Powell Speaks, Jobless Claims, Costco Earnings

Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. It is Thursday, Sept. 26. The Bottom Line segment of today’s podcast starts at (3:45) and Stocks on the Contrarian Radar©️ at (5:38) for listeners who want to skip ahead.

State of Play

Micron (MU 0.00%↑) reported positive earnings after yesterday’s close and raised guidance and the stock surged overnight. As we eye our board of indicators for signs of direction at 0645, investors seem eager to take on risk:

• Stock index futures are rallying on the Micron news, led by tech. The Nasdaq is up 1.4%. S&P 500 futures 0.8% to the good;

• Commodities are mixed. Copper is rallying anew, up almost 2% but WTI crude oil is down almost 2% to trade around $68.50/barrel. Rare divergence there between oil and copper;

• Cryptos are quietly moving higher with Bitcoin up 1% to trade around $64,400;

• Bonds are unchanged through it all. The 2-year yields 3.55% whilst the 10-year yields 3.78%.

Today’s Known Events

Fed Chair Jerome Powell is the main speaker at today’s Treasury Market Conference hosted by the New York Fed. Powell gives (pre-recorded) opening remarks at 0920. It’s unlikely his comments will deviate much, if at all, from last week’s FOMC meeting but you never know.

New York Fed President John Williams also speaks at this event as does Treasury Secretary Janet Yellen.

Before all that we’ll get initial jobless claims at 0830. Economists who were surveyed expect 224,000 new claims, a small increase over the 219,000 recorded last week and right in line with the four-week average of 225,500.

Durable goods orders are also out at 0830. The expectation here is for a decrease of 2.8% month-over-month after an increase of 9.9% last month. Core durable goods, which exclude transportation items, are expected to rise 0.1% MoM after a 0.2% drop last month.

We’ll also get another reading of second-quarter GDP, the third, which can be safely ignored because it is likely to just repeat whatever was in the first two reports (3% annualized growth).

Pending home sales are out at 1000. These are expected to increase by 0.9% MoM after declining 5.5% at the last reading.

Finally one earnings report of note: Costco (COST 0.00%↑) reports after the close at 1600.

Meme by author. This phrase was not ever (to our knowledge) uttered by Powell but is a reference to Vanilla Ice’s hit song from the early 1990s…