Daily Newsletter Oct 05 '22
MyntBit's Daily Plan is dedicated to providing traders with today's recap and bringing setups to watch for stocks and futures for the next trading day.
What is included in tomorrow's game plan?
Daily Recap
Look Ahead - Economic & Earnings Calendar
Key Futures Levels - S&P 500 (/ES) and NASDAQ (/NQ)
Day Trade Stock Ideas - MSFT and META
Today's Recap
Market Snapshot
Market Heatmap
Sector Heatmap
Briefing Market Update
Today's trade started on the defensive, bringing into question the durability of the October rally. The stock market waged a comeback effort that matched up neatly with a lack of follow through selling in the Treasury market after the 2-yr note and 10-yr note tested Friday's settlement levels. The market's ability to turnaround from early lows became its own catalyst with influential upside leadership from mega cap and semiconductor stocks.
The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite ultimately closed just a whisker below the unchanged mark after recovering from losses of 1.8%, 1.4%, and 2.4%, respectively at today's lows. The S&P 500 tested, and found resistance at, the 3,800 level today after setting a new low for 2022 (3586.47) on Friday.
Early action in the stock and Treasury markets reflected participants questioning the Fed rate hike narrative after buying into the idea of a softer approach coming soon. Starting around midmorning, stocks pared earlier losses coinciding with an abatement of selling pressure in the Treasury market. The 2-yr note yield tested the 4.20% level earlier and settled the session up five basis points to 4.13%. The 10-yr note yield tested the 3.80% level earlier and settled the session up 14 basis points to 3.76%.
Mega cap stocks proved to be an important upside driver today. The Vanguard Mega Cap Growth ETF (MGK) closed up 0.01% versus a 0.2% loss in the S&P 500 and a 0.4% loss in the Invesco S&P 500 Equal Weight ETF (RSP).
Another bright spot for the market was semiconductor stocks. The PHLX Semiconductor Index closed with a 0.9% gain. TSMC (TSM 74.48, +1.67, +2.3%) was a winning standout for the group after Morgan Stanley named the stock as a top pick.
Most of the S&P 500 sectors closed with a loss while energy (+2.1%) led the outperformers. Utilities (-2.3%) and real estate (-1.9%) brought up the rear.
Energy was boosted by WTI crude oil futures rising 1.5% to $87.64/bbl after OPEC+ agreed to a 2 million barrel per day production cut starting in November.
Looking ahead to Wednesday, market participants will receive the weekly Initial Claims (Briefing.com consensus 203,000; prior 193,000) and Continuing Claims (prior 1.347 mln) at 8:30 a.m. ET. The weekly natural gas inventories (prior +103 bcf) will be out at 10:30 a.m. ET.
Reviewing today's economic data:
Weekly MBA Mortgage Application Index showed a 14.2% decline compared to last week's 3.7% decline
September ADP Employment Change totaled 208,000 (Briefing.com consensus 198,000) after the prior revised total of 185,000 (from 132,000)
U.S. trade deficit narrowed to $67.4 billion in August (Briefing.com consensus -$67.9 billion) from an upwardly revised -$70.5 billion (from -$70.6 billion) in July
The key takeaway from the report is that it does point to some softening in global economic activity as both imports and exports were less than they were in July.
September IHS Markit Services PMI final reading came in at 49.3 following the prior 49.2 reading.
September ISM Non-Manufacturing Index fell to 56.7% (Briefing.com consensus 56.0%) from 56.9% in August
The key takeaway from the report is that business activity for the non-manufacturing sector held pretty steady in September and was stronger than expected. While a slightly lower reading versus August connotes some slowing, the slowdown for the largest sector of the economy isn't significant enough to fuel a belief that the Fed is about to pivot soon with its monetary policy.
Dow Jones Industrial Average: -16.7% YTD
S&P Midcap 400: -17.5% YTD
S&P 500: -20.6% YTD
Russell 2000: -21.5% YTD
Nasdaq Composite: -28.7% YTD
source: briefing.com
Market Trader by MyntBit
When will the FED pivot? | Market Trader Edition No. 7
Earnings Calendar
Economic Calendar
