We started off Thanksgiving Week yesterday (thanks to the Zacks Equity Research staff for covering my absence Monday) pretty much as we have in the wake of the latest market catalyst: the Dow was flat, the S&P 500 dipped a bit and the Nasdaq performed notably worse than either of them. That catalyst was the collapse of crypto exchange FTX, which pointed to more contagion in the tech-heavy Nasdaq than in the other major indices.
This morning, we see the Dow +114 points at this hour (+3% for the month of November thus far) and the S&P +14. The Nasdaq is putting together something of a bounceback, +31 points, though the index is still down -32% from year-ago highs. In fact, one year ago to the day set a new high in intraday Nasdaq trading: 16,121, closing that day for the first time ever above 16K. This was back when large-cap tech was paving the way forward, the Fed assured us inflation was “transitory” and Ukraine was a peaceful place.
Because it is the first of the “holiday weeks” for the end of this year, we see a drop-off in the number of new potential catalysts hitting the market. Over are Q3 earnings season and the midterm elections (mostly), and the next set of monthly employment prints aren’t due until next week. That said, we do see a sizable batch of economic reads, although they are all compacted into tomorrow’s pre-market session.
Among these important inflation and employment metrics are Durable Goods Orders, Weekly Jobless Claims, PMI Manufacturing and Services surveys, New Home Sales and the minutes from the most recent Federal Open Market Committee (FOMC) meeting from three weeks ago, which parses the meeting of the minds on U.S. monetary policy. We know home sales will continue to slide, but what will be interesting to check on is jobless claims — at what point will these layoffs in Big Tech and elsewhere begin to show up in this data?
Of course, most of these prints are in service of predicting the level of interest rate hikes, meaning we’re still in the “bad news is good news” (and vice-versa) realm of the market. The more evidence the Fed has in determining inflation is being constrained into submission, the better. Currently, the question is whether the next hike (on December 14th) will be another jumbo 75 basis-point (bps) hike or a less-severe 50 bps. Either way, the Fed funds rate would be clearly above 4% for the first time in 15 years.
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Markets Await Economic Data
We started off Thanksgiving Week yesterday (thanks to the Zacks Equity Research staff for covering my absence Monday) pretty much as we have in the wake of the latest market catalyst: the Dow was flat, the S&P 500 dipped a bit and the Nasdaq performed notably worse than either of them. That catalyst was the collapse of crypto exchange FTX, which pointed to more contagion in the tech-heavy Nasdaq than in the other major indices.
This morning, we see the Dow +114 points at this hour (+3% for the month of November thus far) and the S&P +14. The Nasdaq is putting together something of a bounceback, +31 points, though the index is still down -32% from year-ago highs. In fact, one year ago to the day set a new high in intraday Nasdaq trading: 16,121, closing that day for the first time ever above 16K. This was back when large-cap tech was paving the way forward, the Fed assured us inflation was “transitory” and Ukraine was a peaceful place.
Because it is the first of the “holiday weeks” for the end of this year, we see a drop-off in the number of new potential catalysts hitting the market. Over are Q3 earnings season and the midterm elections (mostly), and the next set of monthly employment prints aren’t due until next week. That said, we do see a sizable batch of economic reads, although they are all compacted into tomorrow’s pre-market session.
Among these important inflation and employment metrics are Durable Goods Orders, Weekly Jobless Claims, PMI Manufacturing and Services surveys, New Home Sales and the minutes from the most recent Federal Open Market Committee (FOMC) meeting from three weeks ago, which parses the meeting of the minds on U.S. monetary policy. We know home sales will continue to slide, but what will be interesting to check on is jobless claims — at what point will these layoffs in Big Tech and elsewhere begin to show up in this data?
Of course, most of these prints are in service of predicting the level of interest rate hikes, meaning we’re still in the “bad news is good news” (and vice-versa) realm of the market. The more evidence the Fed has in determining inflation is being constrained into submission, the better. Currently, the question is whether the next hike (on December 14th) will be another jumbo 75 basis-point (bps) hike or a less-severe 50 bps. Either way, the Fed funds rate would be clearly above 4% for the first time in 15 years.