The Fuse
Equity futures are mixed this morning following a weekend of little news. Stocks are trying to regain their footing this week but with plenty of data to chew on and the start of earnings season it may be challenging.
Interest Rates are rising again on the long end of the curve. Last week the 10 year tested the 4.4% level for the first time since November. A rising yields now is going to cause some angst and even panic to develop, but as we saw Friday much of that worry goes away with strong data.
A solid jobs report continued some of the good news about the economy. We can celebrate a very strong economy
with good fundamentals, plenty of hiring and strong wage growth. At this point in the cycle it’s quite rare to see this strength but then covid put that growth on the back burner. Time to shine.
Nothing much yet on the earnings front but Friday will be a big day with some big banks releasing their numbers on that day. Delta will also post Q1 results this week.
Stocks are on the verge of breaking out higher but there is just something holding them back each time that opportunity arises. Fed speakers were aplenty last week and stated under no uncertain terms they are in no hurry to cut rates soon, in fact it may not even happen! Gold had a strong week but is rallying about .5% this morning, crude oil is off a bit as are other commodities.
Breadth was positive but much like last week’s big up session the spread between up/down was not substantial.
In fact, the oscillators remain below zero but new highs did manage to charge forward. That indicator has been on a buy signal for more than five months.
Volume was pretty well elevated in the Nasdaq Friday with the rise up so we can notch an accumulation day but the other indices were lower in turnover than Thursday. It is still a positive, especially since most of the losses from Thursday were wiped away.
We are likely to see bigger turnover later in the week.
Support on the SPX 500 is still around 5,200, the Dow Industrials have fallen over 1000 points in just over a week, but it seems nobody has noticed that big drop. We see 38K as support here and still see a path to 40K over the next month or so if earnings reactions are positive.
The Internals
What’s it mean?
Pretty good action from the VOLD on Friday but not really the oomph you would expect when the markets were up more than 1%. Nevertheless, pretty good recovery day, VIX was down and the TICKS were pretty positive all around. One concern might be that rising put/call on the bottom left, which really could just be a one-off, but if not there could be concern.
The Dynamite
Economic Data:
- Monday:N/A
- Tuesday:small biz optimism
- Wednesday:CPI, fed minutes, wholesale inventories
- Thursday:jobless claims, PPI, auctions
- Friday:consumer sentiment, import/export prices
Earnings this week:
- Monday:
- Tuesday:TLRY, WDFC, PSMT
- Wednesday:DAL
- Thursday:KMX, FAST, CONN
- Friday:JPM, BLK, WFC, C, SST
Fed Watch:
Lots of fed speakers last week and the main theme was – higher for EVEN longer! The data has been relatively strong and even some inflation is starting to creep in. That could be
Stocks to Watch
Inflation – Big inflation numbers coming this week with PPI and CPI. Last two months were pretty hot.
Banks – Financials will kick off the earning season on Friday, high expectations are priced in.
