If the theme is working, why change direction? Investors have been supporting mega-tech this year and that in turn has supported the broader indexes. The NDX now sits with 26.5% ytd gain versus the S&P 500 +9.3%, as that outperformance continued once again in today’s session. Investors have been monitoring the DC debt ceiling talks as Treasury Sec Yellen’s date threat gets closer. But positive a comment from Kevin McCarthy that he sees a debt limit deal on the House floor next week put a bid in…

Markets continue to do their sideways dance as the S&P 500 traded in another tight range today (33bps). With a debt ceiling “conversation” between the White House and Kevin McCarthy expected to start just after the close, and no new news to result, traders were once again in no mood to take a macro view of the indexes. Adding to that lackluster mood was another session of little economic news. The one datapoint out was the NFIB Small Business Optimism, which dropped to 89 versus the previous 90…

The print was barely dry post FOMC yesterday when regional bank PacWest (PACW -50.6%) decided to announce they are looking at strategic options. Those words these days equal almost certain termination in the banking sector, and obviously dampens investor sentiment. To add to the misery, headlines that TD (TD +95bps) and First Horizon (FHN -33.1%) called off their merger, and a FT report that Western Alliance (WAL -38.4%) was also seeking strategic options (“vehemently” denied by WAL), pushed in…

Markets have been trying to fool investors into thinking that the lack of volatility is a positive sign. But the underlying cause has been more derivative led than fundamental, and today’s trading served a reminder that headwinds remain. Earnings and economics have taken over with a side of debt ceiling debate, putting investors into a classic risk-off mood. Dallas Fed missed yesterday (following a weaker Phili Fed last week) and the Richmond Fed followed suit (-10 vs estimates of -8) today. Co…

As April 20 has become a holiday for some, traders took advantage of indexes being near their highs to take some exposure off the table. Confronted with multiple inputs that continue to show a slowing economy, the S&P 500 posted its worst loss in three weeks. Earnings are in full swing and that is proving investors will something besides the Fed and economic data to focus on. While it is still early, the picture remains mixed, with S&P 500 earnings dropping 1.9% y/y (only 16% have reported thou…

Yesterday’s inflation (CPI) data failed to excite the markets beyond the first couple of hours of trading. Even though CPI was better than expected, it was not enough to temper thoughts of another Fed hike in May. And that hike is still coming (as of now) despite the Fed’s staff “projecting a mild recession” later this year. Today, investors got part two of the inflation series via the PPI, and it showed another sequential decline (y/y core 3.4% versus Feb’s revised 4.8%). While this also did n…

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…

Drumroll please! Headlines overnight of potentially more support for deposits via the Treasury spurred a re-risking in the US markets. Traders had swarmed to the safety of Treasuries the last week and a half to hide from the regional bank fallout. This pushed yields to ytd lows, while also propping the quality companies higher (think mega-tech). Those quality names maintained their gains today however, pushing the S&P Growth factor to yet another daily outperformance versus Value (13 days in a…

The financial mess that has been encircling the US went international today with fresh concerns over Credit Suisse. With the Stoxx Banks index closing down 6.9% (and Credit Suisse -24%/ CS ADR +18.5% vs local close though), the early part of the US session was impacted negatively, culminating just after the EU close. The rush to safety continues evidenced by the sovereigns, as 10-yr Bunds moved from 2.45% to 2.12% intraday. And the US 10-yr had a similar trajectory, closing at 3.47% vs yesterda…

And it’s only his first day of his testimony. Yesterday’s price action in the markets was a good foretelling of what was to come. Stocks could not hold onto early gains ahead of Powell’s testimony to Congress, and when he did speak today, he did not mince words. “Economy’s strength suggests peak rate will be higher than previously anticipated” and, “Fed is prepared to speed up rate rises if warranted”. CME data had a 72% expectation for a 25bps rise on March 22 pre-Powell, it stood at 64% for 5…