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Coming off a mixed showing yesterday that saw the Nasdaq Composite reach a new record high on strength in the semiconductor and mega-cap stocks, the stock market is again looking mixed this morning.
Currently, the S&P 500 futures are down one point and are trading in-line with fair value, the Nasdaq 100 futures are down 34 points and are trading 0.1% below fair value, and the Dow Jones Industrial Average futures are up 11 points and are trading 0.1% above fair value.
One can see that there isn’t a lot of conviction in the equity futures trade. That disposition can be attributed to several factors:
It could be any, or all, of these factors, but the major indices won’t be moving all that much at today’s open. Treasuries aren’t moving much either. The 2-yr note yield is down one basis point to 4.83% and the 10-yr note yield is down two basis points to 4.42%, but both are unchanged for the week.
There won’t be any economic data of note to stir things up for either market. Perhaps that will change tomorrow with the release of the April Existing Home Sales Report or the FOMC Minutes for the April 30-May 1 meeting.
Then again, market participants are already well aware that higher mortgage rates, tight supply, and higher prices have produced some healthy headwinds for existing home sales while sticky inflation has produced sticky incantations from Fed officials that they want to be more confident inflation is on a sustainable path to 2% before lowering rates.
Several Fed officials (Waller, Williams, Barr, Mester, Bostic, Collins) will be speaking throughout the day and into the evening, yet the market isn’t expecting anything “new” from them or the FOMC Minutes.
Separately, chip equipment maker Lam Research (LRCX) provided its shareholders with something new, namely a $10 billion share buyback authorization and 10-for-1 stock split, which is expected to be effective after the close on Wednesday, October 2.
Prior to the open on Tuesday, May 21, though, it is looking like a split decision for the major indices amid a lack of conviction.
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Originally Posted May 21, 2024 – A split decision
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