Stock Market Today: December 4th - 8th, 2023

Top of the morning StonkForumers! Happy Tuesday to all of you and welcome to the new trading day and a frrrrrrrrrrrresh start. Here is a quick check on those futures as we are over an hour into the US cash market open.

GLTA on this Tuesday, December the 5th, 2023!

 

Morning Lineup - 12/5/23 - We'll Drink to That
Tue, Dec 5, 2023

It's looking like another weak start to the trading day following a weak overnight session in Asia after Moody's lowered its outlook for China's credit rating citing rising debt levels. Interest rates are lower as the 10-year yield is on the verge of breaking back down through 4.20%. Where it ends the day, though, will be dictated by the upcoming JOLTS and ISM Services reports at 10 AM.

90 years ago today, Utah ratified the 21st Amendment to the Constitution, and the US thereby achieved the three-fourths majority needed to officially repeal the 18th Amendment and end Prohibition on a national basis. While alcohol was technically illegal in the United States for the prior 13+ years, it was always part of the US culture and social scene, and its illegality only gave organized crime groups a wide open field to operate in. That ended with the 21st Amendment, although even with alcohol being legal on a national basis, several states maintained the Prohibition era through state temperance laws. Mississippi was a dry state for another 33 years before it finally ended Prohibition in 1966. We can only imagine what an Ole Miss tailgate would look like if Prohibition was still in place, but probably not this.



Regarding alcohol, we thought it would be a good time to check out how stocks in the sector have been faring lately. Overall, performance has been mixed. Molson Coors (TAP) has been the best performer this year, gaining more than 20%, but it’s down about 10% from its summer high. Along with TAP, other beer stocks have seen modest YTD gains this year. Even the embattled Anheuser-Bush (BUD) has seen a sharp rebound in the last month as the company’s Bud Light brand has been spending big on brand rehab inking deals with Ultimate Fighting (UFC) and NFL legends Peyton Manning and Emmitt Smith. While beer stocks have had a decent year, companies more involved in the spirits business, like Diageo (DEO) and Brown-Furman (BF/b) are both nursing hangovers.

 

Here is a final look at today's market and futures maps, as well as how each sector performed individually at the close on Tuesday, December 5th, 2023.

 

Top of the morning StonkForumers! Happy Hump Day to all of you and welcome to the new trading day and a frrrrrrrrrrrresh start. Here is a quick check on those futures as we are over 2 hours into the US cash market open.

GLTA on this Wednesday, December the 6th, 2023!

 

Morning Lineup - Weak ADP, Strong Russell 2000
Wed, Dec 6, 2023

Futures have caught a bid this morning following overnight strength in Asia and also in Europe this morning. The just-released ADP report didn't do anything to alter that positive mood either, as the headline report came in modestly weaker than expected (103K vs 128K). Non-farm productivity and Unit Labor Costs are just hitting the tape as we type this. It looks like Productivity was higher than expected (5.2% vs 4.9% estimate) and the best since Q3 2020 while Unit Labor Costs fell more than expected (-1.2 vs -0.9%).

Outside of equities, mortgage applications were up for the fifth week in a row, gold is slightly higher, crude oil is slightly lower, bitcoin is above $44K, and Treasury yields have a positive bias with the largest moves at the shorter end of the curve.

After a two-day rally north of 4%, the Russell 2000 gave back about 1.4% on Tuesday but still managed to close above both its 50 and 200-day moving averages for the third day in a row – something we haven’t been able to say since early August.



Whenever a major equity index trades at ‘extreme’ overbought or oversold levels (two or more standard deviations above or below the 50-DMA), it tends to be a sign of overwhelming bullishness or bearishness in the market. These types of readings are mutually exclusive and rarely occur close to each other. The last six weeks for the Russell 2000 have been an exception to that norm. As shown in the trading range chart below, after closing at extreme oversold levels on 10/27, the Russell surged over the next five weeks and closed at extreme overbought levels last Friday (12/1). With just 24 trading days separating the most recent extreme oversold reading from the first extreme overbought reading, it was the quickest that the Russell shifted between the two ranges since June 2021.

In the Russell 2000’s history since 1978, there have only been 16 other times that it went from the oversold extreme to the overbought extreme in 30 trading days or less, and in today's full post for subscribers, we provided an analysis of the index's performance following these prior periods.

 

Here is a final look at today's market and futures maps, as well as how each sector performed individually at the close on Wednesday, December 6th, 2023.

 

Top of the morning StonkForumers! Happy Thursday to all of you and welcome to the new trading day and a frrrrrrrrrrrresh start. Here is a quick check on those futures as we are over 2 hours into the US cash market open.

GLTA on this Thursday, December the 7th, 2023!

 

Morning Lineup - 12/7/23 - Bad Gas
Thu, Dec 7, 2023

It's been a mixed start to the week for indices like the Nasdaq and Russell 2000 while the S&P 500 has been down for three straight days. This morning, futures are flat with a slight positive bias. Overnight in Asia, stocks traded lower on reports that the BoJ is gearing up for rate hikes. That led to a spike in yields and the yen and a decline of over 1% in the Nikkei. In Europe, the declines haven't been as steep as GDP for the region declined 0.1% which was in line with forecasts, although Industrial Production in Germany unexpectedly declined.

Less than three months ago, the price of a gallon of gas in the US was pushing $3.90 and was up 21% on the year, and the price of crude oil was near $95 per barrel. Since then, crude oil prices have tumbled below $70 per barrel (as of yesterday’s close), and a gallon of gas is $3.20 which is down 17.5% from its peak and down slightly on the year. Next week’s CPI report on Tuesday and the subsequent FOMC report should be interesting.

 

Here is a final look at today's market and futures maps, as well as how each sector performed individually at the close on Thursday, December 7th, 2023.

 

Top of the morning StonkForumers! Happy Friday to all of you and welcome to the final trading day of the week and a frrrrrrrrrrrresh start. Here is a quick check on those futures as we are over 30 minutes into the US cash market open.

GLTA on this Friday, December the 8th, 2023!

 

Morning Lineup - 12/8/23 - Listless into Payrolls
Fri, Dec 8, 2023

What was looking like a modestly positive day for stocks earlier has reversed modestly lower, but the reality is that there is little direction ahead of the Non-Farm Payrolls report at 8:30 AM. Also, don't forget about the University of Michigan Sentiment report at 10 AM as well. Overnight in Asia, it was a mostly positive session, although Japan bucked the trend falling more than 1.7% for a 3.4% decline on the week. The culprit there was a weaker-than-expected GDP report coupled with stronger-than-expected inflation (the worst of both worlds). In Europe, the tone is modestly positive as German CPI was right inline with forecasts and employment data in France was stronger than expected.

It’s generally been a positive month so far for US stocks with some small exceptions - and another big one. Leading the way higher, Consumer Discretionary and Real Estate have both rallied more than 2% while Industrials and Utilities are both up over 1%. To the downside, Materials, Consumer Staples, and Technology have all seen modest declines, while Energy has plunged nearly 4%. As a result of Energy’s weakness, while every other sector remains in overbought territory heading into today’s employment report, Energy is not only below its 50-day moving average, but it’s also the only sector that’s oversold.

 

Here is a final look at today's market and futures maps, as well as how each sector performed individually at the close on Friday, December 8th, 2023.

 

And finally here is a quick preview of next week's notable earnings releases courtesy of Reddit's Wall Street Bets:

Have a great weekend everyone!