Remy: US markets are digesting fresh September durable goods orders as Wall Street enters what may be the most consequential 48 hours of the month and stocks are fighting to stabilize after last week's volatility, but mega cap earnings from Alphabet and Microsoft on Deck, followed by Amazon on Thursday, and the Federal Reserve kicks off its two-day policy meeting. And while markets expect Fetcher Kevin Wars deliver a hawkish pause tomorrow afternoon, markets are already pricing in over a likelihood of another rate hike in December. And joining us this morning at the New York Stock Exchange is Michael Ryan King, senior market strategist at the NYSE. Michael, good morning. Thank you so much for joining us.
Michael Ryan King: Good morning, Remy. Thanks for having me.
Remy: Well, we are looking at US stock futures higher this morning and we're digesting earnings as well as the. Latest economic data. So what do you make of what we're seeing in the markets as we head into the opening?
Michael Ryan King: There's been a ton of earnings to digest over the last 24 hours. That's only going to pick up in the size of the companies that are going to be announcing are going to only get bigger in the next couple of days. Yesterday we did see kind of a little reprieve in the markets when we had some financing announcements within the AI trade, right, that's been one of the bigger drags, you know, kind of, you know, uh, you can afford the S&P 500 and technology over the last couple weeks, something, you know, kind of we've been talking about and when you think about kind of the month of October, right, we've really seen kind of the underperformance of tech, you know, while we saw some, you know, breadth improvement, you know, kind of, uh, you know, kind of elsewhere within the market, you know, much of that was happening within, you know, kind of defensive sector. And yesterday with the Meta announcement, the S1 filing, this morning we have Broadcom's announcement of some financing deals to back the purchase of chips. We're now seeing kind of a bounce in some of the some of the beleaguered tech trades and of course the two day Fed meeting kicks off. We have been anticipating the rate announcement which is coming tomorrow afternoon. But of course as we continue to move further into year end, we're going to continue to monitor the geopolitical conflict in the Middle East and we are seeing a reprieve in oil prices, but we have to keep in mind that oil prices do remain elevated.
Remy: So what do you expect from the central bank, the Federal Reserve tomorrow?
Michael Ryan King: Yes, I think it's widely expected that they're going to leave rates unchanged at this point. They've been kind of talking about, you know, kind of start the fact that, you know, kind of financial conditions were, you know, not showing, um, they were not showing, uh, that, that financial conditions were tight. We're finally for the first time. Starting to not necessarily see that they're tight, but we're seeing that there's clearly capital constraints, right? So you're starting to, you have to wonder what the impact of those capital constraints are going to be kind of as we move forward if we start to see kind of A slowdown in any of that AI spending in that AI capex boom that we've seen, so I think. That gives them a reason for pause and then when you think about just kind of how leverage the economy is to kind of financial markets, right, you can see kind of the trickle down effect of what that might potentially look like if we were to see a slowdown in AI spending impacting earnings, potentially impacting markets, right? So I think you're going to see them remain on hold. They will have some hawkish commentary. in and around the inflation backdrop, you know, though we all know that this is a supply driven, primarily a supply driven inflation situation, you know, kind of at this point which you know the monetary policy is not going to necessarily be able to ease. Now when you actually kind of listen to and read through some of the transcripts of earnings calls, what we have seen is that you know the A lot of the companies that are involved in kind of transportation and and and kind of logistics markets, right, they're showing that there's very, very strong demand, but they're starting to pass on some of the increased costs which ultimately is going to potentially kind of push inflation higher as that trickles downstream, you know, pushing inflation higher and also potentially starting to impact the margins of other companies.
Remy: And of course when we're talking about the next 48 hours we will be paying attention to what the Federal Reserve says after the conclusion of their two day meeting. But of course we have big tech earnings coming down the pike. So what are you watching for from the numbers as well as the earnings calls?
Michael Ryan King: Yes, look, I think you know it's We are moving into uh the portion of kind of the tech earnings where you are seeing the companies that have been doing all of this investment actually seeing some return on investment right given just this the the cloud businesses that these companies have right so you'll start to see some of that, um, you know, kind of markets will digest that you're gonna continue to pay attention to kind of how much you know, uh, these capex budgets, you know, kind of and and. kind of how companies are guiding CapEx budgets, right, and then you know there's the question of whether do we see kind of another, um, you know, kind of capital raise from an Amazon or Microsoft right after we just had, you know, Meta come to market, you know, the, the, uh, you know, it was very interesting when you know at the end of last week after their earnings after they announced the Class, you saw kind of a look, you know, um, by the special committee just, you know. Acknowledging that the capital is getting more constrained in the market and that they thought it was important to come to market quickly, right, we potentially have a $100 billion offering coming down the pike from anthropic in the near term. So it will be interesting to see if any of any other kind of hyper scalers do try to. Raise, you know, some additional capital here, you know, kind of ahead of that in the November time frame.
Remy: Yes, a lot to keep our eyes on as we head into month end as well as the rest of the quarter. But before I let you go, it is also a big week for global central banks, and this is a time where we're continuing to monitor Treasury yields, not just here in the US as well as overseas. So what will you be listening for when it comes to the global central banks?
Michael Ryan King: Yes, look, I mean, so interestingly over the last week or two, right, we have finally started to see. The correlations between kind of just oil prices and um you know kind of and treasury yields you know kind of start to break right so markets are beginning to kind of reconsider and and look at kind of that relationship of AI and you know kind of the the the growth backdrop, um, you know, look, I mean I think you know at this point, right, markets are you know kind of expecting the Bank of Japan to continue to to to hike rates over time. Um, you know, and I think, you know, everybody's just, just at this point where they're trying to digest kind of the inflationary backdrop, you know, within the ECB, you know, there's a lot of, uh, you know, a lot of concern around kind of the widening of spreads and peripheral yields and, and, um, you know, in France, right, so you know that's, you know, whether or not they're going to, you know, uh, suggest that they're going to do anything to address that is, is something to pay attention to, uh, you know, kind of from the, from the ECB as well.
Remy: And finally, before I let you go, less than 60 seconds, but what technical levels are you watching when it comes to the S&P 500?
Michael Ryan King: Yes, so you know, to the downside here, right, like 7600, you know, kind of feels like a pretty key level, right? We've kind of pulled back into, you know, into that range, you know, it's around where our previous lows were, the 100 day moving average, right? If you do start to kind of break below that level, right, that would put kind of the 200 day. You're kind of moving average into play, right, which is down, you know, a few percent from, from there, right? So, um, 7600 to the downside, you know, kind of clearly like the, the, the important level is you can have a break back above 7800, right? We've been in this pretty tight range for kind of 345 months, um, you know, at this point. So, you know, right now we're a little bit in no man's land right in the middle of that. We've been kind of chopping, you know, kind of going from the top end of the range right to the bottom. The end of the range, you know, once we kind of clear one way or the other or the other, you know, that will give us kind of a little more directional understanding and then keep in mind we have the midterms next week which we can we can talk about in real time.
Remy: Well, thank you so much, Michael, for joining us on this Tuesday morning and as you mentioned, as we count down to the midterms, I'm sure we will be talking a lot about geopolitics and politics. So thank you so much for joining me today.
Michael Ryan King: Thanks for having me.
Remy: Thank you, Michael.
