Futures vs FV: SP -8.98; DJ -29.36; NASDAQ -73.40
SP500, DJ30 rather calm, of course NASDAQ is lower thanks to the NFLX clean sweep miss. Some say it is done, others saying NFLX never misses twice and some important upgrades on the story. Obviously the former are winning this morning in terms of price. We will see if this turns into some bids. Interesting.
Other earnings not bad as financials keep winning.
BEATS: GS; CMA; JNJ; UNH
Fed: Powell starts his congressional testimony. Kind of overshadowed in the NFLX talk. This is the 'quieter' story out there, that the Fed is on a hiking campaign, that the economy is supposedly strong, but the yield curve is forecasting economic weakness. The key to anything the Fed says or does is whether it gives deference to the yield curve and does not pull a Greenspan and try to explain it away as different this time. If it does not and the curve does not improve, the Fed will once again hike and tighten into a recession.
OTHER MARKETS
Bonds: 2.849% vs 2.856%
EUR/USD: 1.1696 vs 1.1709
USD/JPY: 112.64 vs 112.31
Oil: 68.14, +0.08
Gold: 1239.80, +0.10
SPY futures are now at session lows having given up the bounce off the lows, selling the past hour. That suggests the selling is not yet defined for the morning.
As NFLX and FAANG struggle, watch how financials, some manufacturing (e.g. UTX), metals perform. The latter two are barking dogs and if they show any upside that suggests money rotation. At the same time, watch software, a leading tech group, as its performance will be a tell for NASDAQ as cloud services have driven much of the tech gains.
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Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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