Sep 14, 2021
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“There is a time to make money and a time to not lose money.” – David Tepper
There’s not a lot going on in the futures market this morning as investors await the August read on CPI. While the monthly increase is executed to show an increase of 0.4%, it would be the lowest rate of increase since February. Already this morning, the NFIB Small Business Sentiment survey came in modestly better than expected showing continued tightness in US labor markets. That tightness is only likely to get worse in the months ahead as Amazon announced plans to hire an additional 125K employees in the US at starting wages of $18 per hour. Japanese stocks were higher overnight, but Europe has been drifting lower.
Read today’s Morning Lineup for a recap of all the major market news and events from around the world, including the latest US and international COVID trends.
Including yesterday’s gain, the post-Labor Day trading environment has been a weak one for every sector except Energy. As shown in the snapshot below from our Trend Analyzer, the Energy sector is the only one that hasn’t moved down within its trading range over the last five trading days. Weakness during this period has been led by Real Estate and Health Care which are both down over 3%. Despite those losses, they are still both pretty much at or above their 50-day moving averages. The Industrials sector hasn’t been the weakest of the eleven sectors, but its 2.26% decline has been enough to make it the only oversold sector in the S&P 500.
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Sep 13, 2021
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“The reason I’ve been able to be so financially successful is my focus has never, ever for one minute been money.” – Oprah Winfrey
The post-Summer trading environment hasn’t been particularly positive for bulls as the S&P 500 hasn’t had a positive day since 9/2. Bulls are looking to regroup this morning, though, and futures on all the major averages are firmly in the green. Both the economic and the earnings calendars are essentially blank today and the Fed is in its pre-meeting blackout period as well, so don’t expect much in the way of tape bombs on that front either.
Read today’s Morning Lineup for a recap of all the major market news and events from around the world, including the latest US and international COVID trends.
After hitting a record high back on 9/2, the S&P 500 has now traded lower for five straight trading days. That’s tied for the longest losing streak since 2/22. That streak back in February was also the last time the S&P 500 experienced five straight down days after a record closing high. Since the end of the Financial Crisis in 2009, there have only been six prior periods where the S&P 500 was down for five straight trading days after closing at a record high, and before the most recent one in February, the one prior to that was right after the pre-COVID peak in February 2020.
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Sep 10, 2021
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“No day shall erase you from the memory of time.” – Virgil
After four straight days of losses, the S&P 500 is indicated to end the week on a positive note. That could change between now and the closing bell, but with the PPI report out of the way (mostly inline with expectations), there won’t be much on the data front to derail things. The positive tone in futures this morning is primarily being attributed to news that President Biden and Chinese President Xi spoke on the phone last night for 90 minutes for the first time since February.
Read today’s Morning Lineup for a recap of all the major market news and events from around the world, including the latest US and international COVID trends.
After closing at a record high last Thursday, the S&P 500 heads into the day today riding a four-day losing streak. Despite the string of weak days, the magnitude of the decline has been pretty well contained with a cumulative decline of just under 1%. To put this in perspective, in the entire post-WWII period, the current losing streak represents just the 16th time that the S&P 500 had a 4-day losing streak but was still within 1% of a record closing high.
The log chart below of the S&P 500, where every horizontal line represents a doubling of the index, shows every occurrence mentioned above (there were none prior to 1960). Interestingly, these streaks were pretty much bunched into three different periods. The first was in the 1960s, but from 1968 through 1990, there wasn’t a single occurrence. From 1991 through 1993, there were three occurrences, but then there was another gap of twenty years without a single occurrence! Then, from December 2013 through the present, there have now been six separate streaks.
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Sep 9, 2021
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“Today I will do what others won’t, so tomorrow I can accomplish what others can’t” – Jerry Rice
It’s not often that you see the S&P 500 on pace for its fourth straight down day and it’s still within 0.6% of an all-time high, but it’s been a rather listless market in the days straddling the Labor Day weekend. The economic calendar is light again today with Jobless Claims the only report on the calendar. While the earnings calendar is light today, we’re currently in a relatively busy time of year when it comes to investor conferences, so there’s always the chance that a company drops a surprise at one of these conferences. Today, some of the more notable conferences are the Morgan Stanley Health Care Conference, Barclays Energy Conference, and the Deutsche Bank Technology Conference. In Europe, the ECB just announced its latest policy decision, and while rates were left unchanged, the central bank did take a moderately hawkish tone at the margin by announcing that it would conduct bond market purchases at a ‘moderately lower pace’ than recent activity.
In economic news, both initial and continuing jobless claims came in at post-COVID lows.
Read today’s Morning Lineup for a recap of all the major market news and events from around the world, including the latest US and international COVID trends.
One notable trend in this morning’s corporate announcements comes from the airline sector as not one, not two, and not three, but four different airlines have hit the tape this morning to lower Q3 guidance citing weakness related to the uptick in COVID cases (actually make that five as Delta just recently hit the tape as well). As one might expect after a company lowers guidance, all four stocks are trading moderately lower on the news. While the airline companies are just announcing the news of softer demand and a higher rate of cancellations, their stocks have been telling us this for months. Take a look at the charts below. All four have been in steady downtrends all summer.
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Sep 8, 2021
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“A government big enough to give you everything you want is a government big enough to take from you everything you have.” – Gerald Ford
Labor Day is supposed to mark the unofficial end to summer and the time when people return to work from Summer vacations, but the second trading day of the holiday-shortened week is looking like another quiet one. Futures are indicated lower following a weak session in Europe, but here in the US, the only economic report on the calendar today is the JOLTS report, which is expected to show slightly more than 10 million job openings. In earnings news, the only reports of note are Lululemon (LULU), RH, and Gamestop (GME).
Read today’s Morning Lineup for a recap of all the major market news and events from around the world, including the latest US and international COVID trends.
After Tuesday’s mixed start to the week, the technical picture for the major US indices remains mixed.
In the small-cap space, the Russell 2000 remains stuck in its range. After bouncing for a fourth time right around the $210 level, IWM has taken a pause in the last few days as it tries to digest its late August gains. If you’re bullish on small caps going forward, you’ll really want to see IWM quickly break the string of lower highs.
The Nasdaq 100 (QQQ) was the star of the show yesterday as it managed to eke out gains on an otherwise weak day for equities. With the recent upside, QQQ has become a bit extended as it breaks above its uptrend. The setup for the S&P 500 looks similar to the Nasdaq 100, but unlike QQQ, SPY stalled out just as it bumped up against that trendline resistance.
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Sep 7, 2021
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“Only those who will risk going too far can possibly find out how far one can go.” – T.S. Eliot
Welcome back. While the weather outside may suggest otherwise, the unofficial end to summer has come and gone, football season is ready to kick off, pumpkin-flavored coffee, beer, and bread is everywhere you look, and before you know it, the leaves will start turning. Equity markets are heading into the fall season with more green than red, but treasuries are lower and yields are higher heading into what will be a quiet day in terms of data to kick off the holiday-shortened week.
Read today’s Morning Lineup for a recap of all the major market news and events from around the world, including the latest US and international COVID trends.
With the unofficial end to summer behind us, we wanted to provide a quick summary of how the S&P 500 has historically performed the day after Labor Day (we covered other post-Labor Day performances in today’s Morning Lineup). In the post-financial crisis period since 2010, there has clearly been a Labor Day hangover with the S&P 500 trading lower nearly three-quarters of the time for a median decline of 0.17%, including declines on this day in each of the last four years. From a longer-term vantage point since 1945, the day after Labor Day hasn’t been as negative with a median gain of 0.15% and positive returns 53% of the time. Lastly, with the S&P 500 up just over 20% already this year, we also looked at years where the S&P 500 was up at least 15% YTD heading into Labor Day weekend, and in these scenarios, returns were more positive. In the 16 prior years, the day after Labor Day had a median gain of 0.26% with positive returns half of the time.
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