The Fuse
Equity futures are getting drilled this morning as more banking worries spread around the world. This time it is Europe, where many banks have collapsed today. Led by Credit Suisse, whose woes are well-documented, stocks across the world are reeling.
Stocks look to break the 3900 level once again, and a reversal that engulfs yesterday’s strong up move is going to be extremely bearish. At this point, with a strong move up in volatility we are going to see big swings.
Overnight news about troubles with more banks are putting undue pressure on the markets. Oscillators are still modestly oversold and can get even more oversold. Economic data is going to exacerbate the wild market today.
Strong earnings last night from Lennar, and today solid earnings from fledgling Oatly. Later today we’ll hear from Adobe and Five Below.
CPI came mostly in line yesterday, but still reflected elevated prices. The PPI and retail sales are out this morning, if buyers do not show up the markets could retreat one more time.
Breadth was very strong today
Good turnover today as the oversold condition was corrected in a hurry. Lots of volume came in on the deeply oversold banks, which will require some followthrough.
From the start, markets were strong and rallied up past some recent resistance. The 3900 level on the SPX 500 may now be good support, with one more day of up. The 20 ma is above at 3936 or so.
The Internals
What’s it mean?
Not too much to get excited about with the internals but a late day buy program shoved markets to near their highs of the day. The VOLD had a strong finish with some heavy buy programs hitting at the end of the day. Notice the pullback in the put/call (bottom right), notable as put buying has been elevated. Ticks were strong most of the day (bottom left). This was simply a reversal from a deep oversold condition.
The Dynamite
Economic Data:
- Wednesday:empire state manufacturing, PPI, retail sales, biz inventories
- Thursday:jobless claims, philly fed index, housing starts/permits
- Friday:IP/cap utilization,, LEI, sentiment, Eurozone CPI, labor cost index
Earnings this week:
- Wednesday:OTLY ADBE FIVE
- Thursday:DG SIG FDX GME GRPN DBI WSM
- Friday:BLDP
Fed Watch: No Fed speakers this week as the committee is in the blackout period before their next meeting. However, the data is going to skew the fed funds futures, so we’ll be watching the movements this week.
Stocks/Issues to Watch
Name – Bank ETF, which is falling sharply with all the bank issues.
Name – Rates, which fell sharply on Monday.
Name – VIX, continues to move upward.
