The Fuse
Equity futures are mixed and trying to head higher on this shortened trading day after Thanksgiving. Markets will close at 1pm EST and re-open Monday morning at 930am. Stocks are modestly overbought but are still consolidating recent gains.
Interest Rates are on the rise today as bonds are selling off in front of the weekend.
NVIDIA has delayed delivery of a custom chip to China until perhaps the first quarter, complying with new US export rules. Today is Black Friday, the biggest retail day of the year as shoppers get a jump on holiday sales.
Not much on the schedule for the rest of the week but a bigger load of reports will be coming out next week.
Thanksgiving holiday this week so this is a short week for trading, only 3 1/2 days. A great time to sell some volatility and keep your positions small.
Breadth was higher but not all that great today but it certainly belongs on the bullish side of the ledger. Strong breadth simply means there is strength underneath this market and dip buyers are present. That happened early in the day Wednesday as a selloff was quickly bought up before the closing bell.
Lower turnover once again as desks remain thin into the holiday weekend. While futures traded all day yesterday volatility was rather muted. Given today will be a half trading session and a holiday one to boot we should expect Friday to be the slowest trading day of the year.
The indices are slowly making their way up to some stiff resistance. We’ve talked about the 4,600 level on the SPX 500 but the industrials are about 1% away now from the summer high levels at 35,600. That would be a tremendous achievement to exceed and point the way towards those all time highs from January 2022.
The Internals
What’s it mean?
It seemed to be a positive day as it often is just before Thanksgiving. But there was not much energy and volatility was smashed, the VIX now under 13%. That is highly complacent and a warning flag is up. Ticks were moderate and even in the NYSE and Nasdaq, VOLD higher and ADD too, but just a mirror image of Tuesday’s action. Today’s half session won’t give us too much information but we have the last week of the month coming up fast.
The Dynamite
Economic Data:
- Friday: Global Flash PMI – November
Earnings this week:
- Friday:N/A
Fed Watch:
So many Fed speakers out last week I suspect they are tired of talking. In fact, nothing on the docket for speakers this week. We’ll have the minutes from the last Fed meeting out midday Tuesday. Current odds are favoring a rate cut in 2024 as the Fed’s next move.
Stocks to Watch
Volatility – Expect to see the VIX subdued this week as we often see during a shortened trading week. Volatility sellers get in front of the holiday, hence when the market re-opens next week there could be a giveback and higher VIX, which often means markets decline.
Retail – End of the week is Black Friday, otherwise known as the ‘Super Bowl of Retail’. We’ll have our eyes on Amazon, Walmart and other retailers who try to lure shoppers into finding early Christmas bargains.
Oil – Crude oil prices were up sharply last week and may continue this coming week. We see a rise eventually towards $85 a barrel, which could come soon on furious short covering and added buying.