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
Headline News: The S&P 500 futures are up 22 points and are trading 0.4% above fair value. The Nasdaq 100 futures are up 55 points and are trading 0.2% above fair value. The Dow Jones Industrial Average futures are up 197 points and are trading 0.7% above fair value. A positive bias has taken root in the futures market, aided by reports that China has shortened its quarantine period for inbound visitors and that Shanghai and Beijing reported zero COVID cases for the first time since February. Another supporting factor includes several banks, Goldman Sachs (GS) among them, announcing dividend increases and/or share buyback programs following the Fed’s stress test. JPMorgan Chase (JPM) and Citigroup (C) left their dividend plans unchanged. The reopening optimism surrounding China has helped underpin oil prices ($111.27, +1.70, +1.5%), which have also been bolstered by a Reuters report indicating Saudi Arabia and the UAE have limited spare capacity to boost output. Rising oil prices aren’t helping to assuage headline inflation pressures any more than Nike’s (NKE) inventory surge and fiscal Q1 revenue warning, and ECB President Lagarde suggesting the ECB could move faster on rate hikes if needed, are helping to assuage concerns about… Read More
Headline News: The S&P 500 futures are up 14 points and are trading 0.4% above fair value. The Nasdaq 100 futures are up 79 points and are trading 0.7% above fair value. The Dow Jones Industrial Average futures are up 119 points and are trading 0.4% above fair value. The market seems headed for a higher open with rebound momentum from last week’s rally as the biggest driving force. There’s a few pieces of relatively negative news that are not overpowering the rally effort. The International Monetary Fund released new projections indicating the U.S. will narrowly avoid a recession. The Bank of International Settlements warned about a global risk of stagflation. Also, San Francisco Fed President Daly noted that she sees additional tightening beyond the neutral rate. Separately, the G7 leaders are discussing import bans for Russian gold. This news comes as Russia experienced its first major foreign debt default since 1918. (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets: The S&P 500 rallied sharply to move above resistance at 3900.86 and closed higher at 3911.74. The trading came with above-average volume, with 3,473,551,616 shares traded of which 83% was up volume. The only negative was RSI… Read More
Headline News: The S&P 500 futures are down 51 points and are trading 1.5% below fair value. The Nasdaq 100 futures are down 178 points and are trading 1.8% below fair value. The Dow Jones Industrial Average futures are down 353 points and are trading 1.1% below fair value. There has been no follow through to yesterday’s rebound effort, which is perhaps the biggest reason for the drop in the futures market this morning. The inclination to sell quickly into strength is undercutting investor sentiment once again along with concerns about economic prospects. The latter have shown up this morning in weakening commodity prices — copper futures are down 3.1% to $3.91/lb and WTI crude futures are down 4.8% to $104.73/bbl — and strengthening prices in the Treasury market. The 2-yr note yield is down 10 basis points to 3.12% while the 10-yr note yield is down 11 basis points to 3.20%. The weakness in gasoline futures (-2.1% to $3.71/gal) is also telling, as it comes on top of reports that President Biden is calling on Congress to suspend the national gas tax. Doing so could help provide some price relief at the pump, but at the same time, the… Read More
Headline News: The S&P 500 futures are up 55 points and are trading 1.4% above fair value. The Nasdaq 100 futures are up 181 points and are trading 1.4% above fair value. The Dow Jones Industrial Average futures are up 406 points and are trading 1.4% above fair value. The healthy bid in the futures market follows on the heels of steep losses for the major indices last week that were the worst since March 2020. In brief, it is a rebound effort for a deeply oversold market. Entering today, the major indices are down 9.4-11.7% for the month. Market participants appear to be looking through negative headline developments, like reports that COVID cases have increased in Shenzhen and Macau, increased calls pointing to higher probabilities for a recession in the U.S., and a bevy of headlines pinpointing the specter of more rate hikes on the way from many of the world’s leading central banks. The 2-yr note yield is unchanged at 3.18% and the 10-yr note yield is up three basis points to 3.27%. (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets: The S&P 500 closed the week with a higher close at 3674.84 along… Read More
