Focus Shifts to Fed, However Temporarily

Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. It is Thursday, Nov. 7. The Bottom Line segment of today’s podcast starts at (5:18) followed by Stocks On The Contrarian Radar©️ feat dollar stores DG 0.00%↑ and DLTR 0.00%↑ for listeners who want to skip ahead.

State of Play

Stocks and risk assets rallied in a major way yesterday after Donald Trump’s victory in the presidential election became reality. Major indexes closed at fresh record highs. As we eye our board of indicators for signs of direction at 0545, things are pretty quiet:

• Stock index futures are pointing to gains led by small caps again. The Russell 2000 is up 0.5%. Nasdaq and S&P 500 are right behind;

• Commodities are mixed. Copper is rebounding in a major way, up 2.5% but WTI crude oil is down 0.8% to trade around $71/barrel;

• Cryptos have resumed their ascent, with Bitcoin moving up 1% to trade close to $75,000 again. BTC was briefly above $76,000 yesterday;

• Bonds appear to have stabilized after yesterday’s rout. The 2-year yields 4.25% with the 10-year yield sitting on 4.43%

Today’s Known Events

It’s Fed Day. The US Federal Reserve concludes its two-day meeting with an announcement on interest rate policy at 1400 and ensuing press conference with Fed Chair Jerome Powell.

As previously discussed on this program, the Fed is widely expected to cut its key policy rate by 25bps. This means the focus will be on the language of the policy statement and anything Powell reveals in his presser. The next FOMC meeting is on Dec. 17-18 and Fed fund futures are pricing in another 25bps rate cut at this point. You’re going to want to keep an eye on that.

A couple of earnings to tell you about. This morning’s highlights include industrial conglomerate Haliburton (HAL 0.00%↑), media entertainment company Warner Bros Discovery (WBD 0.00%↑), chocolatier Hershey (HSY 0.00%↑), Papa John’s (PZZA 0.00%↑), and luxury goods merchant Tapestry (TPR 0.00%↑), all due to report before the open at 0930.

After the close at 1600 we’ll hear from DraftKings (DKNG 0.00%↑), Arista Networks (ANET 0.00%↑), Square (SQ 0.00%↑), and Rivian (RIVN 0.00%↑).