Watching paint dry describes most of Monday’s session. That’s adequate, as the day began with a little downside following Moody’s USA downgrade (not really news as followed S&P and Fitch having done so previously), and a rebound as outlined in my pre-opening (just before the Bell) opening ‘X-ray’.
Across the board (Retail stocks and so on) you hear worries about Earnings, but that’s a sector we have not been optimistic about, reflects consumer credit utilization issues, and like the projected Airline stocks declining, a contraction in shoulder-season flying, not just fuel costs (actually slightly lower).
Another aspect to me is revealed by today’s Boeing orders not just for 787’s, but the previously slower-selling 777x. Why? These longer flights and worries by executives that it may impact the future (China/Taiwan?) cause orders that tend to favor longer range capability. To wit: a 777x. (The 787 and A350 from Airbus, are the two with the best air pressurization to lower altitudes versus a slew of others, hence less jet lag for passengers and lower risk of DVT on the very long flights. I’ve mentioned it before, but 787, A350, and now 777 are all longer-range aircraft with the first two better pressurization…737Max…well it’s really a glorified short-range aircraft with dubious confidence among fliers, but also as I’ve noted, less problems with dual angle-of-attack sensors and so on.
Market ‘X’-ray: This soporific market is merely hugging the S&P 4400 area, with pretty-neutral breadth also, awaiting the CPI… and to a lesser degree the San Francisco POTUS/Xi meeting on Wednesday.The war is less a factor in a sense, provided it doesn’t escalate either into new conflicts with the Hezbollah terrorists who hijacked Lebanon ‘or’ further attack on US facilities in the region by any of the (essentially Islamist) player or Iran.Speaking of the Mideast, one or two commentators are trying to excite people about ‘Chinese warships approaching Israel’. Eh…I mentioned this weeks ago and unless something changed, it’s one frigate, a Corvette (small destroyer or similar) and supply ships. And to say ‘approaching Israel’ isn’t exactly correct, as China’s maintained a small naval facility next-door to ‘ours’ in Djubuti for a few years. That’s the Red Sea and ‘sort of’ in the direction of Southern Israel, which would be Eilat and the Negev. There are U.S., Israeli and even Royal Navy ships in that area..and yes, the USS Eisenhower Carrier Battle group, so my fortune cookie says not worry about China stirring up much trouble.Biggest ‘least reported’ stories of the day might be the replacement of Britain’s Home Secretary for sounding too favorable to the Palestinian London March on Armistice Day, and totally outrageous discussions about Hamas at the University of Arizona to children. I’ll add to that an important crossing of the Dnipro River by Ukraine and what seems to be broad ‘retreat’ by Russia’s Army. Why is this not headline news?There is little worthy of discussion, erosion of forward earnings revisions are a topic, which means the S&P is a little less overpriced on a broad basis, and in a sense makes sense, since the so-called mega-caps are still very expensive.As to consumer spending decelerating for months, well yes it’s not news. We will see more from the Black (& Blue) Friday and cyber-Monday sales, which I suspect won’t be a great ‘read’ on consumers, as they’re using more credit. In fact that data will be more illustrative, although consumer credit cards higher rates tend to be about the same regardless of small (Fund rate) Feds.In the meantime I think you’ll hear low guidance from Home Depot (), nothing special from the CPI, and as some of the stocks come down more, they’re less risky (for those who don’t own them of course).
Bottom-line: If nothing else, look for the stock market to at least consolidates adequately. It might just rally more ‘if’ CPI cooperates. Don’t overlook: There were 4 more attacks on U.S. Forces by Iranian proxies, ‘since’ the latest USAF airstrikes in Syria yesterday. This could escalate (time for a ‘head of the snake’ warning to the regime in Tehran?).More By This Author:
Market Briefing For Tuesday, Nov. 14th
