Financial News vs. Noise
Supercharged Tesla and Nvidia bets sold through single-stock ETFs-Financial Times
As we enter a new month we start the big data points for the week—FOMC, AAPL earnings, NFP, and the Treasury refunding.
Treasury refunding is out at 8:30. This is from Citi: Citi US Rates Strategy thinks the Treasury doesn’t have much choice other than to increase coupon issuance substantially and shifting more supply to T-bills is simply not a viable alternative. An announcement tilting more to bonds vs. bills is incrementally negative for equity markets given recent higher yields and steeper term structure, although Monday's announcement of a smaller than expected $776bn borrowing estimate may help a bit.
FOMC is 2pm, nobody expects a rate hike so again it is going to come down to the press conference. Is the Fed done, or do we get more?
AAPL earnings are tomorrow after the close. Options are currently implying a 3.8% move.
NFP is Friday at 8:30. Consensus is 180K. Is good news good news? Or is it bad news? We will find out.
As I have said the past couple of days I am leaning to the long side, not because I’m a bull, but because markets are oversold and there is nothing left in optimal short sale position. I also think the Fed will signal that they are basically done tomorrow and that will mean something. That being said I am sitting on a ton of cash waiting to see what today’s events portend. My leaning is long, but that will change on a dime if the news of the day turns out bearish. Here’s what I am watching:
TLT-Sold my long ahead of QRA and will be watching the 10 day for another long entry. Don’t think I would short it down here.
4. ANF- 5 cents above it’s 10 day, a drop below would trigger a short.
5. Precious metals stocks sold off hard on a strong Dollar, but AU had an undercut and rally at it’s 50 day. That puts it in long entry position with the 50 day as a tight stop.
6. If we get some relief in rates I have to think that filters down to the regional banks. Nothing looks any better than KRE which closed right above it’s 10 day. I am in no way bullish on the regionals, and have an inverse regional ETF that should be out in mid to late November, but they are due for a bounce.
OXY continues to hold it’s 200 day after an undercut and rally yesterday. This could have been buyable with the 200 day as a tight stop.
A few other names catching my eye from the long side: OSTK, ORCL, FCX, ROKU, UPST
If I do need to pivot to the short side some interesting names are ADBE, COF
News vs. Noise
This is the latest from Nickileaks, second paragraph caught my eye, perhaps the Fed is not done? Fed Officials Debate Whether They Have Raised Rates Enough-WSJ.
Officials, whose two-day policy meeting concludes Wednesday, could raise rates again in December or next year if the economy doesn’t cool as they expect and inflation picks up again after slowing since June.
Reminds me of two of my favorite sayings: “Trade the market you have, not the market you want” and “Trade based on what you see, not based on what you think”. Do those two things and no market is confusing. What Makes This Market Correction So Confusing Even if recession is on the way, it is a poor explanation for the stock market’s slide-WSJ
Because maybe it isn’t. Maybe the numbers we are seeing are not reflecting what’s going on in the real world. The Economy Is Great. Why Are Americans in Such a Rotten Mood?-WSJ
The elephant in the room. Opinion: The Fed must push the economy into recession or inflation won’t get back to 2%-MarketWatch
Or have we been in a bear market the whole time masked by the Magnificent 7? Has the S&P 500’s recent correction triggered a new bear market?-MarketWatch
Forget history, anything in markets is always possible. Why a 7% 10-year Treasury yield is still possible-MarketWatch
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