Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets in the day ahead. Today is Tuesday, Oct. 10. The Bottom Line segment of today’s podcast starts at (3:10) for listeners who want to skip ahead.
State of Play
Stocks rebounded yesterday after Fed officials said they may not keep hiking interest rates. This demonstrated that investors do actually care about items outside of the Middle East conflict. As of 0635 it looks like the risk on mood could be set to continue:
Stock index futures are pointing to small gains, led by small caps. The Russell 2000 is up 0.4%. S&P 500 and Nasdaq up a little less;
Bonds are seeing renewed bids at the short end of the curve. The 2-year yield is down 8 basis points to drop to 5%. The 10-year is up 3bps to 4.67%. (Yields move inversely to prices). This means the yield curve is uninverting;
Commodities are mostly unchanged. Copper is down 0.7%. WTI crude oil is flat trading around $86/barrel. Gold and silver are unchanged.
Known Events
PepsiCo (PEP 0.00%↑) just reported earnings, which beat estimates and the company raised guidance. That stock is moving higher in the pre-market
More Fed speakers are on the agenda today. Philly Fed President Patrick Harker speaks at 0900 and Atlanta Fed President Raphael Bostic at 0930. Then this afternoon Minneapolis Fed President Neel Kashkari is up. We also have Fed Governor Chris Waller speaking on the evolution of monetary policy at 1330.
The Bottom Line©️
Fed speakers appear to have gotten their marching orders seeing how yesterday’s commentary was similar to what San Francisco Fed President Mary Daly said last week. As such, it’s unlikely today’s speakers will refute any of this, unless of course one of them decides to go rogue. Bostic and Kashkari are two good candidates for doing exactly that, though it’s worth pointing out that Bostic is just an alternate voting member this year.
Other than that it’s perhaps a little shocking how quickly investors have already moved on from geopolitical concerns. Perhaps markets were right to treat what’s happening in the Middle East as another regional conflict?
Housekeeping
Obviously this is not investment advice (duh). Do your own research, make your own decisions.
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Pepsi Earnings Beat, More Fed Speakers