Intel and Reddit fell further on Friday than their after-hours marks said; Amazon fell far less. The Nasdaq 100 lost 3.5%, gold lost 3.7%, and futures bounced.
...More earnings carnage overnight and the S&P is back at the range lows it has held for months. Will this be the one that breaks them? Plus 2 risk free Double Dip butterflies, crude dings $104.50 and Bitcoin falls out of bed.
...The Nasdaq 100 Fell 1.4% After Earnings and the 2-Year Fell 6bp. Which One Did the Bond Market Read?
Alphabet, ServiceNow and Fortinet reported before Thursday’s open and the Nasdaq 100 fell 1.38%, almost all of it at the opening gap. The same morning September PCE printed 3.6% on the year and the quarter’s PCE price index 2.1% annualised, from 5.0%, and the 2-year fell 6 basis points to 4.61%. Flight from equities or a read of the quarter: the clock assigns one leg, shares another and leaves the afternoon open; the calendar settles the rest.
...Two nights of results have Nasdaq futures 3.52% below Wednesday’s settle and S&P futures 1.36% below. Alphabet, ServiceNow and Fortinet reported before Thursday’s open and 95% of the Nasdaq 100’s 1.38% fall was the opening gap; Amazon, Intel and Reddit reported after the close and the futures were 2.15% lower at the capture. In between, 9 of 11 sector proxies rose, and the 2-year fell 6 basis points on a 2.1% quarterly inflation print.
...The Fed went sput sput fizz, GOOG dropped 11.5% after hours, and the indexes carried on behaving. The Double Dip strategy banks its first official win on SPY with $165 locked in as a minimum profit floor.
...The FOMC held at 3.75 to 4.00% on a 10-2 vote and the long end rose 6 to 7 basis points while the front end fell 3. The textbook says a hawkish split lifts the front end. Here is what the curve did instead, and the one test that would settle it.
...The FOMC held at 3.75 to 4.00% on a 10-2 vote with both dissents for a hike, the 2-year fell 3 basis points to 4.67% and the 30-year rose 7 to 5.37%. Alphabet reported 127.58 billion dollars of revenue at 20:02 UTC and 51.4 billion of capex on the call, and Nasdaq futures read 1.27% lower by the 07:45 UTC capture; Microsoft was 2 to 5% higher. GDP and PCE at 12:30 UTC.
...Day 2 of the opinion lining up with the system. S&P and Naz push off the range lows, VIX loses its nerve, the PnF breaks out toward 7820, crude’s triangle grows up into a channel, and the Poppers lock in a loss then a profit. Storm Boelo optional.
...Both volatility indices fell more than 4% on the day before the FOMC statement, to 17.52 and 97.88, while the front end of the curve rose 2 basis points and the back eased. The textbook says event risk gets dearer into the event. Here is what would settle whether the market was right.
...The VIX fell 4.73% to 17.52 and the MOVE index 4.22% to 97.88 on the session before the FOMC statement, both at their lowest close since 21 October. The Nasdaq 100 rose 1.29% with 6 of 11 sectors lower and 65% of the move has no named cause, Boeing fell 10.69% and the Dow rose 16 points, WTI settled 99.90 and was 101.90 by 09:25 UTC.
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