The Fuse
Equity futures are heading lower this morning as the US markets continue to show weakness at the start of October. Volatility is elevated, the VIX futures this morning are ticking above 20. Perhaps the unsettling situation in the Middle East is playing a bigger role against the markets than anyone expected.
Interest Rates are again back up as bond buyers take some profits. The crowd is clearly waiting for that big jobs report to come Friday am. JPM has laid out potential scenarios that see the market making a big swing up or down, volatility is elevated.
Stocks overseas were mixed with Japan higher by 2% but in Hong Kong those stocks were down .6%, Shanghai was closed. Across the pond Europe declined sharply, down .4%, the dollar jumped as well. Crude oil is back up and over $71.4 per barrel, gold is slightly down as is silver.
Earnings from Levi last night were atrocious, the stock is down sharply today.
This session was typical of some of the sleepy action we had been getting used to in the summer. A big move up/down in the first hour then nothing happens the rest of the day. The range for the day in spy was very tight asa was the nasdaq. Russell 2K remains the wildcard here, if it can start to rally the rest of the indices will start picking up the pace.
Breadth was not great but it wasn’t horrible, either. We are seeing some good participation from several groups and that helps lift markets when the ‘main’ characters are weak. Oscillators are still bearish but clinging to that status, New highs just continue to rip higher and support the bull market condition.
Volume trends are bullish but yesterday the ticks were porous. Not much excitement here in the markets until later in the week and when earnings season gets underway, which should be in a week or so. The encouraging thing is this, the big money is not distributing stocks right at/near all-time highs. That is a positive, but if the markets don’t start moving up, then it is down they go.
A pretty much blah session with stocks making a lower high and lower low. It seems the market is stuck in neutral here, it won’t last this long for sure. We don’t have any changes from yesterday, the support zones are still in place. Higher levels exist but we would need to see a bit of volatility to get there.
The Internals
What’s it mean?
Not much to write home about with the internals. The VOLD was a bit higher, the ADD a bit lower, the VIX fell marginally, the ADSPD about unchanged, and ticks were about even. Much ado about nothing, but the Friday employment report promises to bring some excitement to the party. A VIX below 17.7 would be bullish for markets.
The Dynamite
Economic Data:
- Thursday:Jobless claims, ISM, services PMI, more fed speak
- Friday:Jobs report, NY Fed President
Earnings this week:
- Thursday:STZ, ANGO
- Friday:APOG
Fed Watch:
This has to be a record week for Fedspeak. No less than 13 speeches/opening remarks from everyone on the FOMC committee. That includes Chair Powell on Monday. This past week had several speakers as well as Powell but they did no harm. This week’s labor report is likely to cause a bit of indigestion for some.
Stocks to Watch
Gold – Last week saw the metal close above 2,700 per ounce, gold is on a roll in 2024. It can continue, perhaps towards 2,800 by year end.
China – Stocks from China have been very hot and moving sharply higher of late following some stimulus measures in the country. We’ll see if that continues or if a pullback is seen.
Energy – We have seen oil prices pulling back from the $70 per barrel level amid OPEC+ officials saying they plan to push more oil onto the market.
