Traders Market Weekly: Inflation Obsession in Worsening Liquidity

Viewing 15 posts - 16 through 30 (of 62 total)
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    Ohhhhh the humanity … as we enter scariest month of year & Halloween season
    Indeed the FED punchbowl withdrawal on QE & rates — led to an 8-10% sell-off in SEP-2022
    But OCT-2022 starting off with a rally — as stocks have got to rebound before election day 😉
    Even though IDA was a little rough in SW VA (about 5″ rain on mtn. top) — we all came out “shiny side up” 🙂


    Morgan Stanley knows the game Upgrades ‘underappreciated $BOX 26.69 ▲ 2.30 ▲9.43%

    #BoxWorks event Friday talks from Mark Cuban @mcuban, CEO’s from $IBM Arvind Krishna, Zoom Video $ZM Eric Yuan, HubSpot $HUBS Yamini Ranga CrowdStrike $CRWD George Kurtz


    Dow 29,490.89 765.38 2.66%
    S&P 500 3,678.43 92.81 2.59%
    Nasdaq 10,815.43 239.82 2.27%
    GlobalDow 3,227.63 58.32 1.84%
    Gold 1,708.60 36.60 2.19%
    Oil 83.27 3.78 4.76%

    WALL STREET soared like an EAGLE today in buying positions
    from beaten down stocks in hope of good news .. as 2 of the best HEAVENLY voices celebrate 🙂


    That’s a bounce ..

    Credit Suisse $CS from a 5.6% loss to close $4.01 +0.09 +2.3%
    Credit Suisse executives rebutted EOW concerns, saying bank has strong capital base & liquidity position. That view seemed to placate investors for now $XLE


    All 11 S&P 500 sectors closed up led by energy $XLE +4.8% top performer by a wide margin thanks to rising #oil prices.
    WTI +5.0% to $83.50/bbl in response to reports #OPEC+ considering a production cut of more than one million barrels per day at Wednesday’s meeting.

    Been a lot of hedging with put options, pickup in short-selling activity, extreme bearish sentiment readings. Today’s market outsized gains hot on the heels of an outsized loss last month.

    Market breadth figures reflected the broad-based buying today.
    Advancers led decliners by a 5-to-1 margin at the NYSE and a greater than 2-to-1 margin at the Nasdaq.
    NYSE Adv 2609 Dec 530 Vol 1.0 bln
    Nasdaq Adv 2877 Dec 1329 Vol 4.3 bln

    A stock market can sometimes have a mind of its own and will trade off a predilection in an oversold market that will create the most bang for the buck. October, therefore, started with a bang as new money got put to work in a vast array of beaten-up stocks. Apple (AAPL 142.45, +4.25, +3.1%) was a case in point. It fell 8.1% last week on earnings concerns, but jumped 3.1% today on heavy volume and no good news of note.


    Bond Wrap:

    U.S. Treasuries mostly bullish bias. The 2-yr note yield hit 4.22% in the overnight futures trade and the 10-yr note yield kissed 3.80%, yet they showed some marked improvement into the cash open, catalyzed by the news that the UK government will be scrapping the part of its fiscal stimulus plan that calls for a tax cut for high earners, and some financial stability concerns stemming from an escalation in credit default swap prices for Credit Suisse.

    The British pound rallied nicely (GBP/USD +1.3% to 1.1301) on the UK news.

    The Treasury market’s recovery effort picked up some steam following the release of the weaker-than-expected ISM Manufacturing Index for September and Construction Spending Report for August.

    There was a narrative that the markets were helped today by a view that these developments could spur the Fed to take a less aggressive path with its rate-hike campaign. That view wasn’t necessarily corroborated by the fed funds futures market; nonetheless, it created a trading spark on the first day of October that followed a very bad September for the Treasury market.

    Yields faded away from their best levels as the cash session progressed, but not enough to undo a winning session.

    2-yr: -9 bps to 4.11%
    3-yr: -11 bps to 4.10%
    5-yr: -14 bps to 3.89%
    10-yr: -14 bps to 3.65%
    30-yr: -5 bps to 3.71%


    AXT (AXTI) lowers Q3 revenue guidance to $34-35 mln from $39-41 mln, citing weakening macroeconomic conditions, particularly in the demand environment in China… AXTI down 14.6%
    Essex Property (ESS) announces planned retirement of its President and CEO; appoints Senior Executive Vice President and COO as next President and CEO… ESS down 0.2%
    Maravai Life Sciences (MRVI) appoints William “Trey” Martin as CEO, who joins company from Danaher Corporation… MRVI down 7.0%
    Rivian Automotive (RIVN) reports Q3 production of 7,363 vehicles, deliveries of 6,584 vehicles, and says it remains on track to deliver on its 25,000 annual production guidance — SEC Filing… RIVN up 2.9%
    Rocket Pharmaceuticals (RCKT) commences $100 mln common stock offering pursuant to previously filed shelf registration… RCKT down 6.5%
    TreeHouse Foods (THS) completes sale of a significant portion of its Meal Prep business to Investindustrial for $950 mln… no after hours indication for THS
    Tyra Biosciences (TYRA) files for $400 mln mixed securities shelf offering… TYRA down 5.6%
    Utz Brands (UTZ) announces CEO succession plan; Howard Friedman, currently COO of Post Holdings, will join company as CEO and serve as member of the Board; reaffirms FY22 total net sales, organic net sales, and adjusted EBITDA growth guidance… no after hours indication for UTZ


    S&P futures v fair value +59.50.
    Nasdaq futures v fair value +235.00.

    Sentiment constructive in continuation of yesterday’s recovery.
    #RBA raises 25 v 50bp
    #DXY continues pullback, #GBPUSD reclaims 1.14 #Gilts back above 100.00
    Fed Speakers


    Equity indices in the Asia-Pacific region followed Wall Street’s lead on Monday before getting an extra boost from one of its own, namely the Reserve Bank of Australia (RBA).

    Japan’s Nikkei: +3.0%,
    Hong Kong’s Hang Seng: closed for holiday,
    China’s Shanghai Composite: closed for holiday,
    India’s Sensex: +2.3%,
    South Korea’s Kospi: +2.5%,
    Australia’s All Ordinaries: +3.7%.


    Japan’s September Tokyo CPI 2.8% yr/yr (prior 2.9%) and Tokyo core CPI 2.8% yr/yr (expected 2.8%; prior 2.6%); Monetary Base -3.3% yr/yr (expected +0.6%; prior +0.4%)
    Australia’s August Building Approvals +28.1% m/m (expected +5.0%; prior -18.2%)
    South Korea’s September Nikkei Manufacturing PMI 47.3 (prior 47.6)
    The RBA excited the stock market masses with a decision to raise its cash rate by only 25 basis points, instead of the 50 basis points expected, to 2.60%.
    The decision was tied to a recognition that the cash rate has been increased substantially in a short period of time, and a desire among RBA officials to see how the prior rate increases are affecting the outlook for inflation and economic growth.
    The strong response by the All Ordinaries (+3.7%) and other indices open for trading (Hong Kong and China were closed for holidays) has now left European bourses and the U.S. equity futures market following their lead.
    The policy response has overshadowed the news that North Korea fired a missile over Japan for the first time since 2017 and that Tokyo’s core CPI, up 2.8% yr/yr in September, hit its highest level since 2014.


    Major European indices are up strongly, rallying in response to Wall Street’s strong showing on Monday and the smaller-than-expected rate increase by the Reserve Bank of Australia.

    STOXX Europe 600: +2.4%,
    Germany’s DAX: +2.8%,
    U.K.’s FTSE 100: +1.8%,
    France’s CAC 40: +3.2%,
    Italy’s FTSE MIB: +2.5%,
    Spain’s IBEX 35: +2.5%.


    Eurozone’s August PPI +5.0% m/m (expected +4.9%; prior +4.0%) and +43.3% yr/yr (expected 43.1%; prior 38.0%)
    Spain’s September Unemployment Change 17.7K (prior 40.4K)
    The latter has sparked some hope that the Federal Reserve could soon temper the pace of its rate increases and be closer to the end of its rate-hike campaign, a view that is manifesting itself in a weaker dollar.
    The U.S. Dollar Index is down 0.6% to 111.12, with the euro (EUR/USD +0.6% to 0.9880) showing some strength against the greenback. Falling gilt yields have been another supportive factor for equities.
    They have continued lower today following the news that Finance Minister Kwarteng will release his fiscal plan and forecasts from the OBR later this month instead of November 23, as previously indicated.
    Amid the excitement for stock markets, it was also reported that producer prices in the eurozone increased 43.3% yr/yr in August versus 38.0% in July.


    Gilead Sciences (GILD 64.32, +2.00, +3.21%): upgraded to overweight from neutral at JPMorgan
    Poshmark (POSH 17.57, +1.99, +12.85%): to be acquired for $17.90 per share in cash by Naver Corp., Korea’s largest internet company
    Rivian Automotive (RIVN 34.67, +2.78, +8.72%): reports Q3 production of 7,363 vehicles, deliveries of 6,584 vehicles, and says it remains on track to deliver on its 25,000 annual production guidance
    Maravai Life Sciences (MRVI 23.00, -1.78, -7.18%): appoints William “Trey” Martin as CEO, who joins company from Danaher Corporation
    Blackbaud (BLKB 47.61, +2.60, +5.78%): Clearlake Capital Group discloses 18.4% stake; may seek review of strategic alternatives


    The #aluminum and #copper futures bounce continues pre-market Tuesday
    Alcoa $AA +2.6% after +11.3% yesterday off lower weekly channel
    Freeport McMoRan $FCX +1.8% +7.3% yesterday
    Helped by U.S. dollar decline

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