Market News

Monday, October 12 brings a split trading session across North America, with Canada celebrating Thanksgiving and the US observing Columbus Day, also recognized as Indigenous Peoples’ Day in many places.

The key distinction for traders is that US stock markets are fully open, but the bond market is closed.

The New York Stock Exchange and Nasdaq will operate their regular sessions, from 9:30 am to 4 pm Eastern. There is no early close, so equities traders will have a full day to react to corporate news and weekend developments but news flow is often light on Columbus Day as it's a Federal holiday.

At the same time, Trump has used weekends -- and long weekends -- to attack Iran in the past so that's always a possibility.

US fixed income follows…

The weekly Baker Hughes rig count shows:

• Total Rigs 603 vs 598 last week
• Oil rigs 462 vs 456 last week
• Nat Gas rigs 132 vs 133 last week. 

For the year:

• Total rigs +56
• Oil rigs +44
• Nat gas +12

The price of crude oil is trading at $91.20 down $0.29 or -0.33%

As London/European traders head home for the weekend, the major European indices are closing higher on the day. However, Friday’s gains were not enough to erase the weekly declines for most of the markets. Italy’s FTSE MIB and France’s CAC led the losses, while the UK’s FTSE 100 bucked the trend.

The closing levels and changes for Friday showed:

• Germany’s DAX: 25,087.28, up 280.30 points or 1.13%.

• France’s CAC: 7,803.34, up 73.64 points or 0.95%.

• UK’s FTSE 100: 10,552.04, up 110.45 points or 1.06%.

• Spain’s IBEX: 19,033.10, up 104.20 points or 0.55%.

• Italy’s FTSE MIB: 49,746.30, up 448.41 points or 0.91%.

For the trading week:

• Germany’s DAX: -0.57%.

• France’s CAC: -1.19%.

• UK’s FTSE 100: +0.86%.

• Spain’s IBEX: -0.27%.

• Italy’s FTSE MIB: -1.46%.

France’s…

Last Friday’s G7 pledge to release 100 million barrels of crude and diesel from emergency stocks over four months looked like a forceful response to record diesel prices. JPMorgan’s commodities team says the market shouldn’t read too much into the headline number.

In a note out this week titled “Counted but not delivered,” Natasha Kaneva and colleagues write that the package explicitly counts previously fulfilled commitments and, by their reading, “does not represent 100 million barrels of new intervention.”

The math: IEA members committed 412 million barrels in March. About 321 million have already gone out, leaving roughly 91 million outstanding. That means much of Friday’s announcement was simply the completion of the March release,…

Elon Musk's SpaceX has a supply test today.

Under the reported lockup schedule, up to 328.4 million shares become eligible for sale on October 9. That gives certain employees and early investors the opportunity to sell shares previously subject to restrictions following the IPO.

Does that mean the stock has to fall?

No. Becoming eligible to sell does not mean every holder will sell. Some may take profits. Others may sell a portion or continue to hold. The unlock itself does not create new shares. It makes existing shares potentially available for trading.

Nevertheless, the size deserves attention.

SpaceX’s 65-day average daily trading volume is approximately 92.3 million shares. Today’s maximum release represents roughly 3.6 times that daily…

The USDCHF has been trading in a range of only about 50 pips since midday Monday.

What does that tell me?

The market is non-trending. Buyers and sellers are battling, but neither side is taking control. Moves higher find sellers. Moves lower find buyers. The price goes back and forth.

The 100- and 200-hour moving averages tell the same story. Those moving averages have converged near 0.8322 and are flattening out. When two moving averages come together like that, it reinforces the lack of directional momentum.

They also give traders a barometer. Stay above the moving averages is more bullish. Stay below is more bearish. However, while the price remains inside the range, those shifts in bias can quickly reverse. We need to see the price get…

• Prior was 48.1
• Current conditions 44.7  vs 51.0 exp
• Expectations 47.3  vs 45.5 exp
• One-year inflation 4.7% vs 4.6% prior
• Five-year inflation 3.5% vs 3.4% prior

This report used to be a market mover and fooled the Fed into hiking in the last cycle but it's increasingly unreliable and more a measure of the political mood in the US than anything. That said, the inflation expectations numbers are still worth watching, even if they're mostly a read on gasoline prices.

For what it's worth, this is the worst reading in at least 50 years.

For background, the University of Michigan’s Surveys of Consumers is one of the longest-running gauges of US household mood. It dates back to the late 1940s, and the headline sentiment index is built from two pieces: a…

Earlier this week, the broader S&P, NASDAQ composite, and NASDAQ 100 indices all traded and closed at new record levels. However on Wednesday and Thursday, the price rotated to the downside closing lower on each of those days. Technically the move lower took the indices each to their rising 100 hour moving averages, and each found support buyers near those levels. Although closing lower yesterday, we are seeing some modest follow-through buying today.

Positives for stocks include:

• The 100-hour MAs held yesterday. Using the support you highlighted, buyers showed up where they needed to. Stay above those moving averages and they have a foundation for a further recovery.
• The selling was not across the board. The Dow and Russell 2000 edged…

Bitcoin sellers had their shot. They missed.

The price of bitcoin broke above a swing area between $81,517 and $82,833 on September 21. After that break, buyers largely held support near the top of that area—until yesterday.

Sellers pushed the price back into the swing area and then below its lower boundary at $81,517, opening the door for further downside momentum. However, after moving toward the September 20 low at $80,106, just above the natural support at $80,000, the selling stalled. Sellers turned back to buyers, and the price snapped higher.

In trading today, that recovery has taken bitcoin back above the swing area high at $82,833. Buyers have regained some control, but they still have work to do.

The next upside targets are:

• $83,963:…

Delta missed on Q3 earnings, missed its own guidance by a wide margin, and cut the full-year outlook. But the market expected most of that, and the company remained upbeat about demand with a Q4 guide that's better than consensus.

First, the numbers:

The bad news was this was Delta's first earnings miss in two years but there was a built-in excuse with the rise in fuel prices. All the numbers flow downhill from that but none of it's a surprise given where fuel prices are. The good news is that the Q4 and full-year guide are slightly better than expected, though that will certainly depend on what happens in Iran next.

Delta's adjusted fuel price was $3.61 a gallon, up 60% y/y, and adjusted fuel expense rose 62% to $4.1 billion. Delta absorbed…

Canada’s September employment report was weaker than expected, with employment falling 68,300 versus expectations for a 9,200 increase. That follows a 41,700 decline in August, bringing the combined job losses over the two months to 110,000.

The weakness extended across both full-time and part-time employment:

• Full-time employment: Down 35,400.

• Part-time employment: Down 32,900.

• Unemployment rate: Rose to 6.5%, matching expectations.

• Participation rate: Fell to 64.8%.

The decline in participation is worth watching. Fewer people participating in the labour market can limit the rise in the unemployment rate, even as employment falls.

See Adam’s review of the data HERE.

USDCAD jumps, but buyers struggle to hold the break

The initial reaction sent the…

• Prior was -41.7K

Details for the month of September:

• Employment change: K vs +9.2K expected; prior -41.7K
• Unemployment rate: % vs 6.5% expected; prior 6.4%
• Full-time employment change: K vs prior -35.9K
• Part-time employment change: K vs prior +5.8K
• Participation rate: % vs prior 65.0%
• Average hourly wages for permanent employees: +% YoY vs +2.0% prior

The US-Canada trade war picked up in September. USD/CAD traded at 1.4232 ahead of the data.