Monday began with enthusiasm gapping higher but then quickly faded into a low-volume consolidating session ending in mixed results.  The Mag7 stocks garnered the majority of yesterday’s energy pushing the QQQ toward an all-time high breakout as the SPY squeaked out a small win adding to its seven-week run.  Today traders will have a few notable earings as well as a Housing Starts and Permits report to find inspiration. The attacks in the Red Sea risk affecting the global supply chain so keep an eye on oil as it seems particularly sensitive to the situation.

During the night Asian markets closed mostly higher with only the HSI moving lower after Japan kept its rate policy unchanged creating a steep decline in the yen. European markets trade mixed but mostly lower this morning as they monitor the G7 meeting of finance with central bank officials.  However, U.S. futures continue to pump the premarket higher working to achieve the headlines of the Nasdaq and SP-500 all-time highs.  

Economic Calendar

Earnings Calendar

Notable reports for Wednesday ACN, FDS, FCEL FDX, SCS. WOR.

News & Technicals’

The Red Sea, a vital waterway for global trade, is under threat from Iran-backed Houthi militants who have launched a series of attacks on ships in the area. The attacks have coincided with the ongoing war between Israel and Hamas, raising fears of a wider regional conflict. As a result, several major shipping lines, including BP and Maersk, have halted their services through the Red Sea, disrupting the supply chain of goods and commodities. To counter the Houthi threat, the U.S. and its allies have initiated Operation Prosperity Guardian, a maritime security operation that aims to protect the ships and deter further attacks. The operation is an extension of the U.S. naval force in the Red Sea, which has been facing increasing challenges from the Houthi rebels.

Tesla, the electric car maker, is reportedly raising the hourly wages of some of its employees at its Nevada battery plant by 10% or more, according to CNBC. The company, which has faced labor disputes and unionization efforts in the past, may be trying to appease its workers and prevent them from seeking a collective bargaining agreement in the U.S. The wage hike, which was revealed in internal documents obtained by CNBC, could affect thousands of workers at the Gigafactory, where Tesla produces batteries and powertrains for its vehicles.

Enphase Energy, a solar company that produces microinverters, announced that it will cut 10% of its staff as part of a restructuring plan. The company has been struggling with low demand for its products, as high-interest rates have made solar installations less attractive. Enphase’s stock price has plummeted 53% this year, reflecting its poor performance. The company expects to incur $16 million to $18 million in costs related to the layoffs and the impairment of some of its assets.

The stock market indexes ended Monday with mixed results in a calm low-volume consolidating session. That said the S&P 500  and the Nasdaq added small gains to its seven-week winning streak thanks mostly to the push in the Mag7 stocks. Interest rates rose a bit, but the 10-year Treasury yield stayed below 4% and close to its July low. Today traders will look for inspiration in the Housing Starts and Permits report coming in before the bell and some Fed speeches in the afternoon.  We also have a few notable earnings reports that could add a bit of price volatility.  In this parabolic condition plan carefully as a pullback could begin at any time so try to avoid the fear of missing out chaising already extended names.

Trade Wisely,

Doug