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
Headline News: The S&P 500 futures are up 36 points and are trading 1.0% above fair value as the late-day rally effort on Friday, which helped the S&P 500 escape from bear market territory, has carried over this morning. In the same vein, the Nasdaq 100 futures are up 76 points and are 0.6% above fair value while the Dow Jones Industrial Average futures are up 293 points and are trading 1.1% above fair value. The positive leaning this morning will be deemed a “risk-on trade,” as most stocks are expected to benefit from the improved sentiment. In effect, this is more of a relief trade on the idea that things didn’t unravel Friday after the S&P 500 fell more than 20% from its January high. Instead, buyers stepped up to defend prices, fostering some hope that the market could be poised for an overdue, and meaningful, rebound bid. The 10-yr note yield is up four basis points to 2.83%. The U.S. Dollar Index is down 0.9% to 102.20. WTI crude futures are 0.7% to $111.08/bbl. (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets: The S&P 500 traded down to a new low for the year at 3810.32… Read More
Headline News: The S&P 500 futures are up 47 points and trade 1.2% above fair value at the end of a tough week in which the benchmark index is down 3.1%. Risk sentiment has been aided by a strong showing in foreign markets, including Chinese markets following an unexpected move by China’s central bank. Specifically, the People’s Bank of China unexpectedly cut its five-year prime rate by 15 basis points to 4.45% while leaving its key one-year lending rate steady at 3.7%. China’s Shanghai Composite rose 1.6% on Friday. The Europe Stoxx 600 is currently up 1.6%. The futures market is overlooking disappointing earnings results and guidance from another retailer, Ross Stores (ROST 67.05, -25.65, -27.7%), which is down 28% in pre-market action, as well as disappointing results and guidance from semiconductor company Applied Materials (AMAT 109.50, -1.24, -1.1%). The Treasury market, meanwhile, is a bit more reserved right now. The 2-yr yield is up two basis points to 2.63%, and the 10-yr yield is unchanged at 2.86%. The U.S. Dollar Index is up 0.2% to 102.95. WTI crude is up 0.1% to $110.00/bbl. (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets: The S&P 500 remained above… Read More
Headline News: The S&P 500 futures trade 31 points, or 0.8%, below fair value as the market remains pressured by downside momentum, concerns about inflation, profit margins, and growth prospects, and expectations for a more hawkish Fed. After hearing disappointing earnings news from high-profile consumer companies this week, technology giant Cisco (CSCO 42.90, -5.46, -11.3%) has followed a similar path with a miss on revenue estimates and downside guidance for its fiscal Q4. CSCO shares are down 11% in pre-market action. Cisco’s fiscal quarter ended in April, and the company said it expects the supply challenges that it experienced in that quarter to continue into its July quarter. Other negative-sounding headlines include news that COVID-19 cases continue to rise in the U.S. with 32% of Americans in areas with medium to high transmission, a report indicating that gasoline could reach an average of $5/gallon in the U.S. this summer, and Sri Lanka defaulting on its debt for the first time ever. Demand for Treasuries and gold ($1829.70/ozt, +13.80, +0.8%) has increased amid the disappointing price action in equity futures. The 2-yr yield is down five basis points to 2.63%, and the 10-yr yield is down five basis points to 2.84%.… Read More
Headline News: The S&P 500 futures trade 31 points, or 0.8%, below fair value as inflation concerns pressure risk sentiment following a big rally effort yesterday. Target (TGT 166.80, -48.48, -22.5%) is setting the negative tone with a 22.5% decline in pre-market action after missing EPS estimates on above-consensus revenue, citing “unusually high costs” that impacted profitability. The disappointing news mirrors Walmart (WMT 128.75, -2.60, -2.0%) yesterday and has overshadowed Lowe’s (LOW 188.50, -5.53, -2.9%) earnings beat today. Interestingly, TJX Co. (TJX 57.00, +0.81, +1.8%) is trading higher despite missing revenue estimates and issuing downside Q2 EPS guidance. Persistently high oil prices ($114.42/bbl, +2.01, +1.8%) have added to inflation concerns while an uptick in long-term interest rates has dovetailed with the inflation-expectations narrative. The 10-yr yield is up three basis points to 3.00%. The 2-yr yield is up three basis points to 2.70%. The U.S. Dollar Index is up 0.3% to 103.63. On the data front, investors will receive Housing Starts (Briefing.com consensus 1.775 million) and Building Permits (Briefing.com consensus 1.820 million) for April at 8:30 a.m. ET. Earlier, the weekly MBA Mortgage Applications Index dropped 11.0% following a 2.0% increase in the prior week. (Michael Gibbs, Director of Equity Portfolio… Read More
