U.S. Futures & World Markets

Happy Soul Train Friday! https://mcore.hopp.to/youtube386 Yes, that's a young Rosie Perez.

US stocks are trying to close out the week on a high note with equity futures higher and crude drifting lower. Markets remain remarkably resilient in the face of higher rates and sky-high energy prices. Earnings are strong, the labor market is on solid footing, and multiples have actually contracted. It's not a bad setup when earnings are rising and valuations are falling — as long as those earnings are REAL.

S&P Futures vs. Fair Value: +21.00  |  10-Year Yield: 5.16%

CORE Headlines

Charts & Data

The college enrollment cliff is here. America's 18-24 population projected to shrink by ~2.5 million over the next decade. Expect many college closings and program downsizing. Peter Mallouk.

Fed funds futures now predicting three to four 25bps rate hikes over the next 12 months. Two expected within the next six months. Ed Yardeni via Daily Chartbook.

10-year yields higher for 7 months in a row — tied for the longest streak in 50 years. Jefferies via Daily Chartbook.

AAII bull-bear spread has been negative in 9 of the last 10 weeks — even as stocks sit near all-time highs. AAII via Daily Chartbook: a remarkable contrarian setup.

Financials barely off their high yet have seen very sharp outflows — creating a very low bar for the sector to work. @todd_sohn via Daily Chartbook.

Rate of change matters. Equities start to care when the 10-year moves 2 standard deviations — roughly 50bps over one month. We're getting there: up ~35bps in the past month. Goldman via Daily Chartbook.

Current Momentum drawdown is a 94th percentile event — exceeded only by the GFC and COVID. 22V Research via Daily Chartbook.

S&P 500 Momentum Index rebalance brought an 11.9% reduction in Semiconductors & Semiconductor Equipment weight. S&P Global via Daily Chartbook.

NYSE new lows outnumbering new highs for 23 straight days — but 21 of 28 net new lows came from Utilities, Staples, and Real Estate. "If breadth is bad, don't own breadth!" Larry Thompson via Duality Research.

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