QuiCQ 10/10/2024
A Bull's Dream
"One man's dream is another man's nightmare."
— Bryan Adams, Heat of the Night (1993)
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Headlines like these are the material the dreams of a stock market bull are forged of:
No lie in there, though maybe a slight touch of exarcerbation, as the Dow Jones for example dropped nearly a full 58 points (which equals to -0.14%, in case you wondered). Oh my, the end is nigh’ …
Ok, enough of that.
Indeed did in yesterday session two stocks fall for every stock up (S&P 500) and only three out of the eleven sectors closes higher. However, I cannot help to observe that under the hood twenty stocks hit a new 52-week high, whilst only two a new low.
A lot of action took place in bond markets in yesterday’s session, where a first focus on the higher CPI print pushed the yield on the 10-year treasury to nearly 4.12 from 4.05. However, it seemed that shortly thereafter the market re-focused on the substantially higher jobless claims and continuing claims reports, both suggesting that a pick-up in corporate layoffs may be at hand.
In currency markets, probably worthwhile highlighting the CHF rallying about half a percentage point versus the EUR and the USD, after SNB VP Antoine Marti gave in speeches a bit for the dove and a bit for the hawks, with the focus final on the more hawkish comments. E.g.:
Oil continues to be awfully volatile, probably stopping out bear and bulls on their respective wrong-footed sides … maybe often in the same session!
US earnings season kind of offically kicks off today, with some of the larger financial institutions (e.g. JPMorgan, Blackrock, Wells Fargo, etc.) reporting before the opening bell is rang on Wall Street today.
In our quarterly chartpack (page 53, click here), we showed how tech stocks peaked out in relative terms to the overall market a few month ago and may be in for a period of underperformance. However, zooming in on the same chart we now see an interesting short-term constellation, which, once resolved, could give us indication of the longer-term implications. As the charts shows, we are now rebounding from a key support zone, which could imply that the long-term uptrend is not quiet over yet. Or, the current rebound will lead to a second shoulder, putting a very long-term top into place.
In either case, it will be fascinating to observe!
