Headline News: The S&P 500 futures are up 32 points and are trading 0.8% above fair value. The Nasdaq 100 futures are up 109 points and are trading 0.7% above fair value. The Dow Jones Industrial Average futures are up 191 points and are trading 0.7% above fair value. The futures for the major indices are indicating a modestly higher open. The BofA global fund manager survey reportedly indicated exposure to risk assets has been reduced to levels that weren’t seen even during the global financial crisis and exposure to cash is at the highest level since 2001, according to Bloomberg. Also in play is the average U.S. gasoline prices falling below $4.50/gallon for the first time in nine weeks. The energy complex futures have pulled back this morning. WTI crude oil futures are down 2.4% to $100.12/bbl. Unleaded gasoline futures are down 1.5% to $3.21/gal. Natural gas futures are down 2.0% to $7.23/mmbtu. In addition, the U.S. dollar is weakening, with the EUR/USD up 1.2% to 1.0261. Also, the U.S. Dollar Index is down 0.9% to 106.42. Separately, the ECB may be considering a 50 basis point rate hike this week instead of the expected 25 basis points, according… Read More
Headline News: The S&P 500 futures are up 37 points and are trading 1.0% above fair value. The Nasdaq 100 futures are up 145 points and are trading 1.2% above fair value. The Dow Jones Industrial Average futures are up 327 points and are trading 1.0% above fair value. The futures for the major indices are indicating a modestly higher open to follow through with Friday’s gains. There’s relatively positive central bank news in the mix this morning. People’s Bank of China Governor Yi Gang says the bank will step up with stronger support for China’s struggling economy. Also, the WSJ noted that the Fed is likely to hike 75 basis points at its next meeting, versus a feared 100 basis point rate hike. Other factors indicating a more risk-on tone are the rise in oil prices and strength in cryptocurrencies. WTI crude oil futures are back near the $100.00/bbl level, up 1.0% to $98.58/bbl currently. Bitcoin is up 3.4% to $22,063 and Ethereum is up 9.4% to $1,472.24. The 2-yr Treasury note yield is up two basis points 3.15% and the 10-yr note yield is up two basis points to 2.95%. (Michael Gibbs, Director of Equity Portfolio & Technical Strategy)… Read More
Headline News: The S&P 500 futures are down 54 points and are trading 1.4% 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 422 points and are trading 1.4% below fair value. There is still a bit of hesitation driving sentiment today after JPMorgan (JPM 108.56, -3.35, -3.0%) reported worse-than-expected earnings and revenue. JPMorgan also suspended stock buybacks. A few Fed officials have made comments fueling fears of a 100 bps rate hike for the next meeting instead of the expected 75 bps. Atlanta Fed President Bostic (not an FOMC voter) said “everything is in play” to combat price pressures. Cleveland Fed President Mester (FOMC voter) said that the central bank will need to go well beyond the neutral level of rates. Concerns about European fragmentation is in play with the potential collapse of the Italian government. Italy’s 5-star movement said it would not participate in a parliamentary confidence vote and Prime Minister Draghi said he would not head an administration without the 5-star movement’s participation. The 2s10s spread has become more inverted with the 2-yr note yield up five basis points to… Read More
Headline News: Morning Briefing – Futures edge higher ahead of CPI report The futures for the major indices indicate a modestly higher open despite factors fueling growth concerns. The S&P 500 futures are up 12 points and are trading 0.3% above fair value. The Nasdaq 100 futures are up 51 points and are trading 0.4% above fair value. The Dow Jones Industrial Average futures are up 95 points and are trading 0.3% above fair value. The market slid into the close yesterday after traders passed around a purported leak of a June CPI report, which turned out to be fake. The actual report will be released at 8:30 ET and it is likely to invite a volatile response. Fitting with the growth concern narrative, the International Monetary Fund has cut its U.S. growth projections from 2.9% to 2.3% and warned avoiding a recession is “increasingly challenging”. In addition, the Bank of Korea and the Reserve Bank of New Zealand raised their respective rates by 50 bps, as expected. The energy complex is mostly trending higher before the open. WTI crude oil futures are up 1.1% to $96.87/bbl. Natural gas futures are up 5.6% to $6.35/mmbtu. Going against the grain, unleaded… Read More
Headline News: The S&P 500 futures are down 22 points and are trading 0.6% below fair value. The Nasdaq 100 futures are down 6 points and are trading roughly in line with fair value. The Dow Jones Industrial Average futures are down 216 points and are trading 0.7% below fair value. The futures for the major indices are indicating a lower open, following through with yesterday’s losses. General growth concerns are still in play with the 2s10s spread remaining inverted and the euro falling towards parity. Overseas news paints a picture of global growth concerns. Spain’s Prime Minister Sanchez warned that economic growth in the coming months will be slower than expected. The Bank of Korea and Reserve Bank of New Zealand are expected to announce 50-bps rate hikes tomorrow. Pressure on earnings will be in focus as Q2 results start coming in. PepsiCo (PEP 172.14, +1.67, +1.0%) reported better-than-expected earnings and revenue as well as reaffirming EPS guidance and raised organic revenue guidance for FY22. WTI crude oil futures have fallen below the $100.00/bbl mark, down 4.6% to $99.15/bbl. Unleaded gasoline futures are also falling this morning, down 4.8% to $3.29/gal. Natural gas futures are up 4.0% to $6.57/mmbtu.… Read More
Headline News: The S&P 500 futures are down 32 points and are trading 0.8% below fair value. The Nasdaq 100 futures are down 106 points and are trading 0.9% below fair value. The Dow Jones Industrial Average futures are down 176 points and are trading 0.5% below fair value. Coming off the weekend, sentiment is being pressured by growth concerns. Market participants may be cautious ahead of the CPI report released on Wednesday. Macau has announced new COVID lockdown measures, including closing down casinos for a week-long period. Shanghai discovered the increasingly dominant omicron subvariant of COVID, fueling fears of new lockdown measures there. Additionally, Beijing fined some of the country’s largest internet companies for failing to make proper antitrust declarations on previous deals. Separately, French Minister Le Maire warns to prepare for a total cutoff of Russian gas saying, “Today that is the most likely option.” WTI crude oil futures are down 2.7% to $101.98/bbl. Natural gas futures are up 4.6% to $6.24/mmbtu. Unleaded gasoline futures are down 1.4% to $3.39/gal. The 2-yr note yield is down five basis points to 3.07% while the 10-yr note yield is down four basis points to 3.06%. (Michael Gibbs, Director of Equity Portfolio… Read More
Headline News: The futures for the major indices are mixed as market participants wait for the June jobs report. The S&P 500 futures are down 9 points and are trading 0.2% below fair value. The Nasdaq 100 futures are down 51 points and are trading 0.4% below fair value. The Dow Jones Industrial Average futures are up 12 points and are trading roughly in line with fair value. In overseas news, Japan’s former Prime Minister Shinzo Abe was assassinated while giving a speech at a campaign event. Beijing walked back its earlier announcement indicating mainland China’s first vaccine mandate. On a related note, President Biden is set to meet with advisors today to discuss cutting Chinese tariffs. The 2s10s spread remains inverted heading into the open. The 2-yr note yield is down two basis points to 3.00% while the 10-yr note yield is down three basis points to 2.98%. Energy futures have pulled back some. WTI crude oil futures are down 0.4% to $102.35/bbl. Natural gas futures are down 1.9% to $6.14/mmbtu. Unleaded gasoline futures are down 1.3% to $3.37/gal (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets: The SP&P 500 rallied past resistance at 3900.86 and closed… Read More
Headline News: The S&P 500 futures are up 11 points and are trading 0.2% above fair value. The Nasdaq 100 futures are up 48 points and are trading 0.4% above fair value. The Dow Jones Industrial Average futures are up 128 points and are trading 0.4% above fair value. The market is poised to add to yesterday’s slim gains after a good showing from Asian and European equities. IMF Managing Director Kristalina Georgieva told Reuters the fund would soon downgrade its 2022 forecast for global economic growth for the third time this year. She said the outlook for the global economy had “darkened significantly,” and she could not rule out a possible global recession next year given the elevated risks. Boris Johnson announced his resignation as Conservative Party leader. As recently as last night, Johnson said he intended to stay and fight but said today, “It is clear now the will of the parliamentary Conservative party that there should be a new leader…” The 2s10s spread remains inverted. The 2-yr note yield is up four basis points to 2.98%, while the 10-yr note yield is up one basis point to 2.92%. (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) … 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 58 points and are trading 0.5% below fair value. The Dow Jones Industrial Average futures are down 99 points and are trading 0.3% below fair value. The 2s10s spread remains inverted. The 2-yr note yield is flat at 2.82% while the 10-yr note yield is down one basis point to 2.80%. Shanghai reported the highest number of new COVID cases in three weeks, raising the potential for renewed lockdown measures. In other overseas news, Norwegian oil and gas workers will return to work after an imposition of forced settlements by the government. The energy futures are rising this morning after being hit hard yesterday. WTI crude oil futures are up 0.7% to $100.16/bbl. Natural gas futures are up 2.3% to $5.62/mmbtu. Unleaded gasoline futures are up 0.8% to $3.35/gal. On a related note, the OPEC Secretary-General, Mohammad Barkindo, unexpectedly passed away last night just three weeks shy of the end of his second term. Separately, cryptocurrency lender Voyager Digital has filed for bankruptcy after Three Arrows Capital failed to pay back a $650 million loan. Looking… 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 128 points and are trading 1.3% below fair value. The Dow Jones Industrial Average futures are down 243 points and are trading 0.7% below fair value. The early disposition leans negatively with growth concerns continuing to act as a headwind. Those concerns have shown up in a flattening Treasury yield curve and the euro trading at a 20-year low against the dollar (EUR/USD currently 1.0295). Other macro factors at work in keeping a lid on bullish sentiment include reports that the eurozone’s Sentix Economic Confidence Index saw its lowest reading on Monday (-26.4) since May 2020, South Korea had its highest inflation print (6.0% yr/yr) since 1998, the Yangtze Delta region has seen a rise in COVID cases, and oil and gas workers in Norway have gone on strike over pay. Separately, the Reserve Bank of Australia raised its key policy rate by 50 basis points, as expected, to 1.35%, another crypto lender, Vauld, has paused customer withdrawals, Russia is shutting down the Nord Stream 1 pipeline for summer maintenance work, and the Biden Administration is said… Read More
