Traders Market Weekly: Geopolitics and Stormy Weather

Viewing 15 posts - 76 through 90 (of 91 total)
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    November Home Loans 0.5% m/m (expected 0.0%; last 5.6%)


    Major European indices are looking for a higher finish to the week.
    STOXX Europe 600: +0.6% (-0.2% week-to-date),
    Germany’s DAX: +0.6% (+0.3% week-to-date),
    U.K.’s FTSE 100: +0.7% (-0.8% week-to-date),
    France’s CAC 40: +0.8% (+0.3% week-to-date),
    Italy’s FTSE MIB: +0.6% (UNCH week-to-date),
    Spain’s IBEX 35: +0.7% (-0.9% week-to-date).

    Burberry lowered its guidance due to slowing demand.
    Airbus beat its delivery target for 2023.


    The U.K. reported stronger than expected GDP growth for November, but the pace of growth is expected to decelerate in future readings.
    November Construction Output -0.2% m/m (expected 0.4%; last -0.4%); 0.9% yr/yr (expected 1.3%; last 1.3%).
    November GDP 0.3% m/m (expected 0.2%; last -0.3%); 0.2% yr/yr, as expected (last -0.1%).
    November Industrial Production 0.3% m/m, as expected (last -1.3%); -0.1% yr/yr (expected 0.7%; last -0.5%).
    November Manufacturing Production 0.4% m/m (expected 0.3%; last -1.2%); 1.3% yr/yr (expected 1.7%; last 0.2%).
    November trade deficit GBP14.19 bln (expected deficit of GBP15.70 bln; last deficit of GBP15.94 bln)


    November Consumer Spending 0.7% m/m (expected -0.1%; last -0.9%).
    December CPI 0.1% m/m, as expected (last -0.2%); 3.7% yr/yr, as expected (last 3.5%)


    December CPI 0.0% m/m, as expected (last -0.3%); 3.1% yr/yr, as expected (last 3.2%).
    December Core CPI 3.8% yr/yr (last 4.5%)


    Wells Fargo (WFC 48.50, -0.54, -1.1%): reports EPS in-line, revs in-line; provides FY24 guidance
    JPMorgan Chase (JPM 173.46, +3.16, +1.9%): misses on revs; provides FY24 guidance
    Bank of America (BAC 32.64, -0.51, -1.5%): beats by $0.17, misses on revs

    Morgan Stanley (MS 90.17, -0.34, -0.4%): nears a deal to pay under $500 mln to resolve government probe into big stock sales, according to Reuters


    Delta Air Lines (DAL 40.15, -2.11, -5.0%): beats by $0.12, beats on revs; guides Q1 EPS in-line, revs in-line; guides FY24 EPS in-line


    Tesla (TSLA 219.97, -7.27, -3.2%): Berlin factory may have to suspend production for two weeks citing Red Sea disruptions, according to Reuters; lowers China prices, according to Bloomberg


    UnitedHealth (UNH 511.99, -27.69, -5.1%): misses by $0.15, beats on revs


    Apple (AAPL 185.14, -0.45, -0.2%): nominates Dr. Wanda Austin for election to its Board; announces Al Gore and James Bell will retire from Board


    Intl Flavors (IFF 83.01, +3.23, +4.1%): appoints J. Erik Fyrwald as CEO, succeeding Frank Clyburn, effective February 6; reiterates FY23 guidance and strategic plan


    Geopolitical concerns have also contributed to this morning’s negative bias after the United States and the UK, with support from Australia, Bahrain, Canada, and the Netherlands, conducted strikes against military targets in Houthi-controlled areas of Yemen.

    The geopolitical worries have manifested themselves in rising oil prices ($74.75/bbl, +2.73, +3.8%), but Treasuries have not reacted as one might expect. That is to say, the Treasury market has not seen an influx of safe-haven buyers. The 2-yr note yield is unchanged from yesterday at 4.27% and the 10-yr note yield is up two basis points to 4.00%.


    The Producer Price Index for final demand declined 0.1% month-over-month in December (consensus 0.1%), driven by a 0.4% drop in prices for final demand goods. The index for final demand, less food and energy (“core PPI”), was unchanged month-over-month.

    On a year-over-year basis, the index for final demand was up just 1.0%, versus 0.8% in November, and the index for final demand less food and energy was up 1.8% versus 1.9% in November.

    The key takeaway from the report is that inflation at the wholesale level has been brought under wraps, with deflation appearing in several components, and is expected to translate into friendlier inflation readings for the PCE Price Index that is the Fed’s preferred inflation gauge.

    Treasury yields took a sharp turn lower in response to the PPI.
    The 10-yr note yield, at 4.00% just before 8:30 ET, is down three basis points from yesterday at 3.95%.
    The 2-yr note yield, at 4.28% just before 8:30 ET, is down nine basis points to 4.18%.


    Morning Market

    Market Snapshot
    Dow 37512.46 -198.56 (-0.53%)
    Nasdaq 14966.59 -3.60 (-0.02%)
    SP 500 4777.06 -3.18 (-0.07%)
    10-yr Note +2/32 3.945
    NYSE Adv 1470 Dec 1172 Vol 173 mln
    Nasdaq Adv 2106 Dec 1858 Vol 1.9 bln

    Industry Watch
    Strong: Energy, Real Estate, Utilities, Communication Services, Consumer Staples
    Weak: Consumer Discretionary, Health Care, Industrials, Financials

    Moving the Market
    — Sharp drop in yields, especially the 2-yr note, which is most sensitive to changes in the fed funds rate, after the cooler-than-expected December Producer Price Index
    — Increased expectations for rate cuts starting in March
    — Digesting the first batch of Q4 earnings results, which garnered mixed reactions
    — Earnings-related loss in UnitedHealth (UNH) weighing down the price-weighted Dow Jones Industrial Average

    Apple (AAPL 185.53, -0.08, -0.1%), (AMZN 154.37, -0.81, -0.5%), and NVIDIA (NVDA 544.79, -3.33, -0.6%) were all trading up at their highs of the day. Tesla (TSLA 220.81, -6.41, -2.3%) is another laggard from the mega cap space. Bank stocks lag after earnings results

    The SPDR S&P Bank ETF (KBE) is down 1.2%. This weakness is due in part to negative reactions to earnings results from Bank of America (BAC 32.30, -0.85, -2.6%), Wells Fargo (WFC 47.92, -1.12, -2.3%), and Citigroup (C 51.51, -0.56, -1.1%). JPMorgan Chase (JPM 171.78, +1.18, +0.7%) is trading up after its earnings report.

    Market breadth is still positive, though, despite downside moves. Advancers have a better than 2-to-1 lead over decliners at the NYSE and a 3-to-2 lead at the Nasdaq.

    Rate cut expectations have increased following the pleasing PPI report.

    The fed funds futures market now sees an 83.2% probability of a 25 basis points rate cut at the March FOMC meeting versus a 73.2% probability yesterday and a 68.1% probability one week ago. Notably, rate cut expectations also increased yesterday despite a December CPI report that wasn’t exactly what the market hoped to see, suggesting the market doesn’t think the CPI report indicated an acceleration in inflation.


    Dow 37,592.98 -118.04 -0.31%
    S&P 500 4,783.83 3.59 0.08%
    Nasdaq 14,972.76 2.57 0.02%
    VIX 12.70 0.26 2.09%
    Gold 2,052.40 33.20 1.64%
    Oil 72.78 0.76 1.06%

    YAY – it’s FRIDAY & let’s celebrate with 1 of best “black light” GOAT videos 🙂

Viewing 15 posts - 76 through 90 (of 91 total)
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