Headline News: The S&P 500 futures are limping into week’s end, trading two points, or 0.1%, below fair value. The market continues to digest hawkish Fed expectations, higher interest rates, stubborn technical factors, and the latest earnings news. Dow components American Express (AXP 183.85, -1.89, -1.0%) and Verizon (VZ 54.15, -0.86, -1.6%) are both trading lower following their underwhelming earnings reports, while Snap (SNAP 29.53, +0.11, +0.4%) shares have been extremely volatile after the company missed EPS estimates and guided Q2 revenue below consensus. In the Treasury market, the 10-yr yield hit 2.97% last evening following Fed Chair Powell’s hawkish-sounding commentary earlier on Thursday. The benchmark yield has backed off those highs and currently sits unchanged at 2.92%. The 2-yr yield is up four basis points to 2.73%. The U.S. Dollar Index, meanwhile, remains above the 100.00 level (100.85, +0.27, +0.3%) while WTI crude futures remain above $100.00/bbl ($102.66, -1.13, -1.1%). (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets: The S&P 500 moved above the critical 200-day moving average early, but the index sold off and closed at 4393.66 below support at the 50-day moving average. RSI moved lower, closing at 45.03 in support of the selling, and the… Read More
Headline News: The S&P 500 futures are back on the rise and trade 42 points, or 0.9%, above fair value with earnings news taking the headlines. The Nasdaq 100 futures trade 1.3% above fair value after dropping 1.5% yesterday. The growth stocks seemed to have gotten over the Netflix (NFLX 219.70, -6.49, -2.9%) disappointment yesterday after Tesla (TSLA 1049.00, +71.80, +7.4%) exceeded earnings expectations and reiterated its growth expectations. TSLA shares are up 7% in pre-market action. The airline stocks, meanwhile, continue to fly higher after American (AAL 21.56, +2.08, +10.7%), United (UAL 50.45, +3.93, +8.5%), and Alaska Air (ALK 61.61, +2.92, +5.0%) reported encouraging results and/or provided upbeat revenue expectations. A contrarian mindset might also be driving the futures market higher with investor sentiment having gotten too bearish in recent weeks. That could explain why AT&T (T 19.70, +0.27, +1.4%) is trading higher despite missing EPS estimates or why the uptick in Treasury yields hasn’t bothered the market. The 2-yr yield is up four basis points to 2.61%, and the 10-yr yield is up three basis points to 2.87%. The U.S. Dollar Index is down 0.2% to 100.24. WTI crude futures are up 0.9% to $103.10/bbl. On the data… Read More
Headline News: The S&P 500 futures trade four points, or 0.1%, above fair value as investors continue to show a lack of conviction. Buying interest has been restrained by a lackluster response to earnings news, hawkish-sounding Fed commentary, and upwards pressure in long-term interest rates. Starting with earnings, Dow components Johnson & Johnson (JNJ 176.95, -0.71, -0.4%) and Travelers (TRV 181.75, -3.47, -1.9%) are both trading lower in pre-market action despite beating EPS estimates, but to be fair, JNJ also lowered its FY22 EPS guidance below consensus. In Fedspeak, St. Louis Fed President Bullard (FOMC voter) said in a speech yesterday that he wants rates to go to 3.5% by the end of the year and that the Fed shouldn’t rule out the use of 75-basis-point rate increases, according to Bloomberg. As a reminder, the Fed’s next policy meeting is in two weeks. The 10-yr Treasury note yield continues to head toward 3.00%, topping 2.90% overnight. Right now, the benchmark yield is up three basis points to 2.89%, while the 2-yr yield trades unchanged at 2.47%. The U.S. Dollar Index is up 0.1% to 100.92. WTI crude futures are down 1.2%, or $1.34, to $106.87/bbl. (Michael Gibbs, Director of Equity… Read More
Headline News: The S&P 500 futures trade roughly in-line with fair value in a busy news morning before the market closes for Good Friday tomorrow. Starting with earnings news, UnitedHealth (UNH 539.80, +2.80, +0.5%) and Goldman Sachs (GS 328.68, +6.71, +2.1%) each beat top and bottom-line estimates, while Wells Fargo (WFC 46.88, -1.66, -3.4%) trades lower by 3% after missing revenue estimates. Twitter (TWTR 49.09, +3.22, +7.0%), meanwhile, is up 7% after Elon Musk offered to acquire the company for $54.20 per share in cash. Twitter said it will carefully review the proposal, which is Mr. Musk’s “best and final offer.” Elsewhere, the European Central Bank made no changes to interest rates, as expected, and said incoming data since its last meeting reinforced expectations for net asset purchases under the APP should be concluded in the third quarter. In economic data, Retail Sales for March (Briefing.com consensus 0.6%), weekly Initial Claims (Briefing.com consensus 175,000), and Import and Export Prices for March will be released at 8:30 a.m. ET, followed by the preliminary University of Michigan Index of Consumer Sentiment for April (Briefing.com consensus 58.8) and Business Inventories for February (Briefing.com consensus 1.3%) at 10:00 a.m. ET. U.S. Treasuries are… Read More
Headline News: The S&P 500 futures trade 21 points, or 0.5%, above fair value as the Q1 earnings reporting season begins in earnest following a rough patch in the market. JPMorgan Chase (JPM 130.00, -1.54, -1.2%) is continuing that rough patch after missing EPS estimates, while BlackRock (BLK 719.00, +2.17, +0.3%) and First Republic Bank (FRC 155.73, +0.68, +0.4%) are up modestly in pre-market action after beating EPS estimates. On the economy, JPMorgan CEO Jamie Dimon remained optimistic from a short-term perspective, but he cautioned that he sees significant geopolitical and economic challenges ahead due to high inflation, supply chain issues, and the war in Ukraine. Delta Air Lines (DAL 40.97, +2.35, +6.1%) CEO corroborated Mr. Dimon’s short-term optimism with an observation that March 2022’s historic bookings quarter is continuing into April. DAL shares are up 6% after the company beat top and bottom-line estimates. In economic data, investors will receive the Producer Price Index for March (Briefing.com consensus 1.2%) at 8:30 a.m. ET. Earlier, the weekly MBA Mortgage Applications Index decreased 1.3% following a 6.3% decline in the prior week. U.S. Treasuries trade little changed. The 2-yr yield is unchanged at 2.39%, and the 10-yr yield is unchanged at… Read More
Headline News: The S&P 500 futures trade 11 points, or 0.3%, above fair value while Treasury yields hold steady in front of the Consumer Price Index for March at 8:30 a.m. ET. The Briefing.com consensus is projecting another hot inflation report with a 1.2% m/m increase in total CPI that pushes the yr/yr rate to 8.4%. That should keep expectations elevated for the Fed to issue a 50-basis-point rate hike next month, as Fed officials have been suggesting could be the case. Earlier, the NFIB Small Business Optimism Index for March decreased to 93.2 from 95.7 in February, and later, the Treasury Budget for March will be released at 2:00 p.m. ET. The 2-yr yield is up one basis point to 2.51%, and the 10-yr yield is unchanged at 2.78%. The U.S. Dollar Index is up for the ninth straight session, topping the 100.00 level (100.14, +0.23, +0.2%), while WTI crude futures are rebounding 4.1%, or $3.89, to $98.17/bbl. Separately, shares of Cisco (CSCO 51.63, -1.25, -2.4%) are down 2% in pre-market action after Citigroup downgraded the Dow component to Sell from Neutral. CarMax (KMX 99.50, -3.67, -3.6%) and Albertsons (ACI 33.50, -1.28, -3.7%) are down sharply following their earnings… Read More
Headline News: The S&P 500 futures trade 22 points, or 0.5%, below fair value as Treasury yields continue to push higher in front of a consequential week for economic data and earnings reports. The tech-heavy Nasdaq 100 futures underperform and trade 1.1% below fair value. The 2-yr yield is currently up five basis points to 2.57%, and the 10-yr yield is up another four basis points to 2.76% after rising 34 basis points last week. The rapid rise in long-term rates has undercut the growth stocks within the Nasdaq for valuation reasons. Other negative factors for sentiment include record-high COVID-19 cases in Shanghai that has kept residents in lockdown mode, uncertainty surrounding France’s presidential election runoff on April 24, the Russia-Ukraine situation, and a recognition that the S&P 500 closed below its 200-day moving average (now 4494) last Friday. Interestingly, WTI crude futures have slipped below $94 per barrel ($93.66, -4.60, -4.7%) amid the Shanghai lockdowns, the joint effort among IEA nations to release oil from strategic reserves, and some weakening price momentum. (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets: The S&P 500 failed to breakout past resistance at 4522.00, sold off below the 200-day moving average at… Read More
Headline News: The equity futures market is extending yesterday’s losses, as interest rates continue to rise amid rate-hike/inflation concerns. The S&P 500 futures trade 36 points, or 0.8%, below fair value while the tech-heavy Nasdaq 100 futures trade 1.4% below fair value. Specifically, the 10-yr yield is up eight basis points to 2.63% after starting the month at 2.33%, and the 2-yr yield is up four basis points to 2.55% after starting the month at 2.28%. Treasury yields are at multi-year highs, as is the U.S. Dollar Index (99.50, +0.03, unch). After hawkish-sounding Fed commentary yesterday fueled the rise in interest rates, investors will pay heed to the FOMC Minutes from the March meeting at 2:00 p.m. ET. On a related note, Philadelphia Fed President Harker (alternate FOMC voter) will speak at 9:30 a.m. ET. Earlier this morning, the weekly MBA Mortgage Applications Index fell 6.3% following a 6.8% decline in the prior week. WTI crude futures are up 1.6%, or $1.57, to $103.54/bbl ahead of the weekly EIA crude inventory report at 10:30 a.m. ET (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets: The S&P 500 sold off and briefly undercut support at 4522.00 and closed at 4525.12.… Read More
Headline News: The S&P 500 futures trade roughly in-line with fair value in a relatively quiet session. Investors are waiting for key data on the services sector, speeches from several Fed officials, and any new sanctions against Russia for its alleged war crimes. The Treasury market remains a focal point, as the 2s10s spread has un-inverted. The 2-yr yield is up four basis points to 2.46% amid rate-hike expectations, and the 10-yr yield is up five basis points to 2.46% amid inflation expectations. Oil prices are still trading over $100 per barrel ($103.75, +0.47, +0.5%) while the U.S. Dollar Index (98.94, -0.06, -0.1%) is weaker. On the data front, investors will receive the Trade Balance for February (Briefing.com consensus -$88.5 billion) at 8:30 a.m. ET and the ISM Non-Manufacturing Index for March (Briefing.com consensus 58.5%) at 10:00 a.m. ET. Today’s lineup of Fed speakers includes Minneapolis Fed President Kashkari (alternate voter) at 10:00 a.m. ET, Fed Governor Brainard (FOMC voter) at 11:05 a.m. ET, and New York Fed President Williams (FOMC voter) at 2:00 p.m. ET. (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets: The S&P 500 traded higher on average volume of 2,275,884,800 and closed at 4582.64. The… Read More
Headline News: The S&P 500 futures trade 11 points, or 0.2%, above fair value to start the week, as the market continues to weather a host of growth-related concerns. Some of those concerns include the prolonged Russia-Ukraine situation, the COVID lockdowns in Shanghai, the potential for a Fed policy mistake, the 2s10s spread inversion, supply chain disruptions, and an inflationary environment that includes $100/bbl oil prices ($100.29, +1.02, +1.0%). The Treasury market is trading little changed, although the 30- yr yield has risen four basis points to 2.46% after dropping 18 basis points last week. The 2-yr yield is unchanged at 2.43%, and the 10-yr yield is up one basis point to 2.39%. The U.S. Dollar Index is up 0.3% to 98.88. Today’s economic data will be limited to Factory Orders for February (Briefing.com consensus -0.6%), which will be released at 10:00 (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets: On Friday, the S&P 500 rallied late in the day past resistance at 4522.00 and closed higher at 4545.86. We feel the two-day selloff was enough of a break that buyers could potentially come back into the market and continue the recent uptrend. Potential resistance remains at 4509.03, and… Read More
