The United States economy is full of innovation. It has to be. Manufacturing industries that dominated the economy decades ago - textiles, televisions, even automobiles to a large degree - have moved overseas, where labor and materials costs are lower. Yet the U.S. economy, even during the pandemic and the current period of high inflation, has expanded to record levels. If U.S. corporations weren't innovating, creating new products (such as vaccines and AI) and services (such as Zoom calls) and moving into new markets, the domestic economy would not be growing, and capital would not be flooding into the country. The current high level of the U.S. dollar relative to currencies around the world attests to the confidence that global investors have in the durable and innovative U.S. economy.

Intuitive Surgical designs, manufactures, and markets da Vinci robotic surgical systems and related instruments and accessories in the U.S. and internationally. The da Vinci system enables surgeons to perform a wide range of surgical procedures with shorter recovery periods and higher patient comfort. ISRG was founded in 1995 and is headquartered in Sunnyvale, California.

The volume of weekly insider transactions remains predictably low given the start of earnings season, and the insider-sentiment data from Vickers' Stock Research remains clearly neutral. This ongoing lack of positive sentiment has brought what had been steady improvement in Vickers' overall Insider Index to a halt, as that reading has plateaued. Meanwhile, the NYSE and Nasdaq One-Week Sell/Buy Ratios are relatively close to parity at 4.86 and 5.69, respectively. But the Nasdaq (which had been weaker) is generally improving while the NYSE (which had been stronger) is generally weakening. Should they meet in the middle, overall sentiment will be landlocked in neutral territory, this as stock indices continue to crawl higher and add to impressive gains so far in 2024. On a sector basis, insider buying outpaced selling in Energy, with shares valued at roughly $32 million bought versus about $200,000 sold. Conversely, selling by insiders was particularly notable in Financial, with shares valued at $397 million sold. Selling was also evident in Healthcare, Consumer Staples, and Information Technology. This week, analysts at Vickers highlighted insider transactions of interest at PBF Energy Inc. (NYSE: PBF) and Bank of America Corp. (NYSE: BAC).

Since bottoming on September 16, the five- and 10-year Treasury yields have spiked higher. We have seen the same action from the two-year, which bottomed on September 24. Let's not forget, the FOMC cut the fed funds rate on September 18. We were looking for a jump in rates after the cut, which was certainly a non-consensus call. The 10-year jumped to 4.18% on Monday from an intraday low of 3.6% on September 17, or 58 basis points (bps). The 10-year has run right to its flat 200-day average and is near some key Fibonacci retracement levels in the 4.3% area. The 10-year has busted through trendline resistance off the peaks since late April, but has a way to go to hit the trendline off the peaks since October 2023 (which is up at 4.44% looking out a month). The five-year hit 3.98% yesterday, up from 3.39%, or 59 bps. Immediate key overhead levels for the five-year run from 4.0% to 4.2% and include the 200-day simple and 50-week exponential moving average, as well as some Fibonacci retracement levels. The two-year closed near 4.03% on Monday, up from an intraday low of 3.5% on September 25. Key levels above start at 4.1% and run up to 4.4%. The iShares 20+ Year Treasury Bond (TLT) broke key chart, moving-average, and Fibonacci retracement support on Monday at 93.40. The next key level is a 61.8% retracement at 9.16%. We still believe that when the pullback ends, we will see another rally to recovery highs, with yields falling to 3.25% for the five- and 10-year and down to 3% for the two-year. The Commitment of Traders (COT) data remains very bullish for the two-, five, and 10-year. While not perfect, this setup has worked well in the past. (Mark Arbeter, CMT)