The Fuse
Futures are down in a continuing theme on Fridays – Down markets. We’ll see how it goes today but a risk off day is certainly not unexpected during this seasonally weak period for markets. Not much news to drive stocks higher while the internals have been poor.
Interest Rates are falling today as traders take a risk off approach. If the 10 year yield falls under 3.7% that might be of concern, growth stocks are due for a corrective period.
Global markets were down sharply overnight with Europe, China and Japan down sharply. Recent rate hikes by some European central banks are a reminder the job of fighting inflation is not done yet.
Strong earnings this morning from Carmax has this stock sharply higher this morning.
Day two of Chair Powell’s testimony, this time in front of the Senate. Really nothing new to report. Micki Bowman and Chris Waller, Fed Governors had some sharp words about inflation. A few European banks, England included raised rates Thursday morning.
Breadth was horrendous again on Thursday and it seems buyers are absent. We now have a drop below zero in the McClellan Oscillator and that means the indicator is bearish.
Markets were up but that is the only good thing to say about Thursday’s trading session. The volume on the indices were down, save for the IWM which was higher, and that index was lower! That is more distribution.
Another day of selling this a bit heavier than the prior day. It sure looks as if the markets are going to correct, but the SPX 500 was higher, as was the Nasdaq by more than 1%. We still see 4,400 as strong resistance for the SPX 500.
The Internals
What’s it mean?
Markets were higher yet the internals were down, save for the VIX. Check out VOLD on the to left pane, this showed how skewed the selling concentration was yesterday. Put/calls are on the rise again while the ADD was weak for a second time this week. Something to watch as we head into the last week of the quarter.
The Dynamite
Economic Data:
- Friday: June Flash PMI’s
Earnings this week:
- Friday: KMX
Fed Watch:
A slew of Fed speakers out this week talking about the economy, inflation and their position on rates. Jay Powell gave Senate testimony today, he reiterated the need for more rate hikes. With the last Fed meeting just a week ago, I don’t believe there will be anything too earth shattering to shake up the markets.
Stocks to Watch
VIX – With a big drop below 15% last week we’ll see if some of the is burned of with a rise in volatility.
Housing – Some strong results from Lennar and others, we may see a surge in housing data this week as interest rates make their way lower.
Retail – Not much on the news front for retail but this group is due for some outperformance in the summer, we’ll see how this plays out.