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Author: jsc

Morning Notes — Technical Signals

The mid-October conditions that had us looking for a Q4 rally included technical signals (deep oversold conditions with momentum divergences) that were apparent in all major market inflections over the last 13 years.

Morning Notes — Consolidating Gains

The S&P 500 (SPX) is now consolidating gains from the post-CPI rally that took the index through technical resistance at 3900. Once broken, old resistance levels become new support and 3900 should hold as long as 10-year Treasury yields remain below 4%. 

Morning Notes — Narrative

The bearish narrative includes 1) increased inflation expectations; 2) higher energy costs; 3) higher bond yields; 4) higher terminal rates; 5) expected cuts to FY’23 earnings and; 6) geopolitical shocks have been in place since mid-January and is beginning to feel a bit tired in

Morning Notes — Terminal Rates

Yesterday’s +5.6% gain in the SPX followed a 27bp decline in terminal rate expectations and sharp increase in expected Fed easing 24 months after terminal rates have been reached.

Morning Notes — SPX Rally

SPX rally follows a cooler than expected CPI print.  Consumer Discretionary, REITS and Tech are outperforming, while defensive groups like Health Care and Staples lag but still post solid gains.