Coming off another week of losses, equities bounced from oversold levels. Still, we are facing a third straight month of declines on the backs of a surge in bond yields and disappointing earnings out of the mega-cap names.
This Week on Wall Street - Week of October 30th
Market Commentary
Coming off another week of losses, equities bounced from oversold levels. Still, we are facing a third straight month of declines on the backs of a surge in bond yields and disappointing earnings out of the mega-cap names.
November through year-end have historically been positive seasonally for markets. Yet, we recognize falling earnings guidance, fading consumer confidence, and narrow breadth might overshadow the potential for a strong rally.
Economic News: A less hawkish Fed this week could help markets find support. The decision looms Wednesday, as the committee is expected to hold its benchmark rate at the current level. According to the CME group, there is a 95% chance the rate will be unchanged. For the bond market, this could be the second biggest event this week given the Treasury's refunding announcement. It will update quarterly borrowing estimates today ahead of issuance plans on Wednesday.
In addition to the Fed decision, we will get another read on the labor market Friday. The bulls will be looking for more slowing with the thought being that the Fed will be more comfortable in holding rates into 2024.
Newton scores showed quick deterioration to low levels across major indexes. Overseas markets are grading out relatively better. Yields retreated after hitting the psychological 5% level last week which is helping fixed income scores. Beneath the surface, nearly every sector is poor. This could be setting up for an oversold bounce.
Economic Releases This Week
Monday: None Scheduled
Tuesday: S&P Case-Shiller Home Price Index. Consumer Confidence
Wednesday: ADP Employment Report, ISM Manufacturing, Fed Decision
Thursday: Initial & Continuing Jobless Claims, US Productivity & Unit-Labor Costs
Friday: Jobs Report, ISM Services
Stories to Start Your Week
The United Auto Workers and General Motors have agreed to a deal that will put an end to collective bargaining talks between the union and Detroit automakers.
The German economy was in recession in early 2023 after household spending in Europe's economic engine finally succumbed to the pressure of high inflation.
Israeli defense forces said it is expanding its ground incursion into Gaza, as the country enters a second phase of its war against Hamas.
For the 2nd Halloween in a row, US candy inflation hits double digits.
What is Newton?
Our Newton model attempts to determine the highest probability of future price direction by using advanced algorithmic and high-order mathematical techniques on the current market environment to identify trends in underlying security prices. The Newton model scores securities over multiple time periods on a scale of 0-20 with 0 being the worst and 20 being the best possible score. Trend & level both matter.
Technical trading models are mathematically driven based upon historical data and trends of domestic and foreign market trading activity, including various industry and sector trading statistics within such markets. Technical trading models, through mathematical algorithms, attempt to identify when markets are likely to increase or decrease and identify appropriate entry and exit points. The primary risk of technical trading models is that historical trends and past performance cannot predict future trends and there is no assurance that the mathematical algorithms employed are designed properly, updated with new data, and can accurately predict future market, industry and sector performance.