Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets in the day ahead. Today is Tuesday, Jan. 16, 2024. The Bottom Line segment of today’s podcast starts at (3:05) for listeners who want to skip ahead.
State of Play
It’s a holiday-shortened week with just four trading days. As we look at our board of indicators at 0635, it looks like we’re due for some selling:
Stock index futures are pointing to a lower open, with small caps leading the drop. The Russell 2000 is down 0.9%. Nasdaq futures are down 0.7% with the S&P 500 down 0.5%;
Bonds are selling off again with the yield on the 2-year up 7 basis points to 4.21% whilst the 10-year yield is up 6bps to 4.01% (yields move inversely to prices);
Commodities aren’t doing much. WTI crude oil is up 0.6% to trade around $73/barrel. Copper is up 0.7%.
Known Events
More bank earnings to tell you about today. Goldman Sachs (GS 0.00%↑) and Morgan Stanley (MS 0.00%↑) report before the open at 0930. So does PNC Financial Services Group (PNC 0.00%↑ ) and some other smaller banks. After the close at 1630, we’ll hear from Interactive Brokers (IBKR 0.00%↑).
Later tonight we’re supposed to get a slew of economic data from China, including home prices, industrial production, retail sales, GDP, and unemployment. As with all official Chinese data this very much becomes a question of what the authorities are willing to admit than the publication of actual data.
The Bottom Line©️
Probably earnings will drive things. These were mixed on Friday and markets as a whole didn’t really move as a result. We have the Wall Street Journal this morning crowing about the “powerful mix” supplied by a “profit comeback” and lower rates. The Wall Street Journal has so far this year been a pretty good contrarian indicator. Yeah profits and rate cuts would be nice but what happens once those are priced in? Markets are forward-looking beasts after all.
We’ll get some important updates this week on the state of the US consumer, with retail sales out tomorrow and the Michigan survey on Friday.
Housekeeping
Obviously this is not investment advice (duh). Do your own research, make your own decisions.
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