stock news Archives – Page 98 of 112

Dollar Dominance: How It’s Affecting Stock Performance

John Paul / October 3, 2023

U.S. Equity Futures Swing Amid Dollar’s Rally and Fed Rate Hike Concerns On Tuesday, U.S. equity futures exhibited a see-sawing performance, influenced by the surging dollar and apprehensions surrounding potential Fed interest rate hikes, along with surging Treasury bond yields. The U.S. dollar index, which gauges the greenback against six major global currencies, recorded an overnight gain of 0.13%, reaching 107.047. It crept closer to its highest levels since November of the previous year. These fluctuations followed statements from Federal Reserve officials, including Cleveland Fed President Loretta Mester, emphasizing the necessity of raising interest rates to curb inflation in the robust U.S. economy. Mester articulated, “I suspect we may well need to raise the fed funds rate once more this year and then hold it there for some time as we accumulate more information on economic developments and assess the effects of the tightening in financial conditions that has already occurred,” during a public event in Cleveland. The CME Group’s FedWatch tool currently indicates a 25.7% likelihood of a quarter-point rate hike at the conclusion of the Fed’s upcoming two-day policy meeting on November 1. The odds of a December hike, whether a quarter or half point, stand at just under 45%. Meanwhile, Treasury bond yields continued their ascent, following the most significant one-day increase in nearly a month on Monday. Benchmark 10-year notes reached a new 2007 high of 4.702%, and 2-year notes hovered just below 5.1%. These substantial upward movements, combined with the hawkish rhetoric from Fed officials, place considerable attention on this week’s job market data. Investors are eager to discern if labor market tightness will fuel inflation pressures in the final months of the year. Key economic events this week include the Bureau of Labor Statistics’ monthly jobs openings report, scheduled for release today at 10:00 am, ADP’s monthly employment report on Wednesday at 8:15 am, weekly jobless claims on Thursday at 8:30 am, and the crucial September non-farm payrolls report ahead of the opening bell on Friday. As Wall Street prepares to commence the trading day, S&P 500 futures indicate a modest 4-point gain at the opening bell, while Dow Jones Industrial Average futures suggest a 22-point uptick. Nasdaq futures show a slight 4-point increase. In international markets, the strengthening dollar has contributed to global stock market pressures, with the MSCI World index sliding 0.3% to a four-month low. The Asia ex-Japan benchmark experienced a significant 1.4% decline. In Japan, the Nikkei 225 closed 1.64% lower as the yen reached a multi-year low of 149.87 against the dollar. Japanese Finance Minister Shunichi Suzuki discussed the possibility of currency intervention. Japan resorted to purchasing yen to stabilize the currency in international markets, marking the first intervention in 24 years since it dipped below the 145 mark in September of the previous year. In Europe, the Stoxx 600 opened 0.3% lower in Frankfurt, while the FTSE 100 saw a 0.28% rise as the pound depreciated to 1.2067 against the U.S. dollar. John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com

Market News

Q4 Stock Market Potential: What Could Set This Year Apart?

John Paul / October 2, 2023

Ryan Belanger, a strategist from Claro Advisors, has expressed concerns that the fourth quarter of 2023 might not live up to historical averages. He cites macroeconomic forces indicating a potential recession as the reason behind this apprehension. While the third quarter of 2023 adhered closely to stock-market seasonality patterns, with both August and September proving to be challenging months for U.S. equities, some market experts see the possibility of a stock-market resurgence in the final quarter. Historically, the fourth quarter has been the strongest quarter for the U.S. stock market, with the S&P 500 index showing remarkable gains, nearly 80% since 1950, and an average increase of more than 4%, double the next best quarter, according to Ryan Detrick, Chief Market Strategist at Carson Group. October is renowned for its extreme volatility and historical stock-market crashes, including the Panic of 1907, the Wall Street Crash of 1929, and Black Monday in 1987, all occurring in October. However, Detrick suggests that, in general, October has been a “fairly decent month,” especially following two consecutive months of stock declines. Recent increases in Treasury yields and the strength of the U.S. dollar, along with seasonal market weakness, contributed to the stock market’s downturn in September. The Federal Reserve’s interest rate decisions and Jerome Powell’s press conference further accelerated these trends. Simultaneously, energy prices remained high in September, hovering above $90 a barrel, creating concerns about inflation and the potential need for more interest rate hikes. As a result, the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all posted losses in both August and September. Ryan Belanger, founder of Claro Advisors, anticipates that despite strong seasonal factors, the fourth quarter of 2023 may fall short of historical performance due to indicators pointing toward a recession, such as elevated bond yields and the Federal Reserve’s contemplation of raising interest rates. However, Ryan Detrick of Carson Group remains cautiously optimistic, noting that historical data indicates a potential stock-market rally in the fourth quarter, especially after weak August and September performances. Detrick points out that in the past, when stocks declined 1% or more in the preceding two months, October rebounded with gains of 10.8%, 8.3%, and 8.0%, respectively. Furthermore, the fourth quarter has shown positive returns in 12 out of 13 instances since 1950, with an average increase of more than 7.0%. Moreover, when the S&P 500 has risen between 10-20% for the year leading into the traditionally strong fourth quarter, Detrick expects even more significant gains, averaging over 5%. In 2023, the S&P 500 has already advanced over 12%, indicating a potentially promising outlook for the final quarter of the year. John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com

Market News

S&P 500’s September Suffering: Inflation’s Toll on Markets

John Paul / September 30, 2023

In September, the S&P 500 experienced its most substantial monthly decline since December of the previous year, with a 4.9% loss. On Friday, U.S. stock markets closed with most indices in the red as investors assessed the latest inflation data from the Federal Reserve. This marked the conclusion of a turbulent month for stocks. Here’s a snapshot of how key indices performed: For the week, the Dow registered a 1.3% decline, the S&P 500 dropped by 0.7%, while the Nasdaq Composite managed to eke out a 0.1% gain. All three indices reported both monthly and quarterly losses. Factors influencing the markets: The S&P 500 wrapped up Friday with a slight decline, marking its fourth consecutive week of losses. Initially, U.S. stocks posted gains at the opening bell following the release of the latest inflation data. Investor sentiment has been fluctuating between concerns about a potential U.S. economic recession and the possibility of a “soft landing” facilitated, at least in part, by Federal Reserve interest rate hikes aimed at combatting inflation. According to Brent Schutte, Chief Investment Officer at Northwestern Mutual Wealth Management Co., this uncertainty has left investors searching for answers. September saw the S&P 500’s worst monthly performance, with a 4.9% decline, according to FactSet data. Schutte characterized it as a “tough month for stocks.” Liz Ann Sonders, Chief Investment Strategist at Charles Schwab, noted that the declining breadth in the U.S. stock market might have attracted some “dip buyers” on Friday morning. She added that the inflation data from the Federal Reserve’s preferred gauge, released before the market opened, didn’t significantly impact stocks, as there were no major surprises in the data. The PCE (personal-consumption expenditures) index showed that core prices, excluding volatile food and energy categories, increased by 0.1% in August, a lower-than-expected rise. Additionally, the year-over-year inflation rate eased to 3.9%. However, rising energy prices contributed to a 0.4% increase in the headline PCE price index in August, marking its most significant increase in seven months. According to Carol Schleif, Chief Investment Officer at BMO Family Office, the core PCE still remains nearly double the Fed’s 2% target, prompting the Fed to consider the possibility of another interest rate hike. Callie Cox, U.S. Investment Strategist at eToro, highlighted the decline in services inflation, with prices rising by 4.9% from the previous year in August. This moderation in services inflation aligns with the Federal Reserve’s goals as they approach the end of rate hikes. Higher long-term yields have continued to exert pressure on stocks. On Friday, the yield on the 10-year Treasury note (BX:TMUBMUSD10Y) decreased by 2.4 basis points to 4.572%, although it remained near 16-year highs reached earlier in the week, according to Dow Jones Market Data. In other economic data released on Friday, the Bureau of Economic Analysis estimated that personal income increased by 0.4% in August, with consumer spending also up by 0.4%. There are signs of cooling consumer spending, particularly in the services sector, as per Northwestern Mutual’s Schutte. Investors also received updates from the Chicago Business Barometer, which registered at 44.1 in September, representing its first drop in three months. Meanwhile, the University of Michigan consumer-sentiment index showed sentiment improving slightly at the end of September, with the final reading rising to 68.1 from 67.7 earlier in the month. The University of Michigan data included a reading on inflation expectations, showing respondents expected inflation to decrease further to 3.2% in a year’s time. Some analysts attributed Friday’s fading stock-market gains to portfolio repositioning by funds as they prepared for the fourth quarter, which began the following Monday. The market has been characterized by a risk-off environment for much of September. Notable stocks in focus: John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com

Market News

? S&P 500 Alert: The Mother of All Trend Lines Unveiled

John Paul / September 29, 2023

Following what appears to be the most challenging month for stocks this year, some investors are closely analyzing a chart that signals an impending showdown for the S&P 500 SPX. This chart was shared by a stock market commentator on X, known as Heisenberg, who goes by the handle @Mr_Derivatives: The S&P 500 has experienced a 5.1% decline so far this month, following a 1.7% drop in August, which ended a streak of five consecutive months of gains. Rising bond yields and the possibility of higher interest rates in the coming year have significantly impacted high-performing tech stocks, leaving investors feeling apprehensive. Other contributing factors to this decline include surging oil prices and concerns about potential slowing consumer spending, particularly as student loan payment moratoriums conclude. October is historically known as the most volatile month of the year. Michael Kramer, the founder of Mott Capital Management, emphasized that the chart represents a “major trendline stemming from the October lows.” He pointed out that the Nasdaq Composite has already broken a significant uptrend, which is a bearish sign, coupled with the presence of a head-and-shoulders and diamond reversal pattern. The head-and-shoulders pattern often signals a shift from a bullish to a bearish market, while the diamond reversal pattern suggests a trend reversal following an extended period (learn more here). Kramer’s chart illustrates how these patterns have affected the Nasdaq Composite, which has fallen by 6.7% in September, making it the worst month of 2023: Kramer expressed skepticism about the next significant move for the S&P 500 off that trendline, stating, “If that breaks, we could see a sharp drop back to 4,100.” He also highlighted the climbing 30-year Treasury yield (BX:TMUBMUSD30Y) as a critical factor. “If 4.8% breaks, there is no resistance until 5.4%,” potentially leading to more significant stock declines, including the Nasdaq-100 index (NDX) dropping to around 13,300 from its current 14,580. See his chart for reference: Regarding the 10-year Treasury yield (BX:TMUBMUSD10Y), Kramer noted key resistance at 4.69%, with no significant resistance until it reaches 5.25%. He attributed the onset of market stress to changes in the Bank of Japan’s negative interest rate policy in July, allowing the 10-year JGB (BX:TMBMKJP-10Y) to rise to 1%. “This whole thing started after the July BOJ meeting,” he observed. Kramer also pointed out international developments, referring to it as a “global reset.” The U.K. 10-year gilt yield (BX:TMBMKGB-10Y) surged from a low of 3.08% to 4.5%. He added, “Additionally, I think the market is saying the Fed policy is not restrictive enough.” However, there might be a silver lining in the “mother of all trend lines” chart for the S&P 500, according to Adam Kobeissi from The Kobeissi Letter. He cautioned against assuming that if the trendline breaks, the entire market will collapse. Instead, he sees a different scenario. “If that trendline holds, we should prepare for the next significant upward move,” Kobeissi suggested. Nevertheless, he acknowledged that the near-term trend has been leaning downward, with the S&P 500 establishing lower lows and lower highs. In his analysis, the 4,200 level is crucial support for the index, as it aligns with the high from February 2023. Kobeissi believes that the technical indicators are showing signs of being oversold and anticipates “some sort of a bounce in the 4200-4250 range, which may have already started yesterday, leading into 4335. A rejection of that level would form a lower high and open the door for new lows, while breaking above that level opens the path to 4400. John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com

Market News

US Futures Take a Breather as Oil Rally Pauses

John Paul / September 28, 2023

Thursday saw Wall Street stocks struggling to gain ground, as they grappled with the prevailing market pessimism despite a pause in the oil rally. Investors were eagerly awaiting an update on the state of the US economic growth. Futures linked to the S&P 500 (^GSPC) and the Dow Jones Industrial Average (^DJI) faced challenges in making significant gains, hovering near the flatline. Meanwhile, futures tied to the tech-heavy Nasdaq 100 (^NDX) remained relatively unchanged. The Federal Reserve’s announcement that interest rates would remain elevated for an extended period had unsettled the markets. Nevertheless, stocks appeared to be stabilizing after enduring several days of sharp declines. In the realm of bonds, the rapid rise of the 10-year Treasury yield (^TNX) was showing signs of slowing down, although it still lingered around 4.63%, a level not seen in over 15 years. Both the stock and bond markets felt pressure due to the surge in oil prices, which had reached fresh 2023 highs on Wednesday and had surged by over 35% since the end of June. This surge was expected to drive up fuel costs, presenting a challenge to the Fed’s attempts to curb inflation, and subsequently affecting the likelihood of a rate reduction. On Thursday, oil prices retraced their steps, with West Texas Intermediate futures (CL=F) sliding to $93.50 per barrel after earlier reaching $95. Brent crude futures (BZ=F) were down by 0.5% at $96.09, having come close to $97. The central question remained whether the Fed could successfully orchestrate a “soft landing” for the economy, a subject of significant debate. Investors kept a close watch on updates regarding second-quarter GDP and jobless claims, scheduled for release later on Thursday. Additionally, the week’s data highlight was the forthcoming report on PCE inflation, the preferred gauge of the Fed, set to be released on Friday. However, some believed that it wouldn’t be persistent price increases but rather insatiable consumer spending and an overheated economy that would prompt central bankers to take action. In terms of individual stocks, Micron (MU) witnessed a nearly 5% decline during premarket trading following the chipmaker’s announcement of a wider-than-expected first-quarter loss. John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com

Market News

The Road to Recovery: 3 Indicators to Gauge Stock-Market Pain’s Departure

John Paul / September 27, 2023

Many investors are eagerly seeking signs of the stock market downtrend nearing its end, despite the S&P 500 only witnessing a 5.5% decrease since reaching its highest point in late July. Considering this, Victor Cossel from Seaport Research Partners has presented a few technical charts that could offer some understanding about when a possible reversal may happen. Nonetheless, the crucial idea is that, at present, there is an anticipation of encountering further challenges unless the ongoing rise in Treasury yields and the U.S. dollar ceases. At first, it is important for the proportion of Nasdaq 100 companies that are currently trading below their 200-day average to match the number of S&P 500 and Russell 2000 members that are also trading below their 200 DMAs. Analysts utilize moving averages to evaluate the speed and trajectory of a specific financial asset. Through analyzing these trends in the constituents of an index, analysts can ascertain the degree to which the performance of said index is dependent on a chosen few stocks. This trend has been especially prevalent in the U.S. stock markets over the year, largely attributable to the emergence of the renowned “Magnificent Seven.” The term “Magnificent Seven” is used to describe a group of prominent technology stocks that have seen substantial growth as a result of the increasing popularity of artificial intelligence. This group encompasses companies like Nvidia Corp., Microsoft Corp., Apple Inc., Meta Platforms Inc., Tesla Inc., Amazon.com Inc., and Alphabet Inc.’s Class A and Class C shares. According to the latest information from Cossell, which was current until the close of trading on Monday, 61% of Nasdaq 100 NDX members were above their 200-day moving averages. In comparison, the percentages were 45% for the S&P 500 SPX and 35% for the Russell 2000 IWM. However, these percentages may have altered slightly due to a notable drop in U.S. stock prices on Tuesday. If there is more pressure to sell, traders will closely monitor whether the S&P 500 can continue to stay at 4,200 points, a level that has served as a solid base for the large-cap index for a long time. If the stock market goes down to a level lower than 4,200, it may suggest negative outcomes for the future. Traders would perceive this decrease as a sign that the downwards trend is becoming more powerful. However, the excessive excitement and speculation in the market, which potentially impacted the Federal Reserve’s decision to signal consistent increases in interest rates, are slowly decreasing. One example of this can be seen when the information-technology section of the S&P 500 experienced a correction on Tuesday. It closed at 2,869.6, a decrease of 1.8% in value. This drop caused the index to decline by 10.5% from its highest point in the past year, which was 3,207.29. When a stock or index falls by 10% or more from its recent peak, it is categorized as being in correction territory. The interest rate plans revealed by the central bank after its September policy meeting have been widely cited as the main reason behind the recent changes in Treasury yields and the value of the dollar. The stock market may encounter difficulties if bond yields adjusted for inflation, known as real rates, continue to rise. This was illustrated by Cossel in a chart depicting the S&P 500’s valuation based on the future price-to-earnings ratio, which reveals a significant disparity compared to the current trading of 10-year real rates. In this particular situation, Cossel used the actual rate of interest, known as the 10-year nominal Treasury yield BX:TMUBMUSD10Y. However, this rate has been adjusted by considering the difference between the 10-year Treasury yield and the expected inflation rate, also known as the 10-year breakeven spread. Cossel indicated in the message that if rates do not go down, there is a chance that the S&P 500 could face some vulnerability while remaining at its present levels. The U.S. stock market faced notable declines on Tuesday, as the Dow Jones Industrial Average saw its biggest drop in a single day since March. Additionally, Treasury yields rose and the ICE U.S. Dollar Index reached its highest point in 10 months, indicating a stronger value for the U.S. dollar. Specifically, the ICE U.S. Dollar Index increased by 0.2% to 106.18, as mentioned. The Dow Jones Industrial Average fell by 338 points, indicating a 1.1% decrease to its present value of 33,618.88. In a similar vein, the S&P 500 index dropped by 63.91 points, or 1.5%, reaching 4,273.53. Likewise, the Nasdaq Composite index experienced a decrease of 207.71 points, reflecting a 1.6% decline, resulting in a new level of 13,063.61. John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com