Market Wrap
Sentiment
U.S. inflation data for April indicates a slight easing in disinflationary trends. The main index rose 10 basis points less than predicted. Core inflation increased as expected, but the annual rate was the lowest in three years. Despite Q1 earnings growth surpassing expectations, Q2 guidance has been less optimistic. Full-year 2024 and 2025 earnings and revenue growth forecasts have been slightly raised from a month ago.
Valuations remain high compared to historical averages. Overall, the outlook is optimistic yet pragmatic, with risks evenly distributed around the base case — Claude 3 Opus (Sources: Yardeni Research, Bank of America, Goldman Sachs, LSEG, Nomura, Oppenheimer)
Week Ahead
Concerning economic data, it will be interesting to monitor S&P Global PMIs, durable goods orders, and the final readings for the Michigan consumer sentiment. Durable goods orders are expected to grow for the third month, albeit at a slower pace. Investors will also pay close attention to existing and new home sales, which are anticipated to decline.
Lastly, the earnings season continues with Palo Alto Networks, Lowe’s, Nvidia, PDD Holding, TJX Companies, Analog Devices, Synopsys, Target, and Intuit among the major companies set to report - Source: TradingEconomics
Earnings
Metric | UpDn | This Week | Prior Week | Baseline | Baseline TF |
---|---|---|---|---|---|
Forward 4-qtr Estimate | 🔴 | 252.93 | 252.99 | 243.98 | January 1, 2024 |
Forward 4-qtr PE | 🔵 | 20.9 | 20.6 | 20.16 | January 1, 2024 |
Nominal Earnings Yield | 🔴 | 4.77 | 4.85 | 5.19 | January 1, 2024 |
Options
Metric | UpDn | This Week | Prior Week | Net CHG | % CHG |
---|---|---|---|---|---|
SPX Implied Volatility | 🔴 | 10.01 | 10.67 | -0.66 | -6.19% |
SPX GEX Flip | 🔵 | 5,252.5 | 5,177.5 | 75 | 1.45% |
SPX Skew Adjusted GEX | 🔴 | -3,415,136,551 | -2,180,655,443 | -1,234,481,108 | -56.61% |
Equity Put/Call Ratio | 🔴 | 0.54 | 0.6 | -0.06 | -10% |
VIX Put/Call Ratio | 🔴 | 0.49 | 0.51 | -0.02 | -3.92% |
SPX/W Put/Call Ratio | 🔵 | 1.47 | 1.38 | 0.09 | 6.52% |
Futures
Bull v Bear
This Week: 30d ATM IV 10.00% v 30d HV 12.61% -2.61%Bulls will seek to recapture DTF 1TFU and ideally extend WTF 1TFU on a closing basis. Upside: >5400 is just within +1σ (W) 5403 (+1.42%).Bears will seek to offer < 5305.75 and ideally 5285 (-GEX transition) on a closing basis. Downside: 5266.25 Poor Low & FVG is within -1σ (W) 5253.50 (-1.38%).
Last Week: 5327.25 JUN24 +1.54%Bulls will seek to establish price acceptance > WVAH 5243 and ideally extend WTF 1TFU. Upside: >5300 (1.02%) is within +1σ (W) 5324 (+1.49%).Bears will seek to recapture DTF 1TFD and ideally 5200 (-GEX transition) on a closing basis. Downside: FVG 5168.50 iscoincidental with-1σ (W) 5170 (-1.45%).