TOP EVENTS AND CATALYSTS
The week ahead has some important economic data points including China’s NBS PMIs for September on Monday night, France/Germany’s CPIs for September on Tuesday morning, US home prices for July, the US JOLTs report for August on Tuesday, the Eurozone CPI for September early Wednesday morning, the ADP jobs report for September on Wednesday with consensus modeling +50K vs. +54K in August, the US manufacturing ISM for September on Wednesday with consensus expecting 49.2, up from 48.7 in August, the US jobs report for September with consensus expecting +50K, up from +22K in August, and the US services ISM for September with consensus expecting 52, flat vs. August. US government spending authorization is set to expire on Tuesday. I expect, once again, another Kabuki theater last-minute resolution.
For earnings, the major reports include: Monday premarket: CCL; Monday post-market: JEF, MTN; Tuesday pre-market: PAYX; Tuesday post-market: NKE; and Wednesday pre-market: CAG. Tesla’s Q3 delivery numbers are expected to be released on Thursday, October 2. I expect a firm delivery number this quarter, given that EV subsidies in the US are set to end this quarter, and a substantial number in Turkey, also with the end of EV subsidies. The Q3 pull forward will result in a significant drop in deliveries in Q4 and an even steeper decline in Q1. Elon Musk has a shareholder vote in early November, and pumping up the stock is essential for his compensation plan. Perhaps not discussed enough is a bailout of Xai, which is burning $1 billion a month. One issue with earnings later in October will be the drop in emissions credits, which will be material and an essential legal decision in CA regarding false advertising of Full Self-Driving, due near the end of the month. This could have profound and material implications.
Weekend News
- Trump will meet with the top four Congressional leaders on Monday at the White House (Thune, Schumer, Johnson, and Jeffries) with a shutdown set to occur within days NBC News
- Schumer sees an exit strategy from the current shutdown war as he thinks Republicans will face growing pressure to extend ObamaCare subsidies WSJ
- White House considers a plan to impose tariffs on electronic imports based on the number of foreign chips in each device Reuters
- Xi is eager for Washington to oppose Taiwan’s independence explicitly and hopes to secure such a pledge during ongoing trade talks taking place with the Trump administration WSJ
- American farmers face a crisis as China keeps soybean purchases at zero amid an ongoing trade standoff with Washington FT
- China’s industrial profits surged 20.4% Y/Y in Aug, a sharp improvement from the -1.5% number in July WSJ
- South Korea said it can’t afford to pay $350B upfront in cash, as was suggested in the tentative trade deal recently struck with the US Reuters
- Russia hit Ukraine this weekend with one of the largest aerial attacks of the war WSJ
- Ukraine is pursuing a strategy of severely degrading Russia’s oil infrastructure as it looks to starve Moscow of the cash needed to fund the war The Atlantic
- TikTok – ByteDance is expected to play a much larger role in TikTok US than expected, and will take ~50%+ of the profit even though its equity stake will fall below 20%, as Oracle’s technical relationship to the company looks very similar to its existing one, raising concerns that this “deal” doesn’t really change anything Bloomberg, Bloomberg, Reuters
Charts we are watching
Keeping it simple this week with just a few index charts. S&P had recent Sequential and Combo sell countdown 13’s nearly hitting the upside wave 5 of 5 price objective of 6752. Price flip down with the downside green Setup on day 2 of 9. The Reference Close small red lines are important as closing under would add to conviction of a deeper decline. Of course when this occurs, I will let everyone know.
The Nasdaq 100 Index also has a price flip down with Setup on day 2 of 9 after recently nearly hitting the wave 5 upside price objective. The Reference Close ticked up and remains first support – needs to close under.
I’m starting to think that the lack of new 52-week highs, despite indexes being near all-time highs, is more calendar-related. Would love your thoughts. Only 6.2% of the S&P hit 52-week highs and remain muted.
Both the S&P and Nasdaq 100 Point and Figure bullish percent index reversed to a column of O’s. This is a bearish development and unusual for this to be at the levels here, considering the major indexes are not far off highs. Here is a primer on Point and Figure bullish percent indexes.
Nasdaq 100 bullish percent index is in a column of O’s. This is a negative column and breaking 50% would add to conviction of a further decline.
US economic data for the week – busy
KEY MARKET SENTIMENT
Equity bullish sentiment dropped all week and bounced on Friday, holding the elevated zone >70%. Breaking the lows seen in August would confirm further decline ahead.
S&P and Nasdaq bullish sentiment
Bond bullish sentiment has shown very little movement over the last week, remaining around the ~60% level.
Currency bullish sentiment, with US Dollar bullish sentiment, saw the US Dollar sentiment strong all week, with a fade on Friday.
Commodity bullish sentiment highlighted with metals having a strong week with all nearly back in the extreme zone.
EARNINGS, CONFERENCES, AND ECONOMIC REPORTS
- Monday 29-Sep:
- Corporate:
- Earnings:
- Pre-open: UXIN
- Post-close: FEAM, IDT, MTN, PRGS, TRAK
- Analyst/Investor Event: ARCB, TD
- Brokerage Conference:
- European Respiratory Society Congress
- American Society for Radiation Oncology Meeting
- Jefferies Healthcare Services Conference
- Pickering Energy Partners Conference
- Earnings:
- Economic
- US: Pending Home Sales, Fed Governor Waller Speaking Event; NY Fed Speaking Events
- Europe: Core Retail Sales m/m, Unemployment Rate, Preliminary CPI y/y, Retail Sales y/y, GDP y/y, BoE Mortgage Approvals, M4 MoneySupply m/m, Economic Sentiment Indicator, CPI y/y, Retail sales y/y, PPI m/m
- Asia: Industrial Production m/m, Industrial Production m/m (preliminary), Retail Sales y/y, Retail Sales m/m, Non Manufacturing PMI y/y, official Manufacturing PMI y/y
- Corporate:
- Tuesday 30-Sep:
- Corporate:
- Earnings:
- Pre-open: LW, PAYX, UNFI, VRAR
- Post-close: NKE
- Analyst/Investor Event: BSX, CRH, MTUS, OCUL, PHIO
- Brokerage Conference:
- European Respiratory Society Congress
- American Society for Radiation Oncology Meeting
- Jefferies Healthcare Services Conference
- Pickering Energy Partners Conference
- Lytham Partners Fall Investor Conference
- Stifel Virtual Cardiometabolic Forum
- Deutsche Bank Private Software and AI Company Summit
- PDUFA: ALNY (AMVUTTRA), bentracimab, CLRB (iopofosine I-131), CUTX-101, GSK.LN (Shingrix), ND0612
- Earnings:
- Economic
- US: FHFA House Price Index, Chicago PMI, JOLTS, Consumer Confidence, Redbook Chain Store, API Crude Inventories, Fed Vice Chair Speaking Event, NY Fed Speaking Event
- Europe: PPI y/y, Retail Sales y/y, Final GDP q/q, GDP SA y/y (final), Nationwide House Price Index y/y, Consumer Goods Spending m/m, PPI m/m, Preliminary CPI y/y, KOF Leading Indicator, Unemployment Rate, Manufacturing PMI
- Asia: Housing Starts y/y, Tankan Manufacturing Index, Tankan Non-Manufacturing Index, Trade Balance
- Corporate:
- Wednesday 01-Oct:
- Corporate:
- Earnings:
- Pre-open: AYI, CALM, RPM, RZLV
- Syndicate: +FRMI IPO (~$500M); +NP IPO (~$350M)
- Brokerage Conference:
- European Respiratory Society Congress
- American Society for Radiation Oncology Meeting
- Pickering Energy Partners Conference
- Deutsche Bank Private Software and AI Company Summit
- ODDO BHF Iberian Forum
- JP Morgan Southern Cone & Andean Conference
- Jefferies Private Medtech Summit
- Earnings:
- Economic
- US: MBA Mortgage Purchase Applications, ADP Employment Report, PMI Manufacturing Final, Construction Spending, ISM Manufacturing Index, DOE Crude Inventories
- Europe: Retail Sales y/y, Retail sales y/y, Manufacturing PMI, SVME PMI, Flash CPI y/y, Unemployment Rate
- Asia: CPI y/y
- Corporate:
- Thursday 02-Oct:
- Corporate:
- Earnings:
- Pre-open: ANGO
- Analyst/Investor Event: PLUG, QNCX
- Brokerage Conference:
- Jefferies Private Medtech Summit
- Earnings:
- Economic
- US: Challenger Job Cuts, Factory Orders, Weekly Jobless Claims, EIA Natural Gas Inventories
- Europe: CPI y/y, Unemployment Change, Unemployment Rate, Unemployment rate
- Asia: Unemployment Rate
- Corporate:
- Friday 03-Oct:
- Corporate:
- Analyst/Investor Event: KOP
- PDUFA: CAPLYTA
- Economic
- US: Nonfarm Payrolls, Unemployment Rate, Average Weekly Hours, Average Hourly Earnings, PMI Services Final, ISM Non-Manufacturing Index, NY Fed Pres Speaking Event
- Europe: Retail Sales, Industrial Production m/m, Retail Sales y/y, PPI y/y, GDP y/y
- Asia: Retail Sales Nominal NSA Y/Y
- Corporate:
Thanks to Street Account, Vital Knowledge, and Bloomberg as valued sources.