The major indices saw some modest losses yesterday and they are on track for some modest losses at today’s open.
Currently, the S&P 500 futures are down seven points and are trading 0.1% below fair value, the Nasdaq 100 futures are down 26 points and are trading 0.1% below fair value, and the Dow Jones Industrial Average futures are down 20 points and are trading fractionally below fair value.
There aren’t any specific news drivers that would account for the negative disposition. Rather, it appears to be a case of buyer exhaustion following four straight weeks of gains.
Cloud security software company Zscaler (ZS), up 25% from its October 26 low, is a proxy of sorts for this exhaustion. It delivered a better-than-expected fiscal Q1 earnings report, issued fiscal Q2 and FY24 guidance above consensus estimates, and reaffirmed its FY24 billings outlook, and yet shares of ZS are down 5.1% in pre-market trading.
One can call that a sell-the-news reaction, which is something to which NVIDIA (NVDA) can relate.
After today’s close, CrowdStrike (CRWD), Intuit (INTU), NetApp (NTAP), Hewlett-Packard Enterprise (HPE), and Workday (WDAY) will report their quarterly results, so a bit of a wait-and-see mentality is hanging over the market.
The latter is also true relative to some economic releases on the near horizon. The September FHFA Housing Price Index (prior 0.6%) and the September S&P Case-Shiller Home Price index (Briefing.com consensus 4.1%; prior 2.2%) will be out at 9:00 a.m. ET; however, the focal point on the economic calendar today is the November Consumer Confidence Index (Briefing.com consensus 100.0; prior 102.6) at 10:00 a.m. ET.
These reports will be followed later in the day by the $39 billion 7-yr note auction. The auction results will be released at 1:00 p.m. ET, so the Treasury market will have plenty to chew on.
At the moment, the 2-yr note yield is unchanged at 4.87% and the 10-yr note yield is unchanged at 4.39%. Like stocks then, Treasuries are looking a little tired after a big run.
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Originally Posted November 28, 2023 – Some buyer exhaustion perhaps
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