Futures are flirting with the 10-day moving average again this morning following yesterday’s volatile session.
As we noted yesterday, the 10Y’s recent spurt has investors concerned about the risk that additional Fed rate cuts might not be as certain as bulls would like to believe.
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Futures are off modestly on a slow news day as investors continue to game out how the election will affect their portfolios.
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Starts and permits came in roughly in line with expectations, satisfying both the Fed watchers and the futures, which barely reacted.
Construction fell just enough that it won’t interrupt the Fed’s inflation fighting efforts, but not so much that the soft landing folks are alarmed.
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September retail sales increased more than expected, rising 0.4% versus 0.2% expected. Ex-auto, they increased 0.5%. At the same time, initial unemployment claims came in below expectations: 241K versus 273K and 260K prior.
These data further support the notion of smaller rate cuts going forward – if not an outright pause.
For now, however, the futures added to their overnight gains on the prints, with ES approaching our 5942 target.
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Futures are flat after a turbulent day yesterday and ahead of tomorrow’s retail sales.
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Stocks reached new record highs yesterday and are slated to move even higher.
Note that ES is approaching our Fibonacci 5942 target from several months ago.
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Futures have crept higher in this quiet, semi-holiday pre-market.
The week ahead features several important data points: initial claims and retail sales on Thursday and housing starts on Friday.
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PPI came in at 0.0% MoM and 1.8% YoY, supporting expectations of a 25 bps rate cut in November. Algos approved and are holding yesterday’s trading range. These expectations, however, are probably wrong.
As we’ve discussed often over the past few months, the decline in goods prices from 0.6% in Jul to 0.0% in Aug and -0.2% in Sept was driven primarily by energy prices (-2.7% in Sept), a trend which will reverse in October.
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Is it warm in here or is it me? CPI came in a little hotter than most expected: 0.2% versus 0.1% MoM and 2.4% versus 2.3% YoY. While still down sharply from 9.1% in June 2022, the pace of the decline has many wondering about the Fed’s pace of lowering interest rates.
Futures are off moderately.
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Futures are flat ahead of tomorrow’s CPI print.
Yesterday’s price action put ES in the most ambiguous position possible: poised for a reversal or a breakout.
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