Stock Market Stirs, Wall Street Responds with a “Bearish Boogie”!
Citigroup (NYSE:C) strategists are like the Sherlock Holmes of the stock market, and they’ve spotted a change in the air. August and September have witnessed a transformation from a “bullish extravaganza” to a “bearish ball.” It’s as if Wall Street has traded its pom-poms for pessimism.
The Nasdaq market, in particular, has gone from a vibrant dance floor to a one-person tango; it’s all about that net short move. But don’t panic just yet, because despite this market makeover, it’s not a wild party of excessive trading. The profits and losses from this sentiment swing are about as exciting as watching paint dry – not exactly a rollercoaster ride for investors.
“This leaves positioning relatively light and generally reflecting the apparent bearish sentiment globally,” the analysts wrote in a client note.
“S&P 500 is modestly net short (-0.9 normalized) after switching to negative in the past week. However, significant amounts of long positions still remain, and ETFs have had inflows, so the indication is not as bearish as for Nasdaq.”
Elsewhere, the Eurostoxx 50 stands out with the most bearish net positioning. Nevertheless, recent momentum in this market has been relatively sideways, indicating a degree of uncertainty and a lack of strong directional movement.
Dow futures fall sharply; sentiment hit by hawkish Fed, rising yields
U.S. stock futures traded lower Tuesday, with the Federal Reserve’s indications of a tighter than expected monetary policy next year hitting sentiment.
By 06:35 ET (10:35 GMT), the Dow Futures contract was down 125 points, or 0.4%, S&P 500 Futures traded 20 points, or 0.4%, lower and Nasdaq 100 Futures dropped 70 points, or 0,5%.
Indices set for losing month on hawkish Fed
The main indices on Wall Street are still feeling the impact from last week’s surprisingly hawkish Federal Reserve meeting, with the policymakers signaling another rate increase this year and just two rate cuts next year, down from the four forecast at the June meeting.
Minneapolis Federal Reserve Bank President Neel Kashkari emphasized the point on Monday, stating that given the surprising resilience of the U.S. economy, the Fed probably needs to raise borrowing rates further and keep them high for some time to bring inflation back down to 2%.
On Monday, the benchmark S&P 500, tech-heavy Nasdaq Composite, and 30-stock Dow Jones Industrial Average climbed, snapping four-day losing streaks.
But all of the indices are still on course to finish September sharply in the red, with the tech-heavy Nasdaq Composite down 5.4% in September, heading for its worst month since December, while the S&P 500 and Dow Jones Industrial Average had lost 3.8% and 2.1%.
Moody’s warns about shutdown damage
Also weighing on sentiment is the uncertainty surrounding a potential federal government shutdown, an occurrence that would harm the country’s credit, rating agency Moody’s (NYSE:MCO) said on Monday.
This warning comes just a month after Fitch downgraded the U.S. by one notch on the back of a debt ceiling crisis, meaning Moody’s is the last of the major agencies to still maintain the U.S. with the premier triple ‘A’ rating.
The yield on 10-year Treasury notes rose as high as 4.566%, a 16-year peak, pushing the U.S. dollar to a 10-month peak.
Economic data due for release Tuesday include August new home sales and the September consumer confidence, which are both expected to show a small decrease from the prior months.
Alibaba to list logistics unit in Hong Kong
In corporate news, earnings are due from warehouse retailer Costco (NASDAQ:COST) and whole foods distributor United Natural Foods (NYSE:UNFI).
Additionally, Alibaba (NYSE:BABA) is set to list its logistics unit Cainiao on the Hong Kong Stock Exchange, the Chinese e-commerce giant said in a regulatory filing on Tuesday.
Alibaba will continue to hold more than 50% of the shares of Cainiao after the spinoff.
Crude rebounds from losing week
Oil prices fell Tuesday as renewed stress in China’s property market raised concerns about economic growth this year in the world’s largest crude importer.
Embattled developer China Evergrande (HK:3333) Group warned earlier this week that it was unable to issue new debt, putting the focus firmly on the release of key Chinese purchasing managers’ index data for September later in the week.
By 06:35 ET, the U.S. crude futures traded 0.7% lower at $89.09 a barrel, while the Brent contract dropped 0.7% to $91.28.
Additionally, gold futures fell 0.3% to $1,931.65/oz, while EUR/USD traded 0.1% lower at 1.0597.
Kundan Edifice, an original design manufacturer of flexible LED Strip Lights, made a weak debut on the NSE SME platform today, Tuesday. The company’s shares listed at a 17.58% discount over the initial public offering (IPO) price, opening at Rs 75 as compared to the issue price of Rs 91. Despite edging up slightly to Rs 78.55 by noon, the stock remained below the issue price.
The company’s IPO was open for public subscription from Tuesday, September 12, 2023, and closed on Friday, September 15, 2023. The public offer comprised a fresh issue of 2,772,000 shares aggregating up to Rs 25.22 crore ($3.38 million), with a face value of Rs 10 per share. Investors were allowed to bid for a minimum of 1200 shares and in multiples thereof.
Tech Titans Throw Down in Data Duel: Bytes Before Brawn!
In a legal showdown that’s more thrilling than a courtroom drama, a jury has been summoned to play referee in the ultimate battle of brains. Thomson Reuters (NYSE:TRI) is pointing fingers at Ross Intelligence, alleging that they’ve been playing fast and loose with content from the legal research maestro, Westlaw, to teach their AI rival a few new tricks. It’s like a high-stakes poker game, but with data and algorithms instead of chips and cards.
U.S. Circuit Judge Stephanos Bibas has just set the stage for this blockbuster trial, promising us a front-row seat to one of the first-ever battles in the arena of AI data piracy. And Thomson Reuters, the legal eagle here, is looking forward to laying out their case with all the style and flair of a seasoned litigator. Cue the legal theatrics!
Smart investing is like a well-executed magic trick; it’s all about making your money disappear into the right places, only to reappear later with a few extra zeros attached. It’s the art of turning financial abracadabra into substantial assets. So, while others may be pulling rabbits out of hats, savvy investors are pulling dividends out of stocks and compound interest out of bonds. It’s not about being a financial wizard; it’s about knowing which cards to play and when to fold, all while keeping a keen eye on the market’s sleight of hand. Remember, in the world of investing, it’s not about the wand, it’s about the ROI.