Page One
Briefing.com Summary:
*The buy-the-dip impulse is missing in action for the AI trade.
*Oil prices remain agitated, with WTI and Brent crude futures pushing higher.
*The earnings results have been mostly better than expected, but the reaction to the results hasn't been.
There is something missing ahead of the open, and it is glaringly obvious. That something is a buy-the-dip impulse.
Currently, the S&P 500 futures are down 35 points and are trading 0.4% below fair value, the Nasdaq 100 futures are down 93 points and are trading 0.3% below fair value, and the Dow Jones Industrial Average futures are down 466 points and are trading 0.9% below fair value.
Yesterday's action featured a bruising trade for the AI trade, which unraveled amid growth concerns that involved supply chain constraints and worries about a scarcity of capital to achieve forecasted growth plans.
What was rough for the AI trade, though, was smoothed over by the performance of the interest rate-sensitive, countercyclical, and low-beta stocks. Today, it is looking like a bumpy ride for all parties at the open.
The ongoing agitation of the oil market has contributed to the lack of a buy-the-dip impulse. WTI crude futures are up 1.7% to $101.12/bbl, and Brent crude futures are up 1.4% to $114.78/bbl, creating cost problems for domestic and foreign users of oil.
The elevated oil prices, in turn, continue to keep inflation concerns and rate hike concerns on the front burner.
Other factors keeping the buy-the-dip crowd sidelined include the lackluster response to earnings results, most of which have been better than expected. The overarching issue is that the reports, in many cases, haven't been perfect. A weaker-than-expected gross margin here or a disappointing revenue guide there, for example, have stifled many stocks after their reports.
Western Digital (WDC), Deckers Outdoor (DECK), American Express (AXP), and Verisign (VRSN) are among the latest batch of companies to report. They are all trading lower in today's pre-market action.
There is ample time left in the day, of course, for their fortunes to turn and for the fortunes of the stock market to turn, but that is going to be dependent on the buy-the-dip crowd, which appears to have retreated to a neutral corner ahead of the open.
