 500 futures are points up 41 and are trading roughly 1.3% above fair value. The Nasdaq 100 futures are points up 145 and are trading 1.4% above fair value. The Dow Jones Industrial Average futures are up 282 points and are trading 1.1% above fair value. Equity futures have a positive disposition this morning after the new UK Finance Minister, Jeremy Hunt, announced a reversal of almost all of the tax measures in the prior “mini-budget.” Mr. Hunt added that this would raise GBP 32 billion. This announcement has calmed the currency and UK gilt markets. The 10-yr gilt yield down is down 48 basis points to 3.91%. The US Dollar Index is down 0.3% to 112.99 with GBP/USD +1.0% to 1.1292. The 2-yr note yield is down five basis points to 4.45%, and the 10-yr note yield is down six basis points to 3.95%. Morgan Stanley Chief Strategist Wilson said in a note that there’s a good opportunity for the S&P 500 to have a sizable technical rally, assuming there are no major earnings disappointments or a recession. China reaffirmed its zero coronavirus policy, and President Xi added he is aiming to achieve a peaceful… Read More
Headline News: Stock futures rose Friday, building on the historic turnaround rally a day earlier as investors bet that inflation has peaked. Futures tied to the Dow Jones Industrial Average increased 314 points or 1.05%. S&P 500 futures gained 1.10%, and Nasdaq 100 futures ticked up 1.20%. Stock futures wavered in premarket trading on mixed results from big banks. JPMorgan Chase and Wells Fargo gained after revenue topped expectations, while Morgan Stanley and Citigroup both announced profit misses. The outlook for this earnings season is not good. Profit for S&P 500 companies increased a measly 2.4% in the third quarter, according to the latest analyst estimates collected by FactSet, the worst growth since the third quarter of 2020, the heart of the pandemic. When the third quarter began, earnings growth was expected to be 10% for the period, but rising costs and interest rates have eaten away at companies’ bottom lines. Leading up to the start of this reporting season, 65 S&P companies have issued negative guidance, compared to just 41 giving positive outlooks, FactSet data shows. (Carmen Reinicke and Tanya Macheel CNBC) Markets: The S&P 500 had a 5% swing after establishing a new low for the year… Read More
Headline News: Prices consumers pay for a wide variety of goods and services rose more than expected in September as inflation pressures continued to weigh on the U.S. economy. The consumer price index for the month increased 0.4% for the month, more than the 0.3% Dow Jones estimate, according to the Bureau of Labor Statistics. On a 12-month basis, so-called headline inflation was up 8.2%, off its peak around 9% in June but still hovering near the highest levels since the early 1980s. Excluding volatile food and energy prices, core CPI accelerated 0.6% against the Dow Jones estimate for a 0.4% increase. Core inflation was up 6.6% from a year ago. (Jeff Cox CNBC) Markets: The S&P 500 closed lower at 3577.03 and is also set for a sharply lower open today. The release of the September CPI report has the S&P 500 futures lower by 1.70% with a suggested open of 3527.50. If that holds, the index will be below the lower of the year,3568.45 9/30/2022, and make the next potential support level at 339.52. RSI remains divergent from the S&P 500, and the index could possibly be lower for six days in a row after today. That could… Read More
Headline News: The S&P 500 futures are up 24 points and are trading 0.6% above fair value. The Nasdaq 100 futures are up 94 points and are trading 0.9% above fair value. The Dow Jones Industrial Average futures are up 140 points and are trading 0.4% above fair value. Equity futures are showing some strength this morning. There appears to be a willingness to defend the 3,600 level for the S&P 500 after dropping below that level yesterday. Also, better-than-expected earnings and guidance from PepsiCo are helping investor sentiment. Market participants continue to play a waiting game ahead of the September PPI report at 8:30 a.m. ET this morning and the FOMC Minutes from the September meeting at 2:00 p.m. ET. President Biden says there is a chance of a “slight recession,” but he doesn’t think it will happen. He said there will be “consequences” for Saudi Arabia related to the OPEC decision, according to CNN. There is some speculation that British Prime Minister Truss will scrap some elements of her government’s budget, and the FT reported that the Bank of England signaled a willingness to extend its emergency bond-buying scheme past Friday, but a follow-up report noted that the… Read More
Headline News: The S&P 500 futures are down 19 points and are trading 0.5% below fair value. The Nasdaq 100 futures are down 64 points and are trading 0.5% below fair value. The Dow Jones Industrial Average futures are down 123 points and are trading 0.3% below fair value. Equity futures indicate a lower open as market participants play a waiting game ahead of the FOMC Minutes for the September meeting and key PPI and CPI reports later this week. Participants are also responding to news of the Bank of England intervening again to support the Gilt market. Today the BoE said it will buy index-linked gilts to mitigate dysfunction in the market and “fire sale” dynamics. The U.K.’s Pension and Lifetime Savings Association called on the Bank of England to continue its emergency Gilt buying program until at least the end of the month. GBP/USD +0.3% to 1.1087. New restrictions were announced in Chinese cities amid rising COVID cases. President Biden and G7 leaders are set to hold a virtual meeting today to discuss continued support of Ukraine, according to Reuters. The 10-yr Treasury note yield, which reached 4.00% overnight, is up four basis points to 3.93%. The 2-yr… Read More
