The Fuse
What are futures doing?
ES futures are up strong as there is a nice bid under the market. Nasdaq is higher by nearly 1%, Industrials also gaining some ground. Plenty of work to do however but starting off positive is a good showing by the bulls.
News
Europe had modest gains overnight, the STOXX up .15% lied higher by Germany and France. The FTSE up .15. In Asia Japan was higher by .5% but Hong Kong down, Shanghai slightly higher. Gold is down a fraction, silver down 1% while crude oil hammered, down 3.2%. German bund yields down slightly , 10 yr treasuries pushed below 4.7%.
Volatility
Volatility remains in place, the VIX about flat but vol futures are lower. That is important as the futures are starting to come in line with the cash price, if that trend continues markets may continue to rise.
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Interest Rates
Nice drop in yield across the curve this morning that is supporting stocks in a positive way. Long end of the curve is getting some interest at the 4.7% area, seemingly an attractive level. 2/10 spread continues to widen, high yield remain in demand while fed funds futures are not signaling any different for the September meeting, but December sees a 75% chance of a hike.
Earnings
Nothing much on earnings last night but this morning Dick’s along with some China names and small banks. Tonight we get Intuit, Zoom, Box, and Semtech.
Events
One of the weakest and porous days of the year. The range was narrow and got smaller with each passing moment. Just nothing out there to drive stocks higher or lower for that matter. Stocks continue to trade in a very tight range and with no volatility to speak of. Just very little to do at the moment.
Breadth
What started off as a good breadth day turned even. There was nothing exciting at all for buyers to get excited about, but maybe some earnings later in the week might stoke some buying. Oscillators are still negative, new lows expanding again.
Volume
Very low volume again, that is plaguing this market currently. We may not see much volume return until mid September, that is the market we have right now. Few catalysts to drive markets higher and certainly not any buyers or sellers tipping their hands.
Support Levels
Maybe the indices will touch some levels of support soon, but then again maybe not. The jury is out on direction, lower levels could be tagged very easily but it seems traders are not interested at the moment. Dip buyers nowhere to be found, for good reason.
The Internals
What’s it mean?
The weakness in the internals continue, the VOLD and ADD finishing near the flat line. PUT/CALLS barely budged, ticks were heavy red all day long, and the VIX rose up slightly but finished well off the highs. No future read on the markets from the internals at this time.
The Dynamite
Economic Data:
- Tuesday:Case-Shiller index, new home sales, consumer confidence
- Wednesday:Durable goods, GDP 2nd estimate, PCE, for July, income/spending
- Thursday:Jobless claims, trade, inventories, KC fed survey
- Friday:chicago biz barometer, Michigan final survey, Jackson Hole Conference begins
Earnings this week:
- Tuesday:DKS, BNS, GI, VIPS, BMO, BZ, INTU, SMTC, ZM, BOX, NCNO, JOYY, HEI, ELMD QFIN, STRT
- Wednesday:KSS, ANF, DY, WSM, SJM, LIK, DCI, BBWI, NVDA, CRM, CRWD, OKTA, SNPS, A, VEEV, OOMA, P, NTNX
- Thursday:BBY, BILI, CM, DG, RY, TD, DLTR, HQY, HRL, BURL, MRVL, IREN, ADSK, ULTA, AFRM, WDAY, S, RBRK, ESTC, GAP
- Friday:CHA, MNSO
Fed Watch:
All eyes and ears on the Fed Chair this week as the annual Jackson Hole Conference takes place. This is the scene where in the past there have been policy shifts ‘hinted’ at, but of course anything drastic will have to wait until the September meeting. I do not expect much to change in the language or the message from Warsh, other than talking down inflation and how it needs to be the committee’s goal to get to 2%.
Stocks to Watch
NVIDIA – The giant chip company is in the spotlight as they will deliver earnings on Wednesday. Can they continue to beat and surprise to the upside? Many believe so but the price action has been subdued.
Metals – We talked about gold last week and now it is in the area of new highs. Silver is also on the move and should be making some breakout moves soon.
Oil – Black gold had a good week and looks to make a run at higher prices, the problem is the Iran War continues to linger. That could be problematic as we head into a big driving weekend (holiday).
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