September 26, 2023

Markets:

Stock futures were lower Tuesday as September’s selling pressures took hold of Wall Street following gains seen in the previous session.

Those moves would add to the market’s losses for the month. Entering Tuesday’s session, the Nasdaq Composite was down 5.4% in September, while the S&P 500 and Dow had lost 3.8% and 2.1%. Among the catalysts pushing stocks lower this month is the Federal Reserve warning that it sees fewer rate cuts next year. The news pushed the benchmark 10-year Treasury yield to levels not seen since 2007.

Investors this week are also grappling with negotiations in Washington, as lawmakers hope to avert a government shutdown that could take place as early as Oct. 1 if Congress doesn’t agree on a spending bill.

On the economic data front, investors will keep an eye out Tuesday for August’s final building permits report before the bell, as well as new home sales data for last month later that morning. The Conference Board’s consumer confidence report for September is also due.

Wall Street is coming off a winning session, with the major averages snapping four-day losing streaks.

Portfolio:

We embark upon the new trading session with active positions in AX, CHWY, CLF, and ATEN. As a friendly reminder of a trend we discussed a few weeks ago, the final ten days of September have historically posed challenges for the markets. Our overarching trade strategy and the "pain trade" concept we've emphasized since the beginning of 2023 remain intact and are evolving. The year-end cycle can be tumultuous, yet rife with substantial opportunities. Presently, the market affords us the flexibility to engage in both bullish and bearish trades. We will continue to pinpoint these opportunities meticulously.

Be prepared for today's trading session, and let's aim for a highly productive day. However, it's essential to maintain patience these next few days as the quarter and month come to an end. Expect swings!