Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets in the day ahead. Today is Tuesday, Sept. 12.
State of Play
Stocks rallied yesterday led by tech, with the Nasdaq gaining 1.1%. One driving force was Tesla (TSLA 0.00%↑), which gained 10% on an upgrade from Morgan Stanley. As of 0640 it looks like we’re due to give some of that back:
Stock index futures are pointing lower, with S&P and Nasdaq down 0.2% each;
Commodities aren’t doing much. Copper is unchanged and WTI crude oil is up 0.8% to trade around $88/barrel;
Bonds are unchanged. The 2-year yield is 4.99% whilst the 10-year is 4.28%.
Known Events
It’s another slow day in terms of economic data. No events with economist estimates. Nor do we have any earnings of interest.
But we do get Apple’s (AAPL 0.00%↑) ‘Wonderlust’ iPhone event, which kicks of at 1300. Apple’s stock has been treading water heading into this event. The question is what the company can produce to impress Wall Street and get investors to buy its stock again. We’ll surely get a new iPhone, the 15th, which presumably will have USB-C charging. Other than that, details are scant. That usually means there won’t be much to excite Wall Street because if there were something really groundbreaking, the details would have leaked out long ago.
The Bottom Line©️
Apple and Tesla are nice distractions and show us that the bull market for tech does have legs. The analysts pumping these (and other) stocks may be clueless, but the fact that investors use this to bid up something like Tesla tells us there is still a lot of risk appetite looking for a home. You could also point to the popularity of 24-hour options as further evidence of this.
The focus will return to the Fed and inflation tomorrow with the CPI report. Economists aren’t actually expecting much improvement in the monthly figures, with the headline figure expected to creep up to 0.6% MoM from 0.2% last month. But we’ll get into that tomorrow.
Housekeeping
Obviously this is not investment advice (duh). Do your own research, make your own decisions.
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Apple 'Wonderlust', Tesla, and Risk Appetite