The Fuse
Equity futures are mixed this morning with the Nasdaq showing the way higher following a robust earnings report from mega cap NVIDIA. The tech-laden index is up more than 1% pre-market but Dow futures are slightly lower, the cause being a down session by Boeing on news that 737 production problems exist.
Interest Rates are headed slightly higher this morning as the big surge in bond buying yesterday dissipates. If inflation remains the issue for the Fed (Powell may mention it tomorrow) then rates might climb further. Gold and silver were notably strong on Wednesday.
European and Asian markets were higher overnight as the former was on its way to a four day winning streak. Investors are awaiting comments out of the Jackson Hole Conference, which could spur some volatility action.
Very strong earnings last night from NVIDIA as many expected to see, but also from SPLK, NTAP and SNOW. It’ll be all about tech today and if the bulls can hold these gains there is room for upside in the interim. Today reports from MRVL, ULTA, WDAY, INTU, AFRM and JWN after the close.
Jackson Hole Conference later this week where we’ll hear from Major Bank leaders, topping it off is Chair Powell, who decidedly spooked the markets in 2022 with a very hawkish speech.
Finally a day the bulls can be proud of. Very strong breadth and it held all session long. More than 4-1 positive sets this indicator up for followthrough today, and if so a potential buy signal is just around the corner.
Volume was a bit weak on the day as another summer trading day went by. We expect a bit more turnover to come to market after the Labor Day Holiday, so expect to see more wild swings.
Perhaps the test near 4,330 was enough on Tuesday. That session was a sharp turnaround but still finished off, but yesterday a very strong showing by the bulls has the SPX poised for a move back to 4,500. The Nasdaq, for its part made a solid run above 15K and is now back above that important marker.
The Internals
What’s it mean?
Finally a win for the bulls, there have not been many in August. The VOLD was the clear winner yesterday, look at that surge higher into toe close. Put/calls did run up though and finished sharply higher, this indicator on a sell signal. TRIN also climbed as well, noting more issues moving than volume. But the TICKS really stand out here, notice the heavy green concentrated all day long, a marked shift from recent days. if that continues it’ll be bullish for markets into month end.
The Dynamite
Economic Data:
- Thursday: Jobless claims, Durable Goods, KC Fed manufacturing index
- Friday: Jackson Hole conference (Powell speaks), Univ of Michigan confidence
Earnings this week:
- Thursday: BBW, BURL, DLTR, AFRM, GPS, INTU, JWN, MRVL, ULTA, WDAY
- Friday: n/a
Fed Watch:
It’s the big Jackson Hole Conference later this week, and if you recall Chair Powell’s last appearance there (2022) he brought down the house – so to speak. Stocks were punished and led a path towards the October lows as the Chairman reiterated a hawkish view on interest rates. A year later much has changed and we don’t anticipate the same rhetoric, but it could be market-moving.
Stocks to Watch
NVIDIA – Earnings are out midweek from the big chip maker and many are wondering if NVIDIA can once again pull off a big quarterly report.
Interest Rates – Once again, rates rose up this week and tagged levels not seen in about 15 years. There was a pullback of sorts on rates Friday but plenty of selling in the bond market all week long.
Volume – As we pass a big expiration day on Friday we may see volume levels start to quiet down, approaching the Labor Day holiday. That makes for some erratic movements. We’ll also be watching crude oil as it climbed once again this past week.
