The trading volume was lighter than average in yesterday’s trade, but that didn’t stop the stock market. The bias remained unmistakably bullish as the leadership remained unmistakably mega cap. There has been a little bit of backtracking this morning, however.
Currently, the S&P 500 futures are down 13 points and are trading 0.2% below fair value, the Nasdaq 100 futures are down 77 points and are trading 0.4% below fair value, and the Dow Jones Industrial Average futures are down 78 points and are trading 0.2% below fair value.
Some might characterize that as a negative bias. It really isn’t. It is simply a bias toward consolidation after a huge run and in front of what will unmistakably be a market-moving event.
The said event is NVIDIA’s (NVDA) earnings report and conference call after today’s close. Shares of NVDA have soared 26.6% from their intraday low on October 26, having closed yesterday at an all-time high. With a move like that, it is unmistakable that expectations leading up to NVIDIA’s report are sky high.
How NVDA responds after the report will be instrumental in how the broader market responds after the report.
In the meantime, the market is digesting a slate of results from retailers. The response to those results has been unmistakably mixed, highlighted by weakness in Lowe’s (LOW), Best Buy (BBY), Kohl’s (KSS), Abercrombie & Fitch (ANF), and American Eagle Outfitters (AEO) after their reports and strength in Dick’s Sporting Goods (DKS), Burlington Stores (BURL), and Hibbett (HIBB) following their results.
Another item on the market’s radar today is the release of the FOMC Minutes for the October 31-November 1 meeting at 2:00 p.m. ET.
Presumably, there won’t be much reaction to the minutes given what the market has learned since the meeting, namely that there was some welcome disinflation in the October CPI and PPI reports, and that several Fed officials continue to toe the party line that there is still work to do to bring down inflation but that the Fed can be patient with policy decisions at this point.
Also, it is unmistakable that the fed funds futures market has its mind made up, no matter what anyone says, that the Fed is done raising rates.
The latter is unmistakably the housing market’s hope. It has been compressed by the sharp rise in mortgage rates, which has followed along with the Fed’s rate hikes. There will be a sight line to that compression when the October Existing Home Sales Report is released at 10:00 a.m. ET (Briefing.com consensus 3.90 million; prior 3.96 million).
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Originally Posted November 21, 2023 – No mistaking things
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