nymarketspx
ValueWalk
ValueWalk
10y tested the top at 4.33%, and retreated back to the 4.23% support – but S&P 500 kept declining yesterday. The dollar and real assets were though less determined to move correspondingly, which means that stocks may hold up better today than the 4,365 (another suppozt zone, its upper border) hints at, equals we wouldn‘t get orderly selling continuation or acceleration into a crash till the closing bell. At the same time, this data light day won‘t be a genuinely VIX crush Friday one – the buyers can reasonably target 4,390 at best. The warning sign is accelerating decline in XLK below $166.50 ...
ValueWalk
Similarly to Thu CPI, S&P 500 couldn‘t maintain a modest retracement following the disappointing manufacturing data, but still strong retail sales. Tech failed to react to the reversal in yields (10y back to 4.21% on the close yesterday, and retreating even more today) – arguably the decline was less of a result of banking downgrades echo than it was thanks to the China rate cut, liquidity mop up (preparations to defend CNY), and growing risks within the shadow banking sectors as much as growth prospects. Hence the renewed calls for increasing domestic Chinese consumption. Today‘s housing and ...
ValueWalk
3.2% CPI provided enough fuel for an opening S&P 500 spike above 4,535, but the tech-led rally fizzled out without reaching 4,565, which would make a good shorting area (if exhausted there). Looking under the inflation report hood provides a mixed picture – airfares and health insurance costs decline – in used cars, OK, and still the oil and oil product costs would keep rising. No way to spin it as disinflation continuing if only a 3-month basis is considered. Add wage pressures as the job market isn‘t understandably cooling down much, inflation expectations rising if only bond market metrics ...
ValueWalk
S&P 500 reversed mid session, but it would be premature to call for the end of the correction – odds are that following today‘s rebound, which I saw as likely to stall in the 4,535 area as easy gains from rotation into beaten down sectors are made, and those defensives with energy won‘t be as generous today. For now, stocks will try to position optimisticallty for low CPI (below 3.3% or better yet below 3.2%), and the degree to which they would be able to peek above 4,535 would provide a hint as much as real assets, yields and the dollar. I‘m looking for modest traces of optimism that would be...
ValueWalk
S&P 500 did the compulsory little rebound yesterday – one I didn‘t trust from the get go, yet maxed it out for subscribers enjoying also the Intraday Signals. Stocks had been gradually deteriorating, and it became clear at the onset of European session that we‘re in for a risk-off day taking its toll on most economically sensitive real assets. Keep enjoying the lively Twitter feed via keeping my tab open at all times (notifications on aren’t enough) – combine with subscribing to my Youtube channel, and of course Telegram that always delivers my extra intraday calls (head off to Twitter to talk...
ValueWalk
S&P 500 couldn‘t keep the fine rebound as all eyes were on “good that the job market is still OK, but maybe the Fed would stop hiking now” interpretation of weaker than expected non-farm payrolls. Bonds certainly played ball, but it was more than the dollar that pulled stocks down – all sectors declined from whichever high they had reached intraday, in spite of yields not moving adversely. It‘s that oil prices, gasoline and diesel (heating oil) have appreciated double digits in July, and wage pressures aren‘t weakening much either – take the base effect of Jul 2022 CPI data being removed (it w...
ValueWalk
S&P 500 reversed right on cue yesterday, and the retreat before Apple Inc (NASDAQ:AAPL) earnings was duly bought. Next, it was up to the run up to the non-farm payrolls – stocks froze with fear for which I saw no reason. We got no bad miss in NFPs, and that cleared the path to my a) scenario tweeted in advance. Sectoral performance was good enough already yesterday, and the path to resumption of stock market rise, is clear for today – with returning rotational strength. Subscribers of all three publications are benefiting – and as the notion of rising yields (Treasuries are to gain today) puts...
ValueWalk
S&P 500 couldn‘t take advantage of respite in rising yields after US open as there was no reprieve. No flight to safety to Treasuries to which there‘s no deep enough alternative – yields continued on their pre-Fitch path, and 10-y closed at almost 4.10%. It‘s tech and prior sectoral leaders than need this respite badly – yet odds are neither long-dated rates nor the dollar have peaked yet, which is creating (over time) increasingly intolerable position for servicing the debt when the two nearest quarters the Treasury plans to issue almost $2T in fresh debt only (not mentioning rollovers). Thus...
ValueWalk
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