Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. It is Monday, Sept. 16. The Bottom Line segment of today’s podcast starts at (1:52) and Stocks on the Contrarian Radar©️ at (3:29) for listeners who want to skip ahead.
State of Play
As we eye our board of indicators for signs of direction at 0650 there is not an awful lot to go on:
Stock index futures are quiet with the exception of small caps, which are moving higher. The Russell 2000 is up 0.6%;
Commodities aren’t doing much. WTI crude oil is up 0.5% to trade around $68/barrel with copper up 0.3%;
Cryptos are dropping a bit. Bitcoin is down 2% to trade around $58,700;
Bonds aren’t doing anything. The 2-year yields 3.57% whilst the 10-year yields 3.65%. Yield curve uninversion appears to be sticking this time.
Today’s Known Events
The NY Empire State Manufacturing Index is out at 0830. Economists who were surveyed expect a decline of 4.1, a marginal improvement on last month’s -4.7.
There’s nothing else of interest on the calendar today.
The Bottom Line
It’s all gearing up for the FOMC interest rate decision on Wednesday. The Fed is widely expected to cut for the first time in years. The only question is by how much. Right now Fed fund futures are pretty much evenly split on whether it will be 25bps or 50bps that are chopped off the Fed’s key policy rate.
We won’t know that until Wednesday afternoon. Plenty of time to obsess over it.
Stocks on the Contrarian Radar©️
Intel (INTC 0.00%↑) is up overnight after a report the company signed a $3.5 billion deal as a military contractor. Intel shares clearly needed the boost, as the stock chart illustrates:
We’ve spoken before about the clustering of AI chipmakers, almost all of which simply track Nvidia (NVDA 0.00%↑). Intel was a notable exception. Maybe this means it can rejoin the herd. Last week was a good one for these names. Take the rest of our Big 7: AMD (AMD 0.00%↑), Broadcom (AVGO 0.00%↑), Marvell (MRVL 0.00%↑), Qualcomm ( QCOM 0.00%↑), and Taiwan Semiconductor (TSM 0.00%↑):
You can see that all seven are up multiple percent over the last five trading days, with AVGO leading the charge. That is a shift from the usual NVDA-driven behavior, but is due to Broadcom reporting earnings more recently.
Anyway, this is all good news for these AI chip stocks and the tech sector more generally. The only question is if this is a sign of more upside ahead or just a dead-cat bounce?
Housekeeping
Obviously this is not investment advice (duh). Do your own research, make your own decisions.
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