Stock Market Today: February 22nd - 26th, 2021

Good Wednesday morning StonkForumers!

Here is this morning's pre-market news thread for those of you wanting to get a quick read before today's open-
<-- click there to read!

Hope everyone has a great trading day ahead today.

 

Morning Lineup - 2/24/21 - Asia Down, Europe Up
Wed, Feb 24, 2021

With Asia down overnight and Europe higher, the US is looking to break the tie in favor of the bulls as futures extend the rebound from Tuesday morning's lows. As one might expect given the positive tone in equities, treasury yields are a bit higher. The economic calendar is light today as New Home Sales are the only report scheduled, but Fed Chair Powell will resume his semi-annual monetary report to Congress and a number of other FOMC officials are also scheduled to speak.

Powell is unlikely to say anything new this morning relative to yesterday, but with investors on edge regarding the direction of interest rates, uncertainty remains high as investors weigh the pros and cons of valuations, economic growth, a receding of the winter COVID wave, the potential for less accommodative monetary policy, and many other factors. With all these cross-currents, days like yesterday are likely to be more common.

Seasonal trends have been a tailwind for the market over the last several months, but the winds may be starting to shift. As shown in the snapshot from our Seasonality Tool, while the S&P 500's historical returns from the last ten years over the following week, month, and three months are all positive, relative to all prior periods of similar duration, they rank below the 50th percentile.

 

Good Thursday morning StonkForumers!

Here is this morning's pre-market news thread for those of you wanting to get a quick read before today's open-
<-- click there to read!

Hope everyone has a great trading day ahead today.

 

Morning Lineup - 2/25/21 - Good Economic Data
Thu, Feb 25, 2021

The setup this morning is looking a lot like yesterday. Treasury yields are sharply higher, futures are lower, and bitcoin is above $50K. Yesterday, all those pre-market trends reversed themselves as Treasury yields gave up much of their gains, equities surged, and bitcoin pulled back. Will we see a repeat today?.

If lower treasury yields are what you're looking for, this morning's economic data isn't likely to help much. Durable Goods Orders not only came in much better than expected (3.4% vs 1.1%), but December's report was also revised higher from 0.5% up to 1.2%. Jobless claims came in 95K below estimates, although weather issues may have distorted that number. Lastly, the second look at Q4 GDP came in slightly lower than forecasts at 4.1% compared to estimates for growth of 4.2%.

It's been a tale of two markets for the major US equity indices over the last week. The Nasdaq 100 and S&P 500, both of which are loaded with mega-caps, have dropped more than 1% over the last five trading days, but smaller-cap focused indices have surged more than 2%, while the less tech-centric Dow Jones is up over 1% also. Most of the index ETFs shown have declined relative to their trading ranges in the last week, and all but one of them are still at least at overbought levels. The one index ETF that isn't overbought heading into today is QQQ, and given its recent pullback, its timing score now ranks as 'Good'.



The reason for QQQ's 'Good' timing score is the fact that on Tuesday the Nasdaq 100 looks to have successfully tested its 50-day moving average and saw a decent follow-through on Wednesday. This morning, tech is under pressure again, so watch the $319 level to see if QQQ can continue to hold the line.

 

Are we back to the GME indicator for the market? Where big spikes in GameStop (and other highly shorted names) tended to hurt broader markets?

 

Good Friday morning StonkForumers!

Here is this morning's pre-market news thread for those of you wanting to get a quick read before today's open-
<-- click there to read!

Hope everyone has a great trading day ahead on this final trading day of this week and month of February.

 

Bespoke's Morning Lineup - 2/26/21 - Uneasy Markets
Fri, Feb 26, 2021

Well, that didn't take long. Just days into a market growing uneasy with the rise in government bond yields and Christine Lagarde noted that the ECB is 'closely monitoring' the situation in fixed income markets, Isabel Schnabel, a prominent member of the ECB tried to reassure markets that the ECB "will ensure that there is no unwarranted tightening on financing conditions". She went on to add that the central bank would add further support to the markets if rising yields threaten to hurt growth. On both sides of the Atlantic, central bankers are doing their best to reassure markets that they will keep rates low, but for now, at least, the market isn't so confident.

Futures have been volatile this morning and depending on when you look they may be up or down, and they are currently on the downside for both the S&P 500 and the Nasdaq. The economic calendar is busy with Wholesale Inventories, Personal Income, and Personal Spending at 8:30 AM. At 9:45, we'll get the release of the February Chicago PMI, and then at 10:00, we'll close out the week with the University of Michigan Sentiment Index.

Thursday was a day many bulls would rather forget as the S&P 500 dropped over 2%, and the Nasdaq 100 fell more than 3%. Historically, declines of these magnitudes usually see a modest bounceback the following day, but believe it or not, the distribution of returns based on the day of the market decline varies widely. The charts below show the S&P 500's and Nasdaq 100's average next-day return (top charts) and the percentage of time each index is up (bottom charts) following days when they experience sharp declines.

When the S&P 500 declines more than 2% on a Thursday, the average next-day return is just 0.02% with positive returns 50.6% of the time. Of all the days of the week, that is the second weakest next day return and the second-lowest percentage of positive returns.

For the Nasdaq 100, it's a similar setup. When that index declines more than 3% on Thursdays, the average next-day return is a gain of 0.05% with positive returns just 47.3% of the time. More than any other day of the week, when the Nasdaq 100 drops 3% on a Thursday, the likelihood of a down Friday is the highest.

 

i hope all of you had a great trading month of february! looking forward to seeing what march has in store for us

thanks for all of your contributions in here this week! or at least to the few of you who are have stuck around here anyway

have yourself a wonderful weekend head!

you guys rock!