The Fuse
Equity futures are soft this morning on this last trading day of September and the third quarter. Several monthly and quarterly options will expire today, and given some volatility into this week’s job data and heavy fedspeak it makes sense for investors to take some chips off the table. An up month for September makes it 5 straight higher months.
Interest Rates are modestly higher as we expect to see some wild movement in rates. That often happens at the end of the quarter. Recently, we heard some Fed speakers supporting a faster pace of rate cuts, not quite in line with market expectations but they are getting there. The jobs report later this week will be a piece that will help shape policy and pace of rate cuts.
Stocks are losing steam on this last trading day of September, Europe was down modestly but the big news was an 8% rise in China along with 3.1% gain in Hong Kong. Japan was down nearly 5% though, gold is modestly lower as is crude oil. We should see quite a bit of re-positioning today.
Earnings are sparse this week, the biggest names include Nike, Constellation Brands, Paychex, Levi and McKormick.
Dual events this week with no less than 13 fed speakers all week long. Chair Powell is up on Monday, we don’t expect much different other than ‘stay the course’ and watch the data. Speaking of data, very important jobs information this week, since the committee is now looking closely at this data to make sure a soft landing can be assured.
A decent day for breadth, note the IWM was up strong, better than 1%. That helps to explain the strong breadth, oscillators moved into positive territory as well. New highs are expanding, too and while the day was lackluster the trend is still up until further notice.
Volume is starting to build and will likely be pretty heavy today, being the last day of the month and quarter. Quite a few options will expire and be exercised. Window dressing also explains better turnover, and we’ll see some big volume this week with the heavy dose of Fedspeak and the employment numbers.
Support levels were tested but it was only shallow. Actually, the SPX 500 sold down into the end of the week on putrid volume, but likely some sell programs left over from earlier in the day. Positively, the moving averages are racing higher and will provide good support if/when the market is ready for a correction. The 20 is the best support level, around 5,615 on the SPX 500 and 19,400 on the Nasdaq.
The Internals
What’s it mean?
It sure looked like the bulls had the advantage to start Friday’s trading, but it wasn’t to be. Plenty of jostling, stop-running and hurky jerky movement during the trading session though the internals were not awful. The VOLD was in the lead all day, thanks to strength in the IWM and Industrials, which closed at an all time high. VIX soared late in the day however to push near 17%, today being the last trading day of the month/quarter could be the reason. Ticks were fairly distributed on both sides, plenty of buy/sell signals.
The Dynamite
Economic Data:
- Monday:Fed Speak, Powell speech, Chicago PMI
- Tuesday:US PMI, ISM, construction spending, JOLTS, More fed speak
- Wednesday:ADP, more Fed speak
- Thursday:Jobless claims, ISM, services PMI, more fed speak
- Friday:Jobs report, NY Fed President
Earnings this week:
- Monday:CCL
- Tuesday:PAYX, MCK, ACU, NKE, RGP
- Wednesday:RPM, CAG, LEVI
- Thursday:STZ, ANGO
- Friday:APOG
Fed Watch:
This has to be a record week for Fedspeak. No less than 13 speeches/opening remarks from everyone on the FOMC committee. That includes Chair Powell on Monday. This past week had several speakers as well as Powell but they did no harm. This week’s labor report is likely to cause a bit of indigestion for some.
Stocks to Watch
Gold – Last week saw the metal close above 2,700 per ounce, gold is on a roll in 2024. It can continue, perhaps towards 2,800 by year end.
China – Stocks from China have been very hot and moving sharply higher of late following some stimulus measures in the country. We’ll see if that continues or if a pullback is seen.
Energy – We have seen oil prices pulling back from the $70 per barrel level amid OPEC+ officials saying they plan to push more oil onto the market.
