Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets in the day ahead. Today is Monday, Jan. 8, 2024. The Bottom Line segment of today’s podcast starts at (3:33) for listeners who want to skip ahead.
State of Play
Congressional leaders yesterday announced a deal on spending limits, which would appear to be some progress toward avoiding a government shutdown ahead of the Jan. 19 deadline. This does not appear to have had an impact on markets, as we look at our board of indicators at 0645, sentiment appears to be tilted toward negative:
Stock index futures are pointing to a lower open with Dow Industrials leading the drop for a change. The Dow is down 0.4%, same as the Russell 2000 (-0.4%) with S&P 500 and Nasdaq both down 0.1%;
Commodities are a sea of red, with WTI crude oil down almost 3% to trade around $71.80/barrel. Copper is down 0.2% but precious metals are selling off as well with gold, silver, and platinum all down more than 1%;
Bonds are unchanged. The 2-year yield is 4.38% whilst the 10-year yields 4.03%.
Known Events
It’s a pretty big week with the start of fourth-quarter earnings and the latest inflation numbers on Thursday. Until then there isn’t much on the calendar though.
For today the main event is probably a speech by Atlanta Fed President Raphael Bostic at 1230. Bostic is a full-fledged FOMC voting member this year so it’s worth paying attention to his remarks.
There are some earnings to tell you about, with Jefferies Group (JEF 0.00%↑) reporting after the close this afternoon. This is a small investment bank that could nevertheless shed some light on the state of loan markets and consumer and business health in the US.
The Bottom Line©️
Kind of hard to see where a bullish catalyst will come from today. You may want to keep an eye on Bostic’s speech, especially as it affects the bond market. The Wall Street Journal reports investors doubling down on bonds after we had a reversal on Friday. But the bond market is still quite a bit lower this year. We discussed possible reasons for this last week so no need to rehash that now.
Where that leaves stocks is still in a bit of limbo. We haven’t had much buying so far this year, but then we haven’t really had all that much selling either. Earnings season should change that, but that doesn’t really kick off until late in the week. Maybe we’ll be in a holding pattern for a couple of days then? Famous last words…
Housekeeping
Obviously this is not investment advice (duh). Do your own research, make your own decisions.
This Substack chat tracks The Contrarian’s trades in (almost) real time. The full portfolio is available upon request.
If this daily thing is drowning your inbox and/or you CBF to bother with it and prefer to just get the guest feature or actionable highlights — you can control these settings on your account page.
Please take the listener survey! It’s like, five questions and should only take a few minutes of your time. You can win free merchandise. A lucky respondent will be selected each month to receive a classic crew-neck T-shirt.
Earnings Season