Headline News: The S&P 500 futures are down 2 points and are trading 0.1% below fair value. The NASDAQ 100 futures are down 2 points and are trading slightly below fair value. The Dow Jones Industrial Average futures are down 22 points and are trading 0.1% below fair value. Stock futures are softer this morning. Participants are taking a wait-and-see approach after yesterday’s nice start faded by the close. There is also a sense that mega-cap stocks are overbought on a short-term basis and are due for a period of consolidation. The Reserve Bank of Australia raised its cash rate by 25 bps to 4.10% against expectations for no change and indicated that more rate hikes may be needed. China Securities Journal speculated that the PBOC would cut its reserve requirement ratio and other interest rates in the second half of the year. Labor issues continue at some West Coast ports, according to CNBC. Treasuries are little changed from yesterday’s settlement levels. The 2-yr note yield is down one basis point to 4.47%, and the 10-yr note yield is down one basis point to 3.67%. Oil prices are declining, giving back all of yesterday’s gains. WTI crude oil futures are… Read More
Headline News: The S&P 500 futures are up 1 point and are trading in line with fair value. The NASDAQ 100 futures are down 19 points and are trading 0.2% below fair value. The Dow Jones Industrial Average futures are up 10 points and are trading 0.1% above fair value. Stock futures have been mixed, yet there hasn’t been a lot of movement in either direction. Market participants are anxious to see if Friday’s rally will continue today. Some mega-cap stocks are relatively weak this morning, limiting moves for the broader market. Oil prices are climbing after Saudi Arabia said it would implement an additional voluntary cut in its production of crude oil, amounting to one million barrels per day. WTI crude oil futures are up 2.3% to $73.38/bbl. The Port of Los Angeles and Long Beach is shut down after labor negotiations stall. Separately, President Biden signed the debt ceiling bill into law on Saturday. The 2-yr Treasury note yield is up five basis points to 4.56%, and the 10-yr note yield is up seven basis points to 3.75%. (Michael Gibbs, Managing Director, Lead Portfolio Manager ) Markets: The S&P 500 roared to a new high for the year at… Read More
Headline News: The U.S. economy continued to crank out jobs in May, with nonfarm payrolls surging more than expected despite multiple headwinds, the Labor Department reported Friday. Payrolls in the public and private sector increased by 339,000 for the month, better than the 190,000 Dow Jones estimate and marking the 29th straight month of positive job growth. The unemployment rate rose to 3.7% in May against the estimate of 3.5%, even though the labor force participation rate was unchanged. The jobless rate was the highest since October 2022, though still near the lowest since 1969. Average hourly earnings, a key inflation indicator, rose 0.3% for the month, which was in line with expectations. On an annual basis, wages increased by 4.3%, which was 0.1 percentage point below the estimate. The average workweek fell by 0.1 hours to 34.3 hours. (Jeff Cox CNBC) Markets: The S&P 500 closed at another new high for the year at 4221.02 after briefly touching support at 4169.68. However, the RSI index and the Advanced/Decline line did not achieve new yearly highs. So, the buying was not widespread, and that needs to change before a sustained uptrend can begin. The new potential resistance level is not at… Read More
Headline News: The S&P 500 futures are up 8 points and are trading 0.1% above fair value. The NASDAQ 100 futures are up 11 points and are trading 0.1% above fair value. The Dow Jones Industrial Average futures are down 5 points and are trading slightly below fair value. Stock futures are mixed this morning. The Dow Jones Industrial Average futures are underperforming due to weakness in Salesforce (CRM) following its earnings report. The House passed a 2-year debt ceiling/spending cap bill by a vote of 314-117. The Senate is expected to vote this weekend. Also, market participants are reacting to Fed officials signaling that a pause is likely in June, but officials also contend that more increases may be needed. There is a large slate of U.S. economic data due out today, yet foreign data featured a stronger-than-expected Caixin Manufacturing PMI report from China and better-than-expected inflation data from the eurozone. May CPI was up 6.1% year-over-year versus an expected 6.3% and the prior month’s reading of 7.0%. The 2-yr Treasury note yield is up three basis points to 4.42%, and the 10-yr note yield is up two basis points to 3.65%. (Michael Gibbs, Director of Equity Portfolio & Technical… Read More
Headline News: The S&P 500 futures are down 17 points and are trading 0.4% below fair value. The NASDAQ 100 futures are down 55 points and are trading 0.4% below fair value. The Dow Jones Industrial Average futures are down 92 points and are trading 0.2% below fair value. Stock futures are a little softer this morning as market participants continue to wait on the passage of the debt ceiling and digest increasing calls that suggest mega-cap stocks and growth stocks are due for a period of consolidation. Concerns about global growth prospects have been a limiting factor, too, after China’s Manufacturing PMI remained in contraction for the second consecutive month. Also, worries are mounting about the Fed sticking to a hawkish line after Cleveland Fed President Loretta Mester (not a voting FOMC member), in interview said there is no “compelling reason to pause,” according to the FT. The 2-yr Treasury note yield is down seven basis points to 4.42%, and the 10-yr note yield is down six basis points to 3.65%. (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets: The S&P 500 traded above the resistance level at 4212.97 and outside the upper band briefly on Tuesday. However,… Read More
Headline News: The S&P 500 futures are up 24 points and are trading 0.6% above fair value. The NASDAQ 100 futures are up 195 points and are trading 1.4% above fair value. The Dow Jones Industrial Average futures are down 14 points and are trading slightly below fair value. Stock futures have been mixed this morning following the news over the weekend that President Biden and House Speaker McCarthy reached a debt ceiling deal; however, market participants are now waiting to see if the debt ceiling agreement will pass in both chambers of Congress. Strength in the mega-cap stocks, which are getting an added boost from falling market rates, has been supportive of the S&P 500 and NASDAQ 100 futures. The S&P 500 closing above 4,200 last Friday has been another supportive factor. The 2-yr Treasury note yield is down five basis points to 4.51%, and the 10-yr note yield is down nine basis points to 3.72%. (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets: The S&P 500 rallied past resistance at 4169.68 and came close to the high for the year at 4212.97 before closing at 4205.45. The trading came with an above-average volume of 4,565,496,576, but… Read More
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Headline News: The S&P 500 futures are up 10 points and are trading 0.2% above fair value. The NASDAQ 100 futures are up 57 points and are trading 0.4% above fair value. The Dow Jones Industrial Average futures are up 68 points and are trading 0.2% above fair value. The stock market is poised for a modestly higher open ahead of the extended holiday weekend. Markets are closed on Monday for Memorial Day. Reports indicate that negotiators are close to a deal to raise the debt ceiling for two years while cutting government spending; however, separate reports suggest support from party members on both sides of the aisle is not guaranteed. Market participants are also awaiting key economic data this morning. Namely, the PCE Price Index and core-PCE Price Index, the Fed’s preferred inflation gauge, will be released as part of the Personal Income and Spending Report for April at 8:30 a.m. ET. Treasuries are little changed from yesterday’s settlement levels. The 2-yr note yield is up one basis point to 4.51%, and the 10-yr note yield is down two basis points to 3.79%. The U.S. Dollar Index is down 0.3% to 103.91. WTI crude oil futures up 1.0% to… Read More
Headline News: The S&P 500 futures are up 29 points and are trading 0.7% above fair value. The NASDAQ 100 futures are up 287 points and are trading 2.1% above fair value. The Dow Jones Industrial Average futures are down 66 points and are trading 0.2% below fair value. A huge gain in a semiconductor name after the company beat earnings estimates and raised guidance, along with other semiconductor stocks trading higher in solidarity, has driven the outperformance of the NASDAQ 100 and S&P 500 futures. Meanwhile, debt ceiling uncertainty has kept the broader market in check. The angst around the debt ceiling has escalated after Fitch Ratings put the nation’s AAA rating on “watch negative.” Also, Congressional members will leave Washington for Memorial Day but will return to vote on legislation if a debt ceiling deal is reached, according to The Hill. Fitch’s action has fueled selling in the Treasury market. The 2-yr note yield is up seven basis points to 4.41%, and the 10-yr note yield is up four basis points to 3.75%. Elsewhere, Germany’s Q1 GDP was revised to show a contraction of 0.3% after a 0.4% contraction in Q4, meeting the technical definition of recession with… Read More
