The bulls tacked on more gains Tuesday as the Fed pivot bet continued to inspire the fear of missing out as the DIA and QQQ inked the 9^th straight day of gains. Bond yields continued to decline while oil, one of the main contributors to the decline in inflation continued to rally as the Middle Eastern war spilled out into the Red Sea threatening the supply chain. Today traders have a handful of notable earnings along with Consumer Confidence, Existing Home Sales, and Petroleum figures to digest. Remember volumes could soon begin to decline as holiday vacations begin and keep in mind we could see a hurry-up wait choppy afternoon with the GDP report Thursday morning.

While we slept Asian market mostly gained in reaction to the dovish decision from the BOJ, though Shanghai declined after a hold of benchmark lending rates. Across the pond, European markets trade mixed but mostly higher with modest gains and losses a day after the FTSE inked a three-month high.  However, U.S. futures suggest a modestly bearish open to being Wednesday ahead of earnings and economic reports.

Economic Calendar

Earnings Calendar

Notable reports for Wednesday BB, GIS, TTC, MLKN, & WGO.

News & Technicals’

FedEx, the global delivery giant, saw its shares drop 9% after it reported disappointing results for its fiscal second quarter. The company missed analysts’ expectations for both revenue and earnings, as it faced lower demand for its Express service, which accounts for more than half of its sales. The company also cut its guidance for the full year, citing challenges from the pandemic, labor shortages, and supply chain disruptions.

A study by Lending Tree revealed that Tesla drivers had the highest accident rate in the U.S. in the past year, with 24 accidents per 1,000 drivers from mid-November 2022 to mid-November 2023. Tesla drivers were followed by Ram and Subaru drivers, who also had high accident rates. The study also found that BMW drivers were the worst offenders when it came to driving under the influence, with 3 DUIs per 1,000 drivers in a year, which was double the rate of Ram drivers, who ranked second in this category. The study warned that accidents, DUIs, speeding, and other violations could result in higher insurance premiums for drivers.

U.S. Bank, one of the largest banks in the country, faced a hefty penalty of almost $36 million from federal authorities for breaking consumer protection laws. The bank blocked access to prepaid debit cards for hundreds of thousands of people who relied on them to receive unemployment benefits during the Covid-19 crisis. The bank also received a separate fine of $15 million from the Office of the Comptroller of the Currency, which oversees national banks.

The former CEO of Stimwave Technologies, Laura Tyler Perryman, is facing charges from the SEC for allegedly scamming investors out of $41 million. According to the SEC, Perryman lied about one of Stimwave’s products, claiming that it had FDA approval when it did not. The SEC’s lawsuit comes after Perryman was criminally indicted by the U.S. Attorney’s Office in New York in March for the same scheme.

The equity markets extended the positive streak from the previous weeks as the Fed pivot bet continues to inspire the bulls to play chase. The main economic data that investors watched were U.S. housing starts and Canadian CPI inflation. U.S. housing starts beat expectations by increasing more than 14% from the previous month, while Canadian CPI inflation was slightly higher than anticipated. The market was led by a mix of sectors, with both growth sectors like communication services and cyclical sectors like energy and materials doing well. IWM continued to play catch up, surging 2% on Tuesday and has now risen about 20% since October 31. Oil prices continued to climb, reaching over $74 per barrel as the Red Sea tensions added risk to the supply chain. Today bulls and bears will look for inspiration in Mortgage Apps, Current Accounts, Consumer Confidence, Existing Home Sales, Petroleum Status, and a 20-year bond auction.  We also have a handful of notable earnings to keep traders guessing.  Keep in mind that volume could begin to drop quickly after the morning reaction to data as traders begin holiday vacation plans and wait for the Thursday GDP report.  Plan carefully.

Trade Wisely,

Doug