Headline News: The S&P 500 futures are up 21 points and are trading 0.5% above fair value. The Nasdaq 100 futures are up 64 points and are trading 0.4% above fair value. The Dow Jones Industrial Average futures are up 144 points and are trading 0.6% above fair value. Futures for the major indices are trading higher with a measure of relief that China’s response to Speaker Pelosi’s Taiwan visit was not more consequential. Attention has also shifted to earnings news which is generally better-than-feared. In other news, St. Louis Fed President Bullard (FOMC voter) said after yesterday’s close that he thinks a soft landing is possible, but the Fed will need to keep raising interest rates. He thinks the target range should be 3.75%-4.00% by the end of the year. Also, OPEC+ is meeting today, and there has been speculation that it will increase its production quota. Oil prices are moving higher this morning. WTI crude oil futures are up 0.6% to $95.00/bbl. Unleaded gasoline futures are up 1.6% to $3.11/gal. Natural gas futures are up 1.0% to $7.78. Treasury yields are rising. The 2-yr note yield is up two basis points to 3.09%, while the 10-yr note yield… Read More
Headline News: The S&P 500 futures are down 24 points and are trading 0.7% below fair value. The Nasdaq 100 futures are down 103 points and are trading 0.9% below fair value. The Dow Jones Industrial Average futures are down 165 points and are trading 0.4% below fair value. There’s a weaker tone in the futures market that’s mostly attributed to US-China tensions over House Speaker Pelosi’s anticipated Taiwan visit. Also, there are some reservations that the market rally in July is not sustainable given the deteriorating economic fundamentals. Separately, the Reserve Bank of Australia raised its cash rate by 50 basis points to 1.85%, as expected. According to Reuters, Saudi Arabia is expected to support an oil production increase at the OPEC+ meeting Wednesday. WTI crude oil futures are up 0.8% to $94.63/bbl. Natural gas futures are down 2.7% to $8.08/mmbtu. Unleaded gasoline futures are down 0.5% to $2.98/gal. Treasury yields are falling this morning, with the 2-yr note yield down five basis points to 2.86%, while the 10-yr note yield is down five basis points to 2.56%. (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets: The S&P 500 traded in a tight range and closed… Read More
Headline News: The S&P 500 futures are down 4 points and are trading 0.2% below fair value. The Nasdaq 100 futures are flat and are trading 0.2% below fair value. The Dow Jones Industrial Average futures are up 5 points and are trading 0.1% above fair value. There’s not a lot happening in the futures market this morning. After the big run in July, there is likely an expectation that the market will see some type of consolidation period. Also, Minneapolis Fed President Kashkari (FOMC voter in 2023) said he thinks the market got ahead of itself in anticipating a Fed pivot. In overseas news, Germany had a larger-than-expected decline in June retail sales month/month of 1.6%. In addition, House Speaker Pelosi started her Asian tour and is expected to visit Taiwan, according to CNN. China’s July Manufacturing PMI was 49.0, which is below 50 and indicative of contraction. Later this morning, market participants will receive the July IHS Markit Manufacturing PMI final reading (prior 52.3%) at 9:45 ET. July ISM Manufacturing Index and June Construction Spending are out at 10:00 ET. Also, the Treasury market is mixed, with the 2-yr note yield down two basis points to 2.88% while… Read More
Headline News: The S&P 500 futures are up 23 points and are trading 0.5% above fair value. The Nasdaq 100 futures are up 116 points and are trading 0.7% above fair value. The Dow Jones Industrial Average futures are up 53 points and are trading 0.3% above fair value. The futures for the major indices are indicating a modestly higher open fueled by carryover momentum from yesterday’s rally. This is aided by better-than-feared quarterly results from Apple (AAPL) and Amazon.com (AMZN), along with better-than-expected results from Chevron (CVX) and Exxon (XOM). Also, Eurozone GDP was up 0.7% qtr/qtr in Q2, meanwhile, the July CPI was at a record high of 8.9% yr/yr. Market participants will receive the June Personal Income and Spending report at 8:30 a.m. ET. The focal point for this report is the PCE Price Index. Also out at 8:30 a.m. ET is the Q2 Employment Cost Index. At 9:45 a.m. ET, the July Chicago PMI will be released while the July University of Michigan Consumer Sentiment Final reading is out at 10:00 a.m. ET. Energy futures are up this morning. WTI crude oil futures are up 2.4% to $98.75/bbl. Natural gas futures are up 1.0% to… Read More
Headline News: The S&P 500 futures are down 13 points and are trading 0.4% below fair value. The Nasdaq 100 futures are down 90 points and are trading 0.9% below fair value. The Dow Jones Industrial Average futures are down 64 points and are trading 0.1% below fair value. Amid a flood of earnings since yesterday’s close, the market is poised for a weaker open this morning. Market participants are seemingly concentrating on disappointing guidance from the likes of Meta Platforms (META), Qualcomm (QCOM), and Best Buy (BBY). Also, there are some contentions that the post-FOMC rally yesterday was overdone. In other developments, Senators Manchin and Schumer have reached an agreement to vote on the Inflation Reduction Act of 2022. The bill will reduce the deficit by $306 billion with a 15% minimum corporate tax, invest in the technologies needed for all fuel types — from hydrogen, nuclear, renewables, fossil fuels, and energy storage. Also, it extends ACA subsidies and allows Medicare to negotiate prescription drugs, and closes the carried interest loophole. In addition, the Senate passed a long-awaited $280 billion bill, which includes $52 billion for semiconductor manufacturing, to help the U.S. fend off competition from China. On a… Read More
Headline News: The S&P 500 futures are down 12 points and are trading 0.4% below fair value. The Nasdaq 100 futures are down 42 points and are trading 0.5% below fair value. The Dow Jones Industrial Average futures are 109 down points and are trading 0.3% below fair value. Futures for the major indices are weaker this morning, following a flurry of earnings news since yesterday’s close. The profit warning from Walmart (WMT 119.89, -12.13, -9.2%) seems to be taking precedence as a sentiment driver, as well as relatively lackluster guidance in general from other companies. Today starts the two-day FOMC meeting. Market participants are expecting a 75 basis point rate hike Wednesday but continue to mull uncertainty about the Fed’s guidance after that decision. In other news, yesterday, President Biden said he expects to speak with Chinese President Xi this week but noted that no meeting is set up yet. On a related note, The New York Times reports that the Biden administration has concerns that China could take some potential action in Taiwan in the next 18 months. Treasury yields are on a decline ahead of the open. The 2-yr note yield is down five basis points… Read More
Headline News: The S&P 500 futures are up 17 points and are trading 0.4% above fair value. The Nasdaq 100 futures are up 50 points and are trading 0.2% above fair value. The Dow Jones Industrial Average futures are up 152 points and are trading 0.6% above fair value. There are not a lot of big corporate headlines in play this morning ahead of a busy week for market-moving catalysts. Futures for the major indices are trading up on a general feeling that the Fed is getting closer to becoming less aggressive with rate hikes. Also, a feeling that inflation is at its peak and due to moderate remains in play. Some weekend developments included Treasury Secretary Yellen downplaying the idea of the U.S. being in recession, Russia bombing the Odessa port that facilitates grain shipments, and Reuters reporting that China is aiming to put together a property developer bailout fund of up to $44 billion. This week is full of market-moving catalysts, namely earnings reports from approximately 175 S&P 500 companies which make up nearly 50% of the index’s market cap, the FOMC decision on Wednesday, the advanced Q2 GDP reading, and the June Personal Income and Spending… Read More
Headline News: The S&P 500 futures are down 5 points and are trading 0.1% below fair value. The Nasdaq 100 futures are down 36 points and are trading 0.5% above/below fair value. The Dow Jones Industrial Average futures are up 49 points and are trading 0.2% above fair value. Early action is mixed with better-than-expected earnings in Dow component American Express (AXP ), helping to offset some weakness seen after yesterday’s close in the wake of earnings disappointments from several companies, namely Snap (SNAP ) and Seagate Tech (STX ). The former reported above-consensus earnings but did not provide Q3 guidance, citing uncertainties related to the operating environment as the reason. The latter reported weaker-than-expected earnings and revenue while issuing downside guidance and also warned of weakening global economic conditions. There was also economic data out overnight, which points to the weakening global economic conditions. Preliminary July PMI data from Japan, Australia, France, and Germany all showed weaker-than-expected results. This comes ahead of the July preliminary IHS Markit PMI at 9:45 a.m. ET. Sovereign bond markets rallied as the slowdown narrative picks up steam following the weaker-than-expected PMI reports. CNN reported that the Senate is expected to pass the CHIPS… Read More
Headline News: The S&P 500 futures are down 8 points and are trading 0.3% below fair value. The Nasdaq 100 futures are up 3 points and are trading 0.2% below fair value. The Dow Jones Industrial Average futures are down 109 points and are trading 0.3% below fair value. Futures for the major indices are mixed with mixed reactions to a lot of earnings reports since yesterday’s close. There’s some central bank news in play this morning with market participants waiting on the ECB decision at 8:15 a.m. ET. The ECB is expected to raise its key lending rates by 25 basis points, although there has been some chatter that a 50 basis point increase could also be discussed. In either case, this will be the ECB’s first rate hike in 11 years. Central bank outlier, the Bank of Japan, announced no change in its monetary policy. Its key lending rate remains unchanged at -0.1%. Japan’s central bank also lowered its GDP forecast to 2.4% from 2.9% while raising its inflation forecast to 1.3% from 0.9%. Russia resumed gas flows to Europe through the Nord Stream 1 but at reduced volumes seen before the scheduled maintenance. Italian Prime Minister Draghi… Read More
Headline News: The S&P 500 futures are down 8 points and are trading 0.3% below fair value. The Nasdaq 100 futures are down 15 points and are trading 0.3% below fair value. The Dow Jones Industrial Average futures are down 66 points and are trading 0.1% below fair value. Yesterday’s sentiment-driven gains have been stymied by an early inclination to sell into strength. The European Commission officially asked member states to cut their gas commission by 15% between August 1st and March 31st 2023. The 27 EU governments are asked to update their emergency plans and report to the Commission every two months on how they’re progressing to comply. Commission President Ursula von der Leyen said, “whether a partial major cut-off of Russian gas or a total cut-off of Russian gas, Europe needs to be ready.” In other European news, bond markets got some relief ahead of a key ECB meeting Thursday when Italy’s Prime Minister Draghi said he will stay in power provided parliamentarians back his coalition government. Inflation hit a 40-yr high of 9.4% in the UK, fueling fears that the Bank of England will have to be more aggressive. Bank of England Governor Bailey said policymakers will… Read More
