Charles Payne's Market Commentary

Morning Commentary

INVESTORS ACCEPT SO-SO BOND AUCTION

By Charles Payne, CEO & Principal Analyst
11/9/2023 9:52 AM

Yesterday, the U.S. Treasury auctioned $40 billion of 10-year government bonds. Initially, the market rebounded on this, but it was not an excellent bond auction:

15.1% to primary
15.2% direct bidders
69.7% indirect bidders

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The CBOE 10-Year U.S. Treasury Yield moved lower on the day toward that mythical 4.50% level. There’s no doubt this number excites folks, but from a technical point of view, I think filling the gap right below 4.40% (see circle) and testing 4.10% are more meaningful tests.

Chart

Citigroup (C) notes that since the start of 2022, bond auctions have moved the market on average more than the monthly jobs report.

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The 30-Year Bond auction has the most significant impact; the U.S. Treasury will auction $24.0 billion worth of them today.

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It all boils down to finding buyers, as foreign purchasers haven’t kept pace with the surge in issuance.

Technology (XLK) led the way (surprise), paced by software and semiconductors.

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Nothing has changed – growth rocks, incredible tech, and Communication Services (XLC). While Energy (XLE) continues to slide, and Utilities (XLU) keep melting down.

S&P 500 Map

They aren’t going to lead the market, but this underperformance relative to the overall market for Utilities is mind-boggling.

Disney (DIS) missed on revenue but beat on earnings and posted strong free cash flow. The stock was higher on the news but has a long way to go to reclaim a market leadership role.

Today’s Session

Jay Powell speaks at 2PM and that might put a lid on any upside. That said, the market is looking for any glimmer of hope this rate hiking cycle has ended.

Oops!

Individual investor sentiment surged back to 32% as bearishness plunged almost in half. It’s fine to be wrong, but it’s a mistake to be stubborn. The market is on the verge of a major breakout and most stocks haven’t moved this year after being down last year.

There is gold in them hills.

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