US Markets Fundamental Outlook (Focus: DOW, S&P 500, US Treasuries)

[CFDTrading]

Monday, 13 April 2009 12:39:54 GMT
Written by John Rivera, Analyst
Full Article

What To Watch For In The US Session

• Futures Trading Lower
• Bank Earnings Ahead

U.S. Stock Futures Point Toward Lower Open, Bank Earnings Ahead

U.S. futures are pointing toward a lower open today following the Easter Holiday,and with many trading desks half manned, it could lead to a light volume trading day. Therefore, we could see some volatility like we did on Thursday before the holiday started. The economic calendar is empty and won’t provide any event risk. However, we could se trades start to hedge against tomorrow’s advance retail sales report which is expected to show a 0.3% increase. Earnings season is under way and with Goldman Sachs, JP Morgan and Citigroup set to report financials will come under focus again. The sector has been receiving support as the government continues to take measures to free up credit markets. However, large losses from the leaders in the sector will raise concerns that we may see several banks fail the government’s stress test which could lea to more bankruptcies.

Dow Jones 8083.38
The DJIA futures have remained in negative territory and if banking concerns mount then we could see the blue chip index trade lower. However, a increase in industrial output in China could raise optimism that the global downturn is ending and lift multinational names.

NASDAQ 1652.54
The Nasdaq could trade lower today if we start to see profit taking as the index has erased its losses for the year for a second time. Yet, breaking through the technical level could lead to a continuation of bullish momentum.

S&P 500 856.56
The broader index may also be susceptible to growing banking concerns as the sector still accounts for nearly 13%.

 

[CFDTrading]

Morgan Stanleys Dismal Earnings Could Weigh On Markets Today

Wednesday, 22 April 2009 12:32:46 GMT
Written by John Rivera, Analyst
Full Article

Wells Fargo and Morgan Stanley reported conflicting results which will generate intense focus after U.S. Treasury Secretary Timothy Geithner’s comments yesterday.

What To Watch For In The US Session

• Earnings Remain In Focus As Banks Report
• U.S. Treasury Secretary Timothy Geithner Speaks Again
• House Price Index On Tap

Morgan Stanley’s Dismal Earnings Could Weigh On Markets Today

Wells Fargo and Morgan Stanley reported conflicting results which will generate intense focus after U.S. Treasury Secretary Timothy Geithner’s comments yesterday. Markets rallied when the Treasury Secretary proclaimed that banks had enough reserves to survive the current crisis and that any additional funding needs could be met by existing TARP funds and private investment. Therefore, it depends on whether markets focus on Morgan Stanley’s worse than expected earnings of -$0.57 or Wells Fargo’s beating estimates with earnings of $0.56 on the direction of financials today. Geithner is also scheduled to speak again in Washington today, and markets will look to see if he reinforces his statements from yesterday or shrink from them as he has done on past occasions. The house price index is the only scheduled release due out today and is expected to show prices resumed their descent. However, a 5.2% increase in MBA mortgage applications will add to recent signs that the housing sector is beginning to stabilize.

Dow Jones 7969.56
The DJIA futures are trading lower and could see volatility today with several components reporting mixed results including McDonalds and AT&T beating estimates and Boeing missing by five cents.

NASDAQ 1643.85
The Nasdaq is also seeing its futures lower despite Yahoo’s better than expected earnings. The tech laden index will be focused on Apple’s earnings after the bell which could keep traders on the sidelines.

S&P 500 850.08
The S&P 500 could be subject to the markets sentiment on the banking system as it accounts for nearly 13% of the broader index.

 

[GumbyLearner]

Go short IMHO!

 

[CFDTrading]

Potential Swine Flu Pandemic Expected To Weigh On Sentiment As Futures Point To Lower Open

Monday, 27 April 2009 12:10:53 GMT
Written by John Rivera, Analyst
Full Article

Concerns that the “swine flu” which has seen cases in Mexico and the United States could become a world wide pandemic has sparked risk aversion and sent U.S. futures lower during overnight trading.

What To Watch For In The US Session

• “Swine Flu” Concerns Expected To Weigh On Markets
• U.S. GDP and Bank Stress Test Adding To Concerns
• Verizon and Qualcomm Report Earnings

“Swine Flu” Expected To Weigh On Sentiment As Futures Point To Lower Open

Concerns that the “swine flu” which has seen cases in Mexico and the United Sates could become a world wide pandemic has sparked risk aversion and sent U.S. futures lower during overnight trading. The potential impact on travel and other industries is expected to weigh on those stocks as traders start to factor in the worst case scenario. The other concern is that it could slow the recovery on the U.S. which is expected to be one of the main sources of growth for the global economy based on the level of stimulus it has provided. Markets were already expected to be a little jittery this week with U.S. GDP forecasted to have contracted by 5.0% in the first quarter and the looming results of the bank stress tests. Verizon and Qualcomm offered mixed results when reporting earnings today with the cell phone provider beating estimate of $0.59 with earnings of %0.63 per share. Meanwhile, Qualcomm reported a second quarter net loss of $289 million or $0.18 per share, compared to profit of $766 million or $0.47 per share in the same quarter of last year.

Dow Jones 8076.29
The DJIA futures have been down triple digits throughout overnight trading on the potential global impact of the “swine flu” pandemic. Verizon’s strong earnings and potential deal with Apple to bring over the iPhone could send its shares higher offsetting losses in energy and industrial names.

NASDAQ 1694.29
The Nasdaq is also expected to see be weighed by the global impact of the potential health crisis, which should weigh on airlines stocks and other related industries.

S&P 500 866.23
The S&P 500 is expected to trade lower as analysts asses the potential impact to the U.S. economy of the “swine flu” becoming a national crisis.

Current Snapshot

 

[CFDTrading]

Futures Point Toward Higher Open as Bank Stress Test Concerns Ease

Monday, 04 May 2009 12:09:29 GMT
Written by John Rivera, Analyst
Full Article

The Financial Times reported today that the Bank of America is working to raise more than $10 billion in capital as they look to meet the government’s expected requirement based on the stress tests.

What To Watch For In The US Session

• Bank Stress Test Results Fears Easing
• GM Could Follow Chrysler Into Bankruptcy
• Pending Home Sales On Tap

Futures Point Toward Higher Open as Bank Stress Test Concerns Ease

The Financial Times reported today that the Bank of America is working to raise more than $10 billion in capital as they look to meet the government’s expected requirement based on the stress tests. The final results will be revealed to the public but banks which have already been informed have started to take measures to meet capital requirements as they have given up efforts to convince the government that the additional liquidity isn’t needed. The defiance of the banks and the expectation that they will be able to raise additional capital has taken the bite out of the results and helped prolong recent bullish sentiment. The economic calendar will present some event risk in the form of pending home sales and construction spending. The level of demand for homes is expected to remain flat after February’s surprising 2.1% gain. Another upside surprise would help boost confidence that the sector is reaching a bottom and spur optimism for future growth. The expectations that GM could follow Chrysler into bankruptcy may also have a weighing impact on market today.

Dow Jones 8212.41
The DJIA futures are pointing toward a positive open but have steadily given back gains as we come closer to the opening bell. Weak fundamental data from the Euro-zone including declining German retail sales has offset an improved manufacturing reading from China which had sparked optimism for the global economy.

NASDAQ 1719.20
The Nasdaq could see continued support today but the looming bank stress tests and employment report to end the week could start to see traders hedge their bets and weigh in the tech laden index as we go forward.

S&P 500 877.52
The S&P 500 futures are pointing toward a higher open but a weak housing report combined with the 1.7% decline in construction spending that is expected could reverse sentiment.

 

[CFDTrading]

Improvement From ADP Employment Report Turns Futures Positive, Offsetting Banking Concerns

Wednesday, 06 May 2009 12:52:53 GMT
Written by John Rivera, Analyst
Full Article

The ADP private employment report showed that the economy lost 491,000 jobs in April which was far less than the initial estimates of -645K.

What To Watch For In The US Session

• ADP Shows Labor Market Improving
• Bank of America Reported To Need $34 Billion
• Challenger Job Cuts and MBA Mortgage Applications Add To Improving Picture

Improvement From ADP Employment Report Turns Futures Positive

The ADP private employment report showed that the economy lost 491,000 jobs in April which was far less than the initial estimates of -645K. The report has raised expectations that we may see a similar improvement in Friday’s Non-farm payroll report which has turned futures positive. A report that Bank of America may need to raise $34 billion had weighed on optimism before the labor report and had dragged futures lower. We may still see the pending bank stress tests results limit bullish sentiment as traders fear the unknown. Nevertheless, a 2.0% improvement in MBA mortgage applications and the Challenger job cuts gauge falling from 180.7% to 47.0% add to the improving picture for the U.S. economy.

Dow Jones 8410.65
The DJIA futures have turned decidedly positive following the ADP release and unless we see the concerns over the banking sector the blue chip index may continue its upward trend.

NASDAQ 1754.12
The Nasdaq could receive a significant boost from the labor data and its potential impact on consumer spending. However, dour earnings from Garmin which missed estimates of $0.42 per shares with earnings of $0.25 could send its shares lower and temper expectations for domestic growth.

S&P 500 903.80
The S&P 500 may also find support from the improved labor market but if banking concerns reemerge then the broader index could end the day lower as we get closer to the results of the bank stress tests.

Current Snap Shot

 

[dutchie]

This will stir up the markets if he is successful.

Nunes Sues CNN for $435 Million, Lawsuit Calls Network “The Mother of Fake News”

https://bongino.com/nunes-sues-cnn-for-435-million-lawsuit-calls-network-the-mother-of-fake-news/

 

[DB008]

Jeffrey Gundlach interview/outlook on CNBC Dec 11, 2019. Brilliant. Well worth watching

​

 

[Dona Ferentes]

The US quarterly reporting season is just around the corner. There's been such an interesting split in 2023; how's it going to play from here on?

Magnificent 7 being Alphabet, Amazon, Apple, Meta, Microsoft, NVIDIA, and Tesla

some commentary;
An equity strategist said while this reporting period may lack the splashy “earnings recession over” headlines from last quarter, it will set the tone for 2024.

“One of the more interesting dynamics heading into the fourth quarter reporting period is how much expectations have come down during the past three months, despite the resilient US economy. According to FactSet data, the consensus S&P 500 earnings per share estimate has been cut by 6.8 per cent since September 30,” he said.

As for the Magnificent Seven – they are expected to collectively increase earnings by 46 per cent in the fourth quarter, while the S&P 493 (the S&P 500 excluding these seven stocks), is expected to experience a 7 per cent earnings decline, according to Bloomberg data.

(Microsoft reclaimed its position as the world's most valuable publicly traded company on Friday, surpassing Apple at the market close. Microsoft previously held the top spot in market cap a decade ago and in 2018, 2019, and 2020)

 

[investtrader]

And US Small caps barely made a gain in 2023.

 

[divs4ever]

And US Small caps barely made a gain in 2023.

which is probably a better indication of the US economy

 

[Smurf1976]

Let's see:

Yield curve's been inverted for 18 months.

S&P 500 gains have been dominated by just 7 stocks.

Now there's a high profile ETF launch in a particularly speculative asset (Bitcoin).

And a long term chart currently has a double top in the S&P500 with both highs right at the end of the year (2021 and 2023).

There are two obvious crisis triggers - the situation in the Middle East and second one the extremely polarised US political situation in a Presidential election year.

Any of those things could of course change but until they do, I'm leaning to the Bear side. The counterargument being centred around central bank actions or good news in regard to the above actually being resolved.

 

[investtrader]

Let's see:

Yield curve's been inverted for 18 months.

S&P 500 gains have been dominated by just 7 stocks.

Now there's a high profile ETF launch in a particularly speculative asset (Bitcoin).

And a long term chart currently has a double top in the S&P500 with both highs right at the end of the year (2021 and 2023).

There are two obvious crisis triggers - the situation in the Middle East and second one the extremely polarised US political situation in a Presidential election year.

Any of those things could of course change but until they do, I'm leaning to the Bear side. The counterargument being centred around central bank actions or good news in regard to the above actually being resolved.

Yes, there is very clear double top at 4800 on SPX and the US market is pretty expensive overall. But what if interest rates are slashed mercilessly next year?

 

[Dona Ferentes]

... But what if interest rates are slashed mercilessly next year?

so far away... do you mean This Year?

 

[investtrader]

Ooops .. this year!

 

[divs4ever]

so far away... do you mean This Year?

maybe but with the current trend of jaw-boning , maybe they can stall the cuts until 2025

cut to help Joe Biden , or jaw-bone to keep up the resilient charade

 

[Smurf1976]

Yes, there is very clear double top at 4800 on SPX and the US market is pretty expensive overall. But what if interest rates are slashed mercilessly next year?

Central banks are the most significant thing on the other side of the argument as I see it.

There's no guarantee but the track record of the Fed is no matter how strong the Bear case, they may well pull the proverbial rabbit out of the hat and ignite another rally.

 

[Dona Ferentes]

the daily summary included;..

The S&P 500 marks its first record close in over two years, chipmakers and megacap tech stocks lifted the market higher, US earnings season disappoints

tying that in with a bit of rear view stuff

At the present time the consensus estimate for 2024 is for S&P 500 earnings to grow approximately 10-12%. Which will be about a 10-12% improvement on 2023, as it looks like we might have zero growth in S&P 500 EPS in 2023.
.... the strong performance in the S&P 500 in 2023 was exclusively driven by an expansion in the P/E multiple.

and what have we got?

The valuation puzzle must include interest rates, the direction thereof. The prospect of the combination of easing inflation accompanied by moderate growth could deliver reasonable earnings and a lower discount rate (bond yields) on those earnings.