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 133 points and are trading 1.0% above fair value. The Dow Jones Industrial Average futures are up 252 points and are trading 1.0% above fair value. Central bank news is dominating the wires. The ECB is holding an emergency meeting to discuss fragmentation issues and presumably a response to cure them. Some see this as another “whatever it takes” moment, so European bonds and stocks have rallied on the news. The FOMC completes its two-day meeting today. The market expects a 75-basis point rate hike. The policy directive and summary of economic projections will be released at 2:00 p.m. ET and Fed Chair Powell’s press conference will follow at 2:30 p.m. ET. The Shadow Committee for the Bank of England reportedly expects a 50-basis point rate hike at Thursday’s meeting against expectations for a more modest 25-basis point increase. Reserve Bank of Australia Governor Lowe expects CPI to increase further and believes policy should respond to the CPI pressure in a decisive manner. The Bank of Japan continues to adhere to a yield curve control policy. The… Read More
Headline News: The S&P 500 futures are up five points and are trading 0.2% above fair value. The Nasdaq 100 futures are up 42 points and are trading 0.2% above fair value. The Dow Jones Industrial Average futures are up 19 points and are trading 0.3% above fair value. A reassuring earnings report and outlook from Oracle (ORCL) provided a nice distraction from recent selling efforts. ORCL is up 12% in pre-market action. That has helped the futures trade, but the real catalyst for the uplift in the futures market is the significant weakness seen since last week. The S&P 500 is down 10.0% from its intraday high last Monday while the Nasdaq 100 is down 11.8%. The scope of those losses has stirred some hope that the market could be poised for a rebound effort, although talk of a potential “profit recession,” uncertainty about the ultimate impact of the Fed’s aggressive rate-hike approach, and unruly bond markets have curtailed buy-the-dip interest. Separately, the Fed is now expected to raise the target range for the fed funds rate by 75 basis points on Wednesday versus a previously expected 50 basis points. This can be seen in the fed funds… Read More
Headline News: The S&P 500 futures are down 94 points and are trading 2.4% below fair value. The Nasdaq 100 futures are down 370 points and are trading 3.3% below fair value. The Dow Jones Industrial Average futures are down 612 points and are trading 1.8% below fair value. The stock market is set for a sharply lower open with follow-through selling from Friday’s CPI-induced selloff. Worries about the Fed taking an even more aggressive rate-hike path have undercut risk sentiment along with a massive selloff in cryptocurrency markets, reports of renewed lockdowns in Shanghai and Beijing, and a brief inversion of the 2s10s spread overnight. It all centers around growth concerns, however, which feed directly into concerns about earnings estimates being subject to large downward revisions. Foreign markets have traded lower in the wake of Wall Street’s weakness and amid their own growth concerns. Bitcoin is currently down 13.9% to $23,642.00, feeling the added pressure of crypto lender Celsius announcing that it is pausing all customer withdrawals and transfers due to “extreme market conditions.” The 2-yr note yield is up 18 bps to 3.22%. The 10-yr note yield is up 11 bps to 3.27%. The U.S. Dollar Index is… Read More
Headline News: Inflation accelerated further in May, with prices rising 8.6% from a year ago for the fastest increase since December 1981, the Bureau of Labor Statistics reported Friday. The consumer price index, a wide-ranging measure of goods and services prices, increased even more than the 8.3% Dow Jones estimate. Excluding volatile food and energy prices, so-called core CPI was up 6%, slightly higher than the 5.9% estimate. On a monthly basis, headline CPI was up 1% while core rose 0.6%, compared to respective estimates of 0.7% and 0.5%. Surging shelter, gasoline and food prices all contributed to the increase. Energy prices broadly rose 3.9% from a month ago, bringing the annual gain to 34.6%. Within the category, fuel oil posted a 16.9% monthly gain, pushing the 12-month surge to 106.7%. Shelter costs, which account for about a one-third weighting on the CPI, rose 0.6% for the month and now are 5.5% higher from a year ago. Finally, food costs climbed another 1.2% in May, bringing the year-over-year gain to 10.1%. Those escalating prices meant workers took another pay cut during the month. Real wages when accounting for inflation fell 0.6% in April, even though average hourly earnings rose 0.3%.… 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 27 points and are trading 0.2% above fair value. The Dow Jones Industrial Average futures are up 64 points and are trading 0.2% above fair value. The positive bias comes on the heels of yesterday’s losses, which continued a roller-coaster week of trading action. Accordingly, today is a bit more of that roller-coaster action in a range-bound market ahead of tomorrow’s CPI report. A UBS upgrade of Tesla (TSLA) has been an instrumental support factor this morning. Some better-than-expected May trade data out of China has also been comforting; however, reports today that a southwest neighborhood in Shanghai has been locked down for COVID testing, and that entertainment venues in a Beijing district have been closed, have acted as mitigating factors. On a related note, there was a Bloomberg report that said Chinese regulators may be considering allowing the Ant Group IPO to move forward. Chinese regulators, according to CNBC, have denied that report, so a number of Chinese ADRs have seen a reversal into negative territory on the denial. A short time ago, the ECB announced… 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 25 points and are trading 0.2% below fair value. The Dow Jones Industrial Average futures are down 123 points and are trading 0.3% below fair value. The futures for the major indices are off their lows of the morning, but still trading with a cautious-minded disposition for various reasons that include a continued rise in crude oil futures ($120.65, +1.24, +1.0%), a Q2 profit warning from Credit Suisse (CS), a 10-yr note yield back above 3.00% (currently +5 bps to 3.02%), and another dour mortgage applications report, which featured a 7% wk/wk decline in purchase applications. General growth concerns remain a prominent headwind, and they were exacerbated today by reports pointing to the OECD slashing its 2022 global GDP view to 3.0% from 4.5%, the Atlanta Fed’s GDPNow model estimate for Q2 being cut to 0.9% from 1.3%, and the Reserve Bank of India raising its key policy rate by a larger-than-expected 50 basis points to 4.90% (a 40 bps increase was expected). (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets: The S&P 500 rallied… Read More
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
