Stock Market Today: April 8th - 12th, 2024

Top of the morning StonkForumers! Happy Hump Day to all of you and welcome to the new trading day and a frrrrrrrrrrrresh start. Here is a quick check on those futures as we are less than an hour into the US cash market open.

GLTA on this Wednesday, April the 10th, 2024!

 

Morning Lineup - 4/10/24 - Here it Comes
Wed, Apr 10, 2024

Investors have taken an optimistic tone this morning heading into the release of March CPI, but that could all change in a big way based on the report. The last several weeks have seen increased concern that inflation will be stickier than previously thought. While the market remains near all-time highs, most investors would say a higher-than-expected report is more likely than a weaker-than-expected one.

The recent breakout in gold and other commodities we discussed yesterday is one reason for investors to position for a higher-than-expected report. After years of stalling below resistance, gold finally broke out in early March and has ripped higher ever since.

While it hasn’t been stuck below resistance for nearly as long as gold, the yen has been simmering in a historically tight trading range just below 152. It first tested the 152-level late last year before rallying sharply into the new year (shown as a falling line in the chart). That rally quickly fizzled, and it wasn’t long before it was back to the low 150s range.



Over the last 15 trading days, the daily settlement price for the yen relative to the dollar has been confined to a 0.33% range, the narrowest since the late 1970s! The intraday chart below shows how the yen weakened to just below 152 in late March and has flatlined there ever since. In the last few days, it has inched closer to that critical level but keeps coming up short. At this point, it seems like only a question of when the yen will break through 152. After that will the move be as dramatic as gold’s move over the last month, or will it fail to live up to expectations?

 

Here is a final look at today's market and futures maps, as well as how each sector performed individually at the close on Wednesday, April 10th, 2024.

 

Top of the morning StonkForumers! Happy Thursday to all of you and welcome to the new trading day and a frrrrrrrrrrrresh start. Here is a quick check on those futures as we are less than an hour into the US cash market open.

GLTA on this Thursday, April the 11th, 2024!

 

Morning Lineup - 4/11/24 - Stamp Inflation
Thu, Apr 11, 2024

Futures were higher heading into yesterday's CPI report and reversed sharply lower once the data was released. This morning, we have the opposite backdrop ahead of the March PPI report. While the report is unlikely to be as big of a market mover as the CPI report, the results didn't show as much inflation pressure in the producer sector and jobless claims were pretty much right in line with expectations. The ECB just announced its latest rate decision (no change, "inflation continues to fall") which we break down in this morning's report, and we'll get further color during the press conference at 8:45 Eastern. Overall, futures have rallied a bit on the news as Nasdaq futures moved into positive territory while the S&P 500 is indicated to open just marginally lower. We'll take it!

Yesterday’s CPI report was a disappointment on all fronts, and while the rate of inflation has slowed, it’s still firmly in positive territory which helps explain why consumers are so miserable. When you consider the cumulative impact of these price increases since the lockdowns in March 2020, it adds up. March’s CPI report reached an inauspicious milestone as it was the first time since March 1991 that the four-year rate of change in headline CPI exceeded 20%. We’re still nowhere near the levels from the 1970s and early 1980s, but 33 years is a long time.



If you show the chart above to any consumer and tell them that the cost of living has increased by 20% in the last four years, they’ll probably ask where you've been living the last four years and want to know if there's any room to move in. What we have all experienced seems much larger. Take a bag of Doritos, a subject we have quite an expertise on. In 2019, a 9.75-ounce bag had a suggested retail price of $4.29, but today it costs about $1.50 more and is half an ounce smaller. Ignoring the change in size, that’s still an increase of 35%! These types of examples come up everywhere you look, and while there are some examples where prices haven’t increased by over 20% in the last four years, they aren’t nearly as apparent.

Getting back to the examples of price increases, one we noticed yesterday was postage. The US Postal Service just filed to increase the price of a stamp by 8% to 73 cents in July from 68 cents, The current price, it should be noted, only took effect in January when prices increased by 3%, so this would be the second increase this year and the fourth since the start of 2023! The chart below shows the monthly price levels of a first-class stamp since 1963, and you can see how the pace of increases has picked up steam in recent years. The last time a stamp cost 25 cents was in January 1991. The last time it was 50 cents or less was in late 2018.



In the chart below, we compare the four-year change in the price of a stamp to the four-year change in CPI. If the proposed postage increase takes effect in July, the four-year price change to mail a letter will reach 32.7%, the highest level since the mid-1980s. If CPI increases at a rate of 0.3% per month between now and June (a perfectly realistic, if not conservative rate based on recent CPI reports), the four-year change in CPI will reach 22.2% which would be the largest four-year increase since December 1984. To be fair, the rate of postage inflation still lags the rates from the 1970s, but it’s large and well above the Bureau of Labor Statistics’ official gauge. We should have loaded up on those Forever Stamps four years ago!

 

Here is a final look at today's market and futures maps, as well as how each sector performed individually at the close on Thursday, April 11th, 2024.

 

here is a quick preview of next week's notable earnings releases courtesy of reddit's wallstreetbets:

have yourself a terrific weekend ahead guys!

 

Top of the morning StonkForumers! Happy Friday to all of you and welcome to the final trading day of the week and a frrrrrrrrrrrresh start. Here is a quick check on those futures as we are less than an hour into the US cash market open.

GLTA on this Friday, April the 12th, 2024!

 

Morning Lineup - 4/12/24 - Not So "Golden"
Fri, Apr 12, 2024

Another earnings season has arrived as the big banks kicked off the reporting period this morning, and the results have been stronger across the board. All six companies reporting beat expectations on both the top and bottom lines. While JP Morgan (JPM) is down nearly 3% and Wells Fargo is down fractionally, the other four stocks are all up by at least 1%.

Despite what have been positive results, futures are lower this morning as the market digests yesterday's gains and headlines that Israel is gearing up for an imminent direct strike from Iran. That would have major implications in the energy space, but there have been similar Friday headlines in recent weeks that never amounted to anything.

As for the economic calendar, Import Prices were just released, and they increased by 0.4% m/m which was higher than the 0.3% forecast. Ex petroleum, though, they were unchanged which was less than the 0.1% forecast. The only other report on the calendar for the week is Michigan Confidence, and the specific area of focus will be inflation expectations. For the next year, economists are expecting one-year expectations to remain unchanged at 2.9%.

Gold prices have continued their blistering rally this morning, notching their eighth consecutive daily gain in the past ten days. The yellow metal has surged 17% since the start of March, pushing it more than 20% above its 200-day moving average (DMA) and 12% above its 50-DMA. Both spreads rank in the top 3% historically, a clear signal of gold's recent strength.

This surge in gold has fueled a similar rally in gold mining stocks. The NYSE Arca Gold Miners Index (GDX) has spiked 30% since late February, even outpacing gold itself. However, unlike the commodity, the miners remain in negative territory year-over-year. That being said, the GDX did experience a bullish "golden cross" yesterday, where the 50-DMA crossed above the rising 200-DMA. While technicians often view these patterns as a positive sign, they have a mixed historical record.



In the case of the GDX, not only have golden crosses had a mixed historical record, they’ve been more of a bearish indicator than anything else. Since the inception of the index back in 1994, there have been 13 prior golden crosses, and in the table below we summarize the median performance of the index following each one along with the frequency of positive returns. While the GDX’s median performance over the following week was a gain of 1.7% which is well above the average 0.2% gain for all periods since 1994, median performance over the following one, three, six, and twelve months was not only weaker than the average for all periods, it was flat out negative! One year later, for example, the GDX’s median performance was a decline of 12.3% with positive returns less than 40% of the time.

 

Here is a final look at today's market and futures maps, as well as how each sector performed individually at the close on Friday, April 12th, 2024.