Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. It is Wednesday, Sept. 11. The Bottom Line segment of today’s podcast starts at (3:25) and Stocks on the Contrarian Radar©️ at (5:36) for listeners who want to skip ahead.
State of Play
As we eye our board of indicators for signs of direction at 0655, the outlook would appear to be mixed:
Stock index futures are pointing to a lower open, led by small caps. The Russell 2000 is down 0.4% with S&P 500 and Nasdaq futures down 0.2% each;
Commodities are rebounding. Copper futures are up more than 1%. WTI crude oil is up 2% to trade around $67/barrel;
Bonds are seeing a few bids after rallying yesterday. The 2-year yield is down 2 basis points to 3.59% whilst the 10-year is down 2bps to 3.63% (yields move inversely to prices);
Cryptos aren’t doing anything. Bitcoin is changing hands around $56,500.
Today’s Known Events
The Consumer Price Index, or CPI, is out at 0830. The inflation battle has all but been declared over, with the Fed victorious. But inflation still needs to come down a bit.
Economists who were surveyed expect the headline CPI to come in at 0.2% month-over-month, the same as last month, which would drop annualized headline CPI to 2.6% from 2.9%.
Core CPI, which excludes food and energy, is also expected to print at 0.2% MoM, also the same as last month, which would leave annualized Core CPI at 3.2%.
The Bottom Line
CPI is not the must-see TV it was a few short months ago but it can still move markets. If it comes in hotter than anticipated it will potentially give the Fed less leeway to cut rates as aggressively as it might like. Of course the Fed can just declare that it’s a seasonal outlier and then do what it wants, but that’s the theory at least.
S&P and Nasdaq are quietly up two days in a row, so maybe this is the start of something:
Stocks on the Contrarian Radar©️
Trump Media & Technology (DJT 0.00%↑), probably the closest thing to a proxy on the election, is down 15% overnight. What this tells you about the market’s opinion of Donald Trump’s chances of winning the election after last night’s debate is obvious:
As you can see this has Trump’s chances at their lowest level in a month. All political opinions aside, maybe a buying opportunity? Trump has shown himself to be pretty resilient and often bounces back in the polls.
Of course there are other issues with DJT stock, including the very real chances of shareholder dilution, that make this kind of uninvestable over the long term. But as a proxy on the election?
Housekeeping
Obviously this is not investment advice (duh). Do your own research, make your own decisions.
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