May 25, 2023 7:38am
Debt ceiling negotiations continued to weigh on the major averages and consequences could be serious if NOT resolved
My interpretation of the morning’s numbers is written to be informative; it’s built on what happened or will happen behind the headline today, not tomorrow or yesterday.
Subscription is coming, it’s not conscription but, an offer to join our collective of like-minded investors! Never leave an investor uninformed!
8:00 a.m. edition
Remember that overnight and pre-open actions in futures don't necessarily translate into actual trading in the coming day’s session. My interpretation of the morning’s numbers is written to be informative; it’s built on what will happen behind the headlines today, not tomorrow or yesterday
Dow futures are DOWN -0.29% or (-96 points), S&P futures are UP +0.57% or (+23 point) and NASDAQ futures are UP +1.83% or (+250 points) early in the pre-open – so far
Futures of the S&P 500 and Nasdaq-100 jumped as Dow slipped on Thursday,
European markets were mixed,
Asia-Pacific markets were largely lower.
We need to more than consider the economic environment - rising rates and inflation to comprehend the micro re “our” universe of cell and gene therapy companies …
Wednesday, indexes dived as U.S. lawmakers struggled to reach a deal on the country’s debt ceiling; as the Dow closed DOWN -255.59 points (-0.77%), the S&P closed DOWN -30.34 points (-0.73%) while the Nasdaq closed DOWN -76.08 points (-0.61%)
Debt ceiling concerns, however, look set to hold back the broader market following a U.S. credit downgrade warning from Fitch and a lack of specific progress from the ongoing talks in Washington.
Economic Data Docket: The CME Group's FedWatch now indicate a 33% chance of another 25-basis point rate hike in June, down from 35.6% last week, but is pricing in a 58% chance of a July hike, nearly double last week's odds.
Wednesday (5/24) … RegMed Investors’ (RMi) closing bell: “sector share pricing rolls downhill. Just EIGHT days to default; Kevin McCarthy says 'it's not my fault' the Democrats are so 'EXTREME' and want to keep spending as he admits there is STILL differences in debt limit talks with Biden.” <DM> … https://www.regmedinvestors.com/articles/12974
Ebb and flow:
Q2/23 – May – 7 negative and 11 positive closes
· April ended - 1 holiday, 8 positive close and 11 negative closes
· March – ended with 10 positive and 13 negative closes
· February – 1 holiday, 2 vacation, 7 negative and 8 positive closes
· January – 2 holidays, 11 positive and 9 negative closes
Companies in my headlights – It’s your decision; I provide ideas and context: INDICATIONS
Risky week as debt ceiling throws share pricing to the airstreams – “wind sox wanted”
The BOTTOM LINE:
I follow the dictum, quoting Churchill that “short words are best, and the old words when short are best of all, as I try to keep it simple and short!
Investors should be cautious in the current environment, ready to cut losses quickly.
Quoting again, “Debt-ceiling negotiations are a lose-lose for equity investors at this point, as a failure to strike a deal will lead to an immediate recession, while a deal will strain liquidity from markets as the US Treasury issues trillions in new bonds, which are newly born.” <Jose Torres, Interactive Brokers>
What changes, everything re debt ceiling and nothing as far as “sector divergence, weak breadth with many equities riding the roller-coaster makes adding exposure an issue.”
Not a lot of stocks are offering buying opportunities at the moment.
As I stated, I wouldn’t buy into ANY rally or weakness, I’d be selling. Remember, it's not the news that matters, it's the market reaction to the news.
I also hate to be so negative or contrarian but, this is a NO spin zone and truth is its product; I can always be WRONG but, I am mostly EARLY!
At ANY time, this week, be ready to take partial profits and exit losers.
Opinions expressed are those of the author and are subject to change, and not intended to be a forecast of future events, a guarantee of future results, nor investment advice.
All investments are subject to risks. Investors should consider investment objectives.
Regulation Analyst Certification (Reg AC): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Henry McCusker, the editor and publisher of RegMed Investors does not hold or have positions securities referred to in this publication.