The S&P 500 and Nasdaq Composite had declined for six straight sessions. That streak ended yesterday, not with a resounding rebound effort, but a rebound nonetheless. There is some carryover interest this morning, but not a lot of carry so to speak.
Currently, the S&P 500 futures are up 16 points and are trading 0.3% above fair value, the Nasdaq 100 futures are up 60 points and are trading 0.4% above fair value, and the Dow Jones Industrial Average futures are up 106 points and are trading 0.3% above fair value.
A decent-sized batch of earnings results has been released since yesterday’s close. They were mostly better than expected, including the reports from General Motors (GM), GE Aerospace (GE), Danaher (DHR), Kimberly-Clark (KMB), PepsiCo (PEP), and UPS (UPS).
Even so, the equity futures market has been conservative with its praise for those results, seemingly pre-occupied with the specter of Tesla’s (TSLA) earnings report after today’s close, which is when Dow component Visa (V) will also report.
The latter connotes a wait-and-see attitude in the market, which makes sense and not just in the context of impending earnings news.
There will be the March New Home Sales Report (Briefing.com consensus 670,000; prior 662,000) at 10:00 a.m. ET followed by a $69 billion 2-yr note auction at 1:00 p.m. ET.
Market participants will have to wait on those items, but what they are really waiting on is how the market behaves today. Will there be follow through on yesterday’s rebound effort or will the market succumb to renewed selling interest?
The new home sales data and the auction results might have something to do with that answer given their sway over the Treasury market, but with both the S&P 500 and Nasdaq Composite still staring up at their 50-day moving averages of 5,118 and 16,050, respectively, the price action will be the ultimate driver.
The Treasury market for now is looking a little anxious. The 2-yr note yield is up two basis points to 4.99%, continuing to flirt with a break above 5.00%, and the 10-yr note yield is up two basis points to 4.64%.
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Originally Posted April 23, 2024 – A behavioral study
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