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HomeTrading StrategiesMarket Blast - July 10, 2024

Market Blast – July 10, 2024


The Fuse

Fairness futures are shifting greater this morning after a pleasant begin to the week. We finish Friday with some earnings from a couple of banks which can assist drive the motion into the weekend. Shares are additionally awaiting phrase on the inflation entrance with CPI out tomorrow morning. Just a few Fed audio system shall be out speaking financial system this week and Chair Powell will go to Congress another time this morning.

Curiosity Charges are dropping on the lengthy finish of the curve this morning as fastened earnings cut price hunters step in to buy bonds. Yields have been trending, the market clearly anticipating the speed reduce cycle will start sooner fairly than later. Fed funds now barely predicting three cuts fairly than two, this is able to be strengthened with a low CPI report within the am.

A powerful bid underneath the markets this morning however we’ll see how lengthy that may final. Gold is up properly as is silver, crude oil is flat as is the greenback index. In a single day noticed a blended image in Asia. Japan gained .6% whereas Hong Kong and Shanghai fell. The Stoxx in Europe was barely greater, German 10 12 months bunds fell 4 bps which is spurring a modest rally in US fastened earnings. Nasdaq and SPX 500 are coming off one other document shut.

Earnings season formally kicks off tomorrow am with Pepsi and Delta reporting. JP Morgan together with Wells Fargo and Citi wrap up the week on Friday earlier than the open.

Half one in every of Chair Powell’s testimony on the ‘Hill went off and not using a hitch. Not a lot fanfare with the Chairman being stoic and daring about financial coverage. There was hope he would sign when a price reduce would occur however that was clearly a dream. Regardless, bonds bought off exhausting as charges rose up, curiously so as a result of inflation reviews are arising later within the week which is perhaps bond pleasant.

Breadth was depressing once more, the small caps with one other dreadful efficiency. The IWM simply can’t appear to place collectively consecutive up days with out pulling again. The 200 degree stays good assist however there may be little to assist this index stand up if charges are rising. Oscillators are break up once more, Nasdaq nonetheless inexperienced however barely. New highs are increasing once more.

Heavy quantity once more on the DIA as that index confirmed us a distribution day, but the Nasdaq with greater quantity had accumulation. That is divergence or bifurcation. The SPX 500 was down a however however IWM nonetheless has stronger turnover on the down days. If the 200 degree breaks exhausting this index has a methods to maneuver down.
If Nasdaq holds up longer, who is aware of how that may sway the opposite indices to hitch.

SPX made new floor and practically touched 5,600, however did again away on the shut. We’ll go forward and name 5,500 and 5,550 as assist for now, and far deeper layers of assist under. Nasdaq stays sturdy as cash flows into that index. 19.3K is basically sturdy suppor, 19.7K and above there we’ll name it 20.2K on the hole from final week.

 

The Internals

 

What’s it imply?

The internals proceed to react poorly on the day by day motion and easily seem like some catastrophe is on the best way. The VOLD simply horrible, ADD could be very unfavorable once more whereas ticks have been heavy pink all session lengthy. VIX ticked up a bit. We’re practically mid month and up sturdy for 2 indices, can it final? The internals inform us no.

The Dynamite

Financial Knowledge:

  • Wednesday:Chair Powell testimony (day 2), wholesale inventories
  • Thursday:CPI, jobless claims
  • Friday:PPI, Michigan sentiment

 

Earnings this week:

  • Wednesday:PSMT, WDFC
  • Thursday:DAL, PEP, CTAS, CAG, PGR
  • Friday:JPM, BK, C, FAST, WFC

 

Fed Watch:
Two huge essential days this week with Chair Powell’s bi-annual testimony in entrance of Congress and the Senate. The Chairman is more likely to reiterate the identical phrases because the final assertion and final week, not keen to share if/when the committee is keen to chop charges. He’s more likely to speak positively about jobs and decrease inflation. We’ll see how the markets reply.

Shares to Watch

Fed Funds Futures – Market gamers are desperate to get the Fed reducing charges. Chair Powell is testifying in Congress this week and that may give us some clues as to coverage. Extra importantly, inflation reviews this week will give us extra info.

Curiosity Charges – With out a lot fanfare the ten 12 months yield has fallen sharply from 4.5% to 4.23%. That may be a full price reduce and the futures have responded in sort. The 4.2% degree is strong assist from final month,, will we break it? In that case, small caps will lead the cost.

Banks – Giant banks like JPM, WFC will report this week. They’ve already had an enormous run so maybe it is a promote on the information occasion.
Extra banks report within the coming week.

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