10/8/24
○ The Nasdaq jumped nearly 1.5% in higher volume, picture-perfect price action for the bulls after the index marked a distribution day Monday. The Nasdaq is back above the 18,000 level with its sights now set on its late-September high of 18,327. A decisive move above this level would qualify as a bullish breakout.
○ The S&P 500 added 1% in lower volume, while the Dow Jones Industrial Average and Russell 2000 small-cap index lagged with gains of 0.3% and 0.1%, respectively.
○ The major indexes remain in a tight range. That’s allowing a lot of quality stocks to set up again. A new batch flashed buy signals Tuesday, offering an opportunity to add or reshuffle exposure.
○ In a note to clients on Monday, Ed Yardeni of Yardeni Research called S&P 500 operating forward earnings per share the best leading economic indicator, one that captures analyst consensus estimates for index constituents during the current year and coming year. While this leading indicator doesn’t anticipate recessions, it is available weekly and closely tracks actual quarterly S&P 500 operating EPS, he said.
○ And, he added, it is flashing bullish signals ahead of another S&P earnings season: Forward earnings rose to a record high during the Oct. 3 week. It dipped during (the) second half of 2022, bottomed in early 2023, and has been rising to record highs since late 2023.
○ in a note to clients on Monday, a Bank of America analyst team called the Fed’s emerging rate-cutting cycle a positive for U.S. banks. Rate cuts that lead to rebounding customer activity and a positively sloping yield curve (are) structurally bullish for bank stocks, they said. That rebound would drive positive EPS revisions and a further re-rating higher in bank stock valuations. The analysts added they prefer regional banks on potential to defend net interest income.
○ For banks… A (Donald) Trump win likely seen as positive for relief on the regulatory and M&A fronts. Whereas a Kamala Harris-led Democratic sweep could be the most negative outcome, raising the specter of higher taxes and more regulatory upheaval.
○ Meta says something that makes investors think NVDA will have a great 2025. TSM reports Wed.
○ Chinese stocks sold off as policymakers didn’t announce fiscal stimulus, disappointing investors.
○ Lots of banks reporting this week and next.