Headline News: The S&P 500 futures are up 16 points and are trading 0.3% above fair value. The Nasdaq 100 futures are up 51 points and are trading 0.3% above fair value. The Dow Jones Industrial Average futures are up 103 points and are trading 0.3% above fair value. This morning’s positive bias in the equity futures market is rooted in an expectation for some rebound action following large losses yesterday and this month. Gains in mega-cap stocks have been supportive of the futures trade, along with a drop in market rates. The 2-yr note yield is down seven basis points to 5.07%, and the 10-yr note yield is down four basis points to 4.51%. Another factor contributing to the positive bias this morning is news that the People’s Bank of China injected liquidity and pledged to step up policy coordination. In other news, the Senate unveiled a stopgap funding bill that would avert a government shutdown until November 17. Also, the writers’ strike against Hollywood studios has now ended after both sides reached an agreement on a deal. The MBA Mortgage Applications Index declined 1.3%, with purchase applications falling 1% and refinance applications dropping 2%. (Michael Gibbs, Managing Director, Lead… Read More
Headline News: The S&P 500 futures are down 16 points and are trading 0.3% below fair value. The Nasdaq 100 futures are down 57 points and are trading 0.5% below fair value. The Dow Jones Industrial Average futures are down 112 points and are trading 0.3% below fair value. Stock futures point to losses right out of the gate following yesterday’s modest gains. Relatively soft mega-cap stocks, a missed interest payment by Evergrande, and the specter of rates staying higher for longer are hanging over the broader market. The 2-yr note yield is unchanged at 5.12%, and the 10-yr note yield is down four basis points to 4.50%. Notably, JPMorgan Chase CEO Dimon said that the world may not be ready for interest rates to reach 7%, according to The Times of India. In other developments, bipartisan negotiators are looking to shorten the duration of the near-imminent government shutdown, according to Bloomberg. (Michael Gibbs, Managing Director, Lead Portfolio Manager Markets: The S&P 500 rallied to close higher at 4337.44 and is now back inside the lower Bollinger Band. The index also moved back above the support level at 4328.08, and the RSI index turned higher, closing at 35.99. We feel… Read More
Headline News: The S&P 500 futures are up 13 points and are trading 0.2% above fair value. The NASDAQ 100 futures are up 75 points and are trading 0.4% above fair value. The Dow Jones Industrial Average futures are up 53 points and are trading 0.1% above fair value. Stock futures point to a higher open following yesterday’s retreat. Elevated Treasury yields are top of mind for participants, along with the Fed’s higher for longer messaging. The 2-yr note yield is down two basis points to 5.11%, and the 10-yr note yield is unchanged from yesterday at 4.48%. The Bank of Japan made no changes to its policy stance, as expected; meanwhile, Bloomberg reports that China is looking at relaxing restrictions on foreign investment. The UAW (United Auto Workers) is set to expand its strike if no significant progress is made by noon today. Eurozone’s flash September Composite PMI improved from August but remained below 50.0 (i.e., in contraction), at 9:45 a.m. ET, the preliminary September S&P Global US Manufacturing PMI and S&P Global US Services PMI reports will be released. (Michael Gibbs, Managing Director, Lead Portfolio Manager Markets: The S&P 500 sold off sharply, closing at 4330.00 lower by… Read More
Headline News: The S&P 500 futures are down 34 points and are trading 0.8% below fair value. The NASDAQ 100 futures are down 165 points and are trading 1.0% below fair value. The Dow Jones Industrial Average futures are down 185 points and are trading 0.5% below fair value. Equity futures have a decidedly negative disposition, pressured by ongoing fallout after the latest updates from the Fed that suggested rates will remain higher for longer. The 10-yr Treasury note yield is up seven basis points to 4.44%, which is acting as a headwind for stocks. In other central bank news, the Bank of England left its bank rate at 5.25% against expectations that were split between a pause and another hike. The Swiss National Bank also left its policy rate unchanged, at 1.75%, while central banks in Sweden and Norway raised their rates by 25 bps apiece. Additionally, the Hong Kong Monetary Authority held its policy rate at 5.75%, as expected. Separately, a CNBC report suggested that Hollywood writers and studios are close to reaching an agreement that would end the strike; meanwhile, Reuters reports that the UAW (United Auto Workers) and the Big Three are still far apart in… Read More
Headline News: The S&P 500 futures are up 10 points and are trading 0.2% above fair value. The NASDAQ 100 futures are up 30 points and are trading 0.2% above fair value. The Dow Jones Industrial Average futures are up 95 points and are trading 0.3% above fair value. The stock market is poised for a higher open in front of the FOMC announcement today at 2:00 p.m. ET. That announcement will be accompanied by an updated Summary of Economic Projections and dot plot and will be followed by Fed Chair Powell’s press conference at 2:30 p.m. ET. The positive bias has been supported by falling market rates and oil prices. WTI crude oil futures slipped back below $90.00/bbl, down 0.9% to $89.69/bbl. The 2-yr note yield is down four basis points to 5.07%, and the 10-yr note yield is down two basis points to 4.35%, helped in part by some better-than-expected August CPI data out of the UK. The People’s Bank of China made no changes to its one-year and five-year loan prime rates, as expected. The weekly MBA Mortgage Applications Index rose 5.4%, with refinance applications jumping 13.0% and purchase applications increasing 2.0%. (Michael Gibbs, Managing Director, Lead Portfolio… Read More
Headline News: The S&P 500 futures are up 4 points and are trading 0.1% above fair value. The NASDAQ 100 futures are up 12 points and are trading 0.1% above fair value. The Dow Jones Industrial Average futures are up 24 points and are trading 0.1% above fair value. Stock futures indicate a higher open, but upside moves have been modest as participants await the FOMC (Federal Open Market Committee) policy decision, updated Summary of Economic Projections and dot plot, and Fed Chair Powell’s press conference on Wednesday. Separately, the OECD (Organization for Economic Co-operation and Development) is projecting global growth of 3.0% in 2023 and 2.7% in 2024, noting there are significant downside risks. Its forecast for the US calls for 2.2% growth in 2023 and 1.3% in 2024. The UAW (United Auto Workers) threatened to extend its strike to more plants if there is not enough progress with automakers by noon on Friday. The 2-yr note yield is up two basis points to 5.06% and the 10-yr note yield is unchanged from yesterday at 4.32%. WTI crude oil futures are up 0.7% to $91.17/bbl. (Michael Gibbs, Managing Director, Lead Portfolio Manager Markets: The S&P 500 traded flat most… Read More
Headline News: The S&P 500 futures are down 7 points and are trading 0.2% below fair value. The NASDAQ 100 futures are down 49 points and are trading 0.3% below fair value. The Dow Jones Industrial Average futures are down 29 points and are trading 0.1% below fair value. Equity futures point to a lower open to start the week. Participants are waiting to see how the market responds to Friday’s sell-off and are hesitant in front of Wednesday’s FOMC policy decision. The market is not expecting a rate hike and will be more focused on the updated Summary of Economic Projections and the tone that Fed Chair Powell takes at his press conference. Separately, the UAW strike persists, with Bloomberg reporting that a Stellantis (STLA) offer to increase pay by nearly 21% over four years, with a 10% immediate increase, has been turned down by the UAW. Also, House Republicans presented a short-term bill that would avoid a government shutdown until Oct. 31, according to Reuters. Treasury yields and oil prices are moving higher this morning. The 2-yr note yield is up one basis point to 5.05%, and the 10-yr note yield is up one basis point to 4.34%.… Read More
Headline News: The S&P 500 futures are up 2 points and are trading 0.1% above fair value. The NASDAQ 100 futures are down 23 points and are trading 0.1% below fair value. The Dow Jones Industrial Average futures are up 68 points and are trading 0.2% above fair value. Equity futures indicate a mixed open on this quarterly options expiration day. United Auto Workers launched targeted strikes at three manufacturing plants after failing to reach a deal with the Big Three automakers. Rising oil prices ($90.52/bbl, +0.36, +0.4%) and Treasury yields are also keeping the market in check. The 2-yr note yield is up two basis points to 5.03% and the 10-yr note yield is up three basis points to 4.32%. China reported better-than-expected August industrial production and retail sales data. (Michael Gibbs, Managing Director, Lead Portfolio Manager Markets: The S&P 500 rallied, surprisingly, sharply, moving well past the 50-day moving average to close higher at 4505.10. The trading came with good volume of 2,255,529,984, and 80% of that was up volume. Also, the RSI index continued to move higher to support the rally. The close above the 50-day moving average could signal the potential start of a new uptrend,… Read More
Headline News: The S&P 500 futures are up 15 points and are trading 0.3% above fair value. The NASDAQ 100 futures are up 62 points and are trading 0.4% above fair value. The Dow Jones Industrial Average futures are up 85 points and are trading 0.2% above fair value. The tone is subject to change, however, with the impending 8:15 a.m. ET release of the ECB policy decision and 8:30 a.m. ET release of the weekly jobless claims report, the August Producer Price Index, and the August Retail Sales report. In other developments, the People’s Bank of China will lower the required reserve ratio by 25 bps, effective September 15, for all banks that have not implemented a 5.0% reserve ratio, oil prices are up 1.4% to $89.74/bbl, and the automakers and the United Auto Workers union remain far apart in negotiations, according to The Wall Street Journal, raising the potential for a strike. The 2-yr note yield is unchanged at 4.98%, and the 10-yr note yield is unchanged at 4.26%. (Michael Gibbs, Managing Director, Lead Portfolio Manager) Markets: The S&P 500 tested the 50-day moving and failed, but the index closed higher at 4467.44, while the RSI index closed… Read More
Headline News: Inflation posted its biggest monthly increase this year in August as consumers faced higher prices on energy and a variety of other items. The consumer price index, which measures costs across a wide variety of goods and services, rose a seasonally adjusted 0.6% for the month and was up 3.7% from a year ago, the U.S. Department of Labor reported Wednesday. Economists surveyed by Dow Jones were looking for respective increases of 0.6% and 3.6%. However, excluding volatile food and energy, core CPI increased 0.3% and 4.3%, respectively, against estimates of 0.2% and 4.3%. Federal Reserve officials focus more on the core as it provides a better indication of where inflation is heading over the long term. Energy prices fed much of the gain, rising 5.6% on the month, an increase that included a 10.6% surge in gasoline. Food prices rose 0.2%, while shelter costs, which make up about one-third of the CPI weighting, increased 0.3%. Stock market futures initially fell following the report, then rebounded. Treasury yields were higher across the board. (Jeff Cox CNBC) Markets: The S&P 500 closed lower at 4461.90, while the RSI index moved back below the 50 level, closing at 49.73. The… Read More
