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“If you want to increase your success rate, double your failure rate.” – Thomas J. Watson, Sr
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
We may be starting to sound like a broken record, but once again this morning, futures are little changed with a downside bias, and the government is still closed. With the Fed in blackout ahead of next week’s rate decision, the only data the market has to focus on domestically is earnings. Overall, the pace of reports continues to come in positively with EPS and sales beat rates in excess of 70%. Also on the subject of broken records, it’s now been eight trading days where the S&P 500 has been stuck within the range it traded in on 10/10.
While the government may be closed, Washington is far from quiet, with the latest news being reports that the Trump Administration is in talks to acquire stakes of up to $10 million in various quantum computing stocks, including IonQ, Rigetti Computing, and D-Wave Quantum. Obviously, these stocks are surging in reaction to the news, and as a result have mostly erased yesterday’s declines. It’s worth pointing out, however, that after the gains these stocks have seen in the last couple of years, their market caps are all at or above $10 billion; a $10 million investment works out to less than 0.1%.
Outside of equities, crude oil is surging 5% and back above $60 per barrel after yesterday’s latest round of sanctions against Russian oil companies. Gold is also trying to regroup after the sell-off from the last couple of days, rallying 1.5% and back above $4,100 per ounce, while silver and platinum are both up at least 2.5%. Even Bitcoin and Ethereum have managed to rally more than 1%.
In international markets, Asian stocks were mixed overnight, with the Nikkei falling 1.4% and the Kospi dropping a percent. Hong Kong (0.7%), China (0.2%), India (0.2%), and Australia (0.1%) all managed to finish higher. The tone in Europe this morning is skewed more positive, with the STOXX 600 rallying 0.3% with little in the way of catalysts besides earnings driving the action.
The 10-year yield remains below 4% this morning after trading yesterday at its lowest level since the tariff-tantrum in April. While it wasn’t enough for a 52-week low on an intraday basis, on a closing basis, it was the lowest level since early October of last year. Since peaking at just under 4.6% in May, the 10-year yield has been stuck in a very consistent downtrend channel, and has been moving towards the lower end of that range all month.
