Target Earnings Miss, Tax Wrangling in DC

Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. It is Wednesday, May 21.

State of Play

Stocks finished a little lower yesterday in a pretty blah session. The S&P 500 ended its six-day winning streak. Target (TGT 0.00%↑) earnings this morning fell short of forecasts, though other companies had positive results. There is some wrangling in Washington, DC, as President Trump is apparently so far failing to convince key Republican Congressmen to back his tax bill. As we eye or board of indicators for signs of direction at 0650 ET this is mostly felt in the bond market:

• Bonds are seeing some selling. The 10-year yield is up 5 basis points to 4.54% (yields move inversely to prices). That’s the high end of the range it has found itself these last couple of weeks;

• Stock index futures are pointing to a lower open. Small caps are leading the drop — usually not a good sign — with the Russell 2000 down 1.1%. The S&P and Nasdaq are down 0.8% each;

• Commodities are up a bit. WTI crude oil is up 1.3% to trade close to $63/barrel. Copper is unchanged. Gold and silver are continuing to rally, up 1% or so each;

• Cryptos, too, are showing signs of life. Bitcoin is up 1% to move north of $106,000;

Cover art by author via Flux (Dev) AI