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U.S. Stock Futures Are Higher After Equity Indexes Surged Yesterday #Omicron #Evergrande #MarketUpdate

U.S. stock futures are higher.  After equity indexes surged yesterday, futures are slightly higher in morning trading.  So far the omicron variant is not as severe as initially predicted and fueling markets prices.  Markets are expected to remain volatile as additional information is released.  Treasury long term bond yields are slightly higher and the 10y treasury auction is scheduled for this afternoon.  Evergrande has not made the interest and principal payments on its U.S dollar bonds on Monday and is setting the stage for an ultimate default.   By reducing the reserve requirements for its Banks, the Chinese officials have essentially placed additionally liquidity into the funding markets in preparation of a weightily default.  The possible contagion from this default is expected to be isolated to the Chinese’s real estate segment; however, the subsequent shock to the Chinese economy remains uncertain.   The House passed a bill that would allow the Senate to increase the borrowing limits with a majority vote.  European markets are lower and Asian markets are higher.

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U.S. Stock Futures Are Higher With Milder Severity From The Omicron Variant #Omicron #Bitcoin #SP500

U.S. stock futures are higher.  Milder severity from the Omicron variant is driving equity futures higher and patient data regarding the magnitude  of illness is thus far encouraging, resulting in a constructive backdrop for equities.  Additionally, as information from initial patient experiences are validated, treasury bond yields are expected to inch higher.  Investors are looking for the November CPI report, which will be released on Friday, for firmer direction on inflation.  The Treasury will auction roughly $54B of 3-year notes today.  Bitcoin prices have recovered most of the decline from the weekend and is currently trading above $50k.   The beleaguered Chinese property company Evergrande is likely to default on its debt as S&P Global Ratings said default “looks inevitable” and the Chinese government officials must decide if they should intervene to support the lender and the sector or allow a restructuring.  Yesterday, the People’s Bank of China announced a reserve requirement reduction for banks by 0.5% to 8.4%, starting 12/15/21 and is expected buffer liquidity within the funding markets.   In global trading, European markets are higher and Asian markets closed mainly higher, both supported by positive news from world health officials.

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U.S. Stock Futures Are Higher As Data On Omicron's Severity Has Been Limited #OmicronVariant #Cryptocurrency #Evergrande

U.S. stock futures are higher.  Equity markets are expected to open positive as the first data on omicron variant’s severity has been limited.  Therefore encouraging, but any definitive statements are weeks away as the medical community scrutinizes preliminary patient information.  Yields on the 10y & 30y treasury rates are up this morning after precipitously declining last week and global energy prices are steady.   Friday’s unemployment rate of 4.2% reflects a healthy job market and the Fed is expected to remain on course for its tapering and eventually increasing interest rates in 2022.  Cryptocurrency, as measured by Bitcoin, is up slightly above $48k from Saturday’s low of $42k.  European markets are trading higher.   Asian markets closed mixed.  Evergrande shares declined 20% after it warned investors about a potential default on its dollar bonds and is continuing to sell assets to raise capital and service debt. 

 

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U.S. Stock Futures Are Higher While November Job Growth Was Disappointing #Omicron #Employment #FDA

U.S. stock futures are higher.  Job growth in November was disappointing, with nonfarm payrolls increased just 210,000 versus expectations of 573,000.  Yields on longer term treasuries are lower and futures are still up after the news.  As cases from the new variant increases, employment growth may be adversely impacted.  Janet Yellen’s testimony yesterday further enforced Powell’s statement that inflation is no longer transitory; however, inflation expectations are anticipated to fluctuate as economic growth and more specifically employment growth issues mitigate wage growth.  Omicron is expected to muddle the outlook on inflation.  The FDA is preparing for a quick review of omicron vaccines and cooperating with drugmakers for rapid evaluations of data points and the effectiveness of the current vaccines.  The House and Senate approved federal funding through Feb 18 and discussions related to the debt ceiling are ongoing.  OPEC + decided to maintain its current production levels.  European markets are trading higher & Asian markets closed mainly higher.

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U.S. Stock Futures Are Higher After Yesterday's Volatility Related to the Variant #Omicron #MarketUpdate

U.S. stock futures are higher.   Markets are poised to open higher post yesterday’s volatility related to the variant drove equity prices lower.  Jobless claims from last week were 222k versus estimate of 240k.  Yields on the 10y & 30y bonds inched up a about 3 basis points.  Chairman Powell commented that the Fed is prepared to accelerate the tapering, if necessary, to curtail inflationary pressures, resulting in selling pressure on the shorter end of the curve.  OPEC+ is expected to announce its production targets today, with global energy prices slightly higher in morning trading.  Members are concerned that the new variant might depress energy prices.  European equities are lower reflecting more sensitivity to increasing cases.  Asian markets closed mixed for their trading day.

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U.S. Stock Futures Are Higher After Omicron Uncertainty and More Aggressive Fed Tapering Drove Equities Lower Yesterday #Omicron #ADP #StockFutures

U.S. stock futures are higher.   Chairman Powell stated that it is time to retire the word “transitory” when describing inflation at the Senate Banking Committee meeting yesterday.  The uncertainty regarding the omicron variant and a possibly more aggressive Fed tapering and earlier rate increases drove equities lower yesterday.  Primary equity futures are higher this morning.   Volatility is expected to continue due to the uncertain impact of this new strain on final demand/economic growth and its eventual influence on inflation.  Chairman Powell is set to answer questions at the House today.  ADP reported that private payrolls increased 534k in Nov compared to an estimate of 506K.  Investors are awaiting the employment report on Friday. Currently, longer term bond yields are ticking up a couple basis points.  OPEC+ meets today and tomorrow to determine global crude oil production levels, with production at +400k barrels per day.  European markets are trading higher, in line with U.S futures and Asian markets closed up.

 

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U.S. Stock Futures Are Lower With News That Present Vaccines Are Ineffective Against Omicron #Moderna #Omicron #Biden

U.S. stock futures are lower.   Global equity prices are lower this morning, with news that the present covid-19 vaccines are ineffective against omicron.  Specifically, Moderna’s chief executive told the Financial Times that he was skeptical that the existing vaccines would be as effective against the new variant.  The flight to safety drove 10y yields lower to 1.42% compared to its yesterday’s close of 1.50% and additionally Brent crude is lower this morning.  Markets & investors are expected to remain in a trading range as new information regarding the variant is released.  Chairman Powell is scheduled to testify at the Senate Banking Committee hearing today and in a prepared remarks stated that the recent uptick in covid cases is a threat to the U.S economic growth and might “muddle” an already uncertain inflation outlook.  President Biden in a press conference said he doesn’t expect the U.S to impose additional travel restrictions and lockdowns are unnecessary.  International markets are lower.

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U.S. Stock Futures Are Higher After Friday's Sharp Selloff #Omicron #SP500 #NASDAQ

U.S. Stock Futures Are Higher. After Friday’s sharp selloff, primary equity indexes are expected to open higher.  The new variant, named omicron, triggered a global selling across various asset classes.  The S&P tumbled 2.3% and the Nasdaq slipped 2.2% & the three major benchmarks were negative for the week. The yield on the 10y treasury closed at 1.47% on Friday, compared to previous close of 1.69% and currently trading at 1.54%.  High yield and investment grade spreads widened out on Friday. This morning, credit markets have stabilized with respective spreads on credit default swaps tightening slightly. The VIX index is at 24, down from 28 (Friday’s close). Infection disease experts think it is too early to formulate a definitive conclusions on this new variant and if additional lockdowns/mandates are necessary.  Additionally, it will take approximately two weeks to gather concrete information on omicron.  Brent crude prices are up roughly 4% post a decline of 10% on Friday.  In Washington, the deadline for extending government funding and debt limits are due over the next few weeks.  Additionally, the employment report will be released on Friday.  European markets are higher and Asian markets closed lower.

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U.S. Stock Futures Are Lower Ahead of Thanksgiving #GDP #Thanksgiving #StockMarket

U.S. stock futures are lower.  Ahead of the Thanksgiving break, investors are waiting on a data dump of economic reports.  Today jobless claims, October durables goods order and revised 3rd quarter GDP will be released early morning and later in the morning, October personal income and spending plus the core personal consumption expenditures price index will be announced.  The release includes the Fed’s preferred measure of inflation—the core personal-consumption expenditures price index—which is forecast to show its biggest annual rise since the early 1990s.  Jobless claims were 199,000 versus consensus of 264k and is the lowest level since 1969.  New order for October was -0.5% compared to consensus of 0.3%.  Yields on the 10y & 30y treasury bonds are higher post announcement & yields are higher across the intermediate and longer-term portions of the curve are also up.  Global energy prices are fluctuating slightly higher this morning after a coordinated international release of crude oil reserves.  International markets are trading mixed this morning.

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U.S. Stock Futures Are Lower This Morning #Biden #Energy #Powell

U.S. stock futures are lower.  S&P futures are slightly lower this morning.  Yesterday President Biden nominated Powell to remain as Fed Chairman and Fed governor Lael Brainard as Vice Chairwomen - reflecting policy continuity and stability on monetary programs.  Bonds yields rose after the announcement.  The yield on the 2-y note increased to 0.644% the highest close since 3/2020 and the 30y treasury is trading above 2%.  Additionally, yesterday’s 5y auction was poorly received and resulted in a late day treasury bond selloff.  The President announced that the U.S will release crude oil from its Strategic Petroleum Reserve as a part of a global effort to decrease energy prices in the midst of OPEC+’s hesitancy to augment daily production levels.  Countries, such as India, China, Japan, and U.K, joined the U.S in releasing their respective reserves.  International energy prices are down this morning.  International markets are lower this morning, following the Chairman’s renomination and the eventual tapering.

 

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U.S. Stock Futures Are Higher With Stronger Corporate Profits and Sharper Economic Growth #PresidentBiden #FederalReserve #COVID

U.S. stock futures are higher.  President Biden is expected to announce his candidate for the Federal Reserve Chairperson position, with current probabilities favoring renominating Powell.  The announcement is expected before Thanksgiving Day.  Stronger corporate profits and sharper economic growth remains the principal catalyst for equity markets.  Yields on longer term treasury bonds have inched down a couple basis points as lockdowns in Europe may curtail global economic growth.  U.S investors anticipate that ongoing concerns about new Covid cases are somewhat mitigated by advancements in new treatment alternatives and higher vaccinated population.  U.S Markets are closed on Thursday and with early closing (equities) on Friday at 1 pm; therefore, Thursday’s and Friday’s economic releases will be reported on Wednesday.   European markets are lower due mainly to higher new Covid cases.  Asian markets closed up.  High yield and investment grade spreader are slightly wider.

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U.S. Stock Futures Are Lower With COVID Cases Increasing in Europe #COVID #Germany #WSJ

U.S. stock futures are lower.   Covid 19 cases increasing in Europe with Austria in lockdown and possibly Germany following up with additional restrictions are driving futures lower.   While Austria is not an economic powerhouse of Europe, Germany is and concerns surrounding another wave of harsh limitations and the resulting global economic impacts are driving markets down.   U.S treasury long term bond yields are lower and German bund yields declined to -0.338%, lowest in nine week, as per the WSJ.  Additionally, the dollar index strengthened as a flight to safety and energy prices are down in morning trading.  On the earning front, with 90% of the S&P companies having reported, over 80% of them reported stronger than anticipated results. This is according to Refinitiv.  President Biden is expected name the next Federal Reserve Chairperson within the next week and both Lael Brainard and Jerome Powell are considered.  European markets are lower and Asian closed down for the week.

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U.S. Stock Futures Are Higher As Retailers Posted Stronger Earnings & Overall Consumer Sentiment #HolidayShopping #StockMarket

U.S. stock futures are higher.   Retailers posted stronger earnings and overall consumer sentiment, measuring from retail spending and earnings releases, is positive but might be adversely impacted from higher inflation for the Holiday shopping period.  Last week’s U.S jobless claims totaled 268k, in line with consensus.  Bond yields have ticked lower after a better-than-expected 20y auction results, with yields on both the 10y & 30y inching down.  Discussions between Chinese and U.S leaders on the possibility of releasing respective strategic oil reverses may pressure global energy prices.  European markets are trading down.  The Turkish lira depreciated again after the central bank cut its key policy rate to 15%.  Evergrande continues to sell assets to lessen its illiquidity issues & the avoided a default.  Asian markets are also trading lower with Chinese technology companies reporting lower than expected earnings.

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U.S. Stock Futures Are Lower Following a Stronger October Retail Sales Report #COVID #StockFutures #Inflation

U.S. stock futures are lower.   Following a stronger October retail sales report yesterday and markets ending the day positive,  futures are relatively flat to lower this morning.  Retail sales were 1.7% compared to 1.0% consensus.  This reflects consumer spending strengths post Covid lockdowns and a relatively optimistic consumer, equipped with higher savings and slightly increased pent-up demand.  However, firmer demand may invariably accelerate inflationary pressures. Retail spending trends are a counterbalance to declining consumer confidence survey, which was 66.8 (Nov.) versus 71 (Oct.), the lowest level in a decade.  Robust earnings versus estimates continue to power equities and treasury bonds yields on the long end are higher.  The 20y bond auction is set for today at 1.  The 30y treasury rate has remained above 2% and the 10y is above 1.6%, as investors are concerned about higher inflation.   European markets are up.  U.K. consumer price index (CPI) inflation came in at an annual 4.2% in October, its highest for almost a decade, with energy and automotive costs soaring and might pressure the BOE to ultimately raise rates.  Asian markets closed mixed. 

 

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U.S. Stock Futures Are Higher And Expecting a Positive Open for Equity Markets #Biden #StockMarket #SpendingBill

U.S. stock futures are higher.   Futures are edging higher and expecting a positive open for equity markets.  Continued stronger than anticipated earnings are counterbalancing inflationary pressures and potentially higher interest rates.  Treasury yields (10y &30y) are a about 2 basis points lower compared to Friday’s close and October retail sales numbers will be reported tomorrow.  Additionally, retailers will report earnings this week and investors may gain insight into consumer spending and the coming Holiday sales expectations.   President Biden plans to sign the infrastructure bill today and the spending bill is still pending.  European markets are trading up and Asian markets closed higher. 

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U.S. Stock Futures Are Higher #Inflation #StockMarket

U.S. stock futures are higher.   Markets are expected to open higher.  Higher inflation results are expected to compel the Fed to tighten its accommodative interest rate program earlier.  According to the CME, there is 70% probability that the federal funds will be increased by June 2022.  The Labor Department will release its Job Opening and Labor Turnover Survey (JOLTS) at 10 am and is anticipated to show employment vacancies dropping to 10.2 million post October’s report of 10.4 million.  Anxiety over a colder winter is driving up natural gas futures for December delivery, increasing 5.5% higher and heightening volatility around gas futures prices.  Treasury rates are higher, resuming trading after the Veteran Day observance.  European markets are trading basically flat.  Asian markets closed higher as real estate property companies have stabilized their short-term liquidity issues.  High yield credit spreads have tightened over the last week.  This was driven by better earnings and the search for higher yields.  Corporate fundamentals have been fairly resilient and is expected to improve.  Investment grade spreads are basically flat.

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U.S. Stock Futures Are Higher After Higher Treasury Bond Yields & Elevated CPI Results Drove Markets Lower Yesterday #Bitcoin #Evergrande

U.S. stock futures are higher.   Higher treasury bond yields and elevated CPI results drove markets lower yesterday but futures are pointing to a higher opening.  The bond market is closed today in observance of Veterans Day.  The 10y & 30y treasury yields climbed higher with the 30y auction poorly received.  Invariably, after the CPI report,  the main question most investors have is - will the Fed accelerate its tapering program to mitigate inflation?  Bitcoin hit another record high at $69,000 before declining.  European markets are trading higher.  Asian markets closed higher.  Chinese’s real estate property company Evergrande made its interest payment and once again averted default.   Additionally, the Chinese government wants to moderate its rigid property sector rules, allowing the companies the financial flexibility to prevent bankruptcies.

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U.S. Stock Futures Are Lower After Eight-Day Streak of Record Closes for the S&P #MarketUpdate #SP500

U.S. stock futures are lower. CPI increased 6.2% year over year compared to 5.9% estimate, additionally, the month over month increased 0.9% versus 0.5%.   The annual increase was the highest since 1990.  The 10y treasury ticked up 4 bps versus its close and yesterday’s 10y auctions were received fairly lukewarm reception from investors.  Since the bond market is closed for Veteran’s Day tomorrow, the jobless claims report was released today and showed an increase of 267k applications and in line with consensus.   The 30y auction is today at 1pm.  Futures remain lower post announcement and the S&P closed lower after an eight-day streak of record closes.  While earnings have been a positive catalyst for equity levels, investors are concerned with the pace of inflation and the Fed’s ability to curtail inflationary pressures without damaging general economic growth.   Earnings season is still ongoing and most that have reported exceeded estimates.  International markets are lower. 

 

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U.S. Stock Futures Are Lower After Closing At Another Record Level #SP500 #WhiteHouse #Cryptocurrency

U.S. stock futures are lower.   Markets are expected to pull back in early morning trading after closing at another record level.   Yesterday’s record close for the S&P reflects an all-time high for 8 consecutive trading days.  Treasury yields are drifting lower.  The combination of hedge funds realigning their position post last weeks’ Fed tapering announcement and media speculation related to Lael Brainard’s interview at the White House for Fed chair are the principal reasons for higher bond prices.  Brainard is viewed as more dovish relative to Powell.  However, overall odds are that Chairman Powell will be reappointed.   PPI price rose 8.6% year over year in October in line with consensus and was the higher ever reported going back 10 years, according to the Labor Department.  Core producer prices increased 6.8% year over year and in line with economist estimates.  Cryptocurrency, as measured by Bitcoin, trading above $68,500 reflecting a new all-time high.  International markets are trading and closed higher.

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U.S. Stock Futures Are Higher with Friday's Better than Predicted Employment Report #Biden #StockMarket

U.S. stock futures are higher.  Friday’s better than predicted October employment report continues to be the positive catalyst for equities, with futures trending higher.  The three primary indexes, DJIA, S&P and Nasdaq, closed at record highs driven by stronger earnings and employment growth results.  On Friday night, the House approved the infrastructure bill and President Biden is expected to sign it; the social spending bill is still being negotiated & this week Congress is on recess returning to Washington on Nov 15.  Earnings continue to come in stronger than anticipated and according to FactSet, 82% of the S&P 500 companies that have reported results exceed analyst expectations.  Long term treasury yields are lower and short-term yield have increased.  The shorter end of the yield curve is more sensitive to changes in Fed policy, as the central bank has announced its tapering program.  Investors will get an inflation reading on Wednesday with the CPI announcement.  Global energy prices are higher with Brent crude trading above $83 this morning as international oil stockpiles declined over the last week.  European markets are trading a bit higher and Asian markets closed lower.

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Overview on Wednesday's FOMC Meeting

Overview on Wednesday's FOMC Meeting

Overall, the meeting was in line with expectations with a relatively muted market reaction.

 

Fed Funds Rate:

  • Maintain Fed Funds Rate at range of 0 to 25bps.
  • Fed continues to communicate that Asset Purchase changes are not linked to Fed Funds Rate changes. 

 

Asset Purchases:

 

  • Reducing Asset Purchases from $80B in treasuries to $70B and Agency MBS from $40B to $35B beginning in mid-November.
  • Reducing Asset Purchases from $70B in treasuries to $60B and Agency MBS from $35B to $30B beginning in mid-December.
    • From the statement: "The Committee judges that similar reductions in the pace of net asset purchases will likely be appropriate each month, but it is prepared to adjust the pace of purchases if warranted by changes in the economic outlook."
      • Implied End of QE at current rate is beginning of June 2022
  • Rolling over principal of both Treasury and Agency MBS holdings.

 

Inflation: 

  • Change in Statement: From “Inflation is elevated, largely reflecting transitory factors"    to   "Inflation is elevated, largely reflecting factors that are expected to be transitory. Supply and demand imbalances related to the pandemic and the reopening of the economy have contributed to sizable price increases in some sectors ".
    • Slight change of tone from the Fed in both the statement & conference but maintains transitory inflation view 
      • During the press conference, Powell mentioned they expect inflation to ease by Q2/3 as supply chain and labor issues easing but Fed is willing to take action if necessary.  

Market Reactions:

 

  • As mentioned, market reactions were muted but overall slightly higher on the following:
    • Yield Curve Broadly Higher 
      • Yield Curve Steepened (30-2 and 10-2) 
    • Short Term TIPS slightly higher while Longer Term TIPS lower
    • Rate Hike Expectations: Slightly higher
      • Two 25bp rate hikes expected by end of 2022
        • Vs. Median FOMC Dot Plot of only One 25bp rate hike 
    • Equities were higher as the meeting was perceived as Dovish. 
    • USD was slightly lower 

 

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U.S. Stock Futures Are Higher With An Improving Economy #Employment #Biden #Economy

U.S. stock futures are higher.  Job creation in October was 531,000 versus an estimate of 450,000, reflecting an improving economy.  Futures are pointing to a higher opening post the announcement and 10y and 30y treasury yields ticked lower.  Earnings season continue will 82% of the companies that have reported exceeding estimates.  The confluence of stronger employment growth and earnings momentum are overall positives for the equity markets.  The price of Brent crude rose slightly after OPEC+ rejected President Biden request for more supply and they will maintain current production levels.  European markets are mainly higher.  Asian markets are lower as regulatory concerns from the Chinese government persist, principally in the technology sector. Credit spreads widened out from last week, as credit investors pushed back with the new supply and demanding cheaper levels.  

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U.S. Stock futures Are Higher As The Federal Reserve Announced Its Much Awaited Tapering Plan #SpendingPackage #MarketUpdate

U.S. stock futures are higher.   Liftoff.  The Federal Reserve announced its much awaited tapering plan, which was in line with overall consensus.  Reductions in monthly asset purchases from $120B ($80 treasuries + $40B Agency MBS) to $105B ($70B & $35B, respectively) starting in mid-November was announced.  The pullback in the monetary stimulus program may be recalibrated according to economic growth; specifically, the Fed has the optionality to fully govern the tapering process based on magnitude of underlying economic trends.  Additionally, Chairman Powell reiterated that current higher than expected inflation levels are transitory and the Fed predicts supply chain logistical issues should dimmish mid next year.  Overall yield reaction was timid with yields ticking up post announcement and currently inching lower this morning.  Investors mainly priced in this tapering into current levels and the Fed did provide a consistent transparency over the previous months.  Jobless claims from last week were 269,000 versus estimate of 275,000.   The House is preparing to vote on the revised spending package by today or Friday.  The Bank of England decided to keep rates unchanged at historical low levels surprising most investors.  European markets are trading higher and Asian market closed up.

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U.S. Stock Futures Are Lower as Chairman Powell is Expected to Announce Potential Tapering #WSJ #Economy #ADP

U.S. stock futures are lower.  Chairman Powell is expected to announce a potential tapering this afternoon and investors will be analyzing his statements for insight into inflation expectations and probable rate hiking.  Consensus is for a reduction from $120 billion per month ($80 billion in Treasury + $40 billion in MBS) by roughly $15 billion per month  ($10 / $5 billion, respectively) –  this is from the Wall Street Journal.   The actual reductions may be determined by changes in economic growth and elevated inflation reports.   ADP reported private payrolls increased 571,000 versus an estimate of 395,000 with leisure and hospitality leading the growth.  The employment report will be released on Friday.  The 10y and 30y treasuries are basically trading flat this morning.  European markets are trading mixed and Asian markets closed lower. 

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U.S. Stock Futures Are Higher After All Three Major Indexes Rallied Close to Record Highs #FederalReserve #MarketUpdate #StockMarket

U.S. stock futures are higher.  Markets are pointing to a higher opening after all three major indexes rallied close to record highs.   Better than consensus earnings continue to be the principal catalyst for higher equity prices.  Federal reserve meeting starts today and announcement for Wednesday afternoon.  10y & 30y yields are starting the day a couple basis points lower compared to its respective closing levels.   Global central banks are concerned about higher than anticipated inflation reports  and have voiced efforts to lessen their accommodating interest rate policy.  This morning, the Reserve Bank of Australia announced raising interest rates sooner than expected, following similar plans from the Bank of England and Canada’s central bank.  The Fed is predicted to reveal tapering plans tomorrow afternoon and may provide insight into the magnitude of the pullback.  International markets are mostly mixed.

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78 Hits

U.S. Stock Futures Are Higher As Earnings Optimism Provides Fuel for Higher Markets #Employment #COVID #InfrastructureBill

U.S. stock futures are higher.  Earnings optimism continues to provide the fuel for higher markets, pointing to a positive opening.   A busy week ahead for the markets in terms of economic reports and central bank policy.  Fed officials are meeting on Tuesday and will announce on Wednesday any modifications to its monthly purchases with a potential pull back and eventual tapering.  Friday is the October’s employment report.  As Covid hospitalizations and cases decrease,  job growth should be firmer in October relative to the previous months.  The House is expected to vote on the infrastructure bill and spending packing, which was passed in the Senate.  Treasury yields are a higher by a few basis points.  European markets are trading up as a result of stronger earnings.  Asian markets are mixed.  China’s official manufacturing Purchasing Managers’ Index for October came in at 49.2 over the weekend. It represented the second-straight month of shrinking manufacturing activity in the country, following September’s official manufacturing PMI reading of 49.6.  Figures below 50 represent a contracting manufacturing activity.

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85 Hits

U.S. Stock Futures Are Lower With Disappointing Results from Amazon & Apple #SP500 #Apple #Amazon

U.S. stock futures are lower. Disappointing results from Amazon and Apple plus concerns about higher inflationary issues are pressuring futures lower.  Both companies cited supply side shortages, labor issues, and increased shipping and freight costs for the primary reason for this setback. The S&P hit another high on Thursday and may edge lower for the last day of October trading.  As of yesterday, and according to FactSet, 82% of the S&P 500 companies that have reported results have exceeded analyst expectations.  This morning the Personal Consumption Expenditure index increased 4.4% versus 4.5% expectations (year-over-year).  Yields on the 10y & 30y treasury are higher post announcements.  Inflation issues are dragging down European shares as investors are starting to question the creditability of the European Central Bank’s policy as inflationary issues are mounting.  Asian markets closed slightly lower. Corporate credit spreads are narrower from last week.

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74 Hits

U.S. Stock Futures Are Higher #GDP #COVID19 #Biden #Gazprom

U.S. stock futures are higher.   U.S GDP grew at 2.0% versus consensus of 2.7% and U.S GPD price index increased at 5.7% versus estimate of 5.3%.  This slowdown is mostly likely related to a confluence  of supply chain disruptions, labor issues, and lingering Covid-19 concerns.  Additionally, jobless claims were 281K compared to consensus of 291k.  Equity futures remain in positive territory post announcement.  Stronger earnings results continue to be the primary positive catalyst for investors. The European Central Bank decided to maintain its current intertest rate and monetary policy positions unchanged notwithstanding ongoing higher inflationary pressures.   Yields on the 10y and 30y treasury closed lower yesterday and ticked a few basis points lower post economic releases.   President Biden is scheduled to attend a House Democratic meeting to urge the progressives to vote for the current spending bill. Asian markets closed lower driven lower by inflationary concerns and negative headlines from real estate property developers.  European markets are trading mixed.  Global energy prices declined slightly as Putin told state energy giant Gazprom to fill the storage sites in Europe and thereby somewhat easing fears of a chronic energy shortages.

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76 Hits

U.S. Stock Futures Are Lower as Stocks Are Expected to Pull Back After Record Highs #Biden #StockMarket #COVID19

U.S. stock futures are lower. Stocks are expected to pull back after hitting record highs with futures pointing to a lower opening.  Corporate America is fairly resilient, weathering both the Covid 19 shutdowns and supply chains issues and reporting stronger than anticipated earnings:   they were especially astute at  managing guidance within this tenuous situation over the last year. Senate Democrats presented a new billionaire’s tax proposal to finance the President’s spending package by taxing unrealized gains.  Treasury yields are lower with both the 10y & 30y edging down. The 5-year note auction is set for today at 1pm.   International market are down following U.S futures.

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80 Hits

U.S. Stock Futures Are Higher Following Positive Earnings Results #Tesla #FDA #CovidVaccine

U.S. stock futures are higher.  Record close for S&P & DJIA yesterday following positive earnings results continue to drive futures higher this morning.  With investors intently focused on stronger financial results, investor’s concerns about inflationary issues have receded a bit and 10y yields bonds have declined.   Tesla joined the $1 trillion market cap, reached only by Apple, Microsoft, Amazon, and Alphabet.   An FDA advisory panel will consider endorsing covid-19 vaccines for children 5 to 11 years old.   The Chinese government encouraged Evergrande founder to pay down the companies’ debt with personal wealth after the Company delayed its coupon payment on international bonds.  As previously mentioned, the coupons were paid within the grace period and the fallout from the Chinese real estate liquidity issues are expected to be contained.  European markets are trading higher mainly fueled by better earnings.  Asian markets closed higher following U.S markets.

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83 Hits

U.S. Stock Futures Are Higher with The Last Week of Trading in October #Facebook #SP500 #SpendingPackage

U.S. stock futures are higher.  Equity markets are expected to open higher today with the last week of trading in October.  Bond yields on the 10y & 30y treasuries are ticking a couple basis point higher this morning.  Oil prices continue to remain evaluated with West Texas Intermediate crude around $85 per barrel.  Major tech companies will report results this week with Facebook scheduled to report today after the close and Microsoft, Twitter, and Alphabet scheduled for Tuesday.  Roughly 30% of the S&P companies are expected to release financial results this week.  Regarding the social spending package, key Democratic leaders are optimistic that a compromise can be reached within the week.  European stocks are fairly mixed with a focus on earnings and Asian markets are closed mixed.

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U.S. Stock Futures Are Higher #Evergrande #InterestRates #StockMarket

U.S. stock futures are higher.  Markets are expected to open higher this morning.  Chinese’s property company Evergrande made a last-minute interest payment on its dollar bond ahead of Saturday’s deadline and within its 30-day grace period.  This payment prevented a default and eased investors’ fears regarding a sector fallout.  The Company, however, is not totally out of the woods and will still have to deal with significant structural real estate issues.  Interest rates continue to edge higher with the 10-y ticking close to 1.69% and the yield on five-year notes climbed above 1.20% on Thursday for the first time since February 2020.  European markets are trading higher with positive news from Evergrande and Asian markets closed mixed.  Corporate spreads continue to tighten over the past few weeks.  Credit investors have been capitalizing on higher total yields on new issues in line with higher benchmark treasury rates.

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86 Hits

U.S. Stock Futures Are Lower with S&P Futures Slightly Down in Morning Trading #SP500 #Evergrande #China #JoblessClaims

U.S. stock futures are lower.  After closing higher yesterday, S&P futures are slightly down in morning trading.  Corporate financial results continue to come in favorably versus analyst’s expectations.  Specifically, as of Wednesday, of the 80 companies on the S&P that have reported results, 81% exceeded consensus.  U.S jobless claims from last week were 290k versus 300k estimate, reflecting an overall positive trend compared to the last few months.  10y treasury yields are higher this morning and remaining above the 1.65% mark.  Asian markets are lower with Evergrande experienced setbacks in raising cash to mitigate its current liquidity issues.  While the overall situation has been contained to the Chinese’s real estate market, Chinese’s property sector remains under financial duress as additional companies are facing similar problems.  European markets are also lower following the announcement from China. 

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83 Hits

U.S. Stock Futures Are Lower with Earnings Results Still Beating Consensus #Bitcoin #StockFutures #Earnings

U.S. stock futures are lower.  Futures are ticking slightly lower this morning with actual earnings results still beating consensus.   Bond yields continue to move higher.  The 10y inched up to 1.63% this morning from 1.59% from its previous close.  Oil prices (WTI) are down by roughly 1% as the U.S oil inventories came in higher than expected.  Data from the American Petroleum Institute industry group showed U.S. crude stocks rose by 3.3 million barrels for the week ended Oct. 15.  The first bitcoin-linked ETF – The ProShare Bitcoin Strategy ETF began trading on Tuesday,  and Bitcoin increased to $64,350 in early trading.  European markets are higher and Asian markets closed lower. 

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87 Hits

U.S. Stock Futures Are Higher with Better Than Expected Corporate Results #EarningsSeason #SP500 #Economy

U.S. stock futures are higher.  Better than expected corporate results are driving futures higher this morning.  Stronger earnings growth is counteracting inflation fears and fortifying investor’s positive sentiment.  Additionally, how companies will manage with pending problems, such as  supply chain issues, labor costs, and global reopening will be scrutinized by investors.  According to FactSet, 80% of the S&P companies that have reported exceeded their respective EPS consensus.  The 10y treasury yield is ticking up to a 1.60% level as inflation issues still linger. U.S housing starts fell 1.6% for September and yesterday’s industrial production declined by 1.3% from August, its sharpest decline since February.  The reduction was due mainly to supply chain disruption issues.  European markets are higher and Asian markets closed lower.  The IMF downgraded its 2021 economic growth forecast for Asia to 6.5% from an earlier figure of 7.6%. 

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U.S. Stock Futures Are Lower with China's Slowing Growth Rate #China #Cryptocurrency #Evergrande

U.S. stock futures are lower.  China’s slowing growth rate from 7.9% to 4.9% for the 3Q (y/y)  is driving futures lower this morning.  The magnitude of decline surprised markets and a combination of factors, such as paring back existing stimulus programs, higher energy prices, and supply chain issues were principally responsible for this reduction.  Concerns about growth rates recalibrating lower amid higher energy prices and potentially sticker inflation, as opposed to “transitory”, continue to worry investors.  Treasury bond yields remain higher this morning.  Brent crude futures rose 1% to $85.72.  On the cryptocurrency front, bitcoin traded at $61,409 on Sunday as the first bitcoin ETF is expected to start trading Tuesday.  Corporate earnings so far are coming in higher than expected and companies will continue to report financial results this week.  China’s central bank released an official statement on Evergrande, which stated that the liquidity issues are “controllable”.   European markets are trading lower and Asian markets closed mixed.

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91 Hits

U.S. Stock Futures Are Higher #Biden #SP500 #Retail

U.S. stock futures are higher.  CPI rose 5.4% year over year in September compared to a 5.3% estimate & the monthly figure increased  0.4% versus 0.3% consensus.  Principal issue is that the monthly rise may continue to increase due to a surge in energy prices relative to last year.  Yields on long term treasuries ticked up roughly 2 bps each and S&P futures remain in positive territory.  Global energy prices eased slightly with news that Iranian nuclear talks may resume within the next couple of weeks and potential new supply may enter the market.   President Biden will present a plan today to lessen the congestion at West Coast ports by expanding round-the-clock operations.  The President anticipates that this will alleviate supply chain issues; additionally, logistic companies and retailers, such as FedEx, UPS, Walmart & Home Depot, and others, are also cooperating.  These companies are expected to increase overnight and off-hours operations at the ports to hasten product delivers to their respective customers.  International markets are higher this morning. 

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91 Hits

U.S. Stock Futures Are Higher After Choppy Trading Yesterday #EarningsSeason #DebtCeiling #PresidentBiden

U.S. stock futures are higher:  Markets are expected to open higher today after choppy trading yesterday with the three primary indexes closing lower.  Continuing elevated energy prices may curtail growth as essential gasoline and heating expenses increase.   Treasury yields on 10y & 30y bonds inched lower this morning and the 10-yr note auction is set for today at 1.  Bonds markets were closed yesterday.  Some of largest banks are set to kick off the earnings season tomorrow.  Additionally, the House is scheduled to vote on the short-term debt ceiling hike and approval is expected & should be  signed by the President.  This plan allows the government to operate until the first week of December.  Asian markets closed lower with persistent fears related to the real estate sector and heightened regulatory issues pressuring share prices.  European markets are trading lower.

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98 Hits

U.S. Stock Futures Are Lower With Continuing Uncertainty From A Weaker Than Expected Jobs Report #AAA #Bitcoin #SEC

U.S. stock futures are lower:  Higher global energy prices and continuing uncertainty from a weaker than expected jobs report are negatively impacting equity futures.   West Texas Intermediate crude increased 3.5% this morning and as per AAA, the average gasoline prices at the pump was $3.27 per gallon, reflecting tightening energy supply/demand imbalances.   Even with the weaker September jobs report, yields on the 10y & 30y treasury closed higher.  Concerns regarding higher inflation drove yields higher. The bond market is closed today. This week starts earning releases first from the major banks: 3Q’21 earnings are anticipated to have increased 27.6% year over year and represents the fastest growth since 2010.  Investors will be analyzing the releases for inflationary issues related to supply-chain disruptions, labor shortages and higher global input prices.   Bitcoin prices are trading at $56,322 amid speculation regarding that the SEC might approve a bitcoin futures exchange traded fund in the next few weeks..  International markets are mixed.

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U.S. Stock Futures Are Higher As Senate Passes Short Term Extension To The Debt Limit #Senate #DebtLimit #EnergyMarkets

U.S. stock futures are higher:  New jobs for September was 194,000 versus consensus of 475,000, a noticeable miss versus estimates and prior July and August totals were increased.  The futures remain positive after the announcement.  Questions regarding the timing of a potential tapering is still unclear and next months Fed meeting will be closely scrutinized for meaningful insights.  The 10y yield note climbed above 1.60% for the first time since June this morning but both yields are slightly lower, as investors analyze the report.  Short term extension to the debt limit was passed by the Senate and should provide positive sentiment for investors, the deadline for a possible default is Oct 18.  The plan is now with the House and it is expected to be approved. Volatility in the energy markets continue as WTI ticked up to $80 per barrel with doubts that the U.S would release crude from its strategic reserves. Corporate spreads widened a couple basis points over the last week.

 

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98 Hits

U.S. Stock Futures Are Higher With Progress on Debt Ceiling Talks #Biden #DebtCeiling #Putin #StockMarket

U.S. stock futures are higher:  Progress on the U.S debt ceiling talks is driving futures higher.  Republicans offered a short-term debt limit extension plan which lowered overall investor anxiety regarding a potential government default.  This plan would extend the debt ceiling into December and possibly allow the Democrats to finalize a strategy.  Last week’s new claims for jobless benefits totaled 326,000 versus 345,000 estimate, the key labor report is the employment numbers out tomorrow morning.   Long term treasury yields are slightly higher this morning.  Russian President’s announcement to help stabilize the global energy markets resulted in a lower global energy prices with Brent crude down by roughly 1.1% after hitting annual highs.  International markets are higher this morning with positive news out of Washington.

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106 Hits

U.S. Stock Futures Are Lower with All Three Major Indexes Down This Morning #Energy #Biden #StockMarket

U.S. stock futures are lower: All three major indexes are down this morning.  Ahead of this Friday’s employment report, the 10y & 30y treasury yields are inching higher as higher energy prices, both natural gas and global oil, may fuel faster inflation.   European natural gas prices are higher again and is expected to increase with supply situation remaining tight.  Private employment increased by 568,000 compared to estimates of 425,000, according to ADP and could be a precursor for the jobs report, the consensus is +500,000 in September.    Yields ticked up a few basis points after the report.   President Biden announced that the $3.5 trillion budget will have to be scaled back to possibly between $1.9 and $2.3 trillion and negotiations are still pending.   International markets are lower.

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122 Hits

U.S. Stock Futures Are Higher After Yesterday's Sell Off in All Three Major Indexes #OilPrices #StockMarket #Evergrande

U.S. stock futures are higher:   Markets are expected to open higher after yesterday’s sell off in all three major indexes.  Bonds yields on the 30y are trading above 2% & the 10y is edging around 1.50% and this  plus negative headlines concerning social media stocks have precipitated a pullback in tech shares.  Oil prices hit a 7-year high following OPEC+ decision not to increase the daily production levels – WTI is trading at roughly $78 per barrel.  Higher energy prices contribute to investor’s concerns about possibly higher inflation.  Additionally, natural gas futures are up roughly 3% in morning trading.  Increasing demand and a potentially colder winter combined with supply/production issues are the primary reason for higher prices. Declines in US stock prices pressured Asian share lower and questions about Chinese property companies’ liquidity issues, specifically Evergrande and Fantasia Group, are still pending.  European shares are higher in line with U.S futures.

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112 Hits

U.S. Stock Futures Are Lower with Uncertainty Related to Domestic Legislative Issues #Evergrande #DebtCeiling #Hopson

U.S. stock futures are lower:    Uncertainty related to domestic legislative issues, Chinese property developer Evergrande and slowing potential growth and higher inflation are driving futures lower this morning.  In Washington, officials are negotiating a reduced spending package in order to pass both two legislative plans together, including the bipartisan agreed infrastructure package.   Additionally, discussions about raising the debt ceiling are still in process.  Chinese property developer Evergrande is planning on raising much needed capital from asset sales and another property company Hopson is schedule to announce a major transaction.  Trading on both companies’ shares were halted on Monday.  10y treasury yields are higher this morning as inflation fears are still lingering.  Investors are waiting for the employment report out this Friday.  OPEC+ will meet today to determine production levels, which are expected to remain the same: an increase of 400,000 per day.  Most international indexes are trading lower. 

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U.S. Stock Futures Are Higher After Yesterday's Selloff #Merck #Economy #Pelosi

U.S. stock futures are higher:    After a sell off yesterday, futures markets are higher this morning.  For the 3Q’21, the Dow dropped 1.9%; the S&P 500 gained 0.2%; and the Nasdaq fell 0.4% but YTD gained 10.6%, 14.7% and 12.1%, respectively.  Merck announced that its experimental Covid-19 pill helped prevent high risk covid patients from becoming  seriously sick and plans to file an emergency use authorization as soon as possible.   The Personal Consumption Expenditures index was up month over month at 0.4% versus consensus of 0.3% and y/y also increased to 4.3% compared to 4.2% for estimates.  10y & 30y treasury yields  ticked up about 2 bps following the announcement.  Energy prices declined in early trading as commodity prices hit yearly highs and investors are concerned about demand destruction in economic growth as elevated basic energy costs might increase with winter coming.   Congress failed to vote on the $1 trillion infrastructure bill since Speaker Pelosi had insufficient votes to pass it and may bring it vote today.  Inflation worries are driving down international markets this morning.  High yield spreads have widened out and  investment grade levels remain tight.

 

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107 Hits

U.S. Stock Futures Are Higher As We Reach The Last Day Of The Quarter #SP500 #COVID #InfrastructureBill

U.S. stock futures are higher:    Equity markets are expected to open higher as futures are pointing up for the last day of the quarter.  As of today, and for the quarter, the S&P is up 1.4% and the YTD the index is up 16.06%.   Chairman Powell is set to testify today before the House Financial Services Committee and on Tuesday, Powell told the Senate Banking Committee that inflation pressure could last longer, specifically with the supply chain issues and Covid situation in Asia.  Bond yields took a pause yesterday after a speedy increase over the past few days.  Jobless claims from last week totaled 362,000 versus consensus of 335,000 and the treasury yields ticked up a couple of basis points post release.   The infrastructure bill is expected to come up for a vote today in Congress but faces an uncertain path as some Democrats want action on the $3.5 trillion program first.  Additionally, the Senate has agreed to fund the government into early December and Congress has to pass the funding bill before midnight Thursday to avoid a shutdown.  European markets are trading higher and Asia markets closed higher. 

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106 Hits

U.S. Stock Futures Are Higher After Yesterday's Sell Off #WSJ #Evergrande #StockMarket

U.S. stock futures are higher: Futures are edging higher this morning after yesterdays’ sell off. The magnitude and speed of change in treasury yields spooked equity markets and the rate of this change, roughly 20 bps (10y) in one week, has caught most investors off guard.  Higher global energy/commodities prices and its potential impact on inflation have contributed to this pull back.  Attractive US domestic treasury yields are attracting global capital flows, with the WSJ Dollar Index hitting the highest level since November.  Asian markets are lower this morning.  Worries about persist Chinese regulatory interference and Fed tapering are pressuring shares.  Expect higher volatility in Asian equities as the Evergrande fallout is still analyzed and its impact on the Chinese real estate market is uncertain.   European markets are trading higher,  taking a lead from U.S futures.

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93 Hits

U.S. Stock Futures Are Lower with Higher Bond Yields #Energy #MarketUpdate #China

U.S. stock futures are lower:   Higher bonds yields are negatively impacting equity futures.  Treasury yields have increased across the yield curve as investors anticipate the Fed’s tapering earlier.  The yield on the 10y is at 1.54% compared to 1.45% from last week.  This reversal in yields further reflects a domestic policy shift but also includes other international central bankers changing their policies to less accommodating, resulting in higher global government yields.  Energy prices continue to increase as supply disruptions persist for longer than expected as demand is improving.  Natural-gas prices set fresh highs Tuesday. U.S. Henry Hub natural gas prices jumped 6.3% to $6.09 per million British thermal units, their highest since 2014.  As of today, new infections and hospitalizations are declining nationally and new cases in the most severe locations are also down.   European markets are lower this morning with rising bond yields.  Asian markets closed down.  The People’s Bank of China stated that it would “maintain the healthy development of the property market and safeguard the legitimate rights and interests of house buyers.”  This partial support from the central bankers helped rally some of the beaten down Chinese property developers stock prices. 

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95 Hits

U.S. Stock Futures Are Lower with Higher Bond Yields & Oil Prices #Evergrande #Congress #Powell

U.S. stock futures are lower:   With higher bond yields and oil prices, futures are pointing lower this morning.  The 30y treasury yield broke the 2% level and the 10y is inching close to 1.50% level.  Both yields have quickly increased over the last few days.  The Fed’s change in policy to tapering earlier combined with declining fears of a systemic meltdown associated with Evergrande are the primary reasons for higher yields.  Chairman Powell is set to testify before the Senate on Tuesday and the House on Thursday and most likely will reiterate his policy statements from last week.  While Evergrande did miss the international dollar payment on Thursday’s night, any potential negative domino effect to the broader Chinese or international capital/funding markets are expected to be contained.  Energy prices are higher with Brent crude trading above $79, hitting the highest levels since Oct. 2018.  In Washington, this week Congress will attempt to pass a funding plan to prevent a government shutdown on Friday.  European markets trading mixed and Asian markets closed slightly lower. 

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104 Hits

U.S. Stock Futures Are Lower with Lingering Concerns About Evergrande #ChairmanPowell #Bitcoin #Evergrande

U.S. Stock Futures Are Lower with Lingering Concerns About Evergrande #ChairmanPowell #Bitcoin #Evergrande

U.S. stock futures are lower:   Expecting a lower opening with lingering concerns about Evergrande and higher rates are depressing asset prices.  Evergrande made the local bond payments and dollar bondholders are still waiting for their payment  - there is a grace period that the company can utilize.  However, the contagion from a potential bankruptcy is expected to be contained within the Chinese markets.  Yields are noticeably higher on the 10y & 30y as the flight to safety trade is slowly reversing and Fed’s tapering is anticipated to start within the next few months.  Fed Chairman Powell is set to speak at 10 am with other central bank officials.  Bitcoin prices declined as China announced that offering, trading, order matching, token issuance, and derivatives for virtual currencies are strictly prohibited.  Bitcoin prices are down by roughly 7%.  Credit spreads on both the high yield and investment grade bonds remain tight as the new corporate supply has been smoothly absorbed by investors.  All international markets have closed and trading lower.  Global central banks may be collectively taking a hawkish tone as moderate growth is tenable, demand is stable and inflation is higher. 

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137 Hits

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