Traders Market Weekly: Global Market Dislocation at a Precipice

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    Dow +197.26 at 31021.71, Nasdaq +86.62 at 11534.99, S&P +26.56 at 3899.96

    Strong reverse after follow-through selling interest sent the stock market sliding at the open before the S&P 500 flirted with Friday’s low (3,837) and found support there. Stocks rebounded as Treasury yields fell back from their highest levels of the morning.

    The main indices danced around the unchanged mark for most of the afternoon before catching a bid in the final hour of trade, helped primarily by an uptick in the mega cap stocks and other issues. T

    he S&P 500 broke out of a narrow trading range but found resistance at the 3,900 level, closing a whisker shy of that important level.

    The 2-yr and 10-yr note yields reached their highest levels since 2007 and 2011, respectively. The 2-yr note yield reached 3.97% before settling at 3.94% and the 10-yr note yield reached 3.51% before settling at 3.49%.

    The major averages squeezed out decent gains by the close, but market breadth still painted a mixed picture. Decliners outpaced advancers by a 4-to-3 margin at the Nasdaq while advancers led decliners by a roughly 3-to-2 margin at the NYSE.

    Only two S&P 500 sectors closed with a loss, health care (-0.5%) and real estate (-0.2%). The gainers were led by materials (+1.6%) and consumer discretionary (+1.3%).

    Consumer discretionary was boosted by its homebuilder components after KeyBanc upgraded a number of individual names today. The SPDR S&P Homebuilder ETF (XHB) closed up 1.8% and the iShares U.S. Home Construction ETF (ITB) closed up 2.3%. This came as participants awaited the August Housing Starts and Building Permits report tomorrow at 8:30 a.m. ET, and followed the NAHB Housing Market Index release today.

    Energy complex futures settled in a mixed fashion with WTI crude oil futures falling 0.5% to $84.96/bbl while natural gas futures rose 0.1% to $7.81/mmbtu.

    • This reply was modified 2 months, 2 weeks ago by TradersCom.

    Oxford Industries announced acquisition of apparel brand Johnny Was

    Raised guidance to account for acquisition and for strong DTC sales at Tommy Bahama and Lilly Pulitzer
    $OXM 90.02 ▲ 3.32 (3.83%) today no market after hours


    Equity indices in the Asia-Pacific region ended Tuesday on a higher note.

    —Equity Markets—

    Japan’s Nikkei: +0.4%
    Hong Kong’s Hang Seng: +1.2%
    China’s Shanghai Composite: +0.2%
    India’s Sensex: +1.0%
    South Korea’s Kospi: +0.5%
    Australia’s ASX All Ordinaries: +1.2%


    Casino stocks in Hong Kong outperformed amid reports that travelers will no longer be required to quarantine at a hotel upon arriving to the city.
    The People’s Bank of China made no changes to its one- and five-year loan prime rates against some expectations for a cut.
    The Minutes from the Reserve Bank of Australia’s latest policy meeting showed some members making the case for a slower pace of rate hikes.
    The central bank expects inflation to peak this year and decelerate into the 2-3% target range.
    Kia is reportedly planning to start production of electric vehicles in the U.S. in 2024.
    Japan’s August National CPI 3.0% yr/yr (last 2.6%) and National Core CPI 2.8% yr/yr (expected 2.7%; last 2.4%)


    Major European indices trade in the red.

    —Equity Markets—

    STOXX Europe 600: -0.7%
    Germany’s DAX: -0.8%
    U.K.’s FTSE 100: -0.2%
    France’s CAC 40: -1.1%
    Italy’s FTSE MIB: -1.3%
    Spain’s IBEX 35: -1.0%


    The German government is reportedly nearing an agreement to nationalize energy giant Uniper.
    The Dutch government is planning to cap the price of energy from the start of 2023.
    British Prime Minister Truss said that her government is not planning to begin trade negotiations with the U.S. anytime soon.
    Switzerland’s growth forecasts for 2022 and 2023 were lowered.
    Sweden’s Riksbank announced a 100-bps rate hike to 1.75%, its largest increase since 1992.
    Eurozone’s July Current Account deficit EUR19.90 bln (expected surplus of EUR5.30 bln; last surplus of EUR4.20 bln)
    Germany’s August PPI 7.9% m/m (expected 1.6%; last 5.3%); 45.8% yr/yr (expected 37.1%; last 37.2%)
    Spain’s July trade deficit EUR6.56 bln (last deficit of EUR5.39 bln)
    Swiss August trade surplus EUR3.424 bln (last surplus of EUR3.522 bln)


    S&P futures vs fair value: -25.00. Nasdaq futures vs fair value: -82.00.

    The S&P 500 futures are down 26 points and are trading 0.6% below fair value.
    The Nasdaq 100 futures are down 86 points and are trading 0.7% below fair value.
    The Dow Jones Industrial Average futures are down 193 points and are trading 0.6% below fair value.


    Total housing starts increased 12.2% month-over-month to a seasonally adjusted annual rate of 1.575 million units (consensus 1.448 million), driven by a whopping 28% increase in multi-unit starts. Single-family starts were up 3.4%.
    Building permits, though, were down 10.0% month-over-month to a seasonally adjusted annual rate of 1.517 million ( consensus 1.610 million), paced by a 17.9% decline in multi-unit permits and a 3.5% decline in single-family units.

    The key takeaway from the report is that the weakness in the permits data suggests the strength in starts is not sustainable, especially when also taking into account that mortgage rates have risen since the July-August period and yesterday’s NAHB Housing Market Index for September showed yet another decline in homebuilder sentiment.


    Western Digital (WDC 36.05, -0.57, -1.56%): downgraded to Hold from Buy at Deutsche Bank
    Ford Motor (F 14.30, -0.63, -4.22%): reaffirms FY22 adjusted EBIT of $11.5-12.5 bln; expects Q3 adjusted EBIT of $1.4-1.7 bln; expects 40,000-45,000 vehicles in inventory by end of Q3 lacking parts in short supply
    NIKE (NKE 104.76, -2.45, -2.29%): downgrade to Equal Weight from Overweight at Barclays
    Apogee Enterprises (APOG 42.08, +2.73, +6.94%): beats by $0.23, beats on revs; raises FY23 EPS above consensus, revs above consensus
    Cognex (CGNX 43.30, +1.58, +3.79%): raises its Q3 revenue guidance due to its ability to fulfill customer demand sooner than anticipated
    Peloton (PTON 10.08, +0.16, +1.61%): unveiled Peloton Row, marking its highly anticipated entry into rowing


    ^^^^^ +1s for excellent market insight above
    as FOMC ponders 100 BPS or 75 BPS to cool 8% INFLATION


    Donnie grounded…

    $DWAC Wrecked $18.76 −3.64 (-16.25%)
    after SPAC to take former President #Trump’s new media company public after failing to generate enough votes to extend vote on merger with Trump Media & Technology Group


    Palantir Technologies (PLTR) confirms $20 mln expansion contract from Hyundai Heavy Industries Group… PLTR up 1.1%
    Stitch Fix (SFIX) misses by $0.26, misses on revs; guides Q1 revs below consensus… SFIX down 3.0%
    United Airlines’ (UAL) didn’t perform required inspections on certain wing parts on twenty-five Boeing 777-200 jets, leading to cancellations — Wall Street Journal… UAL up 0.1%


    Apogee Enterprises (APOG) beats by $0.23, beats on revs; raises FY23 EPS above consensus, revs above consensus
    Arthur J. Gallagher (AJG) CFO provides updates on various metrics in slide presentation; sees Q2 Adjusted EBITDAC Margin for brokerage segment of 32.0%
    Cognex (CGNX) raises its Q3 revenue guidance due to its ability to fulfill customer demand sooner than anticipated
    Ericsson (ERIC) publishes restated segment financials
    Ford Motor (F) reaffirms FY22 adjusted EBIT of $11.5-12.5 bln; expects Q3 adjusted EBIT of $1.4-1.7 bln; expects 40,000-45,000 vehicles in inventory by end of Q3 lacking parts in short supply
    Iron Mountain (IRM) reaffirms FY22 revenue guidance in slide presentation
    Olin (OLN) lowers Q3 adjusted EBITDA guidance to a range of $530-550 million (prior guidance called for adjusted EBITDA of approximately $618 mln)
    Omnicell (OMCL) in slide presentation sees 2025 advanced services recurring revenue of $375-600 mln
    ONE Gas (OGS) reaffirms FY22 EPS guidance in slide presentation


    Fair Value for Wednesday, September 21st:
    S&P 500: 3,872
    Nasdaq 100: 11,918
    DJIA: 30,791


    Looking ahead to Wednesday,

    Weekly MBA Mortgage Applications Index (prior -1.2%) at 7:00 a.m. ET,
    August Existing Home Sales (consensus 4.7 million; prior 4.81 million) at 10:00 a.m. ET,
    Weekly EIA Crude Oil Inventories (prior +2.44 million) at 10:30 a.m. ET.

    The FOMC interest rate decision is out at 2:00 p.m. ET followed by Fed Chair Powell’s press conference at 2:30 p.m. ET.

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