October 11, 2023

Markets:

Stock futures rose on Wednesday as Treasury yields continued to retreat from the 16-year highs reached last week. Investors also cheered a large merger in the energy space.

Exxon Mobil agreed to buy shale driller Pioneer Natural Resources in an all-stock transaction worth $59.5 billion, the largest merger announced on Wall Street this year. Pioneer shares were up 2% in early trading. Exxon was down by about 1%.

The 10-year Treasury yield was down more than 9 basis points to 4.56%. A day earlier, the benchmark U.S. yield fell, giving stocks a boost. The 30-stock Dow added 0.4% on Tuesday, while the S&P 500 gained 0.52% and the tech-heavy Nasdaq Composite jumped 0.58%.

Wall Street will get another clue into the state of inflation Wednesday with September’s producer price index report. Economists expect that the PPI gained 0.3% last month, according to Dow Jones.

In addition, minutes from the Federal Reserve’s latest meeting due in the afternoon will offer further insight into the central bank’s hiking cycle after it chose to skip an interest rate increase last month.

Traders are also looking ahead to Thursday’s consumer price index report for September.

Investors continue to assess the ongoing war unfolding between Israel and Hamas after the militant group launched an attack on Israeli civilians in what marked the deadliest offensive the country’s experienced in 50 years. President Joe Biden condemned the Hamas attacks as terrorism in remarks Tuesday and said that the United States stands with Israel.

Portfolio:

In the upcoming trading session, we currently hold positions in NTNX, UNG, PATH, AX, and TH. The markets persist in their upward trajectory, defying bearish sentiments and those who anticipate a downturn. This trend has been a consistent theme throughout the year. It's a reminder to all that amid the noise, it's crucial to follow the overall market trend, even when it seems challenging.

From a technical perspective, there remains one significant obstacle to overcome. If the market dares to breach and maintain levels above the 4520 mark we mentioned a few months ago in our end-of-year outlook, it could set the stage for a remarkable bullish run. We are eager to witness this scenario, as we believe it could offer the best opportunities we've seen in years. While market sentiment has turned sour, and many have become increasingly bearish, we hope our guidance has been instrumental in avoiding these bear traps thus far.

Today, it's important to stay vigilant as it could be another active trading session. We urge a degree of caution due to the release of the Fed minutes.  Let's have a great session.