The Fuse
Equity futures are climbing again as market try to build on Thursday’s buying flurry. Overnight action was positive, the German DAX hit new highs.
Interest Rates or slightly lower to flat with the long end of the curve starting to rise back up.
Chair Powell speaks later this morning and if recent Fed speakers give us a clue, he is not going to be all that dovish. But, you never know how it will proceed.
Very strong earnings this morning from Deere with a beat and raised guidance. Last night saw good top/bottom line results from Applied Materials and Ross Stores.
Put/call ratios fell sharply lower and that is a red flag. Oscillators are mildly overbought but not anything too exuberant.
Breadth was miserable all day long but the last ninety minutes saw the markets push higher, and thus breadth made a bullish turn
Consecutive accumulation days with the SPX 500 breaking out over 4200 is meaningful. If the index gets a weekly close above and confirms next week, June will be an interesting month.
Was that the push over 4200 the markets were waiting for? Of course, we need to see confirmation but with strong volume again this move is not all that skeptical. The only problem would be the lack of participation by the broad market, but it is improving.
The Internals
What’s it mean?
Good start, bad middle but great finish for the indices. That was the story Thursday with a sharp reversal in the VOLD and downside continuation in the VIX. Notable is the sharp drop in put/call, which we would condition a red flag. VIX is now looking to break 16% and with a holiday coming up, that may be in store.
Market players are extremely complacent.
The Dynamite
Economic Data:
- Friday:
Earnings this week:
- Friday: DE, FL
Fed Watch:
Some Fed speakers were out earlier this week with some pretty hawkish comments, not too surprising. We’ll have three more speakers later in the week.
Stocks to Watch
Tesla – With a new CEO named at Twitter, will Elon Musk revert back to the EV company full time and give them the attention they deserve?
Retail – We’ll have the April retail sales numbers this week but also many retailers report their next quarter earnings (see above).
Gold – the metal pulled back to the 20 ma this week where it should find some support.
