The Fuse
Equity futures are rallying a bit this morning attempting to shake off the down session from the prior day. We often see strong money flows to start the month, but with a big jobs number coming tomorrow we might see a bit of caution before that drops on the markets before the start of trading Friday.
Interest Rates are on the rise today but fed funds futures are down a bit after some watered-down talk yesterday about rate hikes.
The House of Representatives voted to pass the debt ceiling bill, while inflation numbers in Europe were better than expected (but still elevated). ADP report on jobs will be a key number today leading into tomorrow’s NFP.
Solid earnings from CRM and CRWD along with OKTA and VEEV, but some moderate guidance has hit these stocks rather severely. However, we may see a rebound in the course of a few days. Tonight we have AVGO, LULU and ZS along with CHPT and DELL.
The first day of the month typically is a strong one, as money flows in. After a poor showing Wednesday we will see if the bulls can turn things around.
Breadth remains a problem for the markets. In fact, new lows are still beating new highs and that list is starting to expand. We’ll be watching this carefully.
Volume levels have started to pick up again following the holiday, and as we see a bit of back n’ fill action we might see better price movement later in the month of June.
With some strength to start the new month perhaps the SPX 500 can get another close above 4,200 this week. If so, that would change the course of the market to at least a neutral to slightly bullish condition.
The Internals
What’s it mean?
Internals were heading lower from the start and never really improved much. Volatility remains low but the TRIN rose up sharply as did the PUT/CALL ratio. This smacks of a warning sign unless they come down today. VOLD was down all session but looks to bounce back later this week.
The Dynamite
Economic Data:
- Thursday: ADP employment, jobless claims, 1Q productivity, ISM, PMI, construction spending
- Friday: Non-farm payroll report
Earnings this week:
- Thursday: AVGO, M, DG, LULU, CHPT, MDB, ZS, ASAN, DELL
- Friday:
Fed Watch: Philadelphia Fed President Harker seems to think a pause may be right at the next meeting. Other Fed members are not so sure though, but the debate around the table in two weeks will be inspiring. Harker will speak more later today.
Issues/Stocks to Watch this week
Jobs Data – The recent gains in jobs data continue to confound everyone. Can we continue creating so many new jobs at this late stage of the cycle? We’ll find out more this week.
Washington DC – More drama with the debt ceiling issue, perhaps there is some progress this coming week, at least we hope so.
Volatility – The VIX fell hard last week and that often means ‘payback’ after a holiday. We’ll see if that happens and a sell the news event is the result.