The bulls had a good day on Wednesday, reliving selling pressure despite the Durable Goods miss and the hawkish Fed minutes confirming more rate hikes are on the way.  This morning we face a big round of retail earnings results and a reading on GDP and Jobless Claims.  The NVDA miss could slightly dampen the bullish spirits in the Nasdaq but remember to respect overhead resistance levels in a market downtrend as the location of potential bear attacks.  With a 3-day weekend approaching, it would not be odd to see traders reducing risk due to the prolonged weekend uncertainty.

While we slept, Asian markets closed mostly lower after the Bank of Korea announced its second straight rate hike.  However, European markets hold modest gains across the board in a cautious morning session.  With potential market-moving economic reports and a busy day of retail earnings, U.S. futures work to extend the relief rally pointing to a bullish open.

Economic Calendar

Earnings Calendar

We have about 50 companies listed on the Thursday earnings calendar, with less than 30 confirmed.  Notable reports include DG, BABA, AEO, AMWD, ADSK, BIDU, BZUN, BRC, BKE, BURL, DLTR, FTCH, GPS, GCO, GLNG, IQ, JACK, M, MDT, RRGB, RY, TITN, TD, UTLA, VMW, WDAY & ZS.

News & Technicals’

Fed minutes released Wednesday indicated that officials are prepared to move ahead with multiple 50 basis points interest rate increases.  In addition, the Federal Open Market Committee said the policy might have to move past “neutral” and into “restrictive” territory.  Nevertheless, the minutes indicate that members are hopeful they can bring down inflation and are concerned about financial stability risks.  In addition, global health concerns loomed over the World Economic Forum once again this year, but business leaders say they are not worried about a recent monkeypox outbreak.  “Is it a Covid-style risk?  No, I don’t believe it is,” Jeremy Farrar, director of global health charity Wellcome, told CNBC.  As of Wednesday, at least 237 confirmed and suspected cases of the disease have been reported globally — double the number recorded at the start of the conference Monday.  In a filing Wednesday, Elon Musk noted that his personal financial commitment to the Twitter deal is now $33.5 billion.  Musk reiterated his commitment to completing the $44 billion deal and is working on additional financing.  Apple is raising pay for corporate and retail workers in response to market conditions, the company said Wednesday.  Apple will increase the starting wage for its retail employees in the U.S. to $22 an hour.   Premier Li Keqiang said during a nationwide videoconference Wednesday, according to a CNBC translation of a Chinese-language state media report.  On Wednesday, a state media news broadcast showed large conference rooms of people from different provinces tuning into the meeting.  There hasn’t been such a meeting of this scale for years, and it’s unprecedented for one meeting to address so many levels of government at once, said Zong Liang, chief researcher at the Bank of China.  Treasury yields trade primarily flat early Thursday, with the 10-year dipping to 2.74% and the 30-year rising slightly to 2.97%.

Although Durable goods orders fell more than expected and the FOMC minutes confirmed more rate hikes are on the way, the bulls had a good day reliving selling pressure as indexes lifted toward resistance levels.  An NVDA earnings miss may take some of the wind out of the Nasdaq sails, but futures are putting on a brave face ahead of the GDP, and Jobless Claims reports.   Traders will also have to deal with our biggest day of earnings reports this week, dominated by struggling retail as consumers curtail spending.  Yesterday’s rally pushed the T2122 indicator near the bearish reversal zone, so keep an eye on and respect overhead resistance levels for possible entrenched bears.  With a 3-day weekend approaching, watch for the possibility of traders reducing risk heading into the uncertainty of the long weekend. 

Trade Wisely,

Doug