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 18 points and are trading 0.2% above fair value. The Dow Jones Industrial Average futures are down 11 points and are trading slightly below fair value. Equity futures are mixed and little changed from the flat line. There is not a lot of conviction this morning ahead of the FOMC rate hike decision at 2:00 p.m. ET followed by Fed Chair Powell’s press conference at 2:30 p.m. ET. In overseas news, South Korea’s CPI increased at its fastest yr/yr pace (+5.7%) since December 2008 in the October reading. China has implemented a 7-day lockdown of the area around the Foxconn iPhone manufacturing plant in Zhengzhou, according to Reuters. Shipping giant Maersk, seen as a gauge for global trade, beat Q3 expectations but warned of “dark clouds on the horizon” as demand slows, according to CNBC. The weekly MBA Mortgage Application Index fell 0.5% with purchase applications falling 1.0% and refinancing applications rising 0.2%. Other data to expect today include: 8:15 ET: October ADP Employment Change (Briefing.com consensus 198,000; prior 208,000) 10:30 ET: Weekly crude oil… Read More
Headline News: The S&P 500 futures are up 36 points and are trading 1.0% above fair value. The Nasdaq 100 futures are up 135 points and are trading 1.2% above fair value. The Dow Jones Industrial Average futures are up 201 points and are trading 0.6% above fair value. Equity futures are higher this morning after yesterday’s modest retreat. First-of-the-month inflows, falling Treasury yields, and speculation that China could soon exit its zero-Covid policy are among the early support factors, along with some M&A buzz that has followed reports of Johnson & Johnson (JNJ) acquiring Abiomed (ABMD) for $16.6 billion in cash. Earnings news has generally been better than expected, and Treasury yields are declining, which is helping to boost sentiment in the market. The 10-yr note yield dropped back below 4.00%, down 13 basis points to 3.94%. The 2-yr note yield is down six basis points to 4.43%. There has been a relief rally in Chinese stocks, and U.S. stocks with high exposure to the Chinese market, after speculation circulated on social media that China is preparing to gradually exit its zero COVID-19 policy, according to Bloomberg. This is unconfirmed by Chinese authorities. In other news, the Reserve Bank… Read More
Headline News: The S&P 500 futures are down 12 points and are trading 0.3% below fair value. The Nasdaq 100 futures are down 52 points and are trading 0.5% below fair value. The Dow Jones Industrial Average futures are down 83 points and are trading 0.2% below fair value. Equity futures are somewhat weak this morning following the recent rally as some profit-taking efforts kick in at month’s end. Market participants are digesting worse-than-expected economic data from the eurozone, which saw CPI hit an all-time high in October of 10.7% year-over-year. Also, China’s Manufacturing PMI for October fell to its lowest level since July, slipping back into contraction with a sub-50 reading (49.2). New COVID cases in parts of China are prompting new lockdown measures. Disney’s Shanghai theme park suspended operations Monday, according to CNBC, and iPhone production could reportedly be at risk due to COVID cases at the Foxconn manufacturing facility. Treasury yields are inching higher this morning. The 10-yr note yield is up three basis points to 4.04%, and the 2-yr note yield is up six basis points to 4.48%. Economic data today is limited to the October Chicago PMI reading (Briefing.com consensus 46.0; prior 45.7), which is… 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 100 points and are trading 0.8% below fair value. The Dow Jones Industrial Average futures are down 8 points and are trading roughly in line with fair value. Equity futures are lower this morning as market participants digest the disappointing guidance from Amazon (AMZN) accompanying their earnings report after yesterday’s close. There may also be a feeling of trepidation in play ahead of the latest inflation reading. The September Personal Income and Spending report, which includes the PCE Price Index, is out at 8:30 a.m. ET. Treasury yields are inching higher as the 10-yr note yield breaches the 4.00% level. The 10-yr note yield is up six basis points to 4.01%, and the 2-yr note yield is up two basis points to 4.36%. The Biden administration is reportedly considering additional restrictions on exports of advanced technology to China, according to The New York Times. Also, the Bank of Japan maintained its ultra-loose policy stance and raised its inflation forecast for 2022 to 2.9% from 2.3%. (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets: The S&P… Read More
Headline News: The U.S. economy posted its first period of positive growth for 2022 in the third quarter, at least temporarily easing inflation fears, the Bureau of Economic Analysis reported Thursday. GDP, a sum of all the goods and services produced from July through September, increased at a 2.6% annualized pace for the period, against the Dow Jones estimate for 2.3%. That reading follows consecutive negative quarters to start the year, meeting a commonly accepted definition of recession, though the National Bureau of Economic Research is generally considered the arbiter of downturns and expansions. The growth came in large part due to a narrowing trade deficit, which economists expected and considered to be a one-off occurrence that won’t be repeated in future quarters. GDP gains also came from increases in consumer spending, nonresidential fixed investment, and government spending. Declines in residential fixed investment and private inventories offset the gains, the BEA said. The report comes as policymakers fight a pitched battle against inflation, which is running around its highest levels in more than 40 years. Price surges have come due a number of factors, many related to the pandemic but also pushed by the unprecedented fiscal and monetary stimulus that… Read More
Headline News: The S&P 500 futures are down 28 points and are trading 0.7% below fair value. The Nasdaq 100 futures are down 198 points and are trading 1.7% below fair value. The Dow Jones Industrial Average futures are down 30 points and are trading 0.1% below fair value. The Nasdaq 100 futures suffer heavy losses, weighed down by Alphabet (GOOG) and Microsoft (MSFT). Things are holding up relatively better for the Dow and S&P 500 futures, which are drawing a measure of support from the notion that the Fed will take a less aggressive rate hike approach after the November meeting due to the emerging signs of an economic slowdown. Treasury yields are moving lower. The 2-yr note yield is down two basis points to 4.45%, and the 10-yr note yield is down five basis points to 4.05%. New lockdown measures have reportedly been implemented in Wuhan amid rising Covid cases. In other developments, UK Prime Minister Sunak has delayed the release of the government’s fiscal plan to Nov. 17. The weekly MBA Mortgage Applications Index was down 1.7%, with purchase applications down 2.0% and refinancing applications down 0.1%. (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets:… Read More
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
