Stock Market Today: April 15th - 19th, 2024

Welcome StonkForums to the trading week of April 15th!

This past week saw the following moves in the S&P:


S&P Sectors End of Week:


Major Indices End of Week:



Major Futures Markets End of Week:


Economic Calendar for the Week Ahead:


What to Watch in the Week Ahead:
(N/A.)

 

Gold & The Dollar Surged This Week, Stocks & Crypto Purged As Reflation & WW3-Risk Wreck Rate-Cut Hopes
FRIDAY, APR 12, 2024 - 04:00 PM

Inflation fears/promises/threats were realized this week with CPI and PPI hot (yes PPI) and UMich infl exp rising too. Inflation data has been surprising to the upside all year and growth data not so much...



...and that rising inflation expectation wrecked the hopes and dreams of the doves this week, smashing expectations for The Fed to less than two total cuts in 2024 now priced in...



Source: Bloomberg

And even the armada of Fed Speakers launched today spoke as one...

• *FED'S COLLINS: NOW SEE FED CUTTING LATER THAN PREVIOUSLY THOUGHT
  
  
• *FED'S GOOLSBEE: IF PCE REINFLATES, 'WE WILL STABILIZE THE PRICES'
  
  
• *FED'S SCHMID: REASON TO THINK RATES WILL STAY HIGHER FOR LONGER
  
  
• *FED'S BOSTIC: `I AM NOT IN A HURRY' TO CUT INTEREST RATES
  
  
• *FED'S DALY: NO URGENCY TO CUT INTEREST RATES

Even with today's sudden slam-down, gold was impressive this week - interestingly rallying along with the USDollar on the week. Stocks were spanked but had a wild ride and today saw Bitcoin & Black Gold monkey-hammered (for no good reason)...



Source: Bloomberg

Stocks really did have a wild ride this week, plunging on CPI (wrecking the narrative), then rallying on a PPI print that was anything but dovish (as the algos took hold), only to get monkey-hammered today as ammo ran out and WW3 risks re0ignioted amid 'imminent' threats between Iran and Israel over attacks. By the end, all the US majors were back at the lows of the week, led by Small Caps and The Dow...



The S&P 500 suffered its worst weekly loss since October (second week lower in a row) and closed at one-month lows, while the median stock closed at two-month lows...



Source: Bloomberg

Energy stocks - which were the only sector green on the week as of last night's close - were unceremoniously dumped today as all S&P sectors ended red with Financials the biggest losers (not a great day for JPM today)...



Source: Bloomberg

Notably, Goldman's trading desk highlights the fact that The Magnificent 7 collectively have been net bought by hedge funds for a second straight week on the Prime book (following 6 straight weeks of net selling), suggesting a renewed focus on quality and balance sheet strength into the Q1 earnings season...



Source: Bloomberg

The group now makes up 19.6% of total US single stock Net exposure on the Prime book, up sharply from the YTD low of 16.9% in early March and approaching the record level of ~20% seen last summer...



Source: Goldman Sachs

Treasuries were bid today (yields down and stocks down) with yields down around 7-9bps across the board. On the week though, yields were higher, led by the short-end/belly of the curve. Obviously the big move was around CPI on Wednesday...



Source: Bloomberg

The dollar roared higher this week (its biggest weekly gain since Sept 2022) to its highest since Nov 2023...



Source: Bloomberg

Crypto was clubbed like a baby seal today, with Bitcoin erasing the week's gains and then some...



Source: Bloomberg

...and once again, the selling pressure was initiated from the perp futs markets....



Ethereum was even worse with ETH/BTC plunging back below recent support (which is also January support) to its lowest since April 2021...



Source: Bloomberg

Some one was definitely not happy about the message that gold was sending this week and Benoit Gilson stomped on spot prices this afternoon after the precious metal soared to new record highs...



Source: Bloomberg

Silver outperformed Gold for the second week in a row, back to its strongest relative to gold since November...



Source: Bloomberg

...surging relative to gold early on today, before the big reversal...



Source: Bloomberg

Crude prices also had a wild ride this week amid "WW3-on / WW3-off" headlines...



Source: Bloomberg

Finally, after the quarter-end surge in RRP usage, the liquidity withdrawals continue, falling to new cycle lows today, barely above $400BN...



Source: Bloomberg

Is it any wonder The Fed is rapidly looking to taper QT?

 

All Good Things Come to an End
Fri, Apr 12, 2024

The rally from the October lows through the end of March was enough to make any bull giddy, but April has brought a decidedly different market mood. Stocks have hit the pause button, and in many cases the rewind button. While the S&P 500 was comfortably above its 50-day moving average (DMA) from early November through the end of March, it has been creeping towards that level all April, and as of Friday afternoon, it even dipped slightly below.



If the S&P 500 closes around these levels this afternoon, it will snap a streak of 109 trading days of closing above its 50-DMA. This streak, though impressive, wasn't record-breaking, but since 1953, only ten were longer, with the last exceeding it coming in 2011. (See chart below for historical context)



The chart below shows where each sector, the S&P 500, Nasdaq, and Russell 2000 are trading relative to their 50-DMAs now versus where they were trading on 3/28 when the S&P 500 last closed at a record high. Not surprisingly, every sector and index is less extended now. Nearly half of the eleven sectors have also broken below their 50 DMAs, while three others (Industrials, Materials, and Technology) are precariously close. While corrections, or what in this case has merely been a pullback, can be unsettling, they are a natural part of any market, even a bull market, environment.

Is It Time to Worry About Inflation Again?


Short answer: likely not. Make no mistake, inflation ran hot in the first quarter, especially relative to the fourth quarter of 2023. The March Consumer Price Index (CPI) report was an unwelcome surprise. Both headline and core inflation (excluding food and energy) came in above expectations. Headline inflation is up 3.5% from last year, and as you can see from the solid line in the chart below, it looks like inflation progress has stalled since June 2023.

But the breakdown also tells us it’s really shelter inflation that is behind the stall. Inflation within every other major category has eased relative to last June – including food prices, vehicle prices, and even things like household furnishings, apparel, airfares, and hotels prices. Gas prices have risen this year, but we’re a long way away from the energy price surge we saw in mid-2022.



I’ve discussed shelter inflation ad nauseum over the past year and half, and so I’ll skip the details. Suffice it to say, official shelter inflation has a significant lag to rents in the private data. Shelter inflation matters a lot for CPI, as it makes up 35% of the basket. Rents of primary residence account for 8% of that, while “owners’ equivalent rent” (OER) accounts for 27%. OER is the “implied rent” homeowners pay, and it’s based on market rents as opposed to home prices.

What’s strange is that the US is the only major country that includes a concept like OER in its CPI basket. Other major countries, including in Europe and Canada, include rental inflation but not OER. The Bureau of Labor Statistics calculates an equivalent measure for the US – called the “harmonized index of consumer prices” (HICP), which you can think of as CPI excluding OER. I find this a useful gauge of inflation because we don’t have to throw all of shelter inflation out, as HICP includes regular rental inflation but excludes the problematic OER. It’s also helpful for comparing US inflation to other countries’ on an apples-to-apples basis. US HICP is up 2.4% since last year, and core HICP (ex food and energy) is up just 1.9%. In March, core HICP rose just 0.2%, equivalent to an annualized pace of 2.3%. This should tell you that underlying inflation is not worrisome.



Unfortunately, regular CPI is what is widely followed in the US. The good news is that shelter inflation is easing (including in March), but it’s happening ever so slowly. Apartment List’s national rental index has been in a year-over-year decline for 10 straight months. Official shelter inflation may not get as low as this, but there’s likely more easing to come in the months ahead.



Shelter was not the only upward force on inflation in March. Core inflation (excluding food and energy) rose 0.36% in March, and shelter contributed 0.19%-points of that. But another 0.09%-points came from motor vehicle insurance, which makes up under 4% of the core CPI basket. Together, shelter and motor vehicle insurance contributed 78% of the core CPI increase in March. Motor vehicle insurance rose 2.6% in March and is up 23% since last year. A big reason is that cars and trucks are pricier now, and so insurance is getting more expensive. Repair costs are also rising – for example, a bumper used to be a cheap replacement part, but not anymore because it’s got advanced electronic sensors in there.

The strong economy is not translating to higher prices
Outside of shelter and motor vehicle insurance, most other categories are seeing disinflation or an outright fall in prices. That’s despite strong household consumption. Whether it’s food prices, commodities outside food and energy (like vehicles, household furnishings and appliances) or services like hotels, airfares, personal care services, theater and concert admissions, and car and truck rentals.

As I wrote last month, one category I like to follow is inflation within food services, i.e. “full service meals and snacks.” It’s tracked core inflation closely even though it’s not included within the core inflation basket. I find it useful because full-services restaurant meals combine several elements that go into inflation, including:

• Commodity prices – food, but also energy (which is used for transportation, amongst other things)
• Wages – for restaurant workers
• Rents – of restaurant premises

Inflation for restaurant meals has eased a lot over the past few months. It was up just 3.3% from last year, which is in-line with what we saw in 2019. At its peak in August 2022, inflation for restaurant meals was as high as 9%. The current level tells me that underlying inflation is quite benign.



Listen to consumers
Fed Chair Powell has said that one cause of spiraling inflation is rising inflation expectations, which is what happened in the 1970s. If consumers expect higher inflation, they tend to demand more wages and that puts more pressure on prices for goods and services. He can rest easy, because consumer expectations of inflation – both over the next one year and the next five years – have come in below 3% for three months straight (using the University of Michigan consumer survey). That’s not far above pre-pandemic levels, when expectations were running around 2.5-2.8%.

Consumer inflation expectations are not particularly accurate in forecasting future inflation. (It’s hard even for the Fed.) But I find it useful as a gauge of current inflation, because consumers usually project current inflation out into the future. And right now, consumers are saying inflation is running only slightly above where it was in 2019.



Rate cuts get pushed out
The firm inflation data in Q1 likely pushes out the timing of the first interest rate cut by the Fed, perhaps to July at the earliest, if not September. There’s even less urgency to cut because the labor market continues to run strong. At the same time, there’s a lot more inflation data to come between now and June, let alone July. The underlying data points to core inflation hitting the Fed’s estimate of 2.6% by the end of the year – and based on their own projection, that’s good enough for the cuts.

As Powell noted in his press conference in March, they didn’t sound victory bells when inflation really eased in the second half of 2023, and they’re not going to panic based on the Q1 data. The disinflation trend is likely on track, albeit with a few bumps along the way.

Are Democrats or Republicans Better for Stocks?


“George Washington was the only president who didn’t blame the previous administration.” -Source unknown

How’s that for a title for a blog? Now that I have your attention, let’s talk a little bit about election years.

We are getting the question of who is better for stocks a lot lately and given the election coming up, this question isn’t going away. Starting with the 82nd Congress in 1951, we found that the S&P 500 was up 11.5% on average when a Democrat was in the White House versus 7.1% for a Republican. But is it that simple?



What about Congress? You could argue if a party controls Congress they yield more power than holding the White House. When the Democrats controlled both the House and Senate, the return drops to only 6.7% compared with 11.0% when Republicans control both chambers of Congress. But the real gains tend to be when things are split, as the returns jump to 14.5%. Gridlock (or compromise) is good.



I shared those charts and more in 16 Charts (and Tables) to Know This Election Year. That was one of our most read blogs all year, so be sure to save that link and re-read it a few times over the course of this election year.

Now here’s one that really caught my attention recently. According to our friends at Bespoke Investment Group, if you invested $1,000 in the S&P 500 when Eisenhower took office in 1953 and invested only when a Democrat was the president you’d have $61,800 today versus $27,400 when only investing during a Republican presidency.



As appealing as that might be to some, if you simply ignored who was in the White House and invested that same $1,000 in the S&P 500 in 1953 it would be worth close to $1.7 million today!



All I can say is wow! I’ve done this for close to 25 years now and I’ve seen so many investors do things purely based on their political beliefs. How many disliked President Trump, rooted for a recession and bear market, only to see 401k balances soar? Today many aren’t happy with President Biden and are avoiding stocks again, yet many portfolios are near the highest they’ve ever been if they stayed invested. Same story with President Obama—if you weren’t invested you missed a great time to buy stocks quite cheaply when he took office in January 2009, only to see stocks soar the next eight years.

The bottom line is don’t let your political beliefs influence your investment decisions.

I will leave you with this really interesting chart from Libby Cantrill, Head of US Policy at PIMCO, on potential winners and losers this coming November. Take note, these views aren’t the Carson Investment Research teams views, but I think Libby is one of the best out there and it is worth thinking about as we move closer to the election.



Best Six Months Rally Respite Underway April Tracks Election Year Seasonality

It’s been a banner “Best Six Months (BSM)” (November-April) for the Dow and S&P 500. From our Seasonal MACD Buy Signal on October 9, 2023, through our April 2, 2024 Seasonal MACD Sell Signal), DJIA gained 16.6%, S&P 500 20.1% – double the historical average BSM gains. These big gains have not left much on the table until later this year.

Risks are more elevated now. Sentiment continues to run high. Valuations are extended. Geopolitical tensions have not eased. And persistent inflation pressures have the Fed in no rush to cut rates. As the election campaign rhetoric heats up and the Best Six Months comes to a close, we are shifting to a more cautious stance.

As you can see in the chart of April 2024 compared to election year Aprils since 1950 the market is tracking the softer election year April pattern

Inflation, Poor Sales, and Fewer Jobs
Tue, Apr 9, 2024

The US data calendar has been light to start the week. Today, the only release of note was the NFIB's reading on small business sentiment. While the index was expected to tick up to 89.9 from 89.4 in February, it instead dropped down to 88.5. That is the weakest reading since December 2012.



Given the weak headline number, breadth in this month's report was terrible. Of the inputs to the Optimism index, only two rose month-over-month. Of those falling categories, one of the more standout declines was an 8-point drop in expectations for real sales. While there have been even weaker readings over the past couple of years, that monthly decline ranks in the bottom 5% of all months on record.



The survey also questions small businesses on what they consider to be their largest problems. These results echoed the deterioration in expectations for higher real sales. As shown below, the percentage of respondents reporting poor sales as their biggest issue has been on the rise. While 8% is far from a historically elevated reading, it is up significantly from the past two years.



Poor sales are not the only concern that ticked higher. The first three months of 2024 have seen hotter-than-expected CPI prints (which we discuss market responses in tonight's Closer), and small firms are increasingly concerned with higher prices. As shown in the first chart below, a quarter of firms noted inflation as their single biggest problem. That erases any improvement in the reading since last May. Additionally, while the increase was much less pronounced, the higher prices index likewise ticked up. That returns this index to the top decile of its historical range.





In today's Morning Lineup, we discussed the labor market indicators' weakness as well as the weakness in capex plans per this report's data. As shown below, each of these categories deteriorated in March with the exception of compensation (both actual and planned). The most significant decline has been hiring plans which is now down to the lowest levels since the spring of 2020. Prior to 2020, the last time the index was this low occurred in late 2016. While small businesses have cut back on hiring plans, they are also reporting job openings as hard to fill at similar levels to before the pandemic.

 

Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD in 2024-



S&P sectors for the past week-

 

Here are the current major indices pullback/correction levels from 52WK highs as of week ending 4.12.24-


Here is also the pullback/correction levels from current prices


Here are the current major indices rally levels from 52WK lows as of week ending 4.12.24-

 

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Here are the upcoming IPO's for this week-

 

Stock Market Analysis Video for April 12th, 2024
Video from AlphaTrends Brian Shannon


ShadowTrader Video Weekly 4/14/24
Video from ShadowTrader Peter Reznicek
(VIDEO NOT YET POSTED.)

 

StonkForumers! Come join us on our stock market competitions for this upcoming trading week ahead!-

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StonkForums Weekly Stock Picking Contest & SPX Sentiment Poll (4/15-4/19) <-- click there to cast your weekly market direction vote and stock picks for this coming week ahead!

Daily SPX Sentiment Poll for Monday (4/15) <-- click there to cast your daily market direction vote for this coming Tuesday ahead!

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It would be pretty sweet to see some of you join us and participate on these!

I hope you all have a fantastic weekend ahead!

 

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Here are the most anticipated Earnings Releases for this upcoming trading week ahead.

***Check mark next to the stock symbols denotes confirmed earnings release date & time***

Monday 4.15.24 Before Market Open:

Spoiler: CLICK HERE TO VIEW MONDAY'S AM EARNINGS TIMES & ESTIMATES!

Monday 4.15.24 After Market Close:

Spoiler: CLICK HERE TO VIEW MONDAY'S PM EARNINGS TIMES & ESTIMATES!

(T.B.A.)

Tuesday 4.16.24 Before Market Open:

Spoiler: CLICK HERE TO VIEW TUESDAY'S AM EARNINGS TIMES & ESTIMATES!

(T.B.A.)

Tuesday 4.16.24 After Market Close:

Spoiler: CLICK HERE TO VIEW TUESDAY'S PM EARNINGS TIMES & ESTIMATES!

(T.B.A.)

Wednesday 4.17.24 Before Market Open:

Spoiler: CLICK HERE TO VIEW WEDNESDAY'S AM EARNINGS TIMES & ESTIMATES!

(T.B.A.)

Wednesday 4.17.24 After Market Close:

Spoiler: CLICK HERE TO VIEW WEDNESDAY'S PM EARNINGS TIMES & ESTIMATES!

(T.B.A.)

Thursday 4.18.24 Before Market Open:

Spoiler: CLICK HERE TO VIEW THURSDAY'S AM EARNINGS TIMES & ESTIMATES!

(T.B.A.)

Thursday 4.18.24 After Market Close:

Spoiler: CLICK HERE TO VIEW THURSDAY'S PM EARNINGS TIMES & ESTIMATES!

(T.B.A.)

Friday 4.19.24 Before Market Open:

Spoiler: CLICK HERE TO VIEW FRIDAY'S AM EARNINGS TIMES & ESTIMATES!

(T.B.A.)

Friday 4.19.24 After Market Close:

Spoiler: CLICK HERE TO VIEW FRIDAY'S PM EARNINGS TIMES & ESTIMATES!

(NONE.)

 

And finally here is the most anticipated earnings calendar for this upcoming trading week ahead-
($NFLX $TSM $BAC $GS $UNH $ASML $JNJ $UAL $AXP $MS $ISRG $PG $SCHW $ABT $AA $NOK $SLB $LVS $SKIL $PLD $BK $MTB $KMI $IBKR $TRV $JBHT $BX $DFS $KEY $USB $PNC $PPG $GNTY $DHI $CSX $ELV $FBK $ALK $SSLG $TCBI $WIT $INFY $INSE $FITB $ALLY $MBWM $SNV $LBRT $OMC $OTRK)


If you guys want to view the full earnings post please see this thread here-

• Most Anticipated Earnings Releases for the week beginning April 15th, 2024 <-- click there to view!

 

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

GLTA on this Wednesday, April the 15th, 2024!

 

Morning Lineup - 4/15/24 - Tax Day
Mon, Apr 15, 2024

The market is breathing a sigh of relief after Iran’s much-anticipated attack on Israel was well enough choreographed that it had minimal damage on Israel. While futures are higher, they’re still well below where they were as of the close on Thursday, so not all of the geopolitical risk has been priced out of the market. Going forward, earnings and the economy will take center stage as it’s a busy week ahead on both fronts. Starting things off this morning, Goldman Sachs (GS) reported better-than-expected EPS and revenues and the stock is trading up over 4%. Regarding the economy, there’s a busy calendar with Retail Sales and Empire Manufacturing at 8:30 followed by Business Inventories and Homebuilder Sentiment at 10 AM.

Happy Tax Day. If you haven’t already filed your taxes for 2023, you’re starting to run out of time. Based on the performance of stocks so far in April, it seems like people who owed money have been raising cash in the stock market as the S&P 500 is down 2.5%, the Nasdaq is down 1.3%, and the Russell 2000 is down 5.7%. While you could make a good argument that the weakness is tax-related, a counter to that argument would be that European stocks have also been weak to kick off the quarter, but April 15thisn’t a tax deadline on the other side of the Atlantic.

Whether it’s tax-related or not, there is some historical precedent for April to get off to a weak start, especially in years when the first quarter was positive. The chart below shows the intraday performance of the S&P 500 during April broken out by how the index performed YTD heading into the month. In the 28 years when the S&P 500 was up YTD heading into April, its average MTD performance heading into the start of trading on the 15th was a gain of just 0.2% with positive returns just 57% of the time. That compares to an average rally of 1.4% and gains 69% of the time in the years when the S&P 500 was down YTD heading into the month. Not only is the S&P 500’s average performance in the first half of April weaker in years when it was up YTD through the end of Q1, but in the seven years since 1983 when it was up 10%+ in the first quarter, the average MTD performance through the close on 4/14 was a decline of 0.2%.

On a positive note, while the first two weeks of April have historically been weaker in years when the S&P 500 was up in Q1 versus down, the rest of April has been more positive. In the 28 years when the S&P 500 was positive in Q1, April’s average performance from the close on 4/14 through month end was +1.4% compared to an average gain of 0.7% for all other years.

 

Here is a final look at today's market and futures maps, as well as how each sector performed individually at the close on Monday, April 15th, 2024.