🌊The Stock Market Surge Continues:“A solid earnings season, easing inflation data and a resilient economy have charged 2024′s market rally. It’s also propelled the S&P to close above the 5,000 level after first touching the milestone during Thursday’s session. The index first crossed 4,000 in April 2021.” (CNBC)
🌽U.S. Grain Estimates Got A Bump:“The WASDE report pegged the U.S. 2023/2024 corn ending stocks at 2.172 billion bushels. The trade's expectation was for 2.148 billion bushels. USDA's January estimate was at 2.162 billion bushels.” (Successful Farming)
⚡Record Treasury Note Auction: “The $42 billion auction—the largest ever according to Treasury data—was awarded a 4.093% in yield, lower than the average yield of 4.290% seen over the past six auctions where new 10-year debt was issued." (Barron's)
🔎A Close Look at Inflation Data: “While inflation has been trending downward, the most recent CPI reading showed prices edging back higher in December, growing at a 3.4% annual rate. Since then, other inflation measurements have shown the deceleration of inflation, so investors will be watching to see if the trend continues.” (Investopedia)
đź‘–Updates on Consumer Spending: "Part of the soft-landing thesis that's taken over markets in the past few months has been consistent stronger-than-expected data on consumer spending. A fresh reading on that trend is set to greet investors on Thursday with the January retail sales report. Economists expect retail sales declined 0.2% in January from the prior month." (Yahoo Finance)
🔊Another Week of Fed Speak: There are 7 scheduled fed governor speaking engagements scheduled for the week so far, “FOMC members Kashkari (Mon), Goolsbee (Wed), Barr (Wed), Bostic (Thurs), Waller (Thus), and Daly (Fri) are on the calendar to speak.” (FX Empire)
STOCK INDEX FUTURES
The pressing question on traders' minds is whether the stock market will maintain its upward trajectory or encounter a pullback.
S&P 500 futures, having recently breached the 5,000 milestone for the first time, appear poised to consolidate around this level, boasting a nearly 5% gain year-to-date.
Analysis of Q4 2023 earnings from over 500 companies through February 7th reveals a robust performance, with 72% reporting earnings per share (EPS) surpassing expectations. This exceeds the historical EPS "beat" rate of 65% over the past decade.
Stocks exceeding EPS estimates have experienced a notable rally, outpacing the typical post-earnings performance by approximately 50 basis points.
Looking ahead, the macro focus remains on Tuesday's release of the January Consumer Price Index (CPI).
INTEREST RATE FUTURES
Federal Reserve Chair Jerome Powell has recently acknowledged the noteworthy easing of inflation but emphasized officials' vigilance regarding associated risks to the dual mandate.
Powell cautioned against prematurely or excessively reducing policy restraint, highlighting the potential risk of reversing progress on inflation. He emphasized the need for greater confidence in the sustained downward trajectory of inflation, acknowledging the absence of a specified duration for achieving such confidence.
Despite expressing optimism, Powell remains cautious, emphasizing that ongoing progress is not guaranteed and any resurgence in inflation would be an unexpected development.
The Fed Fund futures are pricing a 16% chance of a 25 basis point rate cut in March, down from a 70% cut one month ago.
Every Friday afternoon, Topstep Performance Coach John Hoagland fires up his charts and identifies the trends and “areas of importance” futures traders should look out for in the coming week. Read on to see what John’s keeping his eye on this week!
To mitigate Prohibited Conduct, gambling behavior and exploiting the simulated environment, all trading accounts that have any trade day that exceeds 200 total contracts will be subject to review by our Risk & Compliance Team. If Topstep identifies trading activity that, in its sole discretion, relates to Prohibited Conduct, Topstep reserves the right to, delete the trading day and all profits, restart the account or close the account. If repeat violations, Topstep may ban the trader from use of all or a portion of the Site and Services.
All content published and distributed by Topstep LLC and its affiliates (collectively, the “Company”) is to be treated as general information only. None of the information provided by the Company or contained herein is intended as (a) investment advice, (b) an offer or solicitation of an offer to buy or sell, or (c) a recommendation, endorsement, or sponsorship of any security, company, or fund. Testimonials appearing on the Company’s websites may not be representative of other clients or customers and is not a guarantee of future performance or success. Use of the information contained on the Company’s websites is at your own risk and the Company and its partners, representatives, agents, employees, and contractors assume no responsibility or liability for any use or misuse of such information.
Futures trading contain substantial risk and is not for every investor. An investor could potentially lose all or more than the investor’s initial investment. Only risk capital—money that can be lost without jeopardizing one’s financial security or lifestyle—should be used for trading and only those individuals with sufficient risk capital should consider trading. Nothing contained herein is a solicitation or an offer to buy or sell futures or options. Past performance is not necessarily indicative of future results.
CFTC Rule 4.41 - Hypothetical or Simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, because the trades have not actually been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs, in general, are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown.
