Stock Market Today: April 22nd - 26th, 2024

Welcome StonkForums to the trading week of April 22nd!

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.)

 

Tech Wrecks As FedSpeak F**ks FOMO-Followers; Gold Hits New Record High
FRIDAY, APR 19, 2024 - 04:00 PM

Well, that escalated quickly...


In a week characterized by data supporting 'no landing' from a growth perspective and disappointment from a disinflation perspective...



Source: Bloomberg

This was reinforced by FedSpeak that was without exception - hawkish!

As they suddenly realized that all that 'pivot' optimism did nothing but dramatically ease financial conditions and fuck their 'best laid plans' for a rate-cut and soft landing...



Source: Bloomberg

Even the dove-est of the doves - Austan Goolsbee - bent the knee today:

“So far in 2024, that progress on inflation has stalled,” Goolsbee said Friday in remarks prepared for an event in Chicago.

“You never want to make too much of any one month’s data, especially inflation, which is a noisy series, but after three months of this, it can’t be dismissed.”

“Right now, it makes sense to wait and get more clarity before moving,” Goolsbee said.

And sure enough, rate-cut expectations for 2024 and 2025 have both plunged this week...



Source: Bloomberg

...and that has finally started to weigh on investors' risk appetites (that's a long way to catch down to reality)...



Source: Bloomberg

Most traders thought the worst was over last night as the panic-puke in futures was BTFD'd back to unchanged ahead of the cash open, but then the selling started (on Nasdaq) and never really stopped. On the day, Nasdaq was down over 2% while The Dow managed to gain 0.5%. Small Caps were almost unchanged by the end of the day with the S&P lagging...



But, all the majors ended the week red (with The Dow desperately trying to get back to even). Nasdaq was down over 5.5% on the week! S&P and Small Caps down around 3%...



Nasdaq is down for six straight days for its biggest weekly drop since Nov 2022, breaking below its 100DMA as CTA 'sell threshold's were crosed. Goldman's trading desk noted:

"The NDX now pacing for its worst week in over a year (down 6 of 7 weeks) as a complicated technical backdrop (CTAs, lower retail participation, NDX now testing 100-dma, seasonality), sideways earnings revisions thus far (ASML, TSM and even Sheridan’s NFLX EPS revisions were only 1-2% last night), a tense geopolitical backdrop (overnight headlines) and elevated positioning are testing conviction into a busy week of earnings … some debate if this all ‘helps’ the set-up into FAAMG prints or if the market is just read to ‘take a breather’ and sell any good news..."

The MAG7 basket broke below its 50DMA this week - the first time since October, when The Fed 'pivoted' and save the world. The market cap of the MAG7 is now down over $1 Trillion from its highs a week ago...



Source: Bloomberg

AI Leaders crashed relative to firms 'at risk from AI', plunging to their lowest in two months...



Source: Bloomberg

Of note is that the AI Leaders are perfectly back to their prior peak in 2021 (which was driven by chip demand for crypto mining and COVID disruptions), breaking down to the 100DMA and through the medium-term uptrend...



Source: Bloomberg

Semis were slaughtered this week...



Source: Bloomberg

NVDA plunged 10% today back to two month lows, closing below its 50DMA for the first time since Nov 2023...



... now in bear market (down over 22% from its highs) and the CSCO analog doesn't look so crazy anymore...



Source: Bloomberg

Interestingly, amid all this carnage, banks had a decent week with WFC and MS outperforming (JPM still lagging from its drop on last Friday's earnings)...



Source: Bloomberg

The Russell 2000, Nasdaq, and Dow are all back below their 100DMA, and the S&P 500 is pushing down towards its 100DMA (having blow thru the CTA 'sell' thresholds)...



Goldman's trading desk warns, it could get worse: "CTA supply is building – our team’s work shows this group sold $25B globally this week ($9B in SPX) with next week expected to bring another $27B globally (and $10B SPX) in a flat tape scenario. Reminder the medium term threshold (aka most important) level is 4886 – less than 100 handles away from spot."

Next week brings 43% of SPX set to report earnings highlighted by META/MSFT/GOOGL (aka $6.1T of mkt cap) reporting on Thurs night...on the macro front, key reports include 1Q GDP on Thurs & March PCE on Fri.

VIX soared this week to six-month highs, and credit markets also - finally - started to crack...



Source: Bloomberg

Treasury yields ended the week higher, but not before plunging overnight on a flight-to-quality bid as Israeli missiles hit Iran, taking yields lower on the week. By the close of the week, the belly slightly underperformed but yields were all up by around 8-10bps....



Source: Bloomberg

The dollar rallied for the second straight week, hitting its highest since early Nov 2023 last night on the mid-east attacks before sliding back...



Source: Bloomberg

Heading into today's 'halving' - likely to occur within the next few hours - Bitcoin was down, puking once again overnight on geopolitical chaos like it did last weekend, only to see buying come right back (after testing below $60,000 for the first time since early March)...



Source: Bloomberg

5.00% remains a key level for the 2Y Yield...



Source: Bloomberg

Despite two major attacks in the Middle East, oil prices ended lower for the second week in a row (well WW3 hasn't started yet). Some knock-on effects from an evaporation of hope for demand-sponsoring rate-cuts also weighed on sentiment as WTI



Source: Bloomberg

Spot Gold prices spiked overnight on the Israel attack, pulled back, then rallied up to $2400 once again to close at the highs...



Source: Bloomberg

Gold closed the week at a new record high...



Source: Bloomberg

Silver soared 3% on the week to new cycle highs (its highest since Feb 2021)...



Source: Bloomberg

Silver has been broadly speaking outperforming gold in recent weeks after peaking at a gold-to-silver ratio of around 92x in January, it is ow down to 83 (still well above the 65x average since 1980... implying silver remains 'cheap' to gold)...



Source: Bloomberg

...and then there's Cocoa...



Source: Bloomberg

And finally, are bank reserves at The Fed still the driving force for reality?



Source: Bloomberg

We saw the reality check from Aug-Oct last year; are we about to get another?

 

Big Election Year Q1s Dip April-May Before Gains Last 7 Months

2024’s great start was the third best Election Year Q1 since 1950. Looks like we’re tracking Top Q1 Election Years more pronounced April-May dip. Chop continues in July and August and these years have marked time until the election in November, gaining about 2.5% on from April to October. Regardless of the election outcome S&P 500 suffered only two losses in the last seven months of election years since 1950, 2000 and 2008 (2024 STA page 80).

Rates Are Higher, Just Like Everyone Expected


“If everyone is thinking alike, then somebody isn’t thinking.” -General Patton

The quote above is one that I’ve used more in my career than probably any other quote. Markets are all about what is priced in and what isn’t, suggesting that the big opportunities can be found by going against the crowd in some instances. I’m not saying be a contrarian for the sake of being a contrarian, but when things line up against the crowd and you have reasons to go against the herd, that is where huge opportunities can be found.

Last year is the perfect example of this. To start the year all we heard about was the near certain bear market and recession that was coming. It was the most anticipated recession we’ve ever had, even though it hadn’t happened yet. This of course meant the market had priced a recession in and the opportunity was in going against the crowd. The Carson Investment Research team shared data daily on why we didn’t see a recession ahead and expected stocks to do quite well. In fact, we’ve been overweight stocks since December 2022 and remain there today.

This year we’ve seen another example of the crowd all agreeing and the total opposite taking place.

I’m a big fan of the Bank of America Global Fund Manager Survey. It comes out monthly and shows how real money managers are positioned. At the start of the year, it was widely anticipated the Federal Reserve Bank (Fed) would cut short-term rates and as many as seven cuts were expected just a few months ago. As a result, 91% of those surveyed expected rates to go lower over the coming year, the highest and most consensus view ever for this survey. Granted, we still may have lower short-term rates at the end of the year, but with record expectations the potential for extreme positioning was there.



Sure enough, with everyone on one side of the boat, the opportunity was on the other side, as rate cut expectations have come down drastically the past two months, while yields as a result moved higher, not lower.



Here’s a nice chart that shows only two cuts (of 0.25% each) are now expected this year, from the peak of seven three months ago.



Even when most expected six or seven cuts, we always said it would be closer to three. Our main reason was we believed the economy would remain stronger than expected and there just wasn’t a need for that many cuts. That many cuts could mean an economic slowdown, while a few cuts could simply be recalibrating as inflation came under control, with no need for rates up over 5% anymore.

As a result, we came into this year with an underweight on bonds, with very little exposure to longer-term Treasuries. Many were in the camp that you should load up on bonds and buy longer duration bonds (think Treasuries), but we faded the consensus once again. As a result, bonds are having another rough year as rates jump.

Why are yields higher? There are two reasons: the economy is strong and recent inflation data has been a tad higher than expected. Look at recent consumer data like retail sales—the consumer isn’t slowing down. We also are seeing improvements in manufacturing sentiment, which could be a clue strength is coming there as well. Oh, and we are creating 200,000 to 300,000 jobs each month, not something you see in a slowing economy.

Regarding fears that inflation will continue to be sticky or is about to surge, we think there’s room for skepticism. We still see many reasons to expect overall inflation to continue to trend lower and the recent blip is just that, a blip after massive improvements over the past year. Sonu Varghese, our VP, Global Macro Strategist, wrote about this last week in Is It Time to Worry About Inflation Again?, so I won’t say much more on the subject.

As a result, we went from hearing about six to seven cuts, to potentially none being floated! Some economists in bowties are even saying we need rate hikes.

What did the Carson Investment Research team do as a result? For the first time in a very long time we added some bond exposure on the longer end of the curve in the tactically-oriented models we run for our Carson Partners. We are still overweight stocks relative to bonds, but the pendulum swayed too far the other direction the past few months, creating an opportunity to again go against the crowd, as we still expect inflation to improve and as a result, we’re likely see at least two rate cuts.

Let’s sum it up. If you have an average portfolio, you will have average results. There is nothing wrong with that, but our job is to take the big swings when it makes sense. Being overweight equities has made sense and worked very well; now we think fading the masses talking about no cuts (or even a hike) could be quite successful.

Stocks Can Go Down


“However beautiful the strategy, you should occasionally look at the results.”- Winston Churchill

After more than a 30% total return on the S&P 500 the past 12 calendar months, a five month win streak, and a 27% rally in the first 100 trading days off the late October lows, we could finally be looking at a well deserved break. We want to stress, this isn’t something to fear, as it is all part of the process.

In fact, now could be a good time to remind investors that volatility is the toll we pay to invest. Meaning, we all want the gains, but sometimes you have some pain along the way. Or to quote Ben Franklin, “There are no gains without some pains.” Remember last year? Stocks gained more than 20%, yet there was a 10% correction into late October and many investors were quite worried at what was a fairly normal stock market development.

Here’s a great table that we’ve shared before on volatility in most years. Thanks to help from our friends at Ned Davis Research, the average year has more than seven 3% dips a year, more than three 5% mild corrections a year, and a 10% correction a year on average. After yesterday we’ve officially had our first 3% dip. That’s it, one 3% dip and your average year tends to see more than seven. That should put in perspective just how calm things have been lately.



Here’s one more way to look at things. The average year for the S&P 500 since 1980 saw a peak-to-trough correction of 14.2%, with the smallest ever at only 2.5% in 1995. More than three months into 2024 and stocks have only pulled back 3.7%, which would make it one of the smallest ever.

Even last year, when stocks gained more than 25% there was a 10% correction into late October. Once again, we think we are in a bull market and stocks will be higher from where they are now until the end of the year, but to think it’ll be an easy ride getting there isn’t very likely.



Looking at the past 44 years, 23 times stocks fell at least 10% peak-to-trough at some point during the year and 13 of those times (so more than half the time) stocks managed to finish green. The average gain those 13 years? 17.5% on average, suggesting that a correction can indeed happen quite often, but that doesn’t mean stocks have to have a bad year.

Lastly, the S&P 500 closed beneath it’s 50-day moving average for the first time in more than five months yesterday (or 110 trading days to be precise). This was the longest such streak since 2011!

I looked at other long streaks that lasted at least 100 days and what happened after an eventual close beneath this important trendline. Sure enough, three months later stocks were higher more than 87% of the time and six months later higher more than 81% of the time. Could there be a little more weakness, yes, that wouldn’t be out of the ordinary, but big picture we expect any weakness to be well contained and this bull market is still alive and well.



Election Year Drawdowns Happen – S&P 500 Average Pullback 13% since 1952

After five straight months of gains and numerous new all-time highs, recent weakness and the corresponding spike in volatility seem unfamiliar. Despite lingering inflation and escalating geopolitical tensions, S&P 500 was down 3.86% from its closing all-time high of 5254.35 on March 28 through its close on April 16. This is well below the average historical largest drawdown during an election year since 1952 of 13.07%. Were it not for steep declines in 2020 and 2008, election years have tended to enjoy relatively modest drawdowns. Of the last 18 election years, 11 experienced single-digit drawdowns. The smallest was just 3.55% in 1964. DJIA’s record is similar to S&P 500 while the higher beta stocks of the NASDAQ Comp have experienced larger election year drawdowns.

April 2 Seasonal MACD Signal Triggered Right on Time

We issued our Best Six Months MACD Seasonal Sell signal for DJIA and S&P 500 to newsletter subscribers on April 2 when slower moving MACD indicators applied to DJIA and S&P 500 both turned negative after the start of the last month of the BSMs. This marked the start of our transition to a more cautious stance.

Arrows in the charts point to a crossover or negative histogram on the slower moving MACD used by our Seasonal Switching Strategy to issue a sell signal. NASDAQ’s “Best Eight Months” lasts until June. Subscribe to our Almanac Investor Newsletter and get all our trades. https://stocktradersalmanac.com/Alerts.aspx

We do not merely “sell in May and go away.” Instead, we take some profits, trim or outright sell underperforming stock and ETF positions, tighten stop losses and limit adding new long exposure to positions from sectors that have a demonstrated a record of outperforming during the “Worst Months” period.

April Monthly Option Expiration Week - DJIA Up 33 of Last 42

April’s monthly option expiration is generally bullish across the board with respectable gains on the last day of the week, the entire week, and the week after. Since 1982, DJIA and S&P 500 have both advanced 27 times in 42 years on expiration day with average gains of 0.22% and 0.17%, respectively. Monthly expiration day was staging a comeback after four or five declines from 2014 to 2018 but took a hit in 2022’s bear market. Expiration week has a bullish track record over the past 42 years. Average weekly gains are right around 1% for S&P 500, DJIA and NASDAQ. The bullish bias of April monthly expiration also persists during the week after although average gains have not been as strong with selling pressure rising recently (since 2014).

 

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 4.19.24-


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 4.19.24-

 

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Here are the upcoming IPO's for this week-

 

Stock Market Analysis Video for April 19th, 2024
Video from AlphaTrends Brian Shannon


ShadowTrader Video Weekly 4/21/24
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 (4/22-4/26) <-- click there to cast your weekly market direction vote and stock picks for this coming week ahead!

Daily SPX Sentiment Poll for Monday (4/22) <-- 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 4.22.24 Before Market Open:

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

Monday 4.22.24 After Market Close:

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

(T.B.A.)

Tuesday 4.23.24 Before Market Open:

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

(T.B.A.)

Tuesday 4.23.24 After Market Close:

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

(T.B.A.)

Wednesday 4.24.24 Before Market Open:

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

(T.B.A.)

Wednesday 4.24.24 After Market Close:

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

(T.B.A.)

Thursday 4.25.24 Before Market Open:

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

(T.B.A.)

Thursday 4.25.24 After Market Close:

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

(T.B.A.)

Friday 4.26.24 Before Market Open:

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

(T.B.A.)

Friday 4.26.24 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-
($TSLA $META $MSFT $GOOGL $INTC $XOM $IBM $V $F $BA $VZ $CMG $GM $SNAP $ENPH $UPS $GE $T $CLF $OSIS $ROKU $NOW $PEP $LMT $FCX $RCL $VRT $WDC $HUM $SPOT $VKTX $AAL $NUE $NEM $MO $RTX $TXN $LRCX $CAT $CVX $JBLU $DXCM $SAP $TMUS $HAL $LUV $CLS $CDNS $NEE)


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

• Most Anticipated Earnings Releases for the week beginning April 22nd, 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 under an hour from the US cash market open.

GLTA on this Monday, April the 22nd, 2024!

 

Morning Lineup - 4/22/24 - Fool Me Once, Shame On You...
Mon, Apr 22, 2024

Can we finally get an up day today? Equity futures are higher this morning, but as the last week has shown, that means nothing. There’s not much of a catalyst for the rally this morning, besides the market reaching short-term oversold levels. The only economic report on the calendar is the Chicago Fed National Activity Index, and even though this week’s earnings calendar is jammed-packed, today is relatively quiet with Verizon (VZ) and Truist (TFC) being the only major reports so far. After the close, things will also be relatively quiet, but we will get reports from SAP (SAP), Nucor (NUE), Cleveland-Cliffs (CLF), and Ameriprise Financial (AMP).

The S&P 500 had its worst week in over a year (-3.05%), so you would think that pretty much everything was down on the week. That wasn’t the case, though. In the S&P 500, there were actually 179 stocks that finished higher on the week (35.8% of the index), and four of the eleven sector ETFs finished the week higher. Utilities (XLU) and Consumer Staples (XLP) were both up over 1%, Financials (XLF) were up nearly 1%, and Health Care (XLV) was marginally higher. Granted, these aren’t the leadership sectors that market rallies are made of, so you know it’s a tense environment whenever you see defensive sectors leading, but it does show that investors aren’t just exiting equities en masse.

On the downside, the big drag was Technology. With a drop of over 6%, the sector had its worst week since early November 2022 just as the sector was bottoming. Behind Technology, Consumer Discretionary (XLY) and Real Estate (XLRE) were both crushed with declines of over 3.5%.



Technology is the biggest sector in the market, and its chart has started to show signs of breaking down. After last Monday’s break below the 50-DMA, the sector hasn’t been able to come up for air since, and it’s now trading closer to its 200-DMA than its 50-DMA. One potential silver lining is the fact that last Friday’s decline came to a close right at levels that coincide with the high before the late December peak that was followed by a brief but sharp pullback of nearly 5%. For comparison, the current decline in the sector has been nearly twice that at roughly 9%.

 

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 22nd, 2024.

 

Top of the morning StonkForumers! Happy Tuesday 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 under an hour into the US cash market open.

GLTA on this Tuesday, April the 23rd, 2024!

 

Morning Lineup - 4/23/24 - Earnings Picking Up
Tue, Apr 23, 2024

Some of the positive tone from yesterday's gain has followed through to this morning as equity futures are modestly higher and gold and oil both continue to give up ground. Yields are higher, so we couldn't quite get the trifecta, but two out of three isn't bad. Earnings reports have finally taken the spotlight, and this morning's results have been positive with encouraging reports from General Motors (GM) and UPS. After the close, we'll hear from Tesla (TSLA), Texas Instruments, and Visa (V). On the economic calendar, today's reports include S&P PMIs for the Manufacturing and Services sector, New Home Sales, and the Richmond Fed reports.

A lot of the noise coming from the market is ultimately meaningless, but investors crave to find a cause for every effect. Analysts have blamed everything from the tax deadline to geopolitics, higher rates, or an overbought market. The fact that gold and the dollar – two of the biggest haven assets - both rallied throughout much of the decline suggests that geo-political concerns could have been a large factor. If, as gold's price suggests, these anxieties are easing, it could bode well for future market performance.

Whatever the cause, 5% pullbacks in the stock market are incredibly ordinary. Since WWII, there have been 230 different periods where the S&P 500 declined 5% or more on a closing basis without a gain of 5% in between. That works out to once every four months, and besides the one we’re dealing with now (so far), every one of them has been followed by a new high. Some new highs took longer than others to achieve, but eventually, the market got there.

Yesterday was an interesting day for the market. The S&P 500 opened higher, quickly sold off in the morning, gave up nearly all its early gains, and then rallied into early afternoon only to drift lower into the close. For a nervous investor watching every tick, the emotional swings probably went something like the comments in the chart below.



We have no idea whether Friday’s close was the low point of this month’s decline, but what we can tell you is that yesterday’s intraday pattern is very common and the type of action you often see as the market is coming out of a low point in the decline. Going back over the last 30 years, we looked at the intraday performance of the S&P 500 tracking ETF (SPY) on the first trading day after the closing low of each of the 106-prior 5%+ S&P 500 declines. On a median basis, SPY has gapped up 0.58% at the open, but at some point, the market tended to dip and shake out the weak hands. At the intraday low, SPY’s median decline was 0.18% versus the prior day’s close, but it tended to finish the day with a median gain of 1.75%. Even though that first trading day after a closing low was positive, the median decline at the close from the intraday high was 0.36%. In other words, roller coaster patterns like Monday’s intraday chart frequently follow a market low.