Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. It is Thursday, May 9. The Bottom Line segment of today’s podcast starts at (2:15) for listeners who want to skip ahead. Be sure to check out the brand new ‘One Year Ago Today’ segment at the bottom of this page.
State of Play
Stocks were roughly unchanged yesterday in another quiet session. After the close Airbnb (ABNB 0.00%↑) earnings disappointed investors and the stock dropped overnight. As we look at our board of indicators at 0630, risk appetite seems to be abating a bit:
Stock index futures are pointing to a lower open led by small caps. The Russell 2000 is down 0.5%. S&P 500 and Nasdaq down 0.2% each;
Commodities are moving higher. WTI crude oil is up 0.8% to trade around $79.60/barrel, which is higher than it’s been in a week. Copper is unchanged;
Cryptos are dropping with Bitcoin down 2% to drop below $61,000;
Bonds aren’t really doing anything. The 2-year yields 4.85% whilst the 10-year yields 4.52%.
Today’s Known Events
It’s another pretty quiet day. There are a few earnings: Roblox (RBLX 0.00%↑), Warner Bros Discovery (WBD 0.00%↑), GigaCloud Technology (GCT 0.00%↑), and Plug Power (PLUG 0.00%↑) report before the open at 0930. That’s it. The ones after the close are boring.
It’s Thursday so we have initial jobless claims at 0830. Economists who were surveyed expect 212,000 new claims, a tick above the 208,000 seen last week and right in line with the four-week average of 210,000.
The Bottom Line©️
Dow Industrials have been positive six trading days in a row, but the Dow is just 30 stocks. The S&P and Nasdaq, which are a much better reflection of market mood, have been stuck in a kind of purgatory the last couple of days. Earnings has been the driver of individual stocks but the broader indexes haven’t really moved.
Looks like we may need a catalyst of some sort to relieve us of this impasse. Hard to see what will supply it today. Or tomorrow for that matter, when we just have the University of Michigan’s Consumer Sentiment report. We may be stuck until next week when we get new inflation data.
One Year Ago Today…
The back-and-forth over regional banks took another turn, with a sell-off casting doubt on the fledgling recovery of these stocks (Daily Contrarian, May 9, 2023).
…and What Happened:
It turned out to be a buying opportunity for regional banks, judging by the SPDR S&P Regional Banking ETF (KRE 0.00%↑). Over the last year, the KRE is up 33.5%, outpacing the S&P 500 as the chart below illustrates:
Housekeeping
Obviously this is not investment advice (duh). Do your own research, make your own decisions.
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