The Fuse
Equity futures are down a bit in front of the big economic data to be released this morning. September CPI is coming out as is jobless claims, looking for a .1% gain in CPI while core should be .2% (lower than last month). Markets are looking to rise up for a third straight session but there is not much of a bid to carry the load. Earnings from some banks tomorrow and the PPI may change the situation.
Interest Rates are up slightly as bond traders position themselves in front of the important CPI data out today. If the number is hot we may see yields continue to move higher, the notion that fed rate cuts will be coming slower than expected.
Stocks overseas were actually bullish, using a tailwind from the US markets yesterday to move higher. Europe STOXX were higher by 1%, France and Germany were lower however. The dollar was flat, crude oil is higher by more than 1% while gold is also ticking higher, along with silver. Stocks in Asia were higher, the Nikkei (Japan) showed a modest .3% gain while Hong Kong and Shanghai were up 2.7% and 1.3% respectively.
Earnings from Delta and Domino’s were out this morning and they missed badly. The stocks are down a bit on the miss but also some light guidance. We’ll hear from JPM, WFC and BLK in the am.
Lots of Fed speakers out this week, a slew of them as they intersect with some important inflation data.
Another solid day this time with good participation all around. Stocks in the small cap group, IWM struggled a bit during Tuesday’s rally but managed to finish in the green yesterday. It wasn’t ‘lights out’ but positive small caps goes a long way to helping the rest of the markets. New highs for SPX 500 and Industrials, the Nasdaq is trying to clear some room to make a run itself.
Solid volume and decent breadth figures yesterday as the indices notched an accumulation day (barely). Stocks pushed higher and through resistance, but with a couple of big economic reports due this week there could be some fireworks. Remember, volatility elevated, markets are not overbought (based on the oscillators) as we could see a big volatility collapse this week, hence markets higher.
We still are searching for the proper pullback zone where buyers get nervous, but so far this ‘buy the dip’ mentality has prevailed. Many traders thought Monday’s drubbing might lead to a much deeper pullback, but it was not to be. Bears are still conditioned to expect the worst swiftly and decisively, but they have been tormented the last few months. During earnings season, it will be difficult to see too much fall back.
The Internals
Internals
What’s it mean?
Follow through day! Now, that’s more like it. Pretty solid VOLD all session long, the bulls took charge early and ramped up late in the day. Ticks were red on the Nasdaq, curiously and fairly red on the NYSE. We’ll see if the market responds in kind today. ADD finished strong and the ADSPD nearly put in a trend up day. Put/calls were running higher but are still on nascent buy signals.
The Dynamite
Economic Data:
- Thursday:CPI, jobless claims, fed speakers
- Friday:PPI, consumer sentiment, fed speakers
Earnings this week:
- Thursday:DAL, DPZ, TLRY, AEHR
- Friday:JPM, BLK, FAST, WFC
Fed Watch:
A heavy dose of fed speakers this week as the Euro zone kicks off their monetary conference. This is their version of the Jackson Hole conference. Several speakers will be there in Germany but also many others speaking at other locations, no less than 15 speaking engagements this week.
Stocks to Watch
Volatility – We are now 30 days out from the election and the VIX is telling us this. A big pop today in volatility as many traders prepare for some uncertainty, adding protection where they can. It may recede later in the week though with inflation reports.
Oil – Crude oil has been climbing higher for about 10 days now. This is due to the continuing and mounting issues surrounding the Middle East. If there is some resolution we may see oil tank hard, but for now it seems the direction is higher.
China – Stocks have been robust from the Chinese region after they announced a massive stimulus. That helped boost stocks and also cause a massive short squeeze to occur. We are now pretty well overbought on these names.
