The Zigmont Report (Daily Market Recap for 10/9/17)

Mike Zigmont

Mike Zigmont, author of the Zigmont Report, is a partner at New York-based Harvest Volatility Management, a hedge fund with over $10B AUM, offering volatility management solutions to its investor base worldwide.  Mike has been publishing his daily newsletter (Monday-Friday) privately for the firm’s investors and his personal contacts in the investment business since 2008, sending it daily shortly after the market close.

The opinions expressed below are my own

Columbus Day.  Treasury markets were closed today so most of the fixed income complex was also closed.  If institutions aren’t slinging money through bond markets, they probably aren’t slinging money through stock markets.  Capital flow today was 74%.  Today was quiet.

The S&P 500 dropped a trivial amount over the day but we should not attempt to glean anything from that fact.  We are biding our time until we learn something of consequence.

*Maybe* Fed minutes releasing on Wednesday qualify as something of consequence but I don’t think so.

Earnings results are more likely to matter.  JP Morgan is the key release of the week (Thursday morning).  Other financials obviously count too but JP Morgan is regarded as the gold standard of banks/financials and their release will be most influential on the sector and the broader market.

The market is expecting JPM to beat (of course) and is looking for guidance to preserve their 6%-ish revenue growth trajectory.

I have no idea whether JPM will deliver or not but I think anyone looking to speculate early on the coming narrative of earnings season, will be acting on JPM’s information.  We shall see whether that snowballs into significant tape movement or not.

If I’m correct, things should continue to be quiet until Thursday.  I would say the only cause for volatility over the next two sessions would be bolt-from-the-blue geopolitical news.

See you tomorrow,