Headline News: The S&P 500 futures are up 67 points and trade 1.7% above fair value amid dip-buying activity, including in some of the beaten-down mega-caps. The tech-heavy Nasdaq 100 futures trade 1.9% above fair value. Risk sentiment has also been supported by positive earnings results and guidance from Home Depot (HD 306.00, +10.01, +3.4%), an improved unit revenue outlook for Q2 from United Airlines (UAL 45.50, +1.96, +4.5%), and yesterday’s news of Shanghai planning to relax COVID restrictions. Hong Kong is also planning to relax restrictions. Walmart (WMT 138.28, -9.93, -6.7%), however, has dropped 7% in pre-market action on mixed earnings results/guidance in addition to an observation of changes in consumer behavior due to inflation. Investors will get another update on the consumer through the Retail Sales report for April (Briefing.com consensus 0.9%) at 8:30 a.m. ET. Also on the market’s radar is Fed Chair Powell’s conversation at a Wall Street Journal event at 2:00 p.m. ET. Industrial Production (Briefing.com consensus 0.5%) and Capacity Utilization (Briefing.com consensus 78.6%) data for April will be released at 9:15 a.m. ET, followed by Business Inventories for March (Briefing.com consensus 1.9%) and the NAHB Housing Market Index for May (Briefing.com consensus 75) at… Read More
Headline News: The S&P 500 futures trade 26 points, or 0.7%, below fair value in a carryover of selling momentum, particularly in the mega-cap stocks. The tech-heavy Nasdaq 100 futures underperform and trade 1.0% below fair value. The futures market continues to grapple with growth concerns attributed in part to the Fed’s aggressive tightening plans in the face of slowing economic growth and high inflation. After a relatively disappointing April CPI report yesterday, investors will see what producer inflation was in April. Specifically, the Producer Price Index for April (Briefing.com consensus 0.5%) will be released at 8:30 a.m. ET alongside the weekly Initial Claims (Briefing.com consensus 191,000) and Continuing Claims report. There is renewed hope that inflation rates could be peaking, which could be driving another eight-basis-point decline in the 10-yr yield to 2.84%. At the same time, though, growth concerns and some safe-haven positioning could be in the mix, too. The 2-yr yield is down five basis points to 2.59%. The U.S. Dollar Index is up 0.6% to 104.44. WTI crude futures are down 1.4%, or $1.50, to $104.21/bbl. Separately, shares of Walt Disney (DIS 100.85, -4.36, -4.1%) are down 4% in pre-market action after the Dow component missed… Read More
Headline News: The S&P 500 futures trade 35 points, or 0.9%, above fair value as the market tries to bounce from an oversold condition. The benchmark index enters the session down 16.3% for the year and below the 4,000 level. A supportive factor has been the price action in the 10-yr yield, which is currently down seven basis points to 3.01% after hitting 3.20% in overnight trade on Monday. The 2-yr yield is down two basis points to 2.58%. The U.S. Dollar Index is flat at 103.65. WTI crude is down 0.6% to $102.46/bbl. Separately, there will be a bunch of Fed speakers today, starting with New York Fed President Williams (FOMC voter) at 7:40 a.m. ET, Atlanta Fed President Bostic (non-voter) at 8:30 a.m. ET, and Richmond Fed President Barkin (non-voter) at 9:15 a.m. ET. After the open, Minneapolis Fed President Kashkari (non-voter) will speak at 1:00 p.m. ET, followed by Cleveland Fed President Mester (FOMC voter) at 3:00 p.m. ET. Today’s economic data will be limited to the NFIB Small Business Optimism Index for April, which was unchanged at 93.2. Investors will receive no other economic data today. (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) … Read More
Headline News: The S&P 500 futures are down another 69 points to trade 1.7% below fair value after the 10-yr yield hit 3.20% earlier this morning. The tech-sensitive Nasdaq 100 futures underperform and trade 2.5% below fair value. The 10-yr yield is currently up five basis points to 3.17%, which after starting the year at 1.51%, has exerted key pressure on the growth stocks in pre-market action. The 2-yr yield is currently up a mere one basis point to 2.68%. Separately, after the April employment report showed a decline in the labor force participation rate last Friday, the market is now hearing of a “complicated and grave” employment situation in China due to the COVID lockdowns, according to Bloomberg, citing Chinese Premier Li Keqiang. With equity futures, Treasuries, oil prices ($107.05, -2.70, -2.5%), and even gold futures (18.59, -23.70, -1.3%) trading lower, investors are de-risking into cash and hedging against further equity losses. The U.S. Dollar Index is up 0.2% to 103.82. The CBOE Volatility Index is up 13.0% to 34.12. Today’s economic data, meanwhile, will be limited to Wholesale Inventories for March (Briefing.com consensus 2.3%) at 10:00 a.m. ET. The key report this week will be the Consumer… Read More
Headline News: The S&P 500 futures are peeling back yesterday’s relief rally and currently trade 20 points, or 0.5%, below fair value. Yesterday, the market was relieved to hear that the Fed was not considering hiking rates by 75 basis points in coming meetings, preferring instead 50-basis-point increases in the next two meetings. On a related note, the Bank of England on Thursday increased its Bank Rate by 25 basis points to 1.00%, as expected. Some of the enthusiasm has been dialed back this morning, partly because of profit-taking interest from cautious-minded investors and an understanding that the Fed is more concerned with inflation than economic growth right now. In addition, Treasury yields are creeping higher after dropping in yesterday’s session while investors digest some mixed earnings news, including disappointments from eBay (EBAY 50.22, -4.20, -7.7%) and Etsy (ETSY 95.50, -13.83, -12.7%). The 2-yr yield is up seven basis points to 2.68%, and the 10-yr yield is up four basis points to 2.96%. The U.S. Dollar Index is up 0.6% to 103.22. WTI crude futures are up 0.8% to $108.57/bbl in front of an OPEC+ production decision. On the data front, investors will receive the weekly Initial Claims (Briefing.com consensus… Read More
Headline News: The S&P 500 futures trade 23 points, or 0.6%, above fair value as buying interest from the prior two days carries over in front of the FOMC policy decision this afternoon. The Fed is expected to raise the target range for the fed funds rate by 50 basis points and formally present a plan to reduce its balance sheet. The policy statement will be released at 2:00 p.m. ET, followed by Fed Chair Powell’s press conference at 2:30 p.m. ET, which investors will tune in for any hints on how aggressive the Fed plans to be in the future with its tightening plans. In the meantime, there’s been a bunch of earnings news to sift through. Advanced Micro Devices (AMD 96.62, +5.49, +6.0%), Airbnb (ABNB 152.56, +7.56, +5.2%), Starbucks (SBUX 79.06, +4.73, +6.4%), and Moderna (MRNA 158.50, +11.96, +8.2%) are some of the standouts. Lyft (LYFT 23.08, -7.68, -25.0%), on the other hand, has tanked 25% in pre-market action on downside Q2 revenue guidance. On the data front, investors will receive the ADP Employment Change report for April (Briefing.com consensus 390,000) at 8:15 a.m. ET, the Trade Balance for March (Briefing.com consensus -$97.5 bln) at 8:30 a.m. ET,… Read More
Headline News: The S&P 500 futures trade roughly in line with fair value in a meek start to the month following the beatdown in April. Growth concerns continue to linger after China’s April Manufacturing PMI (47.4) contracted more than expected and Beijing tightened COVID restrictions, but the market might be drawing support from new inflows on the first trading day of the month. The 3% markdown in oil prices ($101.63, -3.09, -3.0%) is reflecting reduced demand expectations. There might also be some hesitation about the FOMC’s policy decision on Wednesday, the vast amount of earnings news throughout the week, and key economic data starting with the April ISM Manufacturing Index (Briefing.com consensus 57.9%) at 10:00 a.m. ET and culminating with the April employment report on Friday. The Construction Spending report for March (Briefing.com consensus 0.8%) will be released concurrently with the ISM report, which will be preceded by the final IHS Markit Manufacturing PMI for April at 9:45 a.m. ET. The Treasury market has softened up this morning, pushing yields slightly higher. The 2-yr yield is up three basis points to 2.72%, and the 10-yr yield is up three basis points to 2.92%. The U.S. Dollar Index is up… Read More
Headline News: The S&P 500 futures trade 38 points, or 0.9%, below fair value as discouraging outlooks from Apple (AAPL 159.50, -4.14, -2.5%) and Amazon.com (AMZN 2617.40, -274.53, -9.7%) set the negative tone in the futures market. Apple’s quarterly results were better than expected, but the stock’s 2.5% decline is rooted in a warning that the impact from supply chain issues will be $4-8 billion in fiscal Q3, which is “substantially larger” than what it experienced during fiscal Q2. Amazon is down about 10% after guiding Q2 revenue and operating income below expectations. Intel (INTC 44.88, -1.96, -4.2%) and Chevron (CVX 159.46, -2.33, -1.4%) are also trading lower after the former issued downside Q2 guidance and the latter missed earnings expectations. Honeywell (HON 193.30, +3.38, +1.8%), however, is a notable earnings standout. At 8:30 a.m. ET, investors will receive another inflation update with the inclusion of PCE Prices in the Personal Income (Briefing.com consensus 0.4%) and Spending (Briefing.com consensus 0.6%) report for March and the release of the Q1 Employment Cost Index (Briefing.com consensus 1.1%). Afterwards, the Chicago PMI for April (Briefing.com consensus 62.0) will be available at 9:45 a.m. ET, followed by the final University of Michigan Index of… Read More
Headline News: The S&P 500 futures trade 70 points, or 1.7%, above fair value as positive reactions to earnings reports help drive the rebound-minded bias. The Nasdaq 100 futures outperform and trade 2.1% above fair value. Meta Platforms (FB 203.68, +28.73, +16.4%) is setting the tone with a 16% pre-market gain following its earnings report, followed by healthy gains in Qualcomm (QCOM 144.80, +9.70, +7.2%), McDonald’s (MCD 252.00, +4.86, +2.0%), and Merck (MRK 86.40, +1.99, +2.4%), among others. To be fair, there are always outliers like Teladoc (TDOC 32.40, -23.59, -42.1%), which has cratered over 40% on disappointing guidance. It appears, though, that the TDOC weakness is relatively contained rather than spreading to other growth stocks. In other developments, the Bank of Japan made no headline policy changes; Democrats are attempting to revive Build Back Better discussions, according to The Wall Street Journal; and OPEC+ is likely to agree to another 432,000-bpd oil output increase for June when it meets next week, according to Reuters. Regarding today’s data, investors will receive the advance estimate for Q1 GDP (Briefing.com consensus 1.1%) and the weekly Initial Claims (Briefing.com consensus 182,000) and Continuing Claims report at 8:30 a.m. ET. U.S. Treasuries trade… Read More
Headline News: The S&P 500 futures trade nine points, or 0.2%, below fair value following yesterday’s unprovoked rebound. Investors have been busy reviewing a huge batch of earnings reports. First-quarter results remained mostly better than expected, including from 3M (MMM 149.75, +1.15, +0.8%), UPS (UPS 193.79, +4.15, +2.2%), General Electric (GE 86.79, -3.09, -3.4%), and PepsiCo (PEP 174.27, +0.53, +0.3%). Note, GE is trading lower after saying it expects full-year earnings to be at the low end of its previous guidance range. Growth concerns remain in the mix after Beijing initiated a massive COVID-19 testing campaign, stirring lockdown fears; and Russian Foreign Minister Lavrov, according to Bloomberg, warned western countries that there is a “considerable” chance of nuclear war if weapon deliveries to Ukraine continue. Treasury yields are down for the second straight day. The 2- yr yield is down four basis points to 2.59%, and the 10-yr yield is down four basis points to 2.79%. The U.S. Dollar Index is up 0.1% to 101.90. WTI crude futures are up 0.8% to $99.32/bbl. (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets: The S&P 500 moved below support at 4222.62 but rallied later to close higher at 4296.12. The volume… Read More
