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“If trouble comes when you least expect it then maybe the thing to do is to always expect it.” – Cormac McCarthy
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Markets are looking to get back on track this morning after some turbulence last week. S&P 500 futures are up 0.35% while the Nasdaq is up 0.80%, and both have been picking up steam all morning. Reports that Iran wants to come back to the negotiating table and revive the MoU have added to the positive tone.
Treasury yields are also higher this morning as the 10-year is up 3 bps to 4.57% while crude oil is fractionally lower but still above $80 per barrel. Gold is little changed, and Bitcoin is modestly higher as it looks to get back above $65K.
Asian stocks were mixed to start the week. Japan was closed for a holiday, and South Korea fell more than 4%, but that was mostly catch-up from weakness in the markets on Friday when that market was closed. In pre-market trading here in the US, memory stocks, which South Korea is basically a proxy for these days, are all trading firmly higher. Chinese stocks moved in the other direction as the Shanghai Composite rallied 0.9% and Hong Kong jumped 2.4% on reports that state-owned funds were supporting the market.
In Europe, it’s been a quiet session to start the week. The STOXX 600 was little changed, and no major benchmark index is up or down more than 0.5%. German PPI fell 0.3% versus expectations for a decline of 0.2%, and the y/y reading was just 1.8%
What a difference a week makes. Heading into the weekend before last, the S&P 500 wasn’t at an all-time high, but it closed at its highest level since early June after having just successfully tested its 50-DMA for the third time since its peak. With that high, the S&P 500 had also broken its short-term downtrend that had been in place since the bull market peak. Bulls were starting to get more confident.
A week later, the picture didn’t look nearly as promising. In the five trading days last week, the S&P 500 never really traded above those levels from 7/10, and by Friday’s close, it was back below its downtrend line from the peak. Not only that, but the S&P 500 also closed below the 50-DMA and made a lower low relative to the intraday low in early July.
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