'If the Fed is committed to fighting inflation, 3900 is an easy sale' - MS
And maybe so is 3500...
We think it's in the magnitude of the move lower led by much weaker earnings and a Fed committed to fighting inflation, making 3,900 an easy sale.
-Morgan Stanley
Today:
Market Rundown
MS on Stocks, TD on Gold, JPM’s Marko
Market Rundown:
Good Morning. The dollar is up 22 points. Bonds are weaker with yields up in the front end most. Stocks are down 230-60 bps. Gold is down $1. Silver Fu. are down 25c. Oil is up 14c. Nat Gas is down 16c. Grains are all down with Wheat the weakest. Crypto is up 30-50 bps.
Yesterday: US equities were mixed on Monday Large caps lagged small caps: S&P 500 (-0.08%) vs. Russell 2000 (+0.17%).The Nasdaq added 0.63%, while the "FAAMG" stocks mostly rose. Via DataTrek
Comment: It is reasonable to think that Gold is still getting inflows from the recent bullish reports even while Silver is not. Right now we see CTAs lightly selling Gold while mom and pop boomer investor types buy it. Today Fed Chair Powell speaks at 10a.m. in Sweden. Right now all markets are showing some trepidation as to what Powell will say. That is noise in context of the last 2 days behavior.
The Active Trader post will be out between 9 and 9:30.
TUESDAY, JAN. 10
6 am NFIB small-business index Dec. 92.0 91.3
9 am Fed Chair Jerome Powell speaks Sweden
10 am Wholesale inventories (revision) Nov. 1.0% 1.0%Excerpt: This is What Will Happen if No Pivot
We read the newest piece by Mike Wilson1, the MS UberBear. And it is unsettling.
For MS the bottom line is, “we don't think a 3,500-3,600 (the current recent low) S&P 500 is consistent with the consensus view for a mild recession.”
We include that report at bottom along with our summary. It is long, but very readable. Wilson’s analysis is rational doom and gloom stuff. Less macro and more fundamental at the earnings level as well.
It’s kind of unsettling if you are of the fundamental analysis persuasion as we once upon a time were.
ANALYSIS BELOW…
The Zen Moment:
ZH version HERE