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2023 Highs on the Horizon: Can Holiday Shopping Push the Stock Market Even Higher?

John Paul / November 20, 2023

Goldman Sachs predicts that the consumption rate is likely to see a decline, yet it will persistently expand at a satisfactory pace. American stocks have seen a considerable increase and are now nearing the highest levels reached in the summer. This remarkable rebound coincides with investors preparing for the holiday season, with the eagerly awaited Black Friday just around the corner. The expected surge in shopping on the day after Thanksgiving marks the beginning of a season of higher spending for the holidays. This has the possibility of boosting the stock market after its recent growth. Yardeni Research analysts have stated that the beginning of the holiday sales season seems optimistic, as consumers are currently employed and have a positive view of their finances. Although there is a concern that high interest rates might impact purchases of expensive items that require financing, the strong sales numbers in October indicate a promising start to the holiday shopping season. However, investors are worried that the rise in U.S. stocks in November might have been too much. The S&P 500 index is set to record its largest monthly increase this year due to the strong performance of both bonds and equities. However, it is important to note that the S&P 500 is still 1.6% lower than its highest closing point in July 2023. In just this month, the index has surged by 7.6% following three weeks of positive outcomes according to Dow Jones Market Data. In a telephone interview, Bob Elliott, the co-founder and CEO of investment company Unlimited Funds, shared his view that the situation is being overstated and that there has been a noticeable enhancement in financial circumstances. Elliott states that the enhancement in financial circumstances can be attributed to the U.S. Treasury Department’s recent decision to issue a smaller amount of long-term Treasury bonds than what was anticipated by the market. This action has relieved concerns among investors regarding the demand for long-duration U.S. government debt, which was worried due to the substantial quantity of Treasurys entering the market. Stock prices have risen as a result of the decrease in yields caused by the increase in prices of long-term Treasury bonds. Elliott stated that the Treasury’s decision to enact a policy that lessens constraints is advantageous for the economy as a whole, effectively postponing the implementation of more stringent measures. The Federal Reserve has taken steps to lower inflation, which is currently higher than its desired level of 2%, by increasing interest rates to slow down economic growth. In October, inflation, as measured by the consumer-price index, remained stable at 3.2% compared to the previous year. This is a decline from 3.7% in September and a significant decrease from the peak of 9.1% in June 2022. Investors were hopeful after the consumer-price-index report was made public on November 14th, as it resulted in a sharp decrease in treasury yields. This decline in yields continued throughout the month, while there was an upward trend in stocks. In November, the prices of stocks and long-term Treasury bonds have been rising at the same time. Data from FactSet shows that both the Vanguard Total Stock Market ETF VTI and the Vanguard Long-Term Treasury ETF VGLT have seen a notable rise of more than 7% this month until the end of last week. Based on Dow Jones Market Data, the interest rate for the 10-year Treasury note (BX:TMUBMUSD10Y) stayed relatively consistent at 4.441% on Friday. However, it has fallen by about 43 basis points this month, considering the levels at 3 p.m. Eastern Time. In an interview with MarketWatch, Don McCree, the vice chairman of Citizens Financial Group, mentioned that with the decline in Treasury yields, it would be beneficial for the bank’s corporate clients to take advantage of the opportunity to tap into the debt markets if they expect to refinance in the next three years. This is because borrowing expenses have become cheaper. McCree, who holds the position of commercial banking leader at Citizens, further disclosed that corporations he serves are carefully keeping track of consumer expenditure, particularly throughout the period of holiday shopping. Yardeni Research’s report states that Home Depot and Target have both experienced a decline in their revenue recently. Despite this, their actual performance surpassed the expectations set by analysts. In contrast, TJX, the most successful retailer among the three, saw a notable increase in their quarterly results and expressed optimism for the upcoming holiday season. Consumer savings Jan Hatzius, the chief economist at Goldman Sachs Group, stated during a virtual media briefing on November 16th that the surplus savings of consumers were instrumental in the events of 2022. This can be partially explained by a notable drop in real disposable personal income, which can be attributed to the increase in inflation. Hatzius made these remarks while discussing the future prospects of the bank’s global investment research group in 2024. According to Hatzius, the decline in excess savings has been accompanied by a significant rise in real disposable income, with an estimated growth rate of 4% in 2023. He further added that they expect a similar rate of growth, around 3%, in 2024, which should be sufficient to maintain a decent pace of consumption at approximately 2%. In October, there was a 0.1% decrease in retail sales in the United States – the first decline in seven months, as per Yardeni analysts. However, they mentioned that not every sector saw a decrease. They pointed out that the most recent data indicates that consumers are still spending more on eating out at restaurants compared to last year. Currently, the United States is experiencing a low unemployment rate of 3.9% as of October. During the press conference, Hatzius stated that our goal is to prevent a notable increase in the unemployment rate in the coming year. Moreover, he mentioned that there is a mere 15% possibility of a recession taking place within the following year. Elliott holds the belief that employment is the paramount concern for consumers. He argues that

Market News

Resilient Rise: Wall Street Wraps Up Third Winning Week with Modesty

John Paul / November 18, 2023

Wall Street quietly concluded another week of growth, marking its third consecutive week of positive performance. Stocks maintained a steady upward trajectory, further adding to their already significant gains achieved during November. The S&P 500 went up by 5.78 points, equivalent to a 0.1% increase, reaching a level near its highest point within the past three months. The Dow Jones Industrial Average had a small increase of 1.81 points, less than 0.1%, reaching 34,947.28, while the Nasdaq composite had a gain of 11.81 points, or 0.1%, reaching 14,125.48. Several retail businesses saw substantial growth after surpassing analysts’ predictions in their quarterly earnings. Gap’s stock price skyrocketed by 30.6% when it disclosed a profit that exceeded Wall Street’s expectations, resulting in a year-to-date increase that is more than twice its previous gains. In a similar fashion, Ross Stores witnessed a 7.2% surge in its stock price after revealing stronger-than-anticipated profit and revenue figures. Despite exceeding expectations, BJ’s Wholesale Club faced a decline of 4.8%, which analysts believe was due to the exclusion of new store openings in the underlying sales figure. Regrettably, the company did not meet expectations. Retailers are wrapping up a summer season of revealing their earnings, which have surpassed expectations. According to FactSet, the companies in the S&P 500 are expected to announce their first overall growth in a year. Nevertheless, the primary factor behind the substantial increase in stock prices this week is the perception that inflation has declined sufficiently for the Federal Reserve to halt its ongoing interest rate hikes, which have been adversely impacting the market. In order to control inflation while avoiding a major economic decline, the Federal Reserve has recently raised its main interest rate to its highest level since 2001. This action is intended to stabilize the economy and lessen the effects on financial markets. On Tuesday, a new report showed that consumer inflation was not as high as originally expected in the previous month. This information led to hope that the Federal Reserve would be able to maintain a stable situation effectively. Additional readings supported this positive outlook by suggesting that both inflation and the overall economy might be experiencing a decrease in growth. At present, traders are trying to predict when the Federal Reserve will begin lowering interest rates. This move could potentially increase investment prices and offer support to the financial system. Although the Federal Reserve plans to keep interest rates high for a prolonged period to ensure they effectively combat inflation, traders are considering the chance of rate cuts starting in the summer of 2024. Over the past weeks, there has been a decline in worries over inflation as the price of oil has experienced a substantial decrease. This drop can be attributed to concerns about an imbalance between an excessive supply of crude oil and a lack of demand for it. The price of American crude oil for December delivery rose by $2.99 on Friday, resulting in a settlement price of $75.89. This increase helped to partially regain some of the significant losses experienced earlier in the week. However, it is worth mentioning that the current price is still significantly lower compared to its previous peak of $93 in late September. The price of Brent crude, the global benchmark, rose by $3.19 on Friday, reaching $80.61 per barrel. On Thursday, there was a small drop in the yield of the 10-year Treasury in the bond market, going from 4.44% to 4.43%. Just a few weeks prior to this, it had been even higher, reaching 5%, which was the highest it had been since 2007. This increase had a negative impact on stock and other investment prices. If Treasury bond yields go down a lot and stocks go up a lot, it could have a bad effect on Wall Street. After the Federal Reserve’s recent meeting about interest rates, Jerome Powell, the Chair, said they might not keep raising rates if Treasury yields keep going up and stocks keep going down like they did over the summer. This is because these pressures could serve as substitutes for more rate increases. Since that time, there has been a significant decline in profits, and it appears that November will be the most successful month for the S&P 500 in the past year. Economists from Deutsche Bank suggest that this indicates a relaxation of financial conditions by approximately fifty percent compared to the restrictions seen in October. Nevertheless, Justin Weidner, along with other economists, opines that the Federal Reserve can alleviate its concerns about this relaxation as a result of recent encouraging updates regarding inflation and the economy. The Hang Seng index in Hong Kong saw a noteworthy decrease of 2.1% in global stock markets. Similarly, Alibaba, a major Chinese e-commerce company, faced a significant decline in its stock prices when it decided to cancel its cloud computing unit’s spin-off plan. The company attributed this cancellation to the uncertainties caused by the United States’ chip restrictions. In different regions of Asia, the stock indexes had different performances, while in Europe, they saw a more notable rise.

Market News

Options Showdown: $2.4 Trillion Set to Expire, Igniting Bullish Stock Outlook

John Paul / November 17, 2023

Traders swiftly entered the arena of call options linked to popular U.S. equity exchange-traded funds, capitalizing on the upswing in U.S. stocks following Tuesday’s release of the consumer-price index. Analysts specializing in options markets suggest that this influx could contribute to further upward movement in stocks in the days to come. Data compiled by Rocky Fishman, the founder of Asym50, indicates that options tied to a significant $2.4 trillion in stocks, exchange-traded funds, and equity indexes are slated to expire on Friday. Analysts at Goldman Sachs Group highlighted a marked increase in call buying associated with well-known index-tracking exchange-traded funds this week. This trend resulted in a decrease in the ratio of outstanding calls to puts, commonly referred to as “skew,” for the SPDR S&P 500 ETF Trust (SPY), the Invesco QQQ ETF (QQQ), and the iShares Russell 2000 ETF (IWM). Traders shifted their focus from puts to calls, signaling a heightened sense of optimism in the market. Goldman’s data reveals that skew for calls tied to the IWM, which tracks the Russell 2000 index of small-cap stocks, has reached its lowest level on record. This suggests a surge in bullish sentiment in a market segment that was previously less favored. Brent Kochuba, the founder of SpotGamma, noted the intriguing shift in small-cap skew, emphasizing that with approximately one-third of IWM calls expiring on Friday, the recent momentum in small caps might wane if traders opt not to extend their positions. However, the increased demand for call options could also indicate that more traders are entering the small-cap arena, hoping for a sustained upward trajectory. This shift occurs as segments of the U.S. market, which have trailed Big Tech throughout the year, strive to catch up. Call options symbolize optimistic wagers on an underlying security or index in the options market, while put options represent the opposite outlook. Options serve various purposes, including speculation on market direction or hedging an investor’s portfolio.

DayTradeToWin Review

Unlocking Profit Potential: A Trader’s Journey with Blueprint and Trade Scalper

John Paul / November 16, 2023

Today, we’re embarking on a journey through the dynamic realm of trading, armed with two formidable indicators – the Blueprint and the Trade Scalper. The fusion of these methods unveils remarkable opportunities where multiple signals converge, akin to stumbling upon a hidden treasure in the trading world. As the market unfurls its possibilities, the Trade Scalper confidently signals a long position. Simultaneously, the Blueprint indicator echoes the sentiment with its own long signal, creating a compelling scenario to venture into a long position. Before we plunge headfirst into the trades, let’s strategize. I’ve set my sights on a two-point target, guided by the Average True Range (ATR), with a stop snugly nestled within the same range. Vigilance towards market volatility is paramount, especially during the initial opening moments. If the chaos becomes too overwhelming, exercise patience and let the storm settle. Now, let’s dissect the intricacies of the trades. The Trade Scalper’s long signal becomes our initial entry point. Despite not achieving the perfect fill, being within a tick or two is deemed acceptable. The Blueprint’s long signal also beckons promise. Fast forward an hour, and the trading landscape metamorphoses. We’ve observed successful trades, both long and short, and a fresh long signal emerges at 4533.4. Eager to seize this opportunity, I keep the ATR of 1.5 points in mind. Adaptability is the linchpin for traders. We eschew rigid targets and stops, opting for dynamic adjustments based on ever-changing market conditions. It’s about staying in sync with what the market can offer in the present moment. The Trade Scalper has undeniably proven its mettle today with a plethora of fruitful signals. For those intrigued and hungry for deeper insights into trading, peruse our YouTube channel for a treasure trove of insightful videos. As Black Friday looms, keep your eyes peeled for potential discounts on trading tools and education. And for those eager to kickstart their trading odyssey, explore our free member account at daytradetwin.com. There, you’ll discover complimentary indicators and videos to navigate the enthralling world of day trading. As we conclude, don’t forget to subscribe for live streams, webinars, and stay tuned for upcoming events. Until next time, may your trades be prosperous, your strategies sound, and may the market forever favor your endeavors! Happy trading!

Market News

S&P 500 Futures Showcase Resilience Following Robust Rally

John Paul / November 16, 2023

On Thursday morning, the future predictions for the U.S. stock market showed little change, remaining near their highest point in the last two months. Traders were considering the recent significant increase in value. How are stock-index futures trading On Wednesday, the Dow Jones Industrial Average experienced a rise of 164 points, equivalent to a 0.47% increase, and closed at 34991. The S&P 500 also had a slight increase of 7 points, or 0.16%, resulting in a closing value of 4503. Similarly, the Nasdaq Composite saw a rise of 9 points, or 0.07%, and ended at 14104. What’s driving markets According to the futures market, stock market indexes are currently showing signs of stability after a period of good performance. The S&P 500 is currently at its highest level since September 14th, having risen in value for 11 out of the past 13 sessions. It has gained 7.4% this month. The Nasdaq Composite, which focuses on technology stocks, has also seen an increase in value for 12 out of the past 14 days, with a 9.75% rise in November. The Russell 2000 index, which tracks small cap stocks, has seen an 8.4% increase during the same period. The surge in rallies is primarily driven by the decline in borrowing costs. Over the last month, the 10-year Treasury yield has fallen from its highest point in 16 years, reaching a level of over 5%, to 4.50%. This decrease is linked to positive hopes that the U.S. job market will slow down and inflation will decrease, leading to the Federal Reserve implementing interest rate reductions by mid-2022. Simultaneously, investors are becoming increasingly confident that the slight rise of approximately 500 basis points in interest rates by the Federal Reserve will not cause a substantial decline in the US economy. They are of the opinion that even if there is a mild economic slowdown, it will still be sufficient to help companies sustain their profits. However, there are experts who are advising caution as the CBOE VIX index, which indicates anticipated market volatility, is nearing the level of 14 once again. Additionally, the S&P 500’s 14-day relative strength index has rapidly transitioned from showing that stocks are being sold at an excessive rate to approaching a state where they may be considered overbought, all occurring in just three weeks. Stephen Innes, who is in charge of SPI Asset Management, expressed that the commencement of stock futures was unimpressive as there were concerns about the market progressing too quickly. Traders and investors are worried that they may have made hasty assumptions about the impact of recent weak macro data in the United States on the Federal Reserve’s decision to implement an economic easing policy in the later part of the first quarter of 2024. Innes expressed concern that the markets may be overestimating the likelihood of the Federal Reserve fully accommodating the current situation. Cisco Systems, after the market closed on Wednesday, announced unsatisfactory results, resulting in a decline of their stock by more than 10%. This occurrence highlighted the delicate nature of the market. Walmart, Macy’s, and Williams-Sonoma will publish their financial outcomes before the beginning of the trading day. After the market closes, Applied Materials, Gap, and Beazer Homes will unveil their earnings. Mark Newton, the person in charge of technical strategy at Fundstrat, has shown his support for the recent progress in the stock market. He is pleased to see that a greater number of shares are joining in the upward trend. Newton finds it encouraging that the gains are not exclusively reliant on major tech stocks. He believes that this increased diversification has the capability to sustain the market’s growth in the coming days. Nevertheless, he acknowledged that while there may be instances where stock buying surpasses a sensible level due to current market conditions, this aligns with a consistently unfavorable pattern evident in weekly and monthly graphs. Consequently, it implies that any upcoming stock market growth is likely to encounter significant opposition. As a result, the potential advantages of investing in US Equities in the near future may not be as advantageous if there is another surge in value next week. There will be updates about the U.S. economy on Thursday. These updates will cover the number of individuals who have filed for unemployment benefits for the first time in the week, the price index for imported goods in October, and a survey on manufacturing activity in Philadelphia in November. The reports will be accessible at 8:30 am Eastern Time. The announcement of October’s industrial production and capacity utilization is planned for 9:15 a.m., and this will be followed by the release of November’s home builder confidence at 10 a.m. A notable group of Federal Reserve officials will give speeches on Thursday. The lineup includes Loretta Mester, the President of the Cleveland Fed, speaking at 8:30 a.m.; John Williams, the President of the New York Fed, speaking at 9:25 a.m.; Michael Barr, the Vice Chair for Supervision at the Fed, speaking at 10:35 a.m.; and Lisa Cook, a Governor at the Fed, speaking at noon.

Market News

S&P 500 Outlook: How High Can the Stock Market Soar in the Current Boom?

John Paul / November 15, 2023

The stock market is receiving a boost from the latest inflation report, and this rally appears to have more staying power than previous ones—there’s reason to believe in its resilience. As of Tuesday morning, all three major U.S. stock indexes have surged by over 1%, with the Nasdaq Composite nearly reaching a substantial 2% gain. This positive momentum follows the release of data indicating a 3.2% year-over-year increase in the consumer price index for October. While slightly below economists’ expectations, this figure represents a moderation from September’s 3.7% increase. With the Federal Reserve aiming for a 2% inflation rate, these numbers strengthen the belief that the central bank can maintain steady interest rates, potentially avoiding further hikes to cool the economy. In fact, there’s even speculation that the Fed might consider rate cuts within the next year, making stocks even more appealing. Currently, the S&P 500, hovering just below 4500, is surpassing crucial levels—a positive indicator. Earlier in the year, concerns about rising interest rates and their economic impact led sellers to intervene around the “resistance level” at 4400, causing the index to retreat. However, Tuesday’s gains suggest that such apprehensions are gradually diminishing. It’s worth noting that the next resistance level is approximately 4500. Monitoring whether the index can sustain this level or if sellers will reemerge to push it lower is crucial. As of now, the S&P 500 remains robust, just below the 4500 mark. The sudden surge in buyers suggests the potential for further gains. If the S&P 500 can maintain its current level for a few days, momentum might propel it beyond the 2023 intraday high of 4607, recorded in July. Frank Cappelleri of Cappthesis anticipates an upside target near 4675, which remains achievable if the SPX stays above the 4390 breakout zone. Achieving this lofty level would translate to a gain of approximately 5% from the current position.