US stock futures edged higher after last session's losses as investors try to get past yesterday's hawkish speech by Fed Chair Jerome Powell. However, with more Fed members scheduled to speak today, we expect the hawkish message to be repeated overall today. Powell said he is not (yet) convinced that current monetary policy is restrictive enough to bring inflation back to 2%.
The gains are also being supported by temporary increased demand for US Treasuries, which is pushing yields down again. However, we are seeing very mixed earnings from companies in Asia (Wynn), Europe (Diageo, Richemont) and the US (Trade Desk, Plug Power, Illumina, Unity Software, Groupon – all different sectors). The very weak figures, almost across the board, will affect US equities today – especially the second-tier stocks (mid- to small-cap stocks).
We expect Wall Street to attempt a rebound, especially after the recent very long rally (the S&P 500 closed higher 8 days in a row – a winning streak that ended yesterday). I expect more Fed members to try to push back hopes of a rate cut. The sideways movement will be impacted by profit taking later today.
Continued weakness in commodities and energy shows that commodity traders remain concerned that demand could deteriorate due to weak sales growth in China and Europe and increasing signs of a slowdown in the US.
As yields stabilize, we expect also markets to find a ceiling.
👁 ROB'S MARKET OVERVIEW:
November 10, 2023
🇺🇸 US Markets ↗️/➡️/↘️ (gains after sharp losses yesterday; returning during regular trading)
Cyclical Stocks ↗️/➡️/↘️
Tech/Growth Stocks ↗️/➡️/↘️
Financial Stocks ↗️/➡️
Defensive Stocks ➡️
Energy Stocks ↗️/➡️
Materials Stocks ↗️/➡️
USD, CHF ➡️ (mostly sideways for today but USD overall remaining supported)
JPY, GBP, AUD, CAD ➡️/↘️
⚒ Commodity Markets ↘️
Oil prices ↗️/➡️ (gains limited, especially as concerns about weakening demand comes back)
Natural Gas prices ➡️/↘️
Metal prices ↗️/➡️
⚡️Cryptos ➡️/↗️ (cryptos continue to benefit from Bitcoin ETF optimism)
(*↗️ bullish, ↘️ bearish, ➡️ sideways / stable, ↕️ mixed / volatile)