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“Well it’s kind of the last great American adventure, you know what I mean? Human beings need a little danger, a little uncertainty, a little adventure in their lives and our society frowns upon that.” – Phil Lesh
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Equity futures are higher this morning as we head into the homestretch of the election season but in some ways the year as well. By the end of this week, the calendar will say November, and there will be less than two months left in 2024. Between now and then, though, this week will be jam-packed with earnings (one-third of the S&P 500) and several major economic reports, including Q3 GDP, October Non-Farm Payrolls, and the ISM Manufacturing report.
Crude oil is sharply lower this morning after Israel retaliated against Iran this weekend and did not target energy assets in the country. Crude has been under selling pressure for a few months now. Earlier this month, it tried to rally back above the 200-DMA but was firmly rejected. Then, last week, it closed Friday slightly back above the 50-DMA, but that didn’t hold for very long.
Lower crude oil prices will likely start to show up in prices at the pump in the coming days, and depending on how much weaker it gets, we could see the national average price of a gallon of gas fall below $3, a level it hasn’t traded at in more than three years!
The weakness in oil prices doesn’t do much good for energy stocks, and while it’s the worst-performing sector so far this year, the technical picture for crude oil wasn’t looking as bad as it does for crude oil…yet. As shown in the chart below, the Energy sector broke its downtrend in early October, and while the sector has pulled back 5% from its recent high, it had managed to hold its 50 and 200-day moving averages and has remained above its former downtrend. However, if you look at this morning’s biggest losers, they’re all from the Energy sector, and at least at the open this morning, the Energy sector will trade below those key support levels.