The stock market has made a nice rebound run since last week’s FOMC meeting. Yesterday, however, the S&P 500 hit a wall at 5,200. When it did, there was a uniform retreat in the major indices that diminished the stock market’s rebound impulse.<\/p>\n\n\n\n
That’s not to say there was an unchecked rush of selling interest, only that there was a fading of the buying interest that had been persistent up to that point.<\/p>\n\n\n\n
In the same vein, the equity futures market is fading away this morning. Again, not so much because sellers have taken control of the action, but because buyers are showing a lack of conviction at the index level.<\/p>\n\n\n\n
Currently, the S&P 500 futures are down 22 points and are trading 0.4% below fair value, the Nasdaq 100 futures are down 112 points and are trading 0.6% below fair value, and the Dow Jones Industrial Average futures are down 78 points and are trading 0.2% below fair value.<\/p>\n\n\n\n
It is some typical consolidation activity after a nice run in a short period of time. At yesterday’s highs, the Russell 2000, Nasdaq Composite, and S&P 500 were up 5.6%, 5.4%, and 3.7%, respectively, from their lows on May 1 (FOMC day).<\/p>\n\n\n\n
Outsized moves are being reserved largely for individual stocks. We saw that yesterday with Walt Disney (DIS)<\/strong>, which fell 9.5% in response to its tepid fiscal Q3 guidance. We are seeing it this morning with the likes of Uber (UBER), Rivian (RIVN), Cirrus Logic (CRUS), Reddit (RDDT)<\/strong>, and Twilio (TWLO)<\/strong>. <\/p>\n\n\n\n They are all moving big in response to their earnings results and\/or guidance. UBER is down 8.2%; RIVN is down 7.1%; CRUS is up 15.0%; RDDT is up 11.8%; and TWLO is down 7.3%.<\/p>\n\n\n\n These aren’t the only movers of note, but their price action reflects a market that has turned more discerning at the micro level. To that end, the rewards are greater on positive surprises, whereas the penalty is larger on disappointments.<\/p>\n\n\n\n