Headline News: The U.S. labor market showed no signs of letting up in June, as companies created far more jobs than expected, payroll processing firm ADP reported Thursday. Private sector jobs surged by 497,000 for the month, well ahead of the downwardly revised 267,000 gain in May and much better than the 220,000 Dow Jones consensus estimate. The increase resulted in the biggest monthly gain since July 2022. From a sector standpoint, leisure and hospitality led with 232,000 new hires, followed by construction with 97,000 and trade, transportation and utilities at 90,000. Annual pay rose at a 6.4% rate, representing a continued slowing that nonetheless still is indicative of brewing inflationary pressures. (Jeff Cox CNBC) Markets: The S&P 500 traded in a tight range with below-average volume and closed higher at 4446.82. So far this morning, the S&P 500 futures are lower by .70% after the ADP employment report came in much higher than expected. Economists expected an increase of 220,000, but the reported number was 497,000. So, the prospect of further rate increases by the Federal Reserve is being priced into markets this morning. Potential support remains at 4422.44 and then the 20-day moving average at 4368.90. We… Read More
Headline News: The S&P 500 futures are down 22 points and are trading 0.5% below fair value. The NASDAQ 100 futures are down 89 points and are trading 0.6% below fair value. The Dow Jones Industrial Average futures are down 165 points and are trading 0.5% below fair value. The stock market is poised for a lower open. Geopolitical angst is back in play after reports indicated that the U.S. wants to restrict Chinese access to cloud computing. Also, China’s Ministry of Commerce announced that foreign entities would have to request permission to export gallium and germanium from China. Concerns about global growth have been another limiting factor this morning. China’s Caixin Services PMI returned to its lowest level since January but remained in expansionary territory at 53.9. Services PMI readings from Germany, the U.K., France, Italy, and Spain decelerated from their May levels, but only France’s reading fell into contraction. (Michael Gibbs, Managing Director, Lead Portfolio Manager) Markets: The S&P 500 traded for half a day and closed at a new year-high for the year at 4455.59 on Monday. For the short term, the RSI index did not make a new high which is an issue, but long term,… Read More
Headline News: The S&P 500 futures are down 8 points and are trading 0.2% below fair value. The NASDAQ 100 futures are down 66 points and are trading 0.4% below fair value. The Dow Jones Industrial Average futures are up 3 points and are trading roughly in line with fair value. There’s not a lot of conviction on either side of the tape, driving mixed action in the equity futures market. Participants are waiting to see if there will be any follow-through to yesterday’s rally. Weakness in chipmakers following reports that the U.S. is mulling new restrictions on artificial intelligence chip exports from China has weighed on the broader market. Fed Chair Powell will speak on a policy panel at the European Central Bank (ECB) Forum on Central Banking 2023 in Sintra, Portugal, at 9:30 a.m. ET. Mr. Powell wrapped up his semiannual monetary policy testimony before Congress last Thursday, so there shouldn’t be anything too surprising in his commentary today. After today’s close, the Federal Reserve will release the results from the annual bank stress tests. The weekly MBA Mortgage Applications Index rose 3.0%, with purchase applications and refinancing applications each rising 3.0%. The 2-yr Treasury note yield is… Read More
Headline News: The S&P 500 futures are up 3 points and are trading 0.1% above fair value. The NASDAQ 100 futures are up 49 points and are trading 0.3% above fair value. The Dow Jones Industrial Average futures are down 55 points and are trading 0.2% below fair value. The S&P 500 and NASDAQ 100 futures are somewhat higher this morning, thanks to some rebound action in the mega-cap stocks. Dow Jones Industrial Average futures trade on the weaker side. Quarter-end rebalancing activity will be in play again today. Market participants will also have a slate of economic data to digest that will include: 8:30 ET: May Durable Orders (Briefing.com consensus -1.0%; prior 1.1%) and Durable Orders -ex transportation (Briefing.com consensus 0.0%; prior -0.2%) 9:00 ET: April FHFA Housing Price Index (prior 0.6%) and April S&P Case-Shiller Home Price Index (Briefing.com consensus -2.5%; prior -1.1%) 10:00 ET: June Consumer Confidence (Briefing.com consensus 103.8; prior 102.3) and May New Home Sales (Briefing.com consensus 665,000; prior 683,000) The 2-yr Treasury note yield is down six basis points to 4.68%, and the 10-yr note yield is unchanged at 3.72%. The U.S. Dollar Index is down 0.1% to 102.55. (Michael Gibbs, Managing Director, Lead… Read More
Headline News: The S&P 500 futures are down 15 points and are trading 0.4% below fair value. The NASDAQ 100 futures are down 97 points and are trading 0.6% below fair value. The Dow Jones Industrial Average futures are down 52 points and are trading 0.2% below fair value. Stock futures are weak this morning. Fed Chair Powell indicating yesterday that more rate hikes may be needed has seemingly offered an excuse for investors to take some money off the table after a big run recently. The NASDAQ 100 futures underperform due to lagging mega-cap stocks. The European Central Bank is expected to announce a 25 basis points rate hike at 8:15 a.m. ET. China’s National Bureau of Statistics cautioned that China’s economic recovery is not yet solid. Some economic data corroborated that view, including weaker-than-expected industrial production (3.5% year-over-year; expected 3.8%), retail sales (12.7% year-over-year; expected 13.7%), fixed asset investment (4.0% year-over-year; expected 4.4%) for May. In related news, the PBOC cut the 1-yr medium-term lending facility rate by 10 basis points to 2.65%. Treasury yields are moving higher. The 2-yr note yield is up five basis points to 4.75%, and the 10-yr note yield is up three… Read More
Headline News: The S&P 500 futures are up 4 points and are trading 0.1% 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 92 points and are trading 0.2% below fair value. The equity futures market is mixed ahead of the Fed decision at 2:00 p.m. ET. That decision will also be accompanied by the release of the Summary of Economic Projections and will be followed by Fed Chair Powell’s press conference at 2:30 p.m. ET. The Dow futures are underperforming this morning due to a sizable loss in a large healthcare name, which warned about rising costs. The weekly MBA Mortgage Applications Index rose 7.2%, with purchase applications jumping 8.0% and refinancing applications rising 6.0%. Market participants will also receive the Producer Price Index for May at 8:30 a.m. ET. The 2-yr note yield is down four basis points to 4.66%, and the 10-yr note yield is down two basis points to 3.82%. The U.S. Dollar Index is down 0.2% to 103.16. (Michael Gibbs, Managing Director, Lead Portfolio Manager ) Markets: The S&P 500 rallied past resistance at 4325.28 and closed higher at… Read More
Headline News: The S&P 500 futures are up 12 points and are trading 0.3% above fair value. The NASDAQ 100 futures are up 74 points and are trading 0.5% above fair value. The Dow Jones Industrial Average futures are up 40 points and are trading 0.1% above fair value. Stock futures have a positive disposition to start the week. Some hopeful anticipation that the Fed will not raise rates has contributed to the positive bias along with relative strength in the mega cap stocks. It’s a big week of news that will feature the release of the May Consumer Price Index and Retail Sales, along with policy decisions from the FOMC, the European Central Bank, and the Bank of Japan. Oil prices are lower, down 2.3% to $68.58/bbl, following news that Goldman Sachs has cut its price forecast for Brent Crude (to $86 from $95) and WTI Crude (to $81 from $89) due to higher oil supplies. Treasuries are little changed from Friday’s settlement levels. The 2-yr note yield is down two basis points to 4.60%, and the 10-yr note yield is up one basis point to 3.75%. Economic data today is limited to the May Treasury Budget (prior to… Read More
Headline News: The S&P 500 futures are flat and are trading roughly in line with fair value. The NASDAQ 100 futures are up 20 points and are trading 0.1% above fair value. The Dow Jones Industrial Average futures are down 63 points and are trading 0.2% below fair value. Equity futures are mixed this morning. Market participants are still in wait-and-see mode ahead of the May Consumer Price Index and Fed decision next week. China reported inflation data for May. CPI increased 0.2% year-over-year (expected 0.3%) following a 0.1% increase in April. China’s PPI, however, fell at its fastest pace since early 2016, down 4.6% year-over-year (expected -4.3%) versus a 3.6% decline in April. Treasury yields are moving higher. The 2-yr note yield is up three basis points to 4.56%, and the 10-yr note yield is up four basis points to 3.75%. The U.S. Dollar Index is pulling back from overnight highs, flat at 103.38. There is no U.S. economic data of note today. (Michael Gibbs, Managing Director, Lead Portfolio Manager ) Markets: The S&P 500 closed higher at 4293.93 after a brief attempt at the resistance at 4299.28. The index has now formed a four-day base, and traders appear to… Read More
Headline News: The S&P 500 futures are down 1 point and are trading in line with fair value. The NASDAQ 100 futures are down 12 points and are trading 0.1% below fair value. The Dow Jones Industrial Average futures are down 15 points and are trading slightly below fair value. There’s not a lot of conviction in premarket action, again. Market participants continue to play a waiting game ahead of the May Consumer Price Index and Fed decision next week. Labor issues at West Coast ports are causing vessel buildup and are leading to a breakdown in the supply chain, according to CNBC. The Reserve Bank of India left its key policy rates unchanged, as expected. Four large Chinese banks cut their yuan deposit rates, and there was speculation that the People’s Bank of China will lower its loan prime rate soon. Market participants will receive the weekly initial (Briefing.com consensus 237,000; prior 232,000) and continuing (prior 1.795 million) jobless claims at 8:30 a.m. ET. (Michael Gibbs, Managing Director, Lead Portfolio Manager ) Markets: The S&P 500 closed lower at 4267.52 and has formed a three-day base which we feel will continue until Wednesday’s Federal Reserve meeting. Markets are pricing in… Read More
Headline News: The S&P 500 futures are up 6 points and are trading 0.1% above fair value. The NASDAQ 100 futures are up 26 points and are trading 0.2% above fair value. The Dow Jones Industrial Average futures are up 5 points and are trading slightly above fair value. There’s not a lot of conviction this morning. Market participants are still contending with the notion that mega caps are due for a period of consolidation. Also, China reported a smaller-than-expected trade surplus for May as exports fell more than expected, stoking concerns over global growth prospects. The weekly MBA Mortgage Applications Index fell 1.4%, with purchase applications declining 2.0% and refinancing applications falling 1.0%. (Michael Gibbs, Managing Director, Lead Portfolio Manager ) Markets: The S&P 500 closed higher at 4283.85 and remained at the upper Bollinger Band. However, the last two trading days have formed a small base, and if that continues, the index could work off the overbought conditions that still currently exist. Also, the advance/decline line has not increased at the same pace as the S&P 500. So, there is yet to be a clear path for today’s trading. We still believe the support at 4241.01 could be tested… Read More
