Highlights from The Weekender
Betting markets and stocks are increasingly pricing in a Democratic sweep.
Breadth is improving, but defensives are leading, and credit spreads continue to widen.
SK Hynix earnings this Tuesday will be critical for Korea and semiconductors.
Good morning,
It’s hard to have a view of "the market” much less write a concise introduction about said market, when its most consistent characteristic recently has been the near-inverse correlation between the index and what the majority of its underlying stocks are doing.
The good news is that the S&P 500 heads into this week still above key support. The bad news? It almost certainly won’t hold unless we get some positive earnings reactions from the major tech and communication names reporting this week.
SK Hynix (and Seagate) kick things off on Tuesday, while Wednesday sees Microsoft and Alphabet. Charts don’t predict earnings, and neither do I, but the “trend” in the reactions hasn’t been great, as I noted ahead of the Lam Research report.
If there’s a story that matters outside earnings, it continues to be oil, which quietly posted its second-highest weekly close since the war began, and is on the verge of a major breakout. It’s down slightly this morning, which might help explain equity futures, but any material upward movement this week and it could become the top story.
Day-by-day moves in oil aside, energy stocks act great, and today’s tactical opportunities section will highlight a focused ETF that looks primed to join the party.
