October 3, 2023

Markets:

Stock futures turned down on Tuesday as traders kept an eye on rising Treasury yields, which hit a 16-year high.

The 10-year Treasury yield traded at 4.735%, climbing to its highest level since Aug. 15, 2007. The benchmark yield has surged in the past month, as traders assess the possibility of tighter Federal Reserve for longer.

Wall Street is coming off a mixed session, after lawmakers in Washington arrived at a short-term agreement over the weekend that headed off a government shutdown. The 30-stock Dow closed lower by 0.2%, while the S&P 500 closed marginally higher. The Nasdaq Composite rose for a fourth day in a row.

Investors are hoping to turn the page on a disappointing September for stocks. All three major indexes closed the month and the third quarter lower. The S&P 500 alone lost nearly 5% in September.

That means key economic reports — such as last month’s payroll reports, due Friday — and the kick off of earnings reporting season next week are back in focus.

On the economic data front, investors will be watching the Job Openings and Labor Turnover Survey for August, due Tuesday morning. Economists polled by Dow Jones anticipate 8.8 million job openings.

Portfolio:

We enter the new trading session holding positions in CLF, ATEN, FSLY, IONQ, GRPN, and SOXL. Staying patient and allowing this to technically continue to set-up here. The Q's and IWM caught our attention yesterday with the strong price action displayed on a overall weaker tape to start the weak. One thing that happened yesterday which is noteworthy, CTAs stated they are done selling stocks; headline "After Liquidating $100 Billion, CTAs Are Done Selling Stocks; Will Buy $187 Billion If Markets Bounce". Notorious for always selling the bottoms. The pain trade of higher for this market remains and folks better prepare for another leg higher to end 2023. As hard as that might seem to some, it's the thesis that continues to develop. Be ready today but stay patient.