Weak economic reports, a confirmed recession, growing geopolitical concerns, and the hits keep coming as we slide toward the 3rd quarter and a likely tough earnings quarter for companies to perform. Additionally, today we face the possibility of rising jobless claims and a Personal Income and Outlays report that likely supports the stance of the more interest rate hikes. Although the T2122 indicator suggests a short-term oversold condition, today’s data could keep the bears engaged and discourage the bulls from defending. So, try not to panic, avoid speculation, and don’t fight the bear!
Asia markets traded mostly lower while we slept except for the Shanghai with modest gains as data showed their factory activity grew in June. However, European markets trade decidedly bearish this morning due to persisting recession concerns. With another day of potentially market-moving data just around the corner, the U.S. futures suggest a substantial gap down. So, protect your capital and prepare for another challenging day of volatile price action.
Economic Calendar
Earnings Calendar
This Thursday, we have our busiest day of the week on the earning calendar. Notable reports include MU, WBA, AYI, STZ, SMPL, LNN, RNLX, & TRIB.
News & Technicals’
Wells Fargo CEO Charles Scharf said at the Aspen Ideas Festival on Wednesday that he expects to see the Federal Reserve continue with more significant rate hikes. Scharf credited the Fed for being “very clear about how they’re going to think about what the right movements are going to be,” but the bank CEO still thinks the economy will be surprised by the repercussions. Hackers targeted Horizon, a blockchain bridge that lets users swap tokens between different networks. There are “strong indications” that Lazarus Group, a hacking collective with solid ties to Pyongyang, orchestrated the attack, blockchain analytics firm Elliptic said in a blog post-Wednesday. Harmony said it is “working on various options” to reimburse users as it investigates the theft but stressed that “additional time is needed.” Bitcoin on Thursday briefly fell below $19,000 as the world’s largest digital currency remains under pressure. Investors are also worried about rampant inflation forcing global central banks to raise interest rates. That also sparks fears of a recession in the U.S. and other countries. Meanwhile, major crypto hedge fund Three Arrows Capital fell into liquidation, adding further woes to the market. Treasury yields moved slightly lower in early Thursday trading, with the 10-year priced at 3.06% and the 30-year dipping to 3.10%.
The hits keep coming, with the GDP confirming a recession, mortgage applications continuing to recede, and Powell reiterating an aggressively hawkish Fed. But, if there was some good news, it was the decline in the oil and gas prices as the overall market chopped in a wide price range on lower than average volume. Today we have the potential to receive some more hits with Jobless Claims that have edged slightly higher the last two weeks and a reading on Personal income and outlays that likely favors the hawkish Fed stance. The T2122 indicator is in the bullish reversal zone, but with the low sentiment, we can’t rule out more downside punishment, so buckle up for another challenging day of price action and volatility.
Trade Wisely,
Doug
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