The View from 5th Avenue

Risk-off-ISH is on! In what already felt like a vulnerable start to the week, yesterday’s hawkish tone from the Fed minutes has been followed up today with a rather souring ADP Employment print at more than double the market’s median expectations. As yields quickly reacted higher (for-longer…), sentiment fell in contrary. The 2yr acted in drastic fashion punching above 5% for most of the session and ending just barely below. Both the 10yr and 30yr are now above/at 4% as fears were re-ignited…

With the 4th of July shortened trading week, markets were searching for direction as participants returned to their desks. Q2 returns were solid for the US indexes, but each new economic datapoint that shows some weakness, adds to the debate of how much higher equities can go in the short term. ISM manufacturing data on Monday was weaker than expected, and that was followed by factory orders that fell sequentially today. Alone these are not enough to cause concern for investors to take profits,…

Q2 is now in the books, and it has been solid. The S&P 500 finished with an 8.3% gain, Nasdaq 12.8%, and even the lagging Russell was up 4.9%. And in appropriate fashion, markets rallied today adding boosting those Q2 gains. Economic data has been supportive to the pushed-out recession theme (next year?) and has given some tailwind to increasing equity exposure. While today’s Personal Spending was lighter than expected (+0.1% vs estimates of +0.2%), PCE data also fell sequentially, albeit with…

A day after Jerome Powell warned markets that more restrictions were necessary to cool inflation, traders were surprised after initial jobless claims (act. 239k est. 265k) and continuing claims (act. 1742k est. 1765k) came in lower than expected. On top of the low claims, Q1 GDP posted stronger than expected growth of 2 percent. Yields shot higher and treasuries sold off as the “higher for longer” rhetoric finally takes hold for traders. The US2Y (USGG2YR 4.861%) is at its highest point since M…

On its face, there doesn’t seem to be much that happened today that should turn you bullish if you haven’t been already. A middling, meandering day without much clear direction or conviction, markets largely drifted as volumes slowly dissipated. But a pair of rose-colored glasses (perfect for these summer days) could offer some positives. Yesterday’s gains were hard to accredit a reason why and yet the market largely held on to them. Even more impressive given the expectation we could see a dra…

Put it down to positioning. All major indices went from bottom left to top right over the course of today, indicative of machines systematically walking things higher as we head into month/quarter end on Friday. There were some concerns early doors when Walgreens (-9.3%) issued weak guidance, but robust economic data dispelled any lingering worries. For example, Consumer Confidence rose to 109.7 from last month’s 102.7, and the Richmond Fed index improved to -7 from May’s -15. In addition, Hous…

After the S&P snapped a five-week winning streak on Friday, indexes continued with the same theme today. Momentum seems to have stalled for the major US indexes as of late with investors becoming skeptical of big tech valuations. Breadth was very positive today for the S&P with 70% of stocks up on the day but it was not enough to overcome the negative pressure from big tech. The NYFANG index closed 3% lower, now down 5.2% since the start of last week. While the NYFANG index has seen a pullback…

You work hard all week, in the office early, up (or more likely, out) late and the weekend offers a welcome reprieve. Especially during the summer when you can take in some rays, play some golf and/or fire up the BBQ. Unless of course rain is in the forecast every day from yesterday until what feels like kingdom come. Fortunately the movie ‘Air’ has come highly recommended and so that will take up some weekend time. Sadly, the air has begun to come out of the markets some, this shortened week b…

Mid-June has been a busy month for central bankers, and the world received another batch of hikes today. While the SNB raised 25bps (in line with estimates), both the Norges Bank and BOE were more aggressive in their approach and moved benchmarks higher by 50bps (not consensus). Inflation remains the central theme for most of the world’s economy, and investors seem content for now that central bankers can manage a smooth outcome. After three days of losses, US equities resumed their climb getti…

Equities have come a long way in 2023 with the S&P boasting mid-teens YTD gains and the Nasdaq doubling that tally in as much time. A healthy pullback, or dare I say pause… seems like a reasonable response given the distance travelled of late. As such, equities continued to take a breather for the third session in a row in their ultimate run higher as we digest what’s next from here. Underwhelming volume and turnover (-5-10% for major indexes) have also taken hold as the VIX continued its de…