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“Don’t find fault, find a remedy; anybody can complain.” – Henry Ford
While just about every company reporting earnings has lamented about the semiconductor shortage impacting their business, in Ford’s (F) earnings report last night, the company took a more constructive tone noting that “revenue, net income, adjusted earnings before interest and taxes, cash flow from operations, and adjusted free cash flow were all sharply higher from the second to the third quarter of 2021, driven by significant increases in semiconductor availability and wholesale vehicle shipments from Q2.” The company didn’t say that the shortage is behind us, but it was nice to hear some positive news for a change.
Equity futures are higher this morning with the Nasdaq leading the way, but the gains aren’t even enough to bring us back to levels the major averages were trading at in the final hour of trading yesterday. The S&P 500 is marginally higher on the week, but which side of unchanged it finishes the week will likely hinge on earnings reports from Apple (AAPL) and Amazon.com (AMZN) after the close today.
As if all the earnings news wasn’t enough, there’s also a ton of economic data to contend with both today (Jobless Claims, GDP, Pending Home Sales, and KC Fed) and tomorrow (Employment Cost Index, Personal Income and Spending, Chicago PMI, and Michigan Sentiment). The ECB just announced no major changes to policy in its latest statement noting that its pandemic program will remain in place until at least March, but there will likely be more details to come in the press conference at 8:30 AM. Back here at Home, President Biden is expected to announce details for a framework of a $1.75 trillion social-spending and climate package. Whether Congress can pass it is a whole other story.
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.
There were some really disparate moves in the US Treasury market yesterday as investors sold the short end of the curve on fears of more aggressive policy tightening down the line. At the same time, they were buying the long end betting that more aggressive tightening will cause a slowdown in growth. You can really see the dynamic playing out in the snapshot from our Trend Analyzer below. The ETFs listed below are sorted by where they closed Wednesday within their respective trading ranges, but they are also perfectly sorted by the maturities of the treasuries they track from the short-end of the curve (most oversold) to the long-end (closest to or above their 50-day moving averages).
The charts below show the performance of the 1-3 Year US Treasury ETF (SHY) and the 20+ Year Treasury ETF (TLT). While the magnitudes of the moves are much smaller for SHY, its price chart looks like a steep cliff, while TLT has seen a nice bounce over the last few days.
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