Headline News: The S&P 500 futures are down 2 points and are trading slightly below fair value. The Nasdaq 100 futures are down 16 points and are trading slightly below fair value. The Dow Jones Industrial Average futures are up 18 points and are trading slightly above fair value. Equity futures are little changed from the flat line as participants process the Fed’s latest moves and guidance. Rates are still moving higher from here, and the Fed is signaling that they will not come down anytime soon. Many other central banks are following suit. The Swiss National Bank announced a 75-basis point rate hike to 0.5%. That key policy rate has been negative since 2015. Not long ago, the Bank of England raised its bank rate by 50 basis points to 2.25%, with three policymakers voting for a 75-bps increase. Norway’s Norges Bank raised rates by 50 basis points to 2.25%, as expected, but said future rate hikes would be more gradual. Separately, the Bank of Japan left its key rate unchanged at -0.1%, and Governor Kuroda said the bank wouldn’t be raising rates for some time. In related news, the Ministry of Finance has intervened to support the yen… Read More
Headline News: The S&P 500 futures are up 10 points and are trading 0.3% above fair value. The Nasdaq 100 futures are up 4 points and are trading slightly above fair value. The Dow Jones Industrial Average futures are up 88 points and are trading 0.3% above fair value. Equity futures are in the green but little changed from the flat line. There’s not a lot of conviction ahead of the FOMC decision at 2:00 p.m. ET. The focal point for participants will be the updated terminal rate (from 3.80%) in the Summary of Economic Projections. In other central bank news, there was continued chatter about Japan intervening in the currency market to strengthen the yen ahead of the Bank of Japan’s policy meeting Thursday. The Asia Development Bank lowered its 2022 growth forecast for China to 3.3% from 5.0% and cut the outlook for 2023 to 4.3% from 5.2%. Separately, the British government announced a cap on electricity and gas prices for businesses that will be effective from October 1 through March 31. Russian President Putin announced a partial mobilization of troops in his country’s campaign in Ukraine, boosting the price of oil. WTI crude oil futures are up… 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 67 points and are trading 0.5% below fair value. The Dow Jones Industrial Average futures are down 114 points and are trading 0.3% below fair value. Equity futures indicate a lower open as Treasury yields tick higher. The 2-yr note yield is climbing towards 4.00%, up four basis points to 3.97%. The 10-yr note yield is back above 3.50%, up seven basis points to 3.54%. In overseas news, Sweden’s Riksbank announced a 100-bps rate hike to 1.75%, its largest increase since 1992. Germany’s August PPI was a big surprise to the upside at 7.9% month-over-month versus an expected 1.6% month-over-month increase. Japan’s August National CPI came in at 3.0% year-over-year, following a 2.6% increase in July. The September FOMC meeting starts today, and market participants will receive the rate hike decision at 2:00 p.m. ET tomorrow, along with an updated summary of economic projections. Later this morning, the August Housing Starts (Briefing.com consensus 1.448 million; prior 1.446 million) and Building Permits (Briefing.com consensus 1.610 million; prior 1.674 million) report will be released at 8:30 a.m. ET. (Michael… Read More
Headline News: The S&P 500 futures are down 34 points and are trading 0.9% below fair value. The Nasdaq 100 futures are down 118 points and are trading 1.0% below fair value. The Dow Jones Industrial Average futures are down 264 points and are trading 0.8% below fair value. Equity futures indicate a lower open driven by carryover downside momentum and rising Treasury yields, which continue to pressure investor sentiment. The 2-yr note yield is up seven basis points to 3.92%, and the 10-yr note yield is up five basis points to 3.50%. The former is the highest since 2007 while the latter is the highest since 2011. There’s likely an element of geopolitical angst in play this morning, too, after President Biden said during a weekend interview that the U.S. military would defend Taiwan in the event of an invasion by China. Market participants also await the September 20-21 FOMC meeting and rate hike decision this week. Economic data today is limited to the September NAHB Housing Market Index (Briefiing.com consensus 48; prior 49) at 10:00 a.m. ET. Energy complex futures are making downside moves. WTI crude oil futures are down 2.8% to $82.77/bbl, and natural gas futures are… Read More
Headline News: The S&P 500 futures are down 30 points and are trading 1.2% below fair value. The Nasdaq 100 futures are down 105 points and are trading 1.5% below fair value. The Dow Jones Industrial Average futures are down 209 points and are trading 1.0% below fair value. Equity futures are decidedly weak on this options expiration day following the warning from FedEx (FDX), which piled onto existing concerns about inflation and rate hikes with a backdrop of slowing global growth. Overseas, the UK had weaker-than-expected retail sales in August. Reserve Bank of Australia Governor Lowe said that rates are still too low at this time, adding that he sees “a few” rate hikes in the coming months. South Korea’s unemployment rate reached its lowest level in the 23-year history of the series. Separately, the 2-yr note yield is up two basis points to 3.88%, and the 10-yr note yield is unchanged at 3.46%. Energy complex futures are mixed ahead of the open. WTI crude oil futures are up 1.1% to $85.98/bbl, while natural gas futures are down 1.2% to $8.22/mmbtu. Market participants will receive the preliminary University of Michigan Consumer Sentiment reading (Briefing.com consensus 60.0; prior 58.2) for… Read More
Headline News: The S&P 500 futures are down 7 points and are trading 0.7% below fair value. The Nasdaq 100 futures are down 43 points and are trading 0.9% below fair value. The Dow Jones Industrial Average futures are down 4 points and are trading 0.3% below fair value. Equity futures are mixed, and little changed this morning. Market participants are in wait-and-see mode in front of a heavy slate of economic data this morning that includes August Retail Sales and weekly initial jobless claims. Reports indicate that rail companies and unions came to a tentative agreement to avoid a strike that would have begun at midnight tonight. In central bank news, the PBOC left its key interest rates unchanged. European Central Bank policymaker De Guindos acknowledged that price pressures in the eurozone have continued strengthening and broadening, while policymaker Kazaks said that rates might have to continue rising after February to get inflation back to the 2.0% target. Treasury yields are on the rise, with the 2-yr note yield up six basis points to 3.83% and the 10-yr note yield up three basis points to 3.45%. Energy complex futures are making downside moves. WTI crude oil futures are down… Read More
Headline News: The S&P 500 futures are down 6 points and are trading 0.7% below fair value. The Nasdaq 100 futures are down 23 points and are trading 0.8% below fair value. The Dow Jones Industrial Average futures are down 55 points and are trading 0.5% below fair value. Equity futures are modestly weaker as participants weigh concerns over the Fed raising rates higher than expected for longer than expected and the potential for a hard landing. This comes ahead of another inflation reading out later this morning, the August PPI release. Overseas, there was some speculation that the Bank of Japan is preparing to intervene in the currency market to slow the yen’s depreciation against the dollar. The MBA Mortgage Application Index fell 1.2% compared to last week. Purchase applications rose 0.2%, while refinancing applications fell 4.0%. Other economic data released today includes August PPI (Briefing.com consensus -0.1%; prior -0.5%) and core PPI (Briefing.com consensus +0.3%; prior +0.2%) at 8:30 a.m. ET and EIA Crude Oil Inventories (prior +8.84 million) at 10:30 a.m. ET. Treasury yields are on the rise this morning, with the 2-yr note yield up seven basis points to 3.83% and the 10-yr note yield up… Read More
Headline News: Stock futures dropped on Tuesday morning after an August inflation report came in hotter than expected. Dow Jones Industrial Average futures sank 406 points or about 1.3%. S&P 500 futures fell 1.7% and Nasdaq 100 futures slid 2.3%. The August consumer price index report showed a higher-than-expected reading for inflation. Headline inflation rose 0.1% month over month, even with falling gas prices. Core inflation rose 0.6% month over month. Economists surveyed by Dow Jones had been expecting a decline of 0.1% for overall inflation, with a rise of 0.3% for core inflation. (Jesse Pound and Carmen Reinicke: CNBC) Markets: The S&P 500 rallied for the fourth day and closed higher at 4110.41 and above resistance at 4079.22. So far this morning, the index has a suggested open of 4050.50 or -1.73% after the release of the August CPI. That would have the index open below support, and the 50-day moving average at 4036.89 will become possible support. If the selling picks up during the day, that 50 -day moving could be taken out just two days after being breached. So, caution is warranted today with any new buys. We are currently Intermediate-term bearish and short-term bullish. John… Read More
Headline News: The S&P 500 futures are up 23 points and are trading 0.6% above fair value. The Nasdaq 100 futures are up 84 points and are trading 0.7% above fair value. The Dow Jones Industrial Average futures are up 113 points and are trading 0.3% above fair value. Equity futures indicate a higher open driven by carryover momentum following last week’s rebound effort. There’s also some hesitation ahead of tomorrow’s August CPI report at 8:30 a.m. ET. The White House is expected to tighten restrictions on semiconductor chip exports to China, according to Reuters. In central bank news, there’s some speculation that China will lower its medium-term lending facility rate. European Central Bank policymakers are reportedly preparing to raise the key rate to 2.00% with some lobbying for restrictive policy. ECB policymaker Nagel said that clearer steps would need to be taken if inflation doesn’t ease, adding that it could exceed 10.0% at its peak, which is expected in December. Energy complex futures are making upside moves this morning. WTI crude oil futures are up 0.8% to $87.52/bbl. Natural gas futures are up 1.2% to $8.09/mmbtu. The US Dollar Index is down 0.8% to 108.13. The 2-yr Treasury note… Read More
Headline News: The S&P 500 futures are up 29 points and are trading 0.7% above fair value. The Nasdaq 100 futures are up 120 points and are trading 0.9% above fair value. The Dow Jones Industrial Average futures are up 197 points and are trading 0.6% above fair value. The equity futures market has a decidedly positive bias, with carryover momentum from recent gains driving the upside. Other support factors include softer-than-expected CPI and PPI readings out of China, a weakening dollar, better-than-expected results and guidance from DocuSign (DOCU), and bearish investor sentiment readings that are acting as a contrarian catalyst. The US Dollar Index is down 0.7% to 108.94. EUR/USD is up 0.6% to 1.0054. USD/JPY is down 1.1% to 142.55 after BOJ Governor Kuroda said rapid moves in the yen are not desirable. At the same time, cryptocurrencies are in rally mode with the risk-on sentiment. The 2-yr Treasury note yield is flat at 3.49%, while the 10-yr note yield is down two basis points to 3.27%. (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets: The S&P 500 rallied again, closing higher at 4006.18, and looks set to test the critical 50-day moving average. However, the… Read More
