Equites struggled to find direction even as bond yields dopped and dovish remarks from Fed Governor Christopher Waller.
The inverse of many trading sessions of the prior years, the averages languished even as the typical company rose as a slide in the tech mega caps negatively impacted the benchmarks. Solid earnings from a pair mega cap banks could not buoy the popular indices.
Could this be the start of a 2025 narrative? Bloomberg writes this is the fourth consecutive day when the advanced decline line of the S & P 500 was greater than 200 [yesterday there were 269 more advances than decliners].
Bloomberg further writes that this has only occurred 12 times since 2009. The maximum streak since this period has been five days.
The Magnificent Seven has underperformed since mid-December. A major test arrives on January 29 when MSFT, TSLA and META kick off big tech earnings season.
As stated, Treasury yields declined nominally as Waller stated that officials “could lower rate again in the first half of 2025 if inflation data continued to be favorable.” Markets are suggesting a 31% chance the overnight rate will decline by July.
Trading is expected to wane throughout the day as all markets are closed Monday for the MLK holiday.
Last night the foreign markets were up. London was up 1.36%, Paris up 1.07% and Frankfurt up 0.96%. China was up 0.18%, Japan down 0.31% and Hang Seng up 0.31%
Futures are up about 0.3% on monetary policy optimism. The 10-year is up 9/32 to yield 4.58%.
Kent Engelke
Chief Economic Strategist Managing Director
The views expressed herein are those of Kent Engelke and do not necessarily reflect those of Capitol Securities Management. Any opinions expressed are statements of judgment on this date and are subject to certain risks and uncertainties which could cause actual results to differ materially from those currently anticipated or projected. Any future dividends, interest, yields and event dates listed may be subject to change. An investor cannot invest in an index, and its returns are not indicative of the performance of any specific investment. Past performance is not indicative of future results. This material is being provided for informational purposes only. Any information should not be deemed a recommendation to buy, hold or sell any security. Certain information has been obtained from third-party sources we consider reliable, but we do not guarantee that such information is accurate or complete. This report is not a complete description of the securities, markets, or developments referred to in this material and does not include all available data necessary for making an investment decision. Prior to making an investment decision, please consult with your financial advisor about your individual situation. Investing involves risk and you may incur a profit or loss regardless of strategy selected. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. If you would like to unsubscribe from this e-mail distribution, please reply to this e-mail and indicate that you wish to unsubscribe in your response.
