The Fuse
ES futures are looking strong this morning with the biggest bounce coming from the Nasdaq, which was down in most of Tuesday’s trade. Technology has been hit hard lately but we could be ready for an advance in this group soon. Cisco reports earnings tonight and that could lift the group further if investors like what they hear.
Interest Rates are modestly higher today on very slow trade, bonds continue to remain rather steady. The spread between 2/10 remains at roughly 50bps, the same it’s been for weeks. Fed futures see a 2-1 chance of a cut at next month’s meeting. Long term 30 yr rates are just under 4.8% and steady. High yield is moving up as spreads are tightening.
Stocks are following through again after a good start to the week. In Europe the STOXX gained .4% led by nice gains in France and Germany. The FTSE added more to its big Tuesday gains,, crude oil is down 1% but gold and silver are higher. The US dollar index was flat. In Asia Japan climbed .4%, Hang Seng up .8% and Shanghai slightly lower. Yields in Germany up 1bp, US 10 yr treasuries down 3bps.
Earnings last night from Oklo were a disappointment but the stock is up this morning as it appears Oklo was sold off too hard. This morning Circle reported and missed. Later tonight it is Cisco and several other small names, tomorrow am is Disney and JD.
We’ll give the markets the benefit of the doubt in calling this a followthrough day — barely. We say that only because volatility was rampant. Stocks ran up, down, back up, then down and finished higher. This sort of activity happens when there is a lack of liquidity and that is happening now. A few more days of calmness would be in order. Not much left on the earnings front after Cisco and Disney this week, oh but NVIDIA next week is going to bring everyone together again! Oh joy!
Another positive day of breadth has the bulls feeling much better about things. Stocks only issues are still on buy signals, oscillators are moving in the right direction, NYSE is positive and Nasdaq is nearly there, one positive session and this indicator will be bullish. New highs are almost on a new buy signal.
We could have used better volume but we’ll take what we can get. Strong moves up on higher turnover gives us more confidence that the trend can continue, but if volume is flailing it means the trend is in jeopardy. Being in a bullish seasonal period though means we could certainly carry forward even without the strong turnover, just know that when the seasonality changes in January there will be some payback.
As we mentioned last week the support levels held in, in fact testing that 50 ma on Friday for the SPX 500 was a monumental. That could be the launch point for this next rally, which may be longer in price and duration. Strong technicals should start showing up soon, too.
The Internals
What’s it mean?
Very strong internals for a second consecutive session, the VOLD and ADD finished positively but the latter had some sell programs late in the day. No matter, the VIX continues to decline and is now on a buy signal ticks were heavy green all session long as buy programs persist. Put/calls were lower than usual, ADSPD nearly had a trend up day. Solid day for the internals, look for it to support the markets.
The Dynamite
Economic Data:
- Wednesday:Fedspeak
- Thursday:CPI, jobless claims, Fedspeak
- Friday:Retail sales, PPI, fed speak, biz inventories
Earnings this week:
- Wednesday:CRCL, INVZ, GILT, CSCO, CCAP, LB, PAAS
- Thursday:DIS, JD, PSFF, PLX, CSIQ, AMAT, NU, BZH
- Friday:TWST, MKT, SH
Fed Watch:
Not much data to work with but it appears the Fed is locked into a rate cut in December, only because they have been commenting about the weakening labor market. Some data put together by the Chicago Fed showed this to be true. Lots of fedspeak this week though, we’ll get a good read on their views.
Stocks to Watch
Tesla – After giving Elon Musk his desired pay objection of 1 trillion dollars, we’ll see if Tesla responds and starts moving upward. The stock has been strong in 2025 and is not far off all-time highs.
Bitcoin – the crypto tested the 100K marker this week and helped to drag the other markets down with it. We’ll need to see a basing period first and then see if the crypto currency rises up.
Nasdaq – Coming off the worst week since April, technology names were blasted this past week after many posted some very robust earnings. Can they bounce back? Certainly so but it will take better money flows and volume.
