The View from 5th Avenue

Markets may be trending away from the “bad is good” theme and heading towards “bad is bad” or at least “bad is not good but also not bad”. During this time of rising rates, bad economic data was previously looked at as positive for the markets because it would lead to the Fed pausing rate hikes and possibly pivoting to rate cuts. Today’s reaction by the US markets to the ISM Services data suggests that the previous theme no longer holds water. After posting the largest advance since 2020 in Jan…

On a recent vacation, the course I was playing at assigned me a caddie that went by the name ‘Vegas.’ Right then I knew it was going to be a good day. (The score relative to the enjoyable time had was, to borrow an oft-used word of late, ‘mismatched.) But Vegas was offering more than just advice on club selection and before my approach on #1 (stuck it), I was hearing about his option trading and how he’d moved to a longer-dated strategy because he needed more theta. Of course. We could use some…

The picture of uncertainty –> S&P: Up-Down-Flat-Up. Dow: Up-Drift-Hold-Up. Nasdaq: Down, hold, (failed) attempt to rally. Markets were mixed, struggling to find clear direction today and not just because it’s the first day of Q2 following a lovely weekend, or because this week is a shortened holiday week. Today’s market response feels apropos given the increasing number of respective balls we are juggling lately. Ruling the headlines today was OPEC+ surprise decision to cut production despite…

The quarter has ended! And what a perfect way to end the quarter with everybody’s favorite economic data point, PCE. The Core Deflator YoY came in at 4.6% below estimates of 4.7% which helped propel major US indexes into the green early. While inflation remains persistent and near stagnant, a decrease was a welcomed sight for traders. There are still some concerning components in the PCE data, services continue to make up much of the yearly change. Powell has repeatedly stated that the service…

No news is good news? The calm before the storm? Traders seem to be waiting for the next shoe to drop, while simultaneously mining data to support the theory that we are in a bull market. And any perceived calm in the markets just gives The Fed more fodder to hike rates. Thus, we have been stuck in the same range between 3800 and 4200 since last May. Further, the S&P has crossed above 4000 13x since the start of 2022. Running to stand still is the accurate expression, I suppose. The Fed’s Colli…

The confluence of steadier headlines surrounding the banks and a calendar heading towards month/ quarter end gave support to equities today. Indexes moved higher throughout the trading session, and if you glance at the intraday moves in S&P/ NDX 100 futures from yesterday’s close, it was a steady incline. The support helped push every sector to close in the green, with Semis (SOX +3.27%) and Tech (XLK +2.1%) outperforming. That first group got a boost from Micron (MU +7.2%) better than feared e…

There are a few axioms in this business that can at least help contribute to a long and fruitful career. One is, don’t go out on a Monday night. Sure it may sound great in theory (it doesn’t) but it sets a pretty arduous tone for the rest of the week. (I’ll give you one guess as to what I was up to last night.) Another one is don’t fight the Fed. And yet the market seems to be fixing for a showdown as it remains steadfast in its belief rate cuts are coming as soon as June. The only issue is Pow…

A relatively quiet Monday in US trading after a relatively positive weekend led markets to float relatively higher despite fading into the close. It started with First Citizens (FCNCA +53.7%) striking a deal to absorb SVB loans + deposits at a 23% discount out of the FDIC receivership, which now puts them in the top 15 lenders in the US with a $200b in assets… Then adding FRC (up as much as +36% in premkt trading, eventually closing +11.8%) was boosted higher on reports that US authorities may…

We have reached the end of what was a very bumpy week in the markets. Today turned out to be no different. It started off with futures slightly up and traders preparing for what seemed to be a normal Friday only to have a potential European banking crisis scare markets and send them down 100 bps at the open. Concerns over Deutsche Bank (Germanys largest lender) grew as CDS contracts on the corporation surged, likely due to overall concern with the industry. German Chancellor Olaf Scholz reitera…

One wouldn’t think going from Fed chairperson to head of the Treasury would be that big a leap but Ms. Yellen seems to have forgotten the importance of parsing one’s words. (Her and Jerome have each other’s mobile #’s no?) Some confusing commentary seemed to derail the market’s move higher yesterday, although key resistance on futures not holding did contribute to the fail. Today’s initial jump lent new meaning to the axiom that the first move is the wrong one, but it was far from the only one…