Daily Market Wisdom with Nick Santiago

1. Hot CPI number. This was a very hot CPI number released earlier today. Total CPI was up 9.1%, versus 8.6% in May, and core CPI was up 5.9%, versus 6.0% in May. This was the fastest rate of increase since 1981. Now this number is from June and since that time many commodities have sold off and corrected. Remember, the markets are forward looking.   2. Earnings Season Start Tomorrow. JP Morgan Ch...

1. This is a big week for markets. Wednesday will be the release of the CPI report. This last time this report came out it led to new 52-week lows for markets. Earnings season also begins this week with $JPM $MS  & $TSM scheduled to report later this week. It's also options ex for July on Friday. As you know, there will be a lot of institutional game playing all week into the expiration. Traders s...

1. The markets are stalling out a little today. This is common action after a huge rally like we saw this past Friday. Often after a big run the markets will need to take a breather. Remember, nothing goes up in a straight line.  2. Energy (XLE, XOP, OIH) seems to be the strongest industry group today. This sector was hit hard recently and could still correct further. It looks like a bounce from a...

1. Inverted yield curve between 2's and 10's. This morning, the 2-year note yield is 2.845% and the 10-year note yield is 2.824%. When the short term bond yield is high that the long term bond yield that is what we call an inverted yield curve. It almost always signals a recession and that could be what it is telling us now.  2. Tech (QQQ) staged a solid rally yesterday despite having a sharp gap...

1. Earlier today, the real GDP reportedly decreased at a 1.6% annual rate in the first quarter. This was expected so there were no surprises here. For me, I do not care so much about any of these numbers, I care about the stock market's reaction. Yesterday, the markets had a sharp decline after a one week rally and today they are bouncing a bit after a weak start to the session. Several central ba...

1. Big market rally so far today. It's a broad based move and it's being led by the transports. The transports have been a recent laggard and that is positive near term to see them acting well.  2. Fedex (FDX) reported earnings and the stock is acting well today trading higher by 7.0%. When the transports show leadership it helps everything out.    3. Homebuilder stocks are also strong today. This...

1. Markets are holding firm after a strong gap lower open. Yesterday, the major indexes staged a solid broad based rally. We shall see if they can keep it going into the close today. Often after a big rally we see a more subdued market so that is likely today.  2. Fed Chairman Jay Powell is testifying in front of the Senate Banking Committee. This used to be called the semi-annual Humprey Hawkings...

1. Stocks are rallying after having a very rough time last week. Today is the summer solstice, which is the 1st day of summer. As the seasons change on the solstices and equinoxes we will often see the trend in stocks change around solstices and equinoxes as well. While the primary trend is still down, a counter-trend bounce is underway today.  The rally is broad based and looks good so far. As al...

1 Options Quad Witch everything is down. Wild action. When we get to 3pm, if you’re trading beware. Wild whipsaw at the end of the day. 2. Energy Sell off today. Typical Options Ex move. The high movers get hit and retailers are getting some pops. Oil down 5% and natgas down 4%. 3. Gold and Silver both down. A minor hit. Majors are getting hit. Typical. 4. Bitcoin down. Getting close to that Decem...

It's Fed Day. This is probably one of the most highly anticipated FOMC announcements ever. The central bank is expected to raise rates by 75 basis points today. Up until a few days ago the Federal Reserve bank was scheduled to just raise rates by 50 basis points, but that changed after the hot CPI number last week. Either way, the Fed still has a long way to go as they need to catch up to the 2-ye...

1. Ugly Monday... The decline in the markets is continuing this morning. The S&P 5000 Index is now testing the May 20th lows. Yields are the real story as the 5-year note is inverting against the 30 year note. Yields on the 2's and 10's are also close to inverting. This is one of the main reasons for the decline since Thursday afternoon. Today's decline is broad based and nothing including energy...

1. The CPI report was released earlier today rising to 8.6% in May. This is the highest increase since December 1981. This number was also above expectations and the markets are reacting with a sharp sell-off.  Dow down 700+ points Next week, the Federal Reserve will make their interest rate policy decision. They are expected to raise the fed funds rate by 50 basis points. This news is already bak...

1. Markets are once again chopping around like a ship in the middle of a storm. This type of action does not look to be ending anytime soon, so make sure you take your Dramamine.  Everyone is now looking forward to the Friday CPI number to get a gauge on inflation. As we all know, inflation remains high.  2. Oil is trading around $120.00 a barrel and nat gas is now nearing $9.50. Honestly, the Uni...

1. Elon Musk is pressing Twitter (TWTR) again today.  Musk is requesting certain data and information to facilitate his evaluation of spam and fake accounts. It sounds like this deal is really in trouble, especially if Twitter is not going to cooperate. 2. Markets are rallying higher today to start the session. This rally comes after a sharp Friday sell-off. So far, the rally is being led by the t...

1. Volatile markets remain intact. Nearly every trading day is a roller-coaster ride. traders and investors have to be very nimble at this stage of the game.  2. The FOMC minutes will be released at 2pm ET. Remember, these are not a true transcript of the last Fed meeting. They are a brief outline of what the central bank wants to get across to you. Over the past few days. Many talking heads on TV...

1. Options expiration Friday was one big roller-coaster trading session. By the closing bell stock had reversed a sell-off to new highs and actually finished flat on the day. Today, the markets are seeing some follow through buying to start the day. Either way, nobody is really trusting any rally at this stage of the game. Traders must be very selective on both the long and short side atthis time....

1. Markets are under pressure to start the day. This dip comes as Target (TGT) reported earnings that were impressing Wall Street. Today, Target stock is trading lower by 25%. This is the biggest one day decline that I can remember in the stock. Today's news from Target echoed Walmarts (WMT) report yesterday. The bottom line, inflation and supply shortages are hurting earnings. This news is really...

1. The major stock indexes rallied higher this past Friday and held the gains into the close. This Is a change in character as the past 5 Friday's have been negative and often big declines. The major stock indexes are starting out a little weak today, but nothing horrible is taking place. Often after a big rally session the next day is more subdued. This Is actually normal and that is saying a lot...

1. The Senate is finalizing the $1 trillion infrastructure bill. This could be voted on later this week. This bill still has to get through the House of Representatives, so it could be a while before anything final takes place. Either way, the markets love debt and easy money.  2. The semiconductors ($SMH) stocks are strong again today. As long as this industry group holds up there is usually noth...

1. Earlier today, the CPI report was released.  From CNBC: The consumer price index accelerated 8.3% in April, more than the 8.1% estimate and near the highest level in more than 40 years. Core CPI, which excludes food and energy, also was higher than expected, rising 6.2%. Shelter costs, which comprise about one-third of the CPI, rose at their fastest pace since 1991. Inflation-adjusted earnings...

1. The stock market is under pressure again this morning. The S&P 500 is now testing its 100-week moving average and the psychological 4000 level is in sight. This is a very oversold market right now with a lot of bearish sentiment, but that doesn't seem to matter right now. If there is one word of advice. markets do not fall in a straight line.  There will be bounces.  At this time, inflation in...

1. Markets are basically flat today to start the week. Believe it or not, that is a positive after the Friday bloodbath decline that we saw late last week. Often if there is a big Friday decline the following Monday could be a panic. That is not the case today, at least not yet.  2. Yields on the 10-year note are at new highs today. They are currently at 2.979% testing that psychological 3% level....

1. Markets just can't get any follow through after a rally session. Monday was a strong rally only to be met with selling on Tuesday and Wednesday. Yesterday, markets surged only to be met with selling pressure today.  2. Last night, Apple (AAPL) and Amazon (AMZN) both reported earnings and they are both trading lower today. Amazon is obviously the big lower falling by 13% to $2500/share. That was...

Will April Market Showers Bring May Market Flowers — Nick Santiago 4-27-22 #385 1. Market volatility is very high right now. This past Monday the major indexes staged a decent rally on volume, but yesterday the move was eclipsed as markets went back down. There is a lot of fear out here now.  Obviously, geopolitical events are not going away anytime soon. The next Fed meeting is next week and many...

1. Markets Under Pressure.  Last week, the market stock indexes staged a sharp downturn on Thursday after Fed Chairman Jay Powell reiterated his hawkish stance. He basically said that the central bank was looking to raise by 50 basis points in early May. He also said that they would front load rate hikes to fight inflation. This caused a major downside reversal and the major indexes have been down...