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  Friday, 29 Sep 2017 | 10:44 AM ET

This is the least volatile September ever, here’s what that means for stocks

Posted ByAnnie Pei

The calendar says Fall, but you'd be forgiven if you think it's Summer.

That's because this was the least volatile September on record, but that may not be such a great thing for the rally, according to one top technician.

"In September, you usually see volatility," said the senior market strategist Thursday on CNBC's "Futures Now." "But so far this year, 40 basis points is the average intraday move that we've seen so far on the S&P 500 this September, which is the least volatile ever."

In fact, according to Detrick, this September the S&P 500's average daily range has been around 0.4 percent.

So what does this mean for the market going into the fourth quarter? Detrick points to the fact that October has historically been the most volatile month of the year, with more 1 percent moves than any other month, so investors can expect a likely spike in volatility.

"Could volatility mean a little bit of a pullback?" he said. "Potentially, or maybe just some 1 percent daily changes which again, historically are normal, but clearly we haven't been seeing too many of them so far in 2017."

However, while the market had traded in a range this month, Detrick says that he does see stocks going higher in the fourth quarter. The key here is that while the S&P 500 hasn't seen too many moves beyond that 0.5 percent range, the fact that it has both hit a record high this month while being up 10 percent year to date is historically favorable for stocks.

"That's only happened 12 times since 1950, and sure enough the fourth quarter is up almost 6 percent on average 92 percent of the time, which is 11 out of those 12 times," said Detrick. "The fourth quarter is usually strong, what I'm getting at is it's even stronger when you have pretty good strength in September and throughout the year leading up to it."

This means that according to Detrick's data, the S&P 500 could actually rally another 6 percent before the end of the year.

As of Friday's close, the S&P and the Dow had their first positive September since 2013.

Disclaimer

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  Wednesday, 27 Sep 2017 | 11:23 AM ET

Have no fear! Why one JPMorgan strategist says the markets will keep grinding higher

Posted ByAnnie Pei

If you think a stock market correction is imminent, think again. At least that's the message one JPMorgan strategist has for investors.

Stephen Parker, head of thematic equity solutions for JPMorgan Private Bank, said that any market setback should be used as an opportunity to buy and given today's economic environment, investors should embrace rather than fear pullbacks.

"The economy is picking up steam, we're also about to head into earnings season and I think the results are going to be good," he said Tuesday on CNBC's "Futures Now."

"One of the other things I would point to that's an encouraging sign is over the last few weeks, we've seen some of the more traditional cyclical sectors like energy and banks begin to outperform," he added. "That's a comment that investors are looking at better growth, better fundamentals out of the next couple of months."

In fact, Parker says that global markets are going through "the best sustained global growth environment" since the financial crisis. And while investors are concerned about how inflation has been lower than expected, he believes that this will actually benefit markets in the long run given that it will make sure the Federal Reserve doesn't get too aggressive with rate hikes.

"Historically the thing that tends to end bull markets is when you see an overshoot of inflation that causes the Fed to have to overreact, and that leads to recession," he said.

Essentially, Parker expects that while the Fed will hike rates in December, investors can be assured that any more hikes will be gradual.

The strategist, however, does emphasize that investors should keep buying the dip until economic growth starts to really slow, or there are signs of "overheating" on the inflation front.

Markets opened higher Wednesday, continuing Tuesday's rebound after a sell-off at the beginning of the week.

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  Wednesday, 27 Sep 2017 | 7:50 AM ET

Wells Fargo sees trouble for stocks — brace for a 4% to 8% slide before year’s end

The stock market could come within a hair of a correction in the next three months, Wells Fargo says.

Scott Wren, senior global equity strategist at the Wells Fargo Investment Institute, sees problems for the S&P 500 as the record year comes to a close.

"Our midpoint of our target range for year-end 2018 is 2,500," Wren said Tuesday on CNBC's "Futures Now." "We're basically there right now."

Wren is predicting a 4 to 8 percent dip from current levels before year's end. The official definition of a correction is a 10 percent drop.

It appears his forecast may already be materializing. Just look at the Dow. The index is on its first four-day losing streak since June.

But it's important to note that it has been a banner year for stocks. The Dow has soared nearly 13 percent while the S&P 500 is up 12 percent. The tech-heavy Nasdaq has also reaped big gains, surging nearly 19 percent this year.

"Valuations are meaningfully stretched in that the trailing 12 month P/E ration on the S&P 500 is 20 and change. And, that's against about a 16½ 30-year median," Wren said.

With stocks on the expensive side, an economy that's "not really accelerating" and a Federal Reserve that's firmly executing its rate-hike policy — Wren doesn't see much upside left.

"The net net move between now and the end of 2018 is probably going to be pretty small," he added.

There's a silver lining in Wren's 2017 downward spiral forecast. His year-end S&P 500 price target for 2018 is 2,450 to 2,550, which would suggest solid gains next year.

"That would give us say a 5 to 8 percent return [in 2018]," Wren said. "I think we're going to have an opportunity to buy some stocks."

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  Tuesday, 26 Sep 2017 | 2:33 PM ET

Here’s why crude could rally to $60, its highest price in over two years: Wells Fargo

Posted ByAnnie Pei

Crude is on pace for its best month since April 2016, and one Wells Fargo strategist says there's still room to run in the crude rally.

Scott Wren, a senior global equity strategist at Wells Fargo Investment Institute, says that a "backwardation" has appeared in the oil futures that could take oil up to $60, which it hasn't hit since July 2015. A backwardation occurs when futures contracts expiring at later dates are trading lower than current prices, which according to Wren is being seen now in oil.

This, Wren says, means there is less of an incentive to store oil into the future and hedge against it, which usually leads to higher oil prices in the short-term.

"It's a backwardation setup right now rather than the regular contango kind of formation," he explained Tuesday on CNBC's "Futures Now." "And so people are buying oil in the front months."

But this momentum can only reach a certain point, says the strategist. Wren expects rig counts to rise in the coming months along with production, thereby increasing the supply of oil versus demand. This increase in supply versus demand, says Wren, could send oil prices back to $40 by year-end.

Anthony Grisanti, founder of GRZ Energy, believes that $52.30 to $52.60 is the "next level of resistance" for oil given that he sees demand for oil dropping in October.

Based on Tuesday's levels, when crude oil was just 10 cents away from $52, Grisanti sees oil making a downturn soon.

As of Tuesday afternoon, crude was on track to break a 4-day winning streak.

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  Sunday, 24 Sep 2017 | 5:12 PM ET

What, me worry? Commodities king Dennis Gartman sees gold 'demonstrably higher,' may target $1,400

He called this year's gold rally, and Dennis Gartman isn't letting ominous signs change his forecast.

Gartman, often known as the commodities king, predicts the yellow metal's run has a lot more gas in it.

"A year from now, gold will be demonstrably higher than it is right now," The Gartman Letter's founder told "Futures Now" in a recent interview. "I would certainly think we could see $1400 [an ounce] in dollar terms."

That would represent a gain of about seven percent from current levels.

Bullion dropped below $1300 last week — a key technical level. It came in danger of dropping below its 50-day moving average. However, none of that is rattling Gartman.

"This is a correction but let's understand the last rally that we had took off from $1200 to $1370. The fact that we've fallen back below $1300 I think is relatively inconsequential," he added.

Gold is a go-to asset for investors seeking shelter from market volatility, as well as those who believe paper money could be rendered worthless by inflationary fiscal and monetary policies. Gartman, however, avoided putting himself squarely in either of those camps.

"I am not a gold bug. I don't believe the world is going to come to an end. I don't think you own gold because you think governments are going to be collapsing around the world," he said.

His reason to own gold: Central banks and easy money.

"The monetary authorities are all still remaining expansionary," noted Gartman, given that easy central bank policy tends to undermine major currencies like the dollar and euro. "In that instance, the one currency that will probably do the best of all is gold."

He doesn't believe the Federal Reserve's intention to start reducing its $4.5 trillion balance sheet in October will be a headwind for gold. The unwinding of the Fed's crisis-era policy "is going to take five or six years. This is not something that will occur overnight," he said.

Gartman declared on "Futures Now" last December that gold was the top commodity to own in 2017.

Gold has soared 13 percent so far this year, while other precious metals such as silver and platinum picked up year-to-date gains of six percent and four percent, respectively.

He also noted that the precious metal has outperformed the S&P 500 Index, an observation he says hasn't been getting enough attention on the street.

"If you ask most people what is up more: The S&P or gold for the year," Gartman asked. "Most people wouldn't be able to answer that question properly."

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  Wednesday, 20 Sep 2017 | 10:30 AM ET

A stock market crash is coming, here's what could trigger it, warns Marc 'Dr. Doom' Faber

The U.S. stock market's latest run to all-time highs could be giving investors a false sense of security.

Market watcher Marc Faber, often hailed as the original "Dr. Doom," is not backing down from his long-held correction warning — even though nothing has materialized.

"You don't see, and I don't see. And, nobody sees. That's why people keep buying stocks. And yet, something will happen one day," the publisher of "The Gloom, Boom & Doom Report" said Tuesday on CNBC's "Futures Now."

Faber, who's in his 70s, is convinced another financial crisis like 2008 will happen in his lifetime and it'll come when Wall Street least expects it. He predicted in late June that stocks will fall 40 percent.

He said several scenarios could trigger a deep correction.

"I think it may very well come from a credit event. Or, it may come from the disclosure of a major fraud. Or, it may come because interest rates start to go up," he said.

For now, it appears the rally isn't cracking. The S&P 500 has had 36 record closes this year. The Dow has done even better. It's seen 41 record closes in 2017.

"In 2009 when stocks bottomed out, I can tell you that not many people saw why stocks would go up," Faber said. "Now it's the opposite. The sky is clear. Corporate profits have been expanding — they're good. Interest rates are low, but valuations are very high."

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  Wednesday, 20 Sep 2017 | 7:00 AM ET

Stocks are doing something they haven’t done since the financial crisis: Strategist

Posted ByAnnie Pei

All major indexes are sitting at record highs, but for those looking for what could cause the next downdraft, one strategist says they are missing the big picture.

"I think if you talk to investors and you listen to the narrative, it's all about one macro risk point to another," Joe Zidle said Tuesday on CNBC's "Futures Now.""Yet the markets climb higher and people are asking how can this be. Well the simple answer is we are seeing earnings reflate, not only in the U.S. but all around the world in a way that we haven't seen since the days prior to the credit bubble," which was followed by the financial crisis.

In other words, earnings are going to drive the market higher. Consequently, the Richard Bernstein Advisors portfolio strategist encourages investors to get into cyclical sectors like tech, financials and consumer discretionary given that he believes earnings are going through a reflation period.

Cyclicals are the best bet in this type of environment, according to Zidle, because they are "most sensitive to changes in that profit cycle."

As a result, the strategist sees these cyclical sectors staying strong until the end of the year. So far, the tech sector has surged 22 percent in 2017, with financials picking up steam to rally more than 8 percent so far this year. Consumer discretionary stocks have also climbed almost 10 percent year to date.

Better-than-expected earnings are a big factor in the market rally this year. The S&P 500 is up about 12 percent, the Nasdaq has risen 20 percent and the Dow, which closed at another all-time high on Tuesday, has surged 13 percent.

Disclaimer

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  Sunday, 17 Sep 2017 | 5:00 PM ET

John Kilduff: Crude is at a 'critical level,' but that isn't signaling a breakout

Posted ByAnnie Pei

Crude saw its best weekly gain since July, but Again Capital founding partner John Kilduff says this doesn't mean you should pile into the commodity.

Despite promising technical indicators, there aren't too many factors that would help crude sustain its rally this week, Kilduff said Thursday on CNBC's "Futures Now."

"We're at a critical level. We're arguably at crossroads here in terms of [whether] we get an extended run higher," he said. "The odds, I think, are against it."

Oil rallied back to $50 a barrel on Friday, maintaining the momentum it had gained in the past week thanks to hurricanes Irma and Harvey. But Kilduff isn't too optimistic about the bounce.

"These are big daily price moves that in my view are always very vulnerable to retracement," he explained. "I think there's a lot of noise in the market, because of the hurricanes; there's a lot of trading that got done," and those trades are being unwound.

"So I think, for now, the rug could get pulled out from this rally quite easily."

Not only that, but Kilduff still sees U.S. oil production at highs and a possible fraying of the OPEC members' commitment to reducing crude production. Both would essentially aggravate crude's oversupply problem and drive prices lower.

Crude surged almost 4 percent last week, the commodity hitting highs unseen since the end of July.

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  Wednesday, 13 Sep 2017 | 7:57 AM ET

Volatility comeback could be days away, cautions JPMorgan's Amoroso. Here's why

JPMorgan believes investors should brace for volatility.

Anastasia Amoroso, global market strategist for JPMorgan Private Bank, sees it particularly affecting the bond market.

"I would consider positioning for a pickup in volatility in the fixed income markets or maybe even a pickup in rates. If we start to price in any progress on the tax-reform front, then we may have to price in an incrementally more hawkish Fed," Amoroso said Tuesday on CNBC's "Futures Now." "Volatility in the fixed income markets has been very benign headed into this [Fed] meeting."

Volatility has been trading at historic lows. The CBOE volatility index sank to its lowest level ever on July 26. It has now traded under 10 on 56 occasions, including 38 this year.

"The market is focused on tax reform, but the market is not currently pricing in tax reform. We see that in rates," she said.

And, if rates go up, bonds generally sell-off.

Amoroso doubts the Fed will raise rates a third time this year when it meets next week. She speculates the Fed is taking a wait-and-see approach when it comes to whether the White House can successfully get a tax package through Congress.

"The window for tax reform is pretty limited because it's really between now and the end of December," Amoroso said. "As we get further into next year we start thinking about midterms," she added, referring the the 2018 elections. "You have to deliver sooner rather than later."

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  Sunday, 10 Sep 2017 | 5:00 PM ET

The S&P 500 is doing something it hasn’t since 1995, and that could mean a pullback ahead

Posted ByAnnie Pei

A striking streak in the S&P 500 Index has Ryan Detrick of LPL Financial calling for a market slip.

As of Thursday, it had been exactly 10 months since the S&P 500 saw a pullback of 3 percent, Detrick pointed out. That makes this only the second-longest streak without a 3 percent pullback that has been since 1928, beaten by an 11-month run that took place from the end of 1994 to December 1995.

That extended rally suggests stocks may be overdue for a downturn. Looking forward, Detrick concludes that the market is long overdue for shallow pullback.

"Could we keep going higher without a lot of volatility? It's possible, but we just think it's been awfully long so that a normal correction this time of the year makes a lot of sense to us here," the market strategist said last week on CNBC's "Futures Now."

At the same time, Detrick says that investors shouldn't react too nervously once that long-awaited drop takes place.

"It's just important to remember that whatever the reason may be when that inevitable correction happens, [investors should not] panic," he said. "The economy still looks good, and potentially, this bull market still has a long way to go. It's just near-term, things look dicey."

Markets were mixed on Friday, with the Dow being the only major average that moved higher for the day.

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