Headline News: Consumer prices posted a smaller than expected increase from a year ago, according to the Federal Reserve’s primary inflation gauge, the Commerce Department reported Wednesday. The personal consumption expenditures price index increased a seasonally adjusted 0.3% for the month, putting the 12-month gain at 3.4%. Economists surveyed by Dow Jones had been looking for increases of 0.3% and 3.7% respectively. Excluding food and energy, PCE posted a 0.2% increase that put the annual core level at 3%. The respective forecasts were for 0.3% and 3.3%. Though the Fed officially follows the headline PCE number, officials generally consider core a better gauge of longer-term trends. While the annual increases were less than expected, they came as the Bureau of Economic Analysis adjusted the way it computes several components of the index. It was not immediately clear what impact the revisions had on the final numbers. (Michael Gibbs, Managing Director, Lead Portfolio Manager ) Markets: The S&P 500 sold off, closing at 7,670.84 after briefly testing and holding the 50-day moving average at 7,645.16. The index also closed above its 20-day moving average, suggesting buyers remain active at these levels. However, the Advance/Decline line and RSI both moved lower, indicating… Read More
Headline News: Equity futures point to a modestly higher opening this morning as some of Monday’s pressure from crude oil and Treasury yields eases. The positive bias comes after the major averages started the week with sizable losses amid volatility in both markets, with Treasury yields remaining particularly elevated even after crude oil reversed most of an early surge. Oil prices are pulling back this morning alongside signs that Middle Eastern crude flows are recovering despite the ongoing conflict. Middle Eastern crude exports have risen to around their highest level since the Iran war began, as the U.S. Navy and Gulf producers have become more effective at keeping shipments moving through the Strait of Hormuz and alternative routes, weakening Iran’s leverage over the waterway, according to The Wall Street Journal. Treasury yields are also easing from Monday’s elevated levels, providing some relief for equities. Technology and semiconductor stocks, which were notable sources of weakness in yesterday’s session, are poised for a rebound at the open as the broader market attempts to recover from Monday’s decline. (Michael Gibbs, Managing Director, Lead Portfolio Manager ) Markets: The S&P 500 closed lower at 7,683.69, just above its 20-day moving average of 7,671.07. The… Read More
Headline News: Equity futures point to a lower opening as Treasury yields and oil prices continue to move higher this morning. Crude oil is up $1.53 (+1.7%) to $93.70 per barrel as this week’s UN session has failed to produce any notable headlines of progress between the U.S. and Iran. Treasury yields are soaring to multi-year highs in the wake of a big backup in yields yesterday that pushed stocks lower. Additionally, the market’s expectations of another rate hike continue to increase, with New York Fed President John Williams (voting FOMC member) saying it is reasonable to expect another rate increase this year. The CME FedWatch tool now assigns a 70.9% probability to a rate hike at the October FOMC meeting. On the trade front, Treasury Secretary Scott Bessent said the U.S. & China agreed to extend the trade truce until January 10, according to Fox News. There are several economic data releases ahead of the open. Initial and continuing jobless claims and the Q2 current account balance are due at 8:30 a.m. ET, followed by August new home sales at 10:00 a.m. ET. (Michael Gibbs, Managing Director, Lead Portfolio Manager ) Markets: The S&P 500 closed lower at 7,706.03… Read More
Headline News: Equity futures point to a slightly lower opening this morning following Tuesday’s mixed session, with relatively little in the way of new developments overnight to provide a clear directional catalyst. Crude oil is modestly higher after settling lower yesterday as investors continue to monitor developments surrounding Iran and the Strait of Hormuz. The U.S. and Iran held talks yesterday, with Iran presenting conditions for reopening the strait that reportedly include lifting the U.S. naval blockade, releasing frozen Iranian assets, and ending the war on all fronts, according to Axios. AI also remains in focus ahead of President Trump’s meeting with Chinese President Xi Jinping. The two leaders have pushed back against slowing AI development, even as the U.S. and China explore potential areas of cooperation surrounding risks from increasingly capable AI models. For now, however, neither development has produced a significant shift in the market backdrop, leaving equity futures modestly lower ahead of the open. (Michael Gibbs, Managing Director, Lead Portfolio Manager ) Markets: The S&P 500 traded in a tight range yesterday and closed slightly lower at 7,764.64. The RSI also moved sideways. That kind of consolidation is common after a sharp rally. The index closed just below… Read More
Headline News: Equity futures point to a firmly higher opening this morning as oil prices and Treasury yields retreat to start the week, with crude oil down roughly 2.5% to under $98 per barrel and the 10-year note yield down to 4.95%. The market has been largely driven by oil and yields, as well as the performance of AI-related stocks in recent sessions, driving some choppy action last week that saw the Nasdaq Composite rise by 0.7%, while the DJIA slid 1.7%, its worst week since March. Those themes remain in focus following last week’s FOMC rate hike, with the simultaneous pullback in oil and Treasury yields providing a favorable backdrop for equities this morning. On the geopolitical front, President Trump threatened another attack on Iran but said he remains open to meeting Iranian President Masoud Pezeshkian during this week’s United Nations General Assembly, according to CNBC. The potential for diplomacy comes as U.S.-Iran tensions remain an important influence on oil markets. Strength is also extending to cryptocurrencies, with Bitcoin crossing the $85,000 mark to reach its best level since January. The economic data calendar is relatively light this week following last week’s Fed decision, although President Trump and Chinese… Read More
Headline News: Equity futures point to a higher opening this morning, with mega-cap and semiconductor stocks leading the early advance following yesterday’s post-FOMC retreat. Crude oil is moving lower for the second consecutive session, with WTI crude down $2.47 (-2.4%) to $99.96 per barrel. The decline comes as Axios reports that President Trump is expected to meet with Gulf leaders next week to discuss the next steps in the conflict with Iran. Stocks finished mostly lower yesterday after an initially positive session reversed during Fed Chair Kevin Warsh’s press conference. The FOMC’s widely anticipated 25-basis-point rate hike generated little immediate reaction, but stocks turned lower and Treasury yields rose as Mr. Warsh emphasized that inflation remains too high, reinforcing expectations that additional policy tightening could follow. (Michael Gibbs, Managing Director, Lead Portfolio Manager ) Markets: The S&P 500 sold off to the support level at 7,517.12, where buyers stepped in and helped the index recover to close at 7,551.81. Earlier in the session, the index tested the 50-day moving average at 7,612.00, but sellers emerged at that level. This morning, S&P 500 futures are higher by 1.25%, suggesting investors were encouraged by the Federal Reserve’s 25-basis-point interest-rate increase and its… Read More
Headline News: Equity futures are pointing to a higher open as investors await the afternoon FOMC decision. The CME FedWatch Tool currently assigns a 92.7% probability to a 25-basis-point rate hike this afternoon, with many analysts arguing that the Fed deciding to hold rates could damage its credibility given the current inflation backdrop. As always, Fed Chair Kevin Warsh’s press conference portion of the meeting will be closely watched for any signals on the expected policy path going forward, especially since Warsh himself is an advocate of a “quieter Fed,” and today’s implied hike could be the beginning of a broader tightening cycle rather than an isolated policy adjustment. Oil prices are moving lower this morning, providing some support for equity futures, with WTI crude trading around $103 per barrel after settling above $105 yesterday. Stocks finished broadly lower on Tuesday as another surge in crude oil and elevated Treasury yields weighed on the market. The S&P 500 (-0.45%), Nasdaq Composite (-0.78%), and DJIA (-0.63%) logged their second consecutive declines to start the week, with the energy sector standing out as one of the few areas of strength. (Michael Gibbs, Managing Director, Lead Portfolio Manager ) Markets: The S&P 500… Read More
Headline News: Equity futures point to a lower opening this morning amid pronounced weakness in semiconductor stocks and another increase in crude oil prices. Stocks are coming off a losing holiday-shortened week, although strength across technology stocks on Friday helped the major averages snap a four-session losing streak and recover a portion of their earlier losses. Chip stocks are facing particularly heavy pressure following weakness in overseas trading, as recent comments from several AI executives and developers calling for a slower pace of AI development on safety grounds have weighed on the group. Oil prices are also moving higher, adding another headwind after last week’s sharp advance. The latest increase follows the shutdown of Saudi Arabia’s East-West pipeline, while a planned meeting between Gulf Cooperation Council members and Iran to discuss establishing a temporary shipping corridor through the Strait of Hormuz has been postponed. There are no notable economic releases on this morning’s calendar, leaving attention focused on Wednesday’s FOMC decision. The CME FedWatch Tool currently assigns an 88.5% probability to a 25-basis-point rate hike. (Michael Gibbs, Managing Director, Lead Portfolio Manager ) Markets: S&P 500 futures are lower by 0.66% this morning after falling as much as 1% overnight. The… Read More
Headline News: U.S. wholesale prices rose in August, according to a report Thursday that could play a key role in the Federal Reserve’s upcoming interest rate decision. The Producer Price Index, a measure of final-demand costs for goods and services, increased a seasonally adjusted 0.4% for the month, in line with the Dow Jones consensus, the Bureau of Labor Statistics reported Thursday. On an annual basis, that put PPI at 5.4%, still well above the Fed’s 2% inflation target and 0.1 percentage point higher than expected. PPI rose 0.1% in July, a slight upward revision from the original estimate of no change. Excluding food and energy, core PPI accelerated by 0.2%, against the forecast for a 0.3% increase. Core less trade services, another volatile category, was up 0.3%. (Jeff Cox, CNBC) Markets: The S&P 500 closed lower at 7,636.36 and once again finished just above the potential support level at 7,620.90. The 50-day moving average continues to move higher and may provide additional support at 7,602.02. So far this morning, S&P 500 futures are lower by 0.46%, indicating an opening below 7,620.90. The weakness is being driven by Brent crude oil trading at $105.50 per barrel and the U.S.… Read More
Headline News: Equity futures point to a lower opening this morning as crude oil prices climb following an exchange of strikes between the U.S. and Iran over the weekend. The modest pressure comes after the major averages finished slightly higher last week despite considerable volatility surrounding oil prices, Treasury yields, and monetary policy expectations. Attention this week will turn to the August Producer Price Index on Thursday and Consumer Price Index on Friday, both of which have the potential to shift expectations ahead of next week’s FOMC meeting. The market currently assigns roughly a 60% probability to a 25-basis point rate hike, according to the CME FedWatch tool. (Michael Gibbs, Managing Director, Lead Portfolio Manager) Markets: The S&P 500 closed lower at 7,718.60 but remained above its 20-day moving average at 7,708.70. The RSI and Advance/Decline line remain in downtrends, which will need to be reversed before the index can make a sustained move higher. However, the S&P 500 has now formed a 23-day base, which is a positive sign for the continuation of the recent uptrend. This week’s PPI and CPI inflation reports could be significant market-moving events. Until those reports are released, we expect the S&P 500 to… Read More
