The View from 5th Avenue – 15 September 2022

The respite after Tuesday’s bludgeoning was, sadly, short-lived. We remain in the same range we have been in, and the market feels like it’s still waiting. For what though? Too much on the horizon to pinpoint one event. Yesterday the number of 12-month price lows rose to 103, and as short-term breadth continues to deteriorate, we remain cautious. Indices are still above short-term supports though – 3900 on S&P futures and 12,000 on NASDAQ 100 futures. The headline move was actually in gold today – it has inched closer to the lower end of the range it’s been stuck in the past 2 years, and a significant break below 1676/1670 would open the potential for a further drop to 1569. This move would also reiterate the Dollar’s strength, which continues to push towards the long-term 120 target. Mortgage rates were also grabbing eyes today, as the US 30-year fixed mortgage, chugs its way to the next technical target at 6.5%. Homebuilders were unsurprisingly pressured. The indices were indecisive for most of the day before taking a turn lower in the afternoon. Energy and tech dragged as crude dipped after news yesterday that the US had to refill its strategic reserves. Tech was hurt by the move higher in yields, and mega names continue to populate our 12-month relative low list. Microsoft is on a relative support, as is the SOX. Google, Nvidia, and Meta are three more to monitor. Tech was also dragged lower by Adobe, which was today punished for news of a $20B acquisition of Figma, closing down 16.89%. Banks outperformed as yields moved higher, although the BKX’s move higher hid the fact that it continues to trade in the same tight range it has been this month. Tomorrow brings the latest University of Michigan data, and after admittedly “meh” retail data this morning & a hot CPI print, we will see what consumers are really feeling. Hopefully will be a good end to the week, although with triple witching tomorrow, things could get volatile.