In his Daily Market Notes report to investors, Louis Navellier wrote:
With earnings season in the rearview mirror, and the Fed quiet for the time being, we’re back to focusing on interest rate movements and general economic data to get indications on the likelihood of a soft landing. While earnings season had a lot of “beats” they were mostly drops y-o-y, with the rationale that 2Q23 was the low for earnings, with strong growth still projected in the quarters ahead to support the relatively high P/E multiples.
This morning, stocks popped as interest rates fell on a surprisingly light JOLTS job opening number. Long yields fell 6bps on the news, on hopes that signs of weakness will temper the chance of a Fed rise in September. After a hesitation, the 2yr dropped 10bps to 4.90% and really got stocks moving.
The US Redbook Rises
Today also saw the US Redbook rise to the highest since February, after spending July in the negative zone, a positive sign of consumer spending which has been under a cloud during earnings season. Other data showed the rise in the House Price Index, a bit surprising given the high mortgage rates, and may act to keep upward pressure on rental rates, a very large component of CPI.
As stocks moved up in the first hour of trading, tech is leading again, the QQQ and NASDAQ well ahead of the S&P and Dow with the Magnificent Seven mega techs, rebounding nicely. NVIDIA Corp (NASDAQ:NVDA) has finally gotten legs; after opening down $3 it has swung to up +$15, taking the semiconductor group along for the ride.
The VIX continues to fall as it has since mid-month. International stocks are having a good day, importantly China, with the Hang Seng up almost 2%, coming off its low for the year this week, though still down 8.25% YTD.
Stocks are staging a very nice rebound off the August lows and give hope that the weak seasonality of late summer won’t be repeated in September.
Coffee Beans: Dream Come True?
Six decades after Martin Luther King Jr. delivered the world-changing “I have a dream” speech, 52% of Americans said they thought either a “fair amount” or a “great deal” of progress has been made towards racial equality in the U.S. in the time that lapsed, a third said that there has been “some progress” and 15% said that there has been either “not much” or none at all. Source: Statista. See the full story here.