Slow Thanksgiving Week: A Good Opportunity to Test Base Emotions

Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. It is Monday, Nov. 25. The Stocks on the Contrarian Radar©️ segment of today’s podcast, featuring hospital stocks UHS 0.00%↑ and ARDT 0.00%↑, starts at (7:20) for listeners who want to skip ahead.

State of Play

As we eye our board of indicators for signs of direction at 0700, things are tilted toward risk-on:

• Stock index futures are pointing to a higher open, led by small caps. The Russell 2000 is up 0.9%. This continues a rally from Friday when the Russell gained 1.8% to lead major US indexes. S&P 500 and Nasdaq futures are up 0.5% after modest gains on Friday;

• Cryptos have resumed their ascent. Bitcoin is up 1% to trade around $98,200. So getting closer once again to the elusive $100k threshold;

• Commodities aren’t doing much. WTI crude oil is down 0.3% to trade around $71/barrel. Copper is up 0.6%:

• Bonds also unchanged but worth noting that the yield curve is about to re-invert. The 2-year yield and 10-year yields have converged on 4.35%.

Today’s Known Events

A couple of earnings to kick off a slow Thanksgiving week here in the US:

• Bath & Body Works (BBWI 0.00%↑), subject of a Stocks on the Contrarian Radar©️segment a couple of weeks ago, beat estimates and importantly raised guidance. The stock is moving higher in the pre-market, the to tune of 5% at the time of this writing;

• After the close at 1600 we’ll hear from:

  • Zoom Video Communications (ZM 0.00%↑)

  • Agilent Technologies (A 0.00%↑)

  • Semtech (SMTC 0.00%↑)

And that’s it. Slow day like we said.

The Bottom Line

So yeah, a slow holiday week here in the US. We’re still left pondering the same questions about the incoming Trump administration. Judging by the action since Friday’s open — the rise in small cap stocks especially — it would appear that the Trump trade is maybe back on?

That would bode well for risk appetite. It’s certainly a good opportunity to take the pulse of markets, seeing how the lull in events shows us investor spirits in their rawest form. So if something does drive markets in light of the dearth of activity, it is quite simply one of the base emotions — greed or fear.

And yes, greed still seems boss.

”Thanksgiving Turkey at stock market” by author via OpenArt.ai