The View From Fifth Avenue

It was just two days ago on Monday of this week that we were all highlighting the rarity of a 90% “up” day for S&P breadth in a session. Today is Wednesday (yes, two more days to go..) and we have just had an 84% down day as US equities closed at session lows with all major indexes falling under pressure. Cyclicals heavily underperformed Defensives, TLT ETF hit the lowest levels since 2007, DXY (+.3%) moved higher, Crude (+1.7%) advanced its rally, and Gold (+1.3%) is again in favor as risk-o…

Today was one of those days where a mere glance at the scoreboard would suggest another boring Tuesday in the market. (I stand by my contention Tuesday is the worst day of the week – zero personality.) But you’d be mistaken if the tiny moves in the main indices led one to believe there wasn’t much going on today. We got the 2nd leg of earnings reports from the bank/financials, which broadly read positively. More interestingly, we got another robust retail sales report, and the early returns are…

After last week’s rally was mostly erased on Friday as investors fled to safety for the weekend, the rally resumed today thanks to a combination of factors. Markets tried to move past events in the Middle East given widespread efforts to contain the crisis (though the reverberations and implications will be felt for a long time to come). Instead, they focused on a dovish FT interview by Chicago Fed President Goolsbee, anticipation of Powell’s speech on Thursday, reports of easing sanctions in…

Today has left investors with more questions than answers. Stocks had a decent bid to start the day with a fairly unanimous beat from Bank earnings this morning (more below), but investors were left unsettled after JPM’s CEO, Jamie Dimon, issued a warning on the extraordinary issues facing the market today. The economic data revealed favorable import/export prices, but the Michigan sentiment report showed a sharp decline in confidence and caused major indices to come for sale. Further, news tha…

It’s all about the Rates. Rates advanced higher again today and, consequently, Equities snapped their four-day winning streak. Major US indexes held in around flat/up small for the morning, only to fall well lower during the US afternoon following a much weaker than expected 30yr bond auction. Because, well… it’s all about Rates. Today’s 30yr Bond auctioned wide at 4.837% vs the when-issued level @ 4.80% as demand wobbled with a weak bid-to-cover ratio at 2.35 (vs 2.46 previous) and the dea…

Don’t look now, but the US market is on a 4-day winning streak and yes, that includes each of the ‘Big 3.’ Despite a rather unenthusiastic mood for stocks, October has found its footing, even if it remains tenuous. With earnings set to kick off on Friday (we get a dribbling tomorrow), we’ll soon find out if this newborn confidence is justified. For now, at least things have been going the market’s way. After a mild move higher on Monday, the dollar continued its downward trend. Crude and it’s o…

Equities were in reactionary mode today taking direction from FedSpeak, after Perli, Bostic, Waller, and Kashkari took the mic. Initial commentary was dovish (Bostic) and fueled a risk-on tone, pushing markets to the highs of the day. A sharp decline in Treasury yields was supportive of equities as well, as investors turned to traditional haven assets amid the Israel-Hamas conflict. After Waller leaned quite hawkish in his commentary (“it’s not 4% or 3%, it’s 2%….”), indices moved off highs a…

The weekend attacks set a somber start to the market today. It is Columbus Day in the US, and that meant the bond market was close. With Treasuries not trading, safety assets like the Treasury future (USA +1.44%) and Dollar (+2bps) saw a quick early bid as traders moved towards them. Equities also started cautiously. But with no economic news on the calendar (due to the holiday), investors monitored the Fed speakers today that continue to push the current rate regime. We all know Powell wants h…

The blowout jobs report this morning (in case you need a reminder Non-Farm Payrolls came in at 335k vs 170k expected), spurred selling in treasuries and a concurrent yield spike that initially weighed on equities. It wasn’t just jobs though –The Manheim used car index for September rose 1% m/m as well. However, in a maybe not-so-surprising reversal, stocks found new life by the day’s end, closing well into the green and just off highs. It’s possible that investors had already exhausted their s…

Looking at the finally tally of the indexes do not really reflect the underlying tensions. The 10-year yield has moved from 4.57% to 4.71% in a week as the Street tries to decide what the right level should be amidst recent economic data. Jeffrey Gundlach probably described the current Treasury mood best with the “T-Bill and chill”, after Tuesday’s 52-week auction was met with a higher bid-to-cover ratio (3.21 versus the previous 3.14). Equities have endured their own tumultuous time, first wit…