With the quarter coming to an end keep an eye out for the possibility of institutional window dressing over the next couple of trading days.  Index charts improved on Wednesday helped in large part by the rally of the big tech giants.  However, volume remained suspiciously low as the indexes stretch upward to test significant overhead resistance levels.  With a reading on GDP and Jobless claims before the bell anything is possible at the opening of the day to be prepared for some early session price volatility. 

Overnight Asian markets mainly rallied but with modest upside results despite the easing of banking fears.  European markets are also pushing higher this morning decidedly bullish across the board.  Ahead of market-moving economic data U.S. futures indicate a bullish open but expect some price volatility as the market reacts to the data.  Will it inspire the bulls or the bears?  We will soon find out of plan your risk carefully!

Economic Calendar

Earnings Calendar

Notable reports for Thursday include ANGO, BB, LAC, NEOG & MDRX.

News & Technicals’

Anna Ashton, China director at the Eurasia Group, said that a meeting between Taiwan’s President Tsai Ing-wen and U.S. House Speaker Kevin McCarthy will provoke a strong reaction from China. Taiwan’s President Tsai Ing-wen will likely meet face-to-face with Kevin McCarthy when she makes a transit visit through Los Angeles next week. According to Ashton, “The reality is that McCarthy is third in line to the presidency. A meeting like this would be the senior-most U.S. official meeting with a sitting Taiwan president on U.S. soil ever,”

Elon Musk and other tech industry figures have urged artificial intelligence labs to stop training AI systems more powerful than GPT-4, OpenAI’s latest large language model. In an open letter signed by Musk and Apple co-founder Steve Wozniak, technology leaders urged for a six-month pause to the development of such advanced AI, saying it represents a risk to society. Musk, who is one of OpenAI’s co-founders, has criticized the organization a number of times recently, saying he believes it is diverging from its original purpose.

Big Tech stocks contributed to Wednesday’s advance. Amazon popped 3%, while Meta and Netflix each gained more than 2%. Regional banks, closely followed since Silicon Valley Bank’s collapse earlier this month, also finished the session higher, with the SPDR S&P Regional Banking ETF (KRE) adding around 1%. On Thursday, investors will watch for economic data on weekly jobless claims and the gross domestic product. Boston Federal Reserve President Susan Collins, Richmond Fed President Thomas Barkin, and Minneapolis Fed President Neel Kashkari are all slated to speak in the afternoon.

Technically speaking the index charts improved yesterday with QQQ leading the way.  However, with significant overhead resistance, there is still a lot for the bulls to accomplish before an all-clear can be sounded.  With the pending GDP and Jobless Claims reports before the bell anything is possible by the open depending on whether the bulls or the bears find inspiration in the data.  Watch for whipsaws and big price moves as we push to test overhead resistance with the possibility of a short squeeze mixed in if end-of-quarter window dressing becomes a factor. 

Trade Wisely,

Doug