The Fuse
Equity futures are down this morning after long three day weekend. Volatility fell sharply last week and we often see than given back when markets open up, that is happening today. As we head into earnings season, some caution is warranted.
The Russell 2K has been weak of late and trades below the 20 ma. We’ll be watching this index, as it often leads the rest of the market.
Overnight news that China continues to show interest in a conflict with Taiwan. In addition, Samsung warned last week their earnings will be the smallest since 2009, and they are cutting memory production. Memory prices have tumbled.
Earnings out tonight from cannabis name Tilray.
This week starts off earning season, but we’ll be watching inflation data carefully along with the release of last month’s FOMC meeting minutes.
Breadth was about breakeven, we are still clinging to a buy signal but that could change with a couple of weak sessions.
Volume levels were low on Thursday as many decided to take off early for the long weekend.
We see 4100 on the SPX 500 as good support once again, below there is 4090 and 4050 then 4000. For the Nasdaq, it’s 13K of course, with some levels below there if that falls (12500 and then 12K).
The Internals
What’s it mean?
A rather quiet session Thursday before the three day holiday. Notice the lack of movement (net) in VOLD, ADD which tells us little interest from big buyers or sellers. Volatility plunged, as we often see in front of a holiday weekend (that may get paid back today). Put/calls are still mildly elevated and, the 10 ma is rising again. Something to watch for. ADSPD was basically flat.
The Dynamite
Economic Data:
- Monday: Wholesale inventories, investor movement index
- Tuesday: Small Biz optimism index
- Wednesday: CPI, FOMC minutes, Atlant Fed Biz Inflation expectations
- Thursday: PPI, jobless claims
- Friday: Retail sales, industrial production, biz inventories, consumer sentiment
Earnings this week:
- Monday: TLRY
- Tuesday: KMX, ABS
- Wednesday: RENT, LVMH
- Thursday: DAL, FAST, INFS
- Friday: JPM, UNH, PNC, C, WFC, BLK
Fed Watch: Two Fed speakers this week, Austan Goolsbee on Tuesday and Tom Barkin Wednesday. We don’t expect fireworks from these speakers though a response to last week’s job data is likely.
Issues/Stocks to Watch this week
Banks – JPM, C, WFC, BLK kick off the ‘real’ start of earnings.
Gold, Silver – After a strong couple weeks, seeing if key levels of support hold.
Inflation data – With CPI, PPI out midweek, will these start to materially turn down or force the Fed to hike more.