Headline News: Equity futures point to a mostly lower open this morning following yesterday’s mostly higher finish, which was driven by a rebound in technology and mega-cap stocks. Investors stepped back into AI-related names after last week’s sharp selloff amid concerns about valuations and the reliance on debt to finance infrastructure expansion, although the recovery lost considerable momentum as the session progressed. Buying interest was also relatively narrow, with the S&P 500 Equal Weight Index finishing lower despite gains in the cap-weighted benchmark. That lack of broader participation remains a concern this morning as semiconductor stocks extend yesterday afternoon’s pullback in premarket trading, while rising crude oil prices present an additional headwind for equities. Overseas markets also have a weaker bias. According to Nikkei, AI-spending concerns and elevated borrowing costs weighed on Asian technology shares, while AI-related selling, higher oil prices, and political uncertainty have pressured European markets. September Housing Starts and Building Permits will be released at 8:30 ET, followed by September Pending Home Sales at 10:00 ET. A busy earnings slate also remains in focus before the open. (Michael Gibbs, Managing Director, Lead Portfolio Manager ) Markets: The S&P 500 rallied toward its 20-day moving average at 7,735.54, where… Read More
Headline News: Equity futures point to a mostly higher open this morning as stocks attempt to rebound from last week’s technology-led selloff. Semiconductor stocks and other AI infrastructure-related companies faced particularly heavy selling pressure amid growing concerns about the industry’s reliance on debt to finance its ambitious expansion plans. This morning, investors appear to be taking advantage of the recent weakness, sending NASDAQ futures firmly higher as several of last week’s hardest-hit areas rebound. Meanwhile, geopolitical tensions in the Middle East remain a concern after escalating hostilities pushed crude oil prices sharply higher last week, adding another layer of uncertainty to the market outlook. Attention now turns to a busy week of corporate earnings, particularly among some of the market’s largest technology companies, whose results and commentary could provide important insight into AI spending plans, profitability, and the sustainability of broader market earnings growth. (Michael Gibbs, Managing Director, Lead Portfolio Manager ) Markets: The S&P 500 sold off sharply, closing lower at 7,659.44 and below its 50-day moving average. The RSI also declined to 44.12, reflecting weakening momentum and continued selling pressure. However, buyers stepped in late in the trading session, and that buying interest appears to be continuing this morning,… Read More
Headline News: September brought little relief to the accelerating cost of living, as consumer prices increased again and kept the inflation rate well above the Federal Reserve’s goal. The consumer price index, a broad measure of goods and services costs across the U.S. economy, rose a seasonally adjusted 0.6% for the month, putting the 12-month rate at 3.7%, the Bureau of Labor Statistics reported Wednesday. Economists surveyed by Dow Jones expected respective gains of 0.6% and 3.6%. Stripping out volatile food and energy costs, so-called core CPI rose 0.3% for the month and was up 2.6% on an annual basis, compared to respective estimates for 0.2% and 2.5%. (Jeff Cox CNBC ) Markets: The S&P 500 closed higher at 7,805.45, remaining within its current trading range of 7,771.48 to 7,816.70. This morning’s hotter-than-expected CPI inflation report has raised concerns about a potential Federal Reserve rate hike in October, with the possibility of another increase before year-end. The initial market reaction has been negative, with S&P 500 futures declining 0.29% and the yield on the U.S. Ten-Year Treasury rising 11 basis points. Higher Treasury yields, coupled with renewed inflation concerns, could increase selling pressure on equities today. From a technical perspective,… Read More
Headline News: Equity futures point to a slightly lower opening this morning, as investors assess the recent rise in Treasury yields and continued pressure on semiconductor stocks. On the interest rate front, Fed Governor Christopher Waller said the increase in Treasury yields reflects stronger growth expectations rather than concerns about inflation, according to Reuters. Yields are easing this morning as trading resumes following yesterday’s Columbus Day bond market closure, with a decline in crude oil prices providing some relief. Overseas, European markets are mostly higher, supported by lower oil prices and bond yields. Asian technology markets, however, faced renewed selling pressure amid concerns about elevated AI valuations, substantial capital spending commitments, and growing competition in memory chips. According to Bloomberg, China’s CXMT has claimed a breakthrough in memory technology that could put it ahead of established manufacturers Samsung and SK Hynix, adding to concerns about competition in the industry. Meanwhile, global semiconductor stocks are also facing pressure following Financial Times reporting that a large semiconductor company’s CEO compared aspects of the AI trade to gambling, adding to questions surrounding the sustainability of AI-related investment and valuations. Meanwhile, Q3 earnings season is ramping up today, with several major banking and health… Read More
Headline News: Equity futures point to a subdued start to the week as investors prepare for the unofficial start of the Q3 earnings season, with several major banks scheduled to report results in the coming days. Stocks are coming off a winning week in which broader market participation helped offset weakness in technology stocks, a reversal of the recent trend of narrow market leadership. The Equal-Weight S&P 500 snapped a seven-week losing streak, highlighting the improvement in participation beyond the largest stocks. The AI infrastructure buildout remains in focus this morning, with several notable M&A headlines drawing attention to the space. Meanwhile, crude oil prices are moving higher despite comments from President Trump that Russia and Ukraine have agreed to an “energy ceasefire.” According to Axios, Ukrainian President Volodymyr Zelensky said the agreement was “news to me,” although he indicated that Ukraine would also agree to an energy ceasefire if Russia committed to one. There are no U.S. economic releases remaining today, though this week will feature some key inflation data with the release of the September Consumer Price Index on Wednesday and Producer Price Index on Thursday. (Michael Gibbs, Managing Director, Lead Portfolio Manager ) Markets: The S&P 500 rallied… Read More
Headline News: Equity futures point to a lower opening this morning after the S&P 500 and NASDAQ Composite reached fresh record highs yesterday. Rising Treasury yields and oil prices are creating renewed pressure after stocks received some relief from both fronts to start the week, while mega-cap and technology names are also trading lower in the pre-market. The rebound in oil comes as geopolitical uncertainty remains elevated. Vice President JD Vance said the U.S. remains in discussions with Iranian officials, but that Iran must make meaningful reductions in nuclear enrichment to meet U.S. demands, according to Reuters. The September FOMC Minutes at 2:00 p.m. ET will be the main item on today’s U.S. calendar. Weekly crude oil inventory data are due at 10:30 a.m. ET, followed by August Consumer Credit at 3:00 p.m. ET. (Michael Gibbs, Managing Director, Lead Portfolio Manager ) Markets: The S&P 500 gapped higher at the open and closed at a new all-time high of 7,818.93. The RSI and Advance/Decline lines both moved higher in support of the advance; however, both indicators suggest that buying participation has not been widespread during the recent uptrend. Notably, the S&P 500 remains extended, and a few days of consolidation… Read More
Headline News: Equity futures point to a higher open this morning as stocks look to build upon a solid start to the week. Oil prices and Treasury yields are both moving lower this morning, adding to the constructive backdrop for equities. Crude oil is currently down $2.01 (-2.3%) to $87.42 per barrel amid more favorable reports of increased crude flows out of the Middle East, while the 10-year note yield is down five basis points to 5.26%. While oil prices moved lower yesterday, Treasury yields continued to creep higher. The stock market appeared largely unfazed by the renewed rate pressure, however, as early strength in technology stocks broadened into a solid advance across the wider market as the session progressed. The NASDAQ Composite reached fresh record highs, while the S&P 500 finished less than half a percent below its own record closing high. (Michael Gibbs, Managing Director, Lead Portfolio Manager ) Markets: The S&P 500 rallied to close at 7,773.95, moving above resistance at 7,771.48. Buying was broad based, while the RSI also rose to 59.00. So far this morning, S&P 500 futures are higher by 0.30%, setting the stage for a possible test of the previous all-time high at… Read More
Headline News: Equity futures are pointing to a modestly lower start this morning as investors return from a week in which elevated Treasury yields and narrow market leadership remained key influences on the broader market. Treasury yields remain near multi-decade highs after their rise drove much of last week’s action, continuing to present a significant headwind for equities. The NASDAQ Composite was the only major average to finish last week slightly higher, as strength in mega-cap and technology stocks continued to prop up the major indices despite weaker participation beneath the surface. That divergence was particularly evident in the S&P 500 Equal Weighted Index, which recorded its seventh consecutive losing week, according to FactSet. Corporate news is relatively quiet to begin the week, leaving the broader macro backdrop as the primary focus in early trading. On the energy front, Bloomberg reported that Iran increased attacks on ships just as traffic through the Strait of Hormuz returned to pre-war levels, though crude oil is moving modestly lower this morning. Separately, OPEC members reaffirmed their commitment to market stability. The September ISM Non-Manufacturing Index at 10:00 ET is the main item on today’s U.S. economic calendar, preceded by the final S&P Global… Read More
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
