A daily market update from FS Insight — what you need to know ahead of opening bell
“Finishing races is important, but racing is more important.” ― Dale Earnhardt
Over the Weekend
Israel and Hezbollah creep closer to all-out war EC
House Speaker Johnson axes Trump voting restrictions in new government-funding bill CNBC
Biden: Quad security alliance ‘here to stay’ as US seeks to counter China SEM
Futures steady with focus on Fed speakers, economic data RT
Apollo to offer multibillion-dollar investment in Intel amid reports of Qualcomm offer RT
US and Taiwan seek to strengthen drone supply chain to keep out China FT
US to propose ban on Chinese software, hardware in connected vehicles, sources say RT
Canada opens new critical-minerals hub in push to end China’s dominance FT
Macron unveils new right-wing French government BBC
UniCredit lifts stake in Commerzbank to 21% FT
Big UK investors poised to buy the dip in US property RT
Look out for hungry unicorns: Fed’s rate cut could fuel acquisition spree by mature software startups WSJ
New Catalyst targets $750 million debut fund to back new managers WSJ
Elon Musk backs down, complies with Brazilian court’s legal demands for X FT
GM to lay off about 1,700 workers at Kansas plant RT
Binance CEO invests in compliance to move on from past mistakes WSJ
SpaceX plans to send five uncrewed Starships to Mars in two years, Musk says RT
Section 230 catches up to AI WSJ
As AI matures, chip industry will look beyond GPUs, AMD chief says WSJ
Chip giants TSMC and Samsung discuss building Middle Eastern megafactories WSJ
Behind Microsoft’s AI power deal WSJ
Tourists can finally visit the Oval Office – or at least a replica near the White House, opening today AP
Chart of the Day
| Overnight |
| S&P Futures +5
point(s) (+0.1%
) Overnight range: -17 to +20 point(s) |
| APAC |
| Nikkei flat Topix flat China SHCOMP +0.44% Hang Seng -0.06% Korea +0.33% Singapore +0.38% Australia -0.69% India +0.58% Taiwan +0.57% |
| Europe |
| Stoxx 50 -0.0%
Stoxx 600 +0.11% FTSE 100 +0.02% DAX +0.3% CAC 40 -0.36% Italy -0.2% IBEX -0.1% |
| FX |
| Dollar Index (DXY) +0.34%
to 101.06 EUR/USD -0.48% to 1.1108 GBP/USD -0.25% to 1.3288 USD/JPY -0.17% to 143.61 USD/CNY +0.16% to 7.0583 USD/CNH +0.29% to 7.0628 USD/CHF +0.06% to 0.8505 USD/CAD -0.05% to 1.3562 AUD/USD +0.15% to 0.6817 |
| Crypto |
| BTC +0.65%
to 63623.07 ETH +3.29% to 2658.01 XRP -0.41% to 0.588 Cardano +1.14% to 0.3542 Solana +0.13% to 144.78 Avalanche +0.66% to 27.48 Dogecoin +0.56% to 0.1071 Chainlink +3.7% to 11.46 |
| Commodities and Others |
| VIX +2.54%
to 16.56 WTI Crude -1.0% to 71.2 Brent Crude +0.23% to 74.66 Nat Gas +1.81% to 2.48 RBOB Gas +0.06% to 2.038 Heating Oil +0.54% to 2.173 Gold -0.03% to 2621.04 Silver -1.96% to 30.57 Copper flat at 4.281 |
| US Treasuries |
| 1M -1.1bps
to 4.7266% 3M -1.1bps to 4.6432% 6M -3.5bps to 4.4248% 12M -3.0bps to 3.9052% 2Y -3.0bps to 3.5613% 5Y -1.0bps to 3.4873% 7Y -0.5bps to 3.6059% 10Y -0.2bps to 3.7394% 20Y +0.6bps to 4.1305% 30Y +0.8bps to 4.0913% |
| UST Term Structure |
| 2Y-3
M Spread narrowed 3.7bps to -111.8
bps 10Y-2 Y Spread widened 2.8bps to 17.4 bps 30Y-10 Y Spread widened 1.0bps to 35.0 bps |
| Yesterday's Recap |
| SPX -0.19%
SPX Eq Wt -0.36% NASDAQ 100 -0.24% NASDAQ Comp -0.36% Russell Midcap -0.48% R2k -1.1% R1k Value -0.26% R1k Growth -0.16% R2k Value -1.53% R2k Growth -0.68% FANG+ -0.46% Semis -1.32% Software +0.01% Biotech -0.8% Regional Banks -2.02% SPX GICS1 Sorted: Utes +2.69% Comm Srvcs +0.45% Cons Staples +0.42% Cons Disc -0.01% REITs -0.16% SPX -0.19% Fin -0.29% Energy -0.33% Healthcare -0.34% Tech -0.5% Materials -0.64% Indu -0.69% |
| USD HY OaS |
| All Sectors +2.5bp
to 361bp All Sectors ex-Energy +1.8bp to 335bp Cons Disc +1.5bp to 318bp Indu +2.4bp to 261bp Tech +4.1bp to 351bp Comm Srvcs +3.8bp to 587bp Materials +0.9bp to 347bp Energy +5.8bp to 326bp Fin Snr +1.9bp to 321bp Fin Sub -2.3bp to 232bp Cons Staples +4.0bp to 324bp Healthcare +2.2bp to 381bp Utes -0.1bp to 227bp * |
| Date | Time | Description | Estimate | Last |
|---|---|---|---|---|
| 9/23 | 9:45AM | Sep P S&P Manu PMI | 48.6 | 47.9 |
| 9/23 | 9:45AM | Sep P S&P Srvcs PMI | 55.2 | 55.7 |
| 9/24 | 10AM | Sep Conf Board Sentiment | 104.0 | 103.3 |
| 9/25 | 10AM | Aug New Home Sales | 700.0 | 739.0 |
| 9/25 | 10AM | Aug New Home Sales m/m | -5.3 | 10.6 |
| 9/26 | 8:30AM | 2Q T GDP QoQ | 2.9 | 3.0 |
| 9/26 | 8:30AM | Aug P Durable Gds Orders | -2.8 | 9.8 |
| 9/27 | 8:30AM | Aug PCE m/m | 0.1 | 0.2 |
| 9/27 | 8:30AM | Aug Core PCE m/m | 0.2 | 0.16 |
| 9/27 | 8:30AM | Aug PCE y/y | 2.3 | 2.5 |
| 9/27 | 8:30AM | Aug Core PCE y/y | 2.7 | 2.62042 |
| 9/27 | 10AM | Sep F UMich 1yr Inf Exp | n/a | 2.7 |
| 9/27 | 10AM | Sep F UMich Sentiment | 69.3 | 69.0 |
MORNING INSIGHT
Good morning!
With the Fed “recalibration” under way, the obvious question is what groups are most levered to a Fed easing cycle. Many pundits point to history and note that, in an easing cycle, defensive stocks lead, and thus, investors need to avoid small-caps. However as our clients know, our research has continuously pointed to small-caps as being most positively levered to an easing cycle; as we saw, small-caps outperformed last week.
Click HERE for more.
TECHNICAL
- Short-term bullish trend looks to be back on track after pushing to record highs.
- Gold’s daily cycle composite argues for continued gains into October.
- Natural gas breakout should help UNG bounce to near $17 into next month.
Click HERE for more.
CRYPTO
The last key macro risk for crypto markets this week was Friday’s Bank of Japan (BOJ) meeting, with concerns about potential rate hikes or hawkish commentary. However, the BOJ held rates steady, reaffirming its stance not to raise rates in unstable market conditions. Crypto markets surged in response.
Click HERE for more.
First News
Trafiguring It Out. Trafigura, one of the world’s commodity-trading heavies, is reportedly set to name just the third CEO in its history. Richard Holtum, a former captain in the British Army’s historically prestigious Royal Scots Dragoon Guards, joined Trafigura a decade ago and rose rapidly from junior trader to head of the firm’s natural gas program. Holtum would take leadership of Trafigura just before the company and its former COO stand trial in Switzerland for allegedly bribing officials in Angola, and roughly half a year after the firm pleaded guilty to U.S. bribery charges related to its business in Brazil. Trafigura also faces what is likely to be a hefty bill from the share buybacks it typically uses as part of its employee compensation scheme, amid declining profits.
Trafigura is not the only powerhouse about to put new leadership in place. Last week, Nike announced that Elliott Hill would become the company’s next CEO on October 13, replacing retiring CEO John Donohoe. The sportswear giant has struggled recently: its decision to shift more of its sales away from third-party retailers to a direct-to-consumer model (both online and its own bricks-and-mortar stores) has not gone according to plan. Nike has also been hurt by fierce, new competition from newcomers Hoka and On. Hill will come out of retirement after an entire career spent at Nike, starting as a junior intern in 1988. He has worked in a broad range of roles throughout Nike around the world, including heading up commercial and marketing operations for the Nike and Jordan brands. (BBG, CNBC, WSJ)
Um, Ho Ho Ho? Last week, we saw the release of August retail sales data (which came in stronger than expected). Sounds like the right time to talk about the winter holidays, right? Major retailers certainly think so. Target, Walmart, Best Buy, and Amazon have all announced holiday sales to start in early October.
Fed Chair Jerome Powell told us after last week’s FOMC that the employment market and the economy remain healthy, and the recent rate cut is expected to lower the cost of consumer debt (credit cards, auto loans, and even installment debt, for example). Nevertheless, with many economists noting signs of consumer strain, sales forecasts for this year’s holiday retail season are subdued. Bain, Mastercard, and Deloitte have issued forecasts of between 2.3% and 3.2% growth, lower than the 3.9% growth we saw in 2023.
Macy’s has announced plans to hire 31,500 seasonal workers for the winter holidays, down from the 38,000 it hired in 2023. Target and Walmart both said their 2024 seasonal-hiring plans are comparable to last year’s. (BAR, RIN, RT)
