/ December 20 - New Platform Pre-Release 🖥️
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Friday:
Core PCE Price Index MoM (0.2% exp.)Personal Income MoM (0.4% exp.)
Personal Spending MoM (0.5% exp.)
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Friday:
Carnival CCL
Winnebago WGO
Daily Briefing
*We’ll keep today’s briefing very short, as our focus is the successful release of Signal Sigma V2 (Alpha Version);
*The stock market started yesterday’s session in rebound-mode after the major indices registered sharp declines yesterday in response to the FOMC's decision and acknowledgement that committee members expect rates to stay higher for longer; market breadth was positive and gains in the mega cap space provided an added boost to the broader market; things deteriorated as the session progressed, though;
*Ultimately, the S&P 500 and Nasdaq Composite each settled -0.1% lower; the deterioration was related to rising rates and rollover action in mega cap names; the 10-yr yield jumped another eight basis points today to 4.57% following a batch of economic data (initial jobless claims, third estimate for Q3 GDP, existing home sales, and leading indicators) that was better than expected;
*SPY lost -0.03%, but the news was its inability to rally rather than the loss itself; short term, the market is oversold enough to elicit a bounce, but the upside is momentarily capped at $596 (M-Trend);
*The MACD signal is now sufficiently extended to the downside to suggest that a reflexive bounce can occur over the next couple of weeks;
*Institutional options activity for January - March expiration suggests that buying is happening under the surface (data courtesy of NextSignals);
*We are also watching transaction dollar volume for signs that the current correction episode is over; as long as volume remains elevated (like it is now), the selloff is “confirmed”;
*We need to see volume settle down before anticipating a more sustainable recovery in prices;
*Disappointing earnings results and/or guidance from Micron (MU, -16.2%) and Lennar Corp. (LEN, -5.2%) contributed to the negative vibe in yesterday’s session; this price action also contributed to the underperformance of stocks in their respective industries; the SPDR S&P Homebuilder ETF (XHB) traded -2.2% lower and the PHLX Semiconductor Index (SOXX) showed a -1.6% decline;
*Some individual stocks were able to go against the grain, settling higher; FedEx (FDX, +1.0%), NIKE (NKE, +0.3%), and Carnival Corp. (CCL, +1.5%) were standouts in that respect in front of their earnings reports;
*Separately, the Bank of England voted 6-to-3 to leave its benchmark rate unchanged at 4.75% and the Bank of Japan voted 8-to-1 to leave its benchmark rate unchanged at 0.25%;