Headline News: The S&P 500 futures are down 33 points and are trading 0.8% below fair value. The Nasdaq 100 futures are down 141 points and are trading 1.1% below fair value. The Dow Jones Industrial Average futures are down 213 points and are trading 0.6% below fair value. This morning’s negative disposition is rooted in concerns about economic and earnings growth potential, which have been stirred by a larger-than-expected rate hike by the Reserve Bank of Australia (50 basis points to 0.85%), weaker-than-expected German factory orders for April, and Target (TGT) cutting its Q2 operating margin rate guidance in conjunction with a plan to reduce excess inventory. The bulk of the weakness in the futures market came ahead of Target’s warning, yet that warning has kept the pressure on since it is expected to be a harbinger of profit warnings from other retailers in coming weeks. Today’s economic calendar features the release of the April Trade Balance Report (8:30 a.m. ET) and the April Consumer Credit Report (3:00 p.m. ET). The 10-yr note yield is down one basis point to 3.03%. The 2-yr note yield is unchanged at 2.72%. WTI crude futures are down 0.3% to $118.11/bbl and… Read More
Headline News: The S&P 500 futures are up 45 points and are trading 1.1% above fair value; the Nasdaq 100 futures are up 186 points and are trading 1.5% above fair value; and the Dow Jones Industrial Average futures are up 284 points and are trading 0.9% above fair value. There is a nice bid in the futures market to begin the week. Market participants have been heartened by news reports indicating COVID restrictions in China’s largest cities are being rolled back. Also, there is a buzz around many Chinese-listed stocks following a report that Chinese regulators are ending their probe of Didi (DIDI). There is also some reporting that suggests the Biden Administration is considering lifting tariffs on some imported Chinese goods Separately, there is a nice rebound bid in Tesla (TSLA) after Elon Musk clarified that the company total headcount will increase, but that salaried positions should be fairly flat. That update has taken off some of the edge from his remark last Friday discussing employment at Tesla and his “super bad feeling” about the economy. There is no economic data of note out of the U.S. today. The 10-yr note yield is unchanged at 2.96%. WTI… Read More
Headline News: The S&P 500 futures are down 30 points and are trading 0.7% below fair value. The Nasdaq 100 futures are down 151 points and are trading 1.2% below fair value. The Dow Jones Industrial Average futures are down 180 points and are trading 0.5% below fair value. Concerns about economic conditions are behind the weakness seen this morning in the futures market. A declaration from RH, Inc. (RH) that it has seen a softening in demand, weaker-than-expected retail sales out of Germany, and higher-than-expected inflation out of South Korea are among the focal points, but the main focal point is Elon Musk’s remark that he has a “super bad feeling” about the economy. Musk indicated that Tesla (TSLA) needs to cut about 10% of its staff. That remark follows on the heels of JPMorgan Chase CEO Jamie Dimon saying earlier in the week that he thinks an “economic hurricane” is coming and it also comes in front of today’s release of the Employment Situation Report for May (8:30 a.m. ET) and ISM NonManufacturing Index for May (10:00 a.m. ET). The 10-yr note yield is up one basis point to 2.92%. The 2-yr note yield is up one basis… Read More
Headline News: The S&P 500 futures are up 19 points and are trading 0.5% above fair value. The Nasdaq 100 futures are up 83 points and are trading 0.7% above fair value. The Dow Jones Industrial Average futures are up 139 points and are trading 0.5% above fair value. The positive bias in the futures market has been helped by a pullback in oil prices and some better-than-expected earnings results and reassuring guidance from tech stocks NetApp (NTAP), MongoDB (MDB), and Elastic (ESTC). WTI crude futures are down 2.5% to $112.37/bbl following an FT report that suggests Saudi Arabia is ready to step up production to compensate for any significant drop in output from Russia due to the EU sanctions. Oil futures flirted with $120.00/bbl on Tuesday. Today’s session will feature a bevy of economic data, starting with the May ADP Employment Change Report at 8:15 a.m. ET and followed by the weekly initial claims and revised Q1 Productivity reports at 8:30 a.m. ET. The April Factory Orders Report will be released at 10:00 a.m. ET. Natural gas and oil inventory reports from the EIA will hit the wires at 10:30 a.m. ET and 11:00 a.m. ET, respectively. The 10-yr… Read More
Headline News: The S&P 500 futures are up 11 points and are trading 0.3% above fair value. The Nasdaq 100 futures are up 33 points and are trading 0.3 % above fair value. The Dow Jones Industrial Average futures are up 161 points and are trading 0.6% above fair value. Still, there is some reservation in the air as market participants digest Atlanta Fed President Bostic’s remark that his prior comments pertaining to a possible “pause” in September should not be interpreted as being a Fed put. On a somewhat related note, Treasury Secretary Yellen acknowledged that inflation is too high; meanwhile, WTI crude futures ($115.93, +1.26, +1.1%) are again pushing higher after testing $120.00/bbl yesterday. The Fed begins its balance sheet runoff program today amid the release of some key economic releases that include the April JOLTS – Job Openings Report and the May ISM Manufacturing Index. The 10-yr note yield is up four basis points to 2.88% and the 2-yr note yield is up five basis points to 2.59%. (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets: The S&P 500 briefly traded above support at 4157.87 but retreated to close lower on Tuesday at 4132.15. We… Read More
Headline News: The S&P 500 futures are down 20 points and are trading 0.5% below fair value. The Nasdaq 100 futures are down 10 points and are trading 0.1% below fair value. The Dow Jones Industrial Average futures are down 222 points and are trading 0.6% below fair value. Coming off the extended Memorial Day weekend, the corporate news flow is light in terms of market-moving relevance, yet a rash of macro considerations has stirred some mixed trading interest. The biggest talking points this morning include an agreement by EU leaders to ban 90% of Russian crude oil imports by the end of the year, Shanghai engaging in more reopening efforts, record-high inflation prints for the eurozone in May, Fed Governor Waller (FOMC voter) endorsing 50 basis point rate hikes at several meetings and indicating his support for a policy rate above neutral by the end of the year, and China reporting manufacturing and non-manufacturing PMI data for May that was improved from April but still in contraction territory with sub-50 readings. President Biden plans to meet with Fed Chair Powell at the White House today to discuss the economy but has said he will not do anything to compromise… Read More
.Headline News: The S&P 500 futures are up four points and are trading 0.2% above fair value. The Nasdaq 100 futures are up 19 points and are trading 0.1% above fair value. The Dow Jones Industrial Average futures are down 20 points but are trading 0.1% above fair value. It has been a very good week thus far for the major indices, which have shown a propensity to emphasize positive news over bad news (or to find the good in the bad). The scope of losses coming into this week (S&P 500 and Nasdaq down seven straight weeks and DJIA down eight straight weeks) has created a setup for that mentality and has fostered bargain-hunting interest in many beaten-down stocks. The market’s resilient disposition is on display again this morning, as market participants are seemingly looking through disappointing earnings and guidance from Gap (GPS) and American Eagle Outfitters (AEO), and indications of margin pressures at Costco (COST), to upbeat results and guidance from the likes of Dell (DELL) and Ulta Beauty (ULTA) as grounding points. Soon, they will be looking at the April Personal Income and Spending Report. It is out at 8:30 a.m. ET and it will include the… Read More
Headline News: The S&P 500 futures are up 24 points and are trading 0.6% above fair value; the Nasdaq 100 futures are up 30 points and are trading 0.2% above fair value; and the Dow Jones Industrial Average futures are up 197 points and are trading 0.7% above fair value. The tone had been cautious in the wake of disappointing fiscal Q2 revenue guidance from NVIDIA (NVDA), but a spate of better-than-expected/better-than-feared earnings results and outlooks from the retail space, along with an increased Q2 revenue growth outlook from Southwest Airlines (LUV) and JetBlue (JBLU), have put some spring in the futures market’s step. Additionally, guidance from Shanghai that its lockdown should end June 1, and a burgeoning belief that the market is due for a notable rebound, with some help from month-end rebalancing activity, has also contributed to the positive bias. Today’s economic releases include the second estimate for Q1 GDP, Weekly Initial Claims, and Pending Home Sales for April. The 10-yr note yield is up one tick to 2.76% after flirting with 2.70% overnight. The U.S. Dollar Index is down 0.1% to 101.94. WTI crude futures are up 0.8% to $111.17/bbl. (Michael Gibbs, Director of Equity Portfolio & Technical… Read More
Headline News: The S&P 500 futures are down 14 points and are trading 0.3% below fair value. The Nasdaq 100 futures are down 65points and are trading 0.6% below fair value. The Dow Jones Industrial Average futures are down 126 points and are trading 0.3% below fair value. Buyers continue to lack much conviction as growth concerns persist. Fresh reminders today include reports that Russia is stepping up its military effort in eastern Ukraine, that Beijing continues to wrestle with curbs on activity to try to stop the spread of Covid, ECB member Knot touting the possibility of a 50 basis point rate hike in July, the weekly mortgage applications report showing no growth in purchase applications, and Dick’s Sporting Goods issuing an FY23 EPS outlook that is well below expectations to account for the impact of “evolving macroeconomic conditions.” We’ll hear more about those evolving conditions and how the Fed was considering them at the May 3-4 FOMC meeting when the minutes from that meeting are released today at 2:00 p.m. ET. The 10-yr note is down three basis points to 2.73%. The 2-yr note yield is unchanged at 2.50%. The U.S. Dollar Index is up 0.5% to 102.33.… Read More
Headline News: The S&P 500 futures are down 44 points and are trading 1.1% below fair value. The Nasdaq 100 futures are down 209 points and are trading 1.7% below fair value. The Dow Jones Industrial Average futures are down 219 points and are trading 0.6% below fair value. The negative disposition has been driven primarily by a warning from Snap (SNAP) that it expects its Q2 revenue and adjusted EBITDA to be below the low end of its prior guidance range as macro conditions have deteriorated faster and further than anticipated. The context behind that warning has weighed on investor sentiment from a broader standpoint and it has undercut a number of other social media stocks more directly that derive a large chunk of revenue from online advertising services. That includes names like Alphabet (GOOG), Meta Platforms (FB), Twitter (TWTR), and Pinterest (PINS). Separately, a batch of mostly weaker than expected preliminary PMI readings for May out of the eurozone have added to concerns about slowing growth along with reports that Beijing is stepping up quarantine efforts to stop the spread of COVID. The 10-yr note yield is down four basis points to 2.82%. The U.S. Dollar Index is… Read More
