tsptalk's Market Talk

[tsptalk]

Big tech earnings are shaking things up this morning. GOOG was down last night after reporting but Microsoft was actually up and was trading up after the opening bell, but that has completely flipped and that's not a good sign for stocks, especially big tech and the Nasdaq - and perhaps the S&P 500.

Why it went from trading at new highs at the open and then reversed down, I don't know, but that's an ugly outside reversal day. However it all depends on the close, and the Fed is still on deck. A pullback wouldn't be the worst thing here, but that looks troubling for MSFT.

Despite Microsoft being the 2nd highest weighted stock in the Dow and it being down 1.3%, the Dow is actually up this morning because the other top 4 weighted stocks, 1, 3, and 4, are all up, and Boeing (#13 on that list), is up 3.4%.


Small caps are holding up a little better with yields down again, and the I-fund is actually up as the dollar is also falling.

Oil is down, gold and silver are up (weak dollar) early, and bitcoin is down after a decent run higher in recent days.

 

[tsptalk]

Stocks are bouncing back today after the Fed triggered drubbing yesterday, although they are struggling to hold their earlier highs. Yields are down sharply for a second straight day, and the dollar is also down slightly helping the stock market setup, however small caps are not taking advantage and they (S-fund) are flat after losing the morning gains already and testing yesterday's lows again, which is the bottom of a gap it filled yesterday.

The fact that the Fed is holding off on rate cuts longer than most expected is putting the pressure on the small caps but it's clear that the next move from the Fed is a cut in rates, but when? So the rest of the market is trying to figure out the impact of "higher for longer" with the understanding that there's an eventual cut coming.

Look at the 10-year yield trading under 3.9% again. The stock market was expected rate cuts but it looks like the bond market is only now accepting that and the month long rally in January has finally ended, and support broke in a hurry.

 

[dannyboy]

Stocks are up big after some strong earnings from Netflix. Not usually a big market mover, but there were also some big moves in semiconductors on mixed results out of that sector.

The 10-year yield is down slightly - nothing that would ignite this kind of buying, but the dollar is down sharply, which helps prices in general - particularly the I-fund in our case.

I've been looking for that open gap to get filled which would help this dollar ETF (UUP) create a right shoulder in the inverted H&S pattern.

That has so far resulted in a breakout of one of the bull flags on the I-fund chart that I had mentioned in a commentary earlier this week. The first one was a fake out a couple of weeks ago.

Thanks

 

[tsptalk]

A jobs report that nearly doubled expectations, flattened the futures market which had been set to gap up on the Meta and Amazon earnings. Yields and the dollar spiked on the news putting pressure on the market, which still opened higher, but well off the overnight futures highs.

The S, I, and F funds are feeling the effects of that rally in yields and the dollar as the odds of a March rate cut fell from 38% to 19% on the Jobs Report

 

[tsptalk]

The jobs report that seemed a little unbelievable, is certainly getting cred from Wall Street as we see another gap up in yields and the dollar this morning. Whether they believe it or not, what they believe is the data will effect the Fed's decision on interest rates.

Large cap stocks are off slightly but small caps and the I-fund (and bonds / F-fund) are down sharply again to stat the new week.

 

[rdodson]

The jobs report that seemed a little unbelievable, is certainly getting cred from Wall Street

What are the chances the job numbers are corrected in a month or two when no one is looking?

 

[tsptalk]

Lower yields and a weaker dollar are helping stocks out this morning, particularly the small caps which have been in much need of some help after lagging and delivering weak breadth numbers all year. The Nasdaq was down slightly.

The 10 year T-note is down helping bonds and the F-fund to some early gains. High yield corporate bonds are also up, along with gold, silver, bitcoin, and the price of oil.

The key will be holding onto these gains into the close as the bears seem to be getting more aggressive since the Fed meeting.

 

[tsptalk]

Big move in the Transports this morning.

 

[tsptalk]

There's probably a story being told here but the action feels random. Large caps are flying high and the S&P 500 seems to be on a mission to hit 5000. Meanwhile small caps are back to struggling mode after showing life on Tuesday.

Yields were down early, now up slightly, but mostly flat. The dollar is down slightly. Oil is up, the metals are mixed with gold up and silver down, and bitcoin is down as well but it has been very choppy and trading in a tight range so far this month.

The Fed’s Neel Kashkari expects only two or three interest rate cuts this year. He said, "I would say, two or three cuts would seem to be appropriate for me right now. But again, I don’t want to prejudge things, but that’s, that’s my gut, based on the data we have so far.”

Small caps seem to be adjusting to this less favorable development after the market had expected up to 6 cuts this year.

 

[tsptalk]

Lots of green in the large cap indices, but many more stocks are down again, than up. Small caps can't get any traction.

 

[tsptalk]

The S&P 500 has come within 1.70 of hitting 5000 today before backing off a bit. It will certainly make headlines and should create fanfare once it hit's it, and that could bring in more money, but it may also create a capitulation-like peak at some point over 5000.

It blasted right through 4000 in 2021 but the other round numbers did see some churning below the number for weeks to months before taking off again.

 

[tsptalk]

Yields and the dollar are up, yet small caps are outperforming to start the day. Interesting. With the S&P 500 hitting 5000 (or very close) are investors finally looking to move to the less crowded trade? I know, this happens at least once a week where small caps get some rotational attention, but it has repeatedly failed.

I like the small caps chart although it is not indicative of sticky high yields or higher interest rates, so can this rotation actually occur this year?

1987 was a one hit wonder and often comparisons are made to this chart, but for giggles, here the Russell 2000 charts versus the S&P 500 from 1897.

 

[tsptalk]

Stocks are up to start the day with a little help from some favorable inflation data. Maybe... because bond yields are up this morning and that's not something we'd expect from favorable inflation data.

We also wouldn't expect small caps to be leading with yields up, but they are.

The S&P 500 is trading above 5000 this morning at 5012, and it's now 20% above the October low. The Nasdaq is also at a new high.

Gold is down, oil is up, and bitcoin is soaring.

 

[tsptalk]

The opening action had the 10-year yield slightly lower, but off its earlier lows, the dollar was a up modestly. Small caps are leading and making new 2024 highs while the Dow, S&P, and Nasdaq are near flat in early trading.

The European market are leaning positive so the EFA is up a bit, but the positive dollar is weighing on it.

Oil is down slightly, as is gold, silver is up a bit, and bitcoin is up and racing toward 50,000 again.

 

[tsptalk]

Easy come, easy go for stocks as the CPI Report came in hot catapulting yields and the dollar higher, which will put pressure on stocks today. Does the pullback get bought quickly, or is this the start of another peak? It will be ugly early, but the close is key.

 

[JTH]

Easy come, easy go for stocks as the CPI Report came in hot catapulting yields and the dollar higher, which will put pressure on stocks today. Does the pullback get bought quickly, or is this the start of another peak? It will be ugly early, but the close is key.

That's one heck of a gap on SPX, -1.07% at the open.

 

[tsptalk]

That's one heck of a gap on SPX, -1.07% at the open.

And it filled the gap from Feb 7.

 

[tsptalk]

 

[JTH]

Nice rejection at the 200 SMA, it's been awhile, but if we could get back up to the 20s, that'd be some legit fear...

 

[tsptalk]

Was yesterday's CPI sell off a one-day shake out? No quick failure yet from this morning's snap back rally. That's a good sign but it's still early. There were overhead gaps to fill and what happens when those get filled will be telling.

Yields and the dollar are down, but not yet giving back much of yesterdays moves.

The Nikkei was down last night in sympathy with US stocks, but Europe was bouncing back.

Oil is up, gold is down and bitcoin is up to $52K this morning.