The Fuse
Equity futures are ripping higher this morning after strong earnings from Amazon and Apple have propelled markets to explode towards new all-time highs. Strong Fridays are important for the trend to continue.
Interest Rates are a bit higher this am as some bond traders take some risk off the table. High yield spreads remain tight, the 2 yr is steady after a rise in yield this week, and fed futures also remain steady look for a good chance of a cut in December but not conclusive yet.
Stocks are looking better today with solid earnings beats, the STOXX though dropped slightly as did the FTSE, THE US dollar index rose again, up .1%. Stocks in Asia were mixed, Japan with more upside, higher by 2.1% but China stocks were down, Hong Kong off 1.4% and Shanghai down .8%. Gold is back up as is silver modestly, crude oil fractionally higher. Yields in Germany and the US up small.
Earnings from Amazon and Apple were tremendous, these stocks ripping higher today and helping vault the Nasdaq towards new highs. Coinbase was also very strong and is moving higher, Reddit and Western Digital also pushing to new highs. Roku is sliding a bit but Cloudflare is robust with good guidance. Today Exxon and Chevron reported strong earnings but weaker guidance.
Miserable performance for the markets but we sorta expected that given the rancid results from Meta and missed guidance from Microsoft. Google was strong but could not save the day, not to mention the profit taking that occurred before month-end. I suspect both bulls/bears cannot wait for October to be over. On to November!.
More negative breadth and this time it hit the market between the eyes. Heavy turnover again and another negatvie on the a/d line spells trouble, though we may have some positivity today following strong earnings last night. Given the fact oscillators worsened there sell signal remains in place on this indicator. New highs still trouncing new lows however, this is still on a buy signal.
Heavy selling all day can be attributed to those two lousy performers mentioned earlier. However, yesterday was not considered a day of distribution as the turnover was less than the prior day, if that is a saving grace. No matter how you slice it, negativity continues to permeate, if support levels suddenly fail to hold there will be more worries to come.
As mentioned yesterday, there is a good feel for the markets being tired here. That should not come as a surprise, the month of October has been strong and nary a retreat was experienced. Yet, a pullback before a year-end rush could be happening here, at least to scare the bulls into submission, allowing the dip buyers to come back in.
The Internals
What’s it mean?
Nothing but negative from the internals here, the VOLD and ADD just horrible. It’s interesting that even earlier in the week there was only a modest gain in the VOLD and ADD when markets rose up. Put/calls were rising yesterday but the VIX fell and then rallied, TICKS were mostly red. Just a negative day all around.
The Dynamite
Economic Data:
- Friday:PCE, income/spending, employment cost, fed speak
Earnings this week:
- Friday:CVX, XOM, ABBV, LYB, CHTR, CBOE, NINE, LIN
It’s a huge week for the Fed with some fed speakers later in the week, but the spotlight is on the committee and Chair Powell. The FOMC is expected to cut rates one more time at this week’s meeting, bringing the funds rate down to 3.75%. That is a path the committee talked about at the last meeting with their projections indicating this to be the action. How many more cuts is now the question, Chair Powell may address that in the press conference.
Stocks to Watch
Gold – The yellow metal remains quite volatile and we’ll be looking for gold to make more big moves this week. Gold volatility is extremely high and causing the severe moves up and down, silver as well.
Apple – Always have one eye on the big Apple as they report earnings this coming week. How is the iPhone 17 doing so far, will they run out of product? How about services and other items to drive margins? The anticipation and expectations are high, the stock may fade if there is not enough left into the future for investors.
Google and Meta – We are focusing on these two names here as they are both reporting on Wednesday. Google hit a new high Friday while Meta is still floundering, I expect to see both move sharply following their earnings release.
