Technical analysts are warning that markets are poised to retest June lows, with 3,640 on the S&P 500
SPX,
in the spotlight.
āInvestors have become much less comfortable with this tighter liquidity environment, with many realizing it will stay in place for a much longer period of time than initially expected, which ultimately leads to the current decreasing appetite for riskier assets,ā said Pierre Veyret, technical analyst at ActivTrades.
One result has been a steady push by investors into the dollar, which Citigroup strategists have described as āone of the only places to hide.ā While the greenback is looking overvalued and a turning point is inevitable, Citi says either āglobal growth expectations need to turn or the Fed needs to pivot,ā for that to happen.
Our call of the day comes from Julian Emanuel, Evercore ISIās chief equity and quantitative strategist, who thinks the Fed will drag the dollar lower sooner than many think.
Emanuel tells clients in a note that last weekās FedEx
FDX,
profit gloom and the inverted yield curve between the two- and 10-year Treasurys are red flags for a global recession reaching U.S. shores.
With that, Emanuel expects āthe Fed could (and should) guide markets on Wednesday that ādata dependencyā for the central bankās Nov. 1-2 FOMC decision is 0-75bp in hikes, not 50-75.ā Given the Fed will be assessing enormous tightening already in place and potential for messy midterm elections, the strategist thinks U.S. dollar will ācontinue to temper its strength.ā
The dollar index is up about 1.3% so far for September, after a blistering 2.6% gain in August.
Evercore ISI
The Evercore team offers up a list of āDollar-Down Denominatorsā ā S&P 500
SPX,
names that could outperform in case of a dollar pull back, alongside āBuck Backslidersā equities that could underperform amid a weakening dollar.
From the āDenominatorsā list are export-oriented sectors with more than 70% foreign revenue exposure and high short interest, that have underperformed their peers in 2022. NVIDIA
NVDA,
Linde
LIN,
Mondelez International
MDLZ,
and Estee Lauder
EL,
are just a few of those names.
Evercore ISI
On the āBackslidersā list are Verizon Communications
VZ,
AT&T
T,
Union Pacific
UNP,
and Lockheed Martin
LMT,
to name a few.
Evercore ISI
So far for Monday itās dollar up.
Hear from Ray Dalio at theĀ Best New Ideas in Money FestivalĀ on Sept. 21 and Sept. 22 in New York. The hedge-fund pioneer has strong views on where the economy is headed.
The markets
Itās not just stock futures
ES00,
YM00,
NQ00,
Oil
CL.1,
is dropping, while bitcoin
BTCUSD,
and Ethereum
ETHUSD,
prices are getting hit particularly hard, following the latterās so-called āmergeā last week. Bond yields
TMUBMUSD02Y,
TMUBMUSD10Y,
are climbing, while gold prices
GC00,
are down.
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The chart
Zoom Video Communications
ZM,
has not just been a āposter childā for stocks hitting new lows on the Nasdaq, ābut one of the greatest leading indicators of where the market is going overall,ā says Michael Kramer, the founder of Mott Capital Management.
The video-conferencing group that surged during the pandemic, made a new low on Friday, and āprobably isnāt finished falling either, with the following significant support at $76.45 and then $70,ā he said.
Hereās his chart, andĀ full blog post.
Mott Capital
The tickers
These are the top-searched tickers as of 6 a.m. Eastern Time:
Ticker | Security name |
TSLA, |
Tesla |
GME, |
GameStop |
AMC, |
AMC Entertainment |
BBBY, |
Bed Bath & Beyond |
AAPL, |
Apple |
NIO, |
NIO |
HKD, |
AMTD Digital |
APE, |
AMC Entertainment preferred shares |
CHPT, |
ChargePoint Holdings |
AMZN, |
Amazon.com |
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