U.S. stock futures remained flat as the last day of September began, following three consecutive weeks of gains for the major averages. Despite a challenging start to September, historically the weakest month for the stock market, markets rebounded as the month progressed, buoyed by the Federal Reserve’s interest rate cuts. Investors are now looking ahead to a significant test later in the week with the release of September’s jobs report on Friday. Additionally, Carnival is set to announce its quarterly earnings on Monday morning, adding to the week’s financial highlights.

European markets began the week and the final trading session of September on a negative note, with auto stocks leading the decline, down 3.8%. Stellantis, listed in Milan, saw its shares plummet by 13.5% after the automaker revised its 2024 annual guidance downward due to worsening global industry conditions. Similarly, France’s Renault experienced a drop of over 6% on Monday, while German automakers Porsche and Volkswagen both fell by around 3%.

China’s CSI 300 index experienced a significant surge, rallying by 8.48% to close at 4,017.85. This impressive performance was driven by strong gains in healthcare and tech stocks, marking a nine-day winning streak. It was the index’s best day since September 2008 and its highest level since August 2023. In contrast, Japan’s Nikkei 225 index faced a sharp decline, tumbling nearly 5% on Monday. This drop, coupled with a weakening yen against the dollar.

Economic Calendar

Earnings Calendar

Notable reports for Monday before the bell include CCL. After the bell there are no notable reports.

News & Technicals’

U.S. East and Gulf Coast port workers are poised to go on strike at midnight on Monday, with no negotiations currently scheduled to prevent the stoppage. This strike threatens to halt container traffic from Maine to Texas, potentially costing the economy up to $5 billion a day. The disruption could affect the flow of essential goods, from food to automobiles, at major ports, risking job losses and increasing inflation just weeks before the U.S. presidential election. With no talks planned before the Monday deadline, the situation remains critical.

Oil markets have not priced in an ‘all-out war’ despite the recent escalation in tensions following the killing of a Hezbollah leader by an Israeli airstrike in Beirut. The confirmation of the leader’s death by Hezbollah did not lead to a sharp reaction in oil prices. Instead, the global benchmark Brent crude saw a modest increase of 1.56%, reaching $73.10 per barrel, while U.S. West Texas Intermediate futures rose by 1.09%, trading at $68.19 per barrel.

The French-Italian conglomerate Stellantis, which owns brands like Chrysler, Dodge, Jeep, and Maserati, has issued a warning about lower-than-expected sales across most regions for the second half of the year. As a result, Stellantis has revised its adjusted operating income (AOI) margin for the full-year 2024 to a range of 5.5% to 7.0%, down from its previous “double digit” outlook. Similarly, Aston Martin, famous for its iconic models featured in James Bond films, has also announced reductions in its profit margin and production targets for the year. 

With the corporate buyback blackout in full effect the indexes could easily experience choppy market conditions as we wait for the official kickoff to 4^th quarter earnings on OCT. 11.  I continue to suggest raising your stoploss levels to protect your positions with the T2122 staying very elevated in the short-term.  That said, I would not rule out the possibility of a little volatility today due to end of quarter window dressing.

Trade Wisely,

Doug