Stock Market Today: April 3rd - 7th, 2023

Welcome StonkForums to the trading week of April 3rd!

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 on Friday:


Economic Calendar for the Week Ahead:


What to Watch in the Week Ahead:

(N/A.)

 

Banks Bust As Big-Tech Booms In Q1; Gold & Crypto Soar As Dollar Dumps
Q1 2023 - and even more specifically the month of March - can be summarized with one simple image...



Bank crisis in US and EU, global war rhetoric rising, de-dollarization actions escalating, US layoffs exploding? Makes you wonder about the state of the dollar eh?



Source: Bloomberg

BUT Everything must be ok right - the S&P 500 is above pre-SVB levels (just ignore the bank stocks collapse)...



Source: Bloomberg

However, a bigger picture look paints a different picture as the dollar suffered its second straight quarterly decline) as Bitcoin soared over 70% and Gold jumped almost 9% (bonds and stocks were also higher in Q1)...



Source: Bloomberg

In equity-land, the divergence across the majors in Q1 is quite shocking as long-duration mega-cap tech (and trash) soared while Big-Caps (Dow) and Small-Caps (Russell 2000 - heavy with small financials) ended around unchanged.

That was the Nasdaq's best quarterly performance since Q2 2020 (and before that to Q1 2012)...



Source: Bloomberg

For the month, the Nasdaq is up over 8%, its biggest March advance since 2010. The Russell 2000 and Trannies were the ugliest horse in March's glue factory...



Source: Bloomberg

Dow surged to its best week since November, but Small Caps outperformed, up over 3%...



The last 3 Friday have seen fear over SVB, CS, & DB respectively, so 4th time was the charm this week with a major melt-up as early 0DTE negative delta flows (as the S&P broke above 2065 JPM Collar Call Strike) were rapidly unwound as stocks continued to squeeze higher and that accelerated the gains...



Source: SpotGamma

The S&P rallied all the way back up to the key 4100 level today...



The S&P 500's performance in Q1 was dominated by just 15 stocks...



In fact, it gets worse, according to Bianco Research, META, AAPL, AMZN, NFLX, GOOGL, MSFT, NVDA, TSLA account for all of the S&P's YTD return. They are up +4.6%. The other 492 stocks collectively are down for the year (-.99%).



Source: Bianco Research

Mega-Cap techs saw market caps soar with AAPL back above $2.5 trillion, MSFT back above $2 trillion, AMZN back above $1 trillion, and META and TSLA back above $500 billion...



Source: Bloomberg

Tech and Discretionary dramatically outperformed in Q1 while Energy and Financials lagged...



Source: Bloomberg

European markets were mixed in March with Germany and France ending green while UK was the biggest loser...



Source: Bloomberg

On the month, European banks are modest underperformers relative to US banks, but both are ugly...



Source: Bloomberg

March was a wake-up call for commercial real estate, as Office REITs crashed hard...



Source: Bloomberg

US growth stocks have dominated Q1, crushing value stocks (until this week when the ratio of Russell 1000 Value/ Growth hit the August lows). For context, this is the biggest growth/value quarter since Q1 2020 (and before that Q1 2009)



Source: Bloomberg

March saw bond vol (MOVE) explode relative to equity vol (VIX) - to the same extent as October 2008...



Source: Bloomberg

Thanks to March ugliness (and basically no issuance), corporate bond spreads in US and EU are wider in Q1 after blowing out wider in March, erasing all the compression from Jan/Fed...



Source: Bloomberg

While stocks bounced back above pre-SVB levels, the credit market remains much more stressed (even with the rally of the last 2 days)...



Source: Bloomberg

Q1 was a wild one for bonds with Treasury yields exploding higher on hawkish Fed realizations and then collapsing lower on safe-haven/recession anxiety over the bank crisis. Amid all the chaos, yields ended the quarter surprisingly grouped, down around 30bps or so (with the belly outperforming)...



Source: Bloomberg

March was a big month for the yield curve with its biggest monthly steepening since May 2013 (2s10s +32bps), ending Q1 unchanged...



Source: Bloomberg

Yields were all higher on the week (with the short-end underperforming)...



Source: Bloomberg

The market's expectations of The Fed's actions has swung violently in Q1 from a post-payrolls-beat, post-hawkish-Powell surge (expecting rates to be over 100bps higher by year-end) to a post-SVB failure collapse (expecting rates to be almost 100bps lower by year-end). The quarter ends with coin-flip odds of one more rate-hike before The Fed is done and then cuts starting by September...



Source: Bloomberg

Interestingly, the short-term yield curve is ending Q1 just a little more dovish than it started it - having been dramatically more hawkish and dovish intra-quarter...



Source: Bloomberg

The dollar is set to end the quarter 1.4% lower, its first consecutive quarterly loss since 2020, amid easing concerns about the global banking sector and money market wagers on Federal Reserve interest-rate cuts. This is the 5th monthly drop in the dollar out of the last 6 months...



Source: Bloomberg

All the major cryptos had a good Q1, with Solana outperforming and Bitcoin gaining more than Ethereum (and that was in spite of 'Operation Choke Point 2.0')...



Source: Bloomberg

Bitcoin is up for the 3rd month in a row for its best quarterly gain since Q1 2021, back above $28,500 (and Ethereum is also up for 3 straight months (best Q since Q1 2021), nearing 7 month highs at $1850)...



Source: Bloomberg

NatGas was the standout commodity performance in Q1, collapsing 50% as warmer weather spoiled Putin's party plans. Gold was the quarter's best performer (along with copper - China reopening hopes) as crude closed lower...



Source: Bloomberg

Gold is up for the second quarter in a row (up over 19% in the last 6 months - its best such gain since 2016), with its highest quarterly close in history. March saw gold rally almost 9% -its best month since July 2020 (topping $2000) once again...



Oil has been on a tear for the last two weeks with WTI back above $75, but remains down on the year, after breaking below its Jan/Feb range...



And finally, Q1 saw over $450 billion of inflows into Money-Market funds and over $300 billion in deposit outflows from US domestic banks...



Source: Bloomberg

And in case you were wondering what has sparked this sudden panic-buying in bonds, bullion, bitcoin, and big-tech? That's easy - The Fed!!! Just as we warned would happen mid-March...

It's the 'old QE' trade writ large. But what happens next (as The Fed balance sheet actually shrunk modestly last week) and Goldman's US Activity Index just dropped into contraction...



With recessionary signals growing louder, maybe pricing in some 'easing' by The Fed is 'fair' but that appears fully priced-in to stocks at near-record high valuations (esp. mega-cap tech).

 

DJIA, S&P 500 & NASDAQ Higher 66.7% of the Time on First Trading Day of April

According to the Stock Trader’s Almanac 2023, the first trading day of April is DJIA’s fourth weakest first trading day of all months based upon total points gained. However, looking back at the last 21 years, in the tables below, we can see DJIA, S&P 500 and NASDAQ have all advanced 66.7% of the time (up 14 of last 21) with average gains of 0.16%, 0.24%, and 0.26% respectively. The Russell 2000 is modestly softer, but it has still been up more frequently than down. Five declines in the last ten years (the largest in 2020) have weighed on performance.


April 2023 Almanac: DJIA’s Top Month

April is the final month of the “Best Six Months” for DJIA and the S&P 500. The window for our seasonal MACD sell signal opens on April 3, the first trading day of the month this year. From our Seasonal MACD Buy Signal on October 4, 2022, through the close on March 27, DJIA was up 6.98% and S&P 500 is up 4.92%. This is below historical average performance largely due to persistent inflation, a tightening Fed, regional bank uncertainties and Russia’s ongoing invasion of Ukraine. But before the “Worst Months” arrive, April’s solid historical track record could help reignite the market.

April 1999 was the first month ever to gain 1000 DJIA points. However, from 2000 to 2005, “Tax” month was hit declining in four of six years. From 2006 through 2021, April was up sixteen years in a row with an average gain of 2.9% to reclaim its position as the best DJIA month since 1950. DJIA’s streak of April gains ended in 2022’s bear market. April is now the second-best month for S&P 500 and fourth best for NASDAQ (since 1971).

Typical pre-election year strength does bolster April’s performance since 1950. April is DJIA’s best month in pre-election years (+3.9%), second best for S&P 500 (+3.5%) and third best for NASDAQ (+3.6%). Small caps measured by the Russell 2000 also perform well (+2.9%) with gains in eight of eleven pre-election year April’s since 1979. S&P 500’s and NASDAQ’s single losing pre-election year April was in 1987.

Here Come the April Flowers
Posted on March 31, 2023

It was anything but smooth, but stocks are set to begin 2023 with a solid start, with the S&P 500 up more than 5% for the year with one day to go in the first quarter. Although we continue to hear how bad things are, we’d like to note that these gains came on the heels of a 7.1% gain for stocks in the fourth quarter of 2022. Most investors probably have no idea stocks have done so well, given the barrage of negative news out there.

Here’s a chart we’ve shared a lot, but it is playing out nicely. If you look at a four-year Presidential cycle, we are in the midst of the strongest period for stocks. In fact, historically, the second quarter of a pre-election year is up a solid 4.8% on average and higher 72.2% of the time. Given the overall negative sentiment, an economy that continues to defy the skeptics, and this positive seasonality, we’d be open to a continuation of the rally off the October lows last year.



Take one more look at the above. Last quarter was higher, making that 18 out of 19 times that stocks gained in the first quarter of a pre-election year.

Turning to April, turns out stocks have historically been higher this month during a pre-election year an incredible 17 out of 18 times since 1950, with only a 1.2% drop back in 1987, the only blemish. As you can see below, only January has a higher average return during a pre-election year, which played out this year with a huge 6.2% gain in January 2023. Why is April usually strong? It could be a combination of springtime buying, good riddance to winter, or putting tax refunds to work. But the bottom line is that this is something we’d rather know than ignore.



But it isn’t just pre-election years when April does well. Since 1950, it is the second-best month (only November is better); for the past 10 years, it ranks fourth, and for the past 20 years, it has been the best month of the year.



The elephant in the room is that April last year was terrible, with the S&P 500 down 8.8%, for the worst April since 1970. Of course, back then, the start of the war, higher inflation fears, a Fed just starting to hike, and economic worries lead to the historic drop.

We remain overweight stocks and expect the lowered expectations amid a better economy to have the potential to drive higher stock prices in 2023, with gains that could reach between 12-15% this year.

Sentiment Still Bearish...Or Is It?
Thu, Mar 30, 2023

The S&P 500 has made a press back up towards the high end of the past month's range this week, but sentiment has yet to reflect the moves higher in price. The past several weeks have seen the AAII sentiment survey come in a relatively tight range between the high of 24.8% on March 9th and a low of 19.2% the following week. That is in spite of the recent updates to monetary policy and turbulence in the banking industry. Today's reading was smack dab in the middle of that recent range at 22.5%.



Given there have not been any major developments with regard to sentiment, the record streak of below-average (37.55%) bullish sentiment readings has grown to 71 weeks.



While bullish sentiment was modestly higher this week rising 1.6 percentage points, bearish sentiment shed 3.3 percentage points to fall to 45.6%. That is only the lowest reading in three weeks as bearish sentiment has sat above 40% for all of March.



The predominant sentiment reading continues to be bearish. The bull-bear spread has been negative for six weeks in a row following the end of the record streak of negative readings in the bull-bear spread in February.



Taking into account other sentiment surveys, the AAII reading stands out as far more pessimistic at the moment. In the chart below, we show the readings of the AAII bull-bear spread paired with the same spread in the Investors Intelligence survey and the NAAIM Exposure index. Whereas the latter two surveys have basically seen readings return back to their historical averages, the AAII survey sits 1.6 standard deviations below its historical average. In other words, overall sentiment might not be as pessimistic as the AAII survey would imply.



Claims Spend Another Week Below 200K
Thu, Mar 30, 2023

Initial jobless claims took a step higher this week rising by 7K to 198K. With last week's number also going unrevised, claims have now been below 200K for 10 of the last 11 weeks. That being said, this week's reading was the highest since the 212K print in the first week of March.



Before seasonal adjustment, claims were once again higher rising by over 10K week over week to 223K. Although that is not a concerningly high reading nor is it a large jump, the increase was peculiar in that it went against expected seasonal patterns. Prior to this year, jobless claims have only risen week over week in the current week of the year 16% of the time; the most recent instance prior to 2020 (right as claims surged at the onset of the pandemic) was in 2017.



Although initial jobless claims modestly deteriorated, it has not exactly been a worrying increase as claims remain at historically healthy levels. The same goes for continuing claims. This week saw continuing claims rise by a modest 4K to 1.689 million. That is only the highest level since the end of February when claims totaled over 1.7 million.



Chipping In: The Future of US Manufacturing
Posted on March 30, 2023

Here’s something really positive about the US economy
It’s hard to get away from the negative headlines that have accompanied the Silicon Valley Bank crisis. Recession calls have seen a renewed uptick since the crisis unfolded, whereas they were dying down prior to that, thanks to positive economic data in February and early March. Note that what little real-time data we’ve seen since then isn’t pointing to a sudden stop for the economy. Of course, we’ll continue to track the data, but at this point, we continue to believe that the economy can avoid a recession this year.

The biggest positive that the economy currently has going for it right now is employment. Payroll growth has averaged just over 350,000 over the past three months, and the unemployment rate is at 3.6%, close to 50-year lows. Weekly initial claims for unemployment benefits remain low, suggesting that employment growth continues to run strong even in March.

Nevertheless, even when discussions of the labor market arise, Tech sector layoff announcements loom disproportionately large. We wrote about this over a month ago, putting these layoffs in perspective. The companies making these announcements saw payrolls surge after the pandemic, and now they’re retrenching.

In any case, there’s something else that you don’t hear a lot about amid all the negative headlines.

A potentially bigger story
As good as the labor market is right now, what’s interesting is that American companies reshored a record 365,000 manufacturing jobs in 2022. These numbers, reported by the Reshoring Initiative, include jobs that had previously been done in other countries and jobs created by foreign-owned companies here in the US.

The 2022 number is a 53% increase from 2021, which itself saw a 54% increase from 2020. These numbers are typically volatile, but the sheer magnitude of the increase over the last few years suggest we have the making of a trend.



The report points out that the increase was driven by a surge in electric vehicle batteries and chips, along with a continued uptrend in industries like electrical equipment, chemicals, transportation equipment, and medical equipment.

The increase from 2020-2022 was partly due to companies recognizing that supply chains extending across the world are vulnerable to disruptions and geopolitical events.

The other big reason is that manufacturing investment in the US is surging after Congress and the President passed last year’s “Inflation Reduction Act” (IRA) and the “Chips and Science Act.” We wrote at the time that the IRA was poorly labeled, but it was a big deal, including:

• Taking a practical, all of the above approach, to the energy transition, with money for clean energy but also nuclear power and the oil and gas industry.
• Tax credits and subsidies for clean energy companies, with even traditional infrastructure companies (like midstream pipelines) benefiting.
• Provisions designed to revive US manufacturing and counter China, with the US engaging in industrial policy on a scale we haven’t seen in recent decades.

We wrote at the time that this could potentially incentivize investment in technology and increase productivity, which would be good for all workers, let alone economic growth and corporate profits.

It’s nice to see that it’s happening on the ground. Electric vehicle batteries were the most active product to be reshored in 2022!

And there’s even more evidence.

Manufacturing construction is booming
The construction industry has clearly taken a hit from the Federal Reserve’s aggressive interest rate hikes. Mortgage rates surged as a result, and that froze home-buying activity. Single-family housing starts collapsed 32% year-over-year in February 2023. Multi-family housing is holding on, but that’s because a lot of units remain under construction, and rental demand is high thanks to low housing inventory.

And now, with the bank crisis, commercial real estate has come under the microscope. Small banks make a lot of loans to this sector, and a pullback in lending will hurt. Though commercial and office construction had already been slowing before the crisis. You just have to walk across the downtown of any major metro in America to realize that offices are not in great demand.

Yet, here’s what’s interesting and important:

The total dollar value of all private construction spending rose about $61 billion over the year through January, representing a 4.4% y/y increase. Of this, almost $49 billion came from manufacturing construction spending.

As of January, manufacturing construction spending in dollar terms is up 54% y/y and it is up 90% from 2 years ago.



A year ago (Jan ’22) manufacturing construction made up just about 6.5% of total private construction in the US. It’s risen to almost 10% now (Jan ’23).

And this is almost entirely being driven by the computers and electronics industry, including investment in semiconductor plants, where construction spending is up 158% y/y and a whopping 723% over the last 2 years!

Construction spending across the rest of the manufacturing industry is up 17% y/y – not too shabby by itself, but pales in comparison to what’s happening on the computers and electronics side.



Of course, a lot of this is driven by subsidies and tax credits, and that’s not going to continue year after year.

But investment spending tends to feed on itself, especially since that can boost productivity. That’s potentially a huge positive for the American economy over the next decade.

Sometimes it helps to pull back and look at the bigger, and longer-term, economic picture.

Would You Believe Me If I Told You?
Posted on March 28, 2023

They call it March Madness for a reason, but this is getting a tad extreme. Besides the fact that no 1, 2, or 3 seeds made the Final Four, the real madness can be found in the financial world.

What we’ve seen so far this March has been unbelievable in so many ways. In fact, at the start of the month, if someone would have told you all the incredible things that would happen, yet stocks would take it in stride, I’m not sure most of us would ever believe it.

Here are some of the things that we’ve seen so far this month:

• One of the worst banking crises in U.S. history, with the second and third-largest bank failures seemingly happening overnight.
• More than 100-year-old banks in Europe going under or on the edge of failure.
• One of the most volatile bond markets ever, with the cherry on top being the 2-year yield falling from 5% to 4% in two days during the worst of the worry.
• A Fed that was all set to hike by 50 basis points (and probably a few more after that) to a 25-basis point hike and potentially only one more. In other words, perhaps the fastest Fed pivot in history.
• As a result, the volatility in the bond market and yields was unlike anything we’ve ever seen before.
• We even had Jerome Powell say for that depositors should assume their deposits are safe, while Janet Yellen said she hadn’t even considered increasing FDIC insurance. These two things happened at the same time last Wednesday afternoon! Talk about confusing messages.
• Bank stocks tanked, with many smaller regional banks getting cut in half or worse.
• Gold found a bid and moved close to $2,000 an ounce as trust in the entire system deteriorated.
• I’m sure there are more, but you get the point here. Not a lot of good news in March.

Now would you believe me if I told you all those things would happen, yet stocks would be up? That’s right, the S&P 500 was up the past two weeks and is flat for the month, while the Nasdaq-100 hit seven-month highs last week.

I’ll be the first to admit that isn’t what I would have expected in the face of those horrible headlines. Yet, here we are. It was the most volatile bond market ever, yet stocks were incredibly calm, all things considered. Madness indeed.

How is this possible? Here are a few ideas:

• A dovish Fed is what the market wants.
• Inflation continues to come back to earth, while supply chains are improving as well.
• The economy remains strong and, to the chagrin of many vocal bears, will still be able to avoid a recession.
• March has been a month of major lows lately, and history could be repeating. 2003, 2009, and 2020 all stand out as months that felt like the end of the world, yet were actually great buying opportunities.
• Lastly, overall market sentiment is over-the-top negative. Once everyone who will sell has sold, that is how bottoms form. The table below from the recent Bank of America Global Fund Manager Survey showed that the most loved asset last month was cash, and the most hated was U.S. stocks.

This doesn’t mean stocks have to bottom, but this is the type of thing you tend to see at major lows and suggests there very well could be plenty of cash to move back into U.S. equities on any good news.



It has been a wild month, and it isn’t over yet, but continue to follow the Carson Investment Research team as we break it all down.

Richmond Fed Rebounds Without Other Regions
Tue, Mar 28, 2023

This morning the Richmond Fed released the fifth and final regional manufacturing report. Consistent with other regional Fed reports released this month, which we discussed through our Five Fed Manufacturing Composite in last night's Closer and will update with the addition of the Richmond Fed again tonight, manufacturing activity remains in contraction. That being said, the index rose 11 points from a recent low of -16 to -5.



In terms of percentiles, that reading remains in the bottom quartile of its historical range. However, that is a massive improvement from the bottom 5% reading last month. Additionally, the month-over-month increase was significant, just shy of a top decile increase. Breadth in this month's report was solid with only vendor lead times and employment metrics like wages and availability of skills falling further. Most other categories saw higher month-over-month readings with several (like Shipments and New Orders) being historically large.



As mentioned above, demand-related metrics like New Orders, Shipments, and Backlogs of Orders surged in March. However, coming from very weak readings in February, it is still not a positive picture. Shipments was the only one of these indices to move back to an expansionary reading. Shipments expectations were also particularly rosy with the reading of 25 marking the highest level in eleven months. Meanwhile, the Vendor Lead Times index remains around some of the lowest levels on record which indicates firms are reporting rapid declines in the time it takes for products to reach their destination.



Given orders are coming in more slowly and supply chain improvements have made doing business easier, inventories are beginning to build. Indices tracking both Raw Material Inventories and Finished Good Inventories have rapidly risen over the past several months following deeply contractionary readings throughout 2020 through 2022. This month, the index for Finished Good Inventories hit a new post-pandemic high while Raw Material Inventories have flattened out after peaking at the end of last year.



Whereas inventory indices have flown higher, price indices are plummeting. Prices Paid hit a new low of 6.24% with expectations hitting a new low in tow. Prices Received actually saw a very modest increase following sharp declines since November.



Home Prices Fall Nationwide, Except for Miami
Tue, Mar 28, 2023

Home price figures around the country for January were published by S&P CoreLogic today in the form of the updated Case Shiller indices. Below is a table showing the month-over-month and year-over-year change for the 20 cities tracked along with the three national indices. For each city, we also include how much home prices are still up from their pre-COVID levels in February 2020 and how much home prices are down from their post-COVID peaks.

For the month of January, the national indices showed home prices down about 0.50% month-over-month (m/m) and still up 2-3% on a year-over-year (y/y) basis. There were four cities that saw m/m declines of more than 1%: San Francisco, Seattle, Phoenix, and Las Vegas. Miami was the only city that gained m/m at +0.09%.

Year-over-year, San Francisco is now down 7.60%, while Seattle is down 5.11%. San Diego and Portland are the only other cities in the red y/y, while Tampa and Miami are the only two cities still up 10%+ y/y.







Home prices have been falling hard in recent months (which hasn't made its way into the official inflation data yet). Below is a look at the drop in home prices from their post-COVID highs. As shown, while some cities like New York, Miami, and Atlanta have yet to fall much at all, cities like San Francisco and Seattle are down more than 15%.



Even with the drops, though, prices are still up across the board from the levels they sat at in February 2020 just before COVID hit. As shown below, the two best-performing cities post-COVID in terms of home price appreciation are two Florida cities: Tampa and Miami. Cities that are up the least post-COVID (but still up 20-30%) include Portland, Chicago, DC, Minneapolis, and San Francisco.



Below is a look at the actual levels of the 20 Case Shiller city indices plus the three national indices. We've drawn lines to show when COVID hit so you can see how much prices are up from pre-COVID levels.









Short Interest Update
Mon, Mar 27, 2023

Although equities broadly are starting the new week higher, the most heavily shorted stocks are trading lower today. In the chart below, we show the relative strength of an index of the 100 most heavily shorted stocks versus the Russell 3,000 since January 2021 (the peak of the meme stock mania). Overall, the past couple of years since that period have consistently seen heavily shorted names underperform as seen through the downward trending line below. Although heavily shorted names saw some outperformance in January, they are making new lows.



On Friday, the latest short interest data as of mid-March was released by FINRA. Overall, there has not been too much of a change in short interest levels with the average reading on short interest as a percentage of float of Russell 3,000 stocks rising by 5 bps since the start of the year to 5.8%.

Prior to the changes to industry classifications that went into effect one week ago, the formerly labeled "retailing" industry consistently held the highest levels of short interest. Now, it is the Consumer Discretionary Distribution and Retail industry in the top spot with an average short interest level of 12.7%. That is up from 12.5% coming into the year and is multiple percentage points higher than the two next highest industries: Pharmaceuticals, Biotechnology & Life Sciences (9.36%) and Autos (9.18%). In spite of the recent bank closures, the banking industry actually has the lowest average levels of short interest. That being said, the latest data as of March 15th would have only accounted for a few days following the collapse of SVB. As such, the next release scheduled for April 12th with end-of-month data will provide a better read on the recent banking trouble's impact on short interest levels.



In the table below, we show the individual Russell 3,000 stocks with the highest levels of short interest as of the March 15th data. The sole two stocks with more than half of shares sold short are both Health Care names: Design Therapeutics (DSGN) and Allogene Therapeutics (ALLO). Both have seen short interest levels rise mid-single digits year to date. Other notables with high levels of short interest include some names that were briefly in vogue in recent years like Carvana (CVNA) and Beyond Meat (BYND). While short interest levels remain elevated, those are also two of the stocks listed below that have seen the largest declines in short interest this year which is likely due to solid appreciation in their stock prices. Only Marathon Digital (MARA) has seen a larger drop with its short interest level falling 11.4 percentage points since the end of last year after the stock more than doubled year to date. We would also note another crypto-related name, MicroStrategy (MSTR), is on the list and has been the second-best performer of the Russell 3,000 stocks with the highest short interest.



Commercial Bank Deposits Down a Record 3.33% YoY
Mon, Mar 27, 2023

The Federal Reserve's FRED data on commercial bank deposits was just updated through the week of 3/15. From the prior week, deposits fell roughly $100 billion, or about 0.56% from $17.6 trillion down to $17.5 trillion. A week-over-week decline of 0.56% is nothing out of the norm, although it was the biggest decline in percentage terms since last April when deposits fell 0.6% during the week of 4/20.

What is out of the norm is the drop we've seen in bank deposits over the last year. Prior to 2023, the largest year-over-year decline we'd ever seen in bank deposits was a 1.58% drop back in September 1994. That record drop was broken earlier this year when we got a reading of -1.61% during the week of 2/1. Since 2/1, the year-over-year decline has only gotten worse. As of the most recent week (3/15), the year-over-year decline stands at -3.33%.

Below is a chart showing the year-over-year change in commercial bank deposits using data from FRED. What stands out the most is not just that we're now at record YoY lows, but that it's coming after what had been record YoY increases in deposits. Remember, after COVID hit, the government deposited cash into the bank accounts of Americans multiple times.



Below is a look at the absolute level of commercial bank deposits over the years going back to 1974 when FRED's data begins. During the COVID recession from March through May 2020, bank deposits increased roughly $2 trillion. As you can see in the chart, we've never seen a spike anywhere near as large over such a short period of time. Notably, though, deposits kept on running higher for the next two years, rising another $2.8 trillion by the time they peaked at $18.16 trillion in mid-April 2022. That peak came a month after the Fed's first rate hike of the current tightening cycle, and since then we've seen deposits fall about $650 billion from their highs. Given how elevated deposits remain above pre-COVID levels, there's no reason to think they won't fall further unless banks really step up the interest they're paying on deposits given a Fed Funds rate of 5%.



Pending Home Sales Better But Still Weak
Wed, Mar 29, 2023

As we noted on Twitter earlier, Pending Home Sales for the month of February came in better than expected, rising by 0.8% compared to forecasts for a 3.0% decline. Wednesday's report also marked the first string of back to back to back positive and better-than-expected readings since the second half of 2020. While the increases are welcomed, we would note that on a y/y basis, Pending Home Sales remain depressed. Relative to a year ago, February Pending Home sales declined 21.1% which is actually an improvement from late last year when they were down over 30% for three straight months.



A 20%+ y/y decline in Pending Home Sales is not unprecedented, but it isn't common either. Prior to the current period, the only other times they were down over 20% were in the early months of COVID and in a handful of other months during and immediately after the financial crisis. What has been unprecedented about the current period is the fact that Pending Home Sales has been down 20%+ for nine straight months! Going back to 2002, there was never another period where Pending Home Sales were down 20%+ or more for even three months let alone nine!

 

Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD in 2022-



S&P sectors for the past week-

 

Here are the current major indices pullback/correction levels from 52WK highs as of week ending 3.31.23-


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 3.31.23-

 

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Here are the upcoming IPO's for this week-

 

Stock Market Analysis Video for March 31st, 2023
Video from AlphaTrends Brian Shannon


ShadowTrader Video Weekly 4/2/23
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 Q2 2023 Quarterly Stock Picking Contest & SPX Sentiment Poll <-- click there to cast your quarterly market direction vote and stock picks for Q2 of this year 2023!

StonkForums April 2023 Stock Picking Contest & SPX Sentiment Poll <-- click there to cast your monthly market direction vote and stock picks for April of this year 2023!

StonkForums Weekly Stock Picking Contest & SPX Sentiment Poll (4/3-4/7) <-- click there to cast your weekly market direction vote and stock picks for this coming week ahead!

Daily SPX Sentiment Poll for Monday (4/3) <-- click there to cast your daily market direction vote for this coming Monday 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 4.3.23 Before Market Open:

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

Monday 4.3.23 After Market Close:

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

(T.B.A.)

Tuesday 4.4.23 Before Market Open:

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

(T.B.A.)

Tuesday 4.4.23 After Market Close:

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

(T.B.A.)

Wednesday 4.5.23 Before Market Open:

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

(T.B.A.)

Wednesday 4.5.23 After Market Close:

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

(T.B.A.)

Thursday 4.6.23 Before Market Open:

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

(T.B.A.)

Thursday 4.6.23 After Market Close:

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

(T.B.A.)

Friday 4.7.23 Before Market Open:

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

(T.B.A.)

Friday 4.7.23 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-
($SAIC $CAG $LW $AYI $STZ $FLGC $MSM $OCX $DLO $RPM $LEVI $SMPL $LNN $APLD $SCHN $EGY $IONM $KRUS $GNLN $SGH $RELL $WDFC $FRLN $SNAX $ZENV $CLIR $RGP $SLP $SDRL $NG)


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

• Most Anticipated Earnings Releases for the week beginning April 3rd, 2023 <-- click there to view!

 

REMINDER: U.S. MARKETS ARE CLOSED ON FRIDAY, APRIL 7TH, 2023 IN OBSERVANCE OF GOOD FRIDAY.

 

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

GLTA on this Monday, April the 3rd, 2023!

 

Good Monday 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 new trading week, month and quarter ahead!

 

Morning Lineup - 4/3/23 - Oil Gushes
Mon, Apr 3, 2023

Equities are poised to open right around the unchanged level this morning as crude oil is surging following news of the OPEC+ production cut over the weekend. Within the market, though, there's a lot of dispersion as energy stocks are surging while tech stocks have been under pressure on concerns that higher oil prices will push inflation higher and keep the Fed on the warpath to hike rates for longer.

The surprise production cut from OPEC+ over the weekend has both oil prices and oil-related stocks rallying this morning as the S&P 500 Energy sector ETF (XLE) is set to gap up over 4%. As mentioned above, the S&P 500 is treading water after last week’s surge and is poised to open around the unchanged level. While energy stocks are notoriously volatile, this morning is set to be just the ninth time since 2000 that XLE has gapped up at least 3% even as the S&P 500 ETF (SPY) gapped down or up less than 0.5%.

The first chart below shows the performance of SPY over the last ten years (a period that covers all the occurrences mentioned above) with the red dots indicating each of the days that XLE gapped up 3%+ while the S&P 500 was basically flat or down at the open. More than half of these occurrences (5) occurred in a three-month span from April to June 2020 with another occurrence last February and the other two occurrences back in 2019 and 2016. While the most recent occurrence was followed by weakness, the S&P 500 rallied immediately following the prior occurrences.



Below we show a similar chart for the Energy sector. Here, forward returns were more mixed. The most positive period was after the most recent occurrence, but forward returns following each of the pre-COVID occurrences were weaker.

 

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 3rd, 2023.

 

Ugly Data & Oil Shock: Stagflation Threat Sparks Bond & Gold Gains; Banks & The Buck Dumped

OPEC+ pissed in Powell's victory-lap-over-inflation punchbowl overnight, jolting stocks lower. Ugly Manufacturing ISM data early on sparked the ubiquitous 'bbrrrrrr' trade with gold and stocks bid, dollar and bond yields tumbling. The St.Louis Fed's Jim Bullard raised the specter of OPEC+'s production cut making The Fed's job harder (i.e. forcing them to be more hawkish than they would like to be) which then reversed some of the equity gains (especially in big-tech and small caps - finance-heavy). Finally, the Atlanta Fed GDPNow model estimate for Q1 2023 real GDP growth is 1.7% on April 3, down from 2.5% on March 31.

Oil prices shot 6-7% higher on the OPEC+ news, with WTI back above $80, its highest since Jan 27th (breaking above its 50- and 100-DMA). This was WTI's best day since 4/12/22...



Source: Bloomberg

OPEC+'s timing could not have been better (as we warned last week)...

CTAs are $30BN short and are about to start chasing https://t.co/Th55TKBgoN

— zerohedge (@zerohedge) March 29, 2023
The Dow dramatically outperformed Nasdaq (by the most since Oct 27th at its peak before the late melt-up), with mega-cap tech red and Small Caps ramped into the green late on. S&P stumbled around unch for most of the day before the late-day buying panic...



Early in the day, 0DTE traders faded the opening ramp, took some profits then led the charge higher with huge positive delta flow...



HIRO Indicator | SpotGamma™

Energy stocks massively outperformed on the day. Financials were flat-ish, while Discretionary was worst...



Source: Bloomberg

Regional Banks were hit again, back below the 3/24 close (before the 'all clear' ramp)...



After 3 straight days of relative weakness, value stocks outperformed growth stocks to start Q2 (but we note a similar pump and dump pattern)...



Source: Bloomberg

Weaker growth (ISM) and stronger inflation (OPEC) = stagflation... and that's not at all what Powell and his pals want to see, as May rate-hike odds rose to 65%...



Source: Bloomberg

Interestingly, further out the curve you can see the impact of OPEC (hawkish) and ISM (dovish) on the market's expectations for Fed actions...



Source: Bloomberg

Inflation expectations jumped to 5-week highs...



Source: Bloomberg

Treasury yields were all lower on the day - after quite a rollercoaster higher (OPEC+ inflation) then plunge lower (ISM weakness) - with the short-end outperforming...



Source: Bloomberg

The Dollar saw a similar velocity - ramping higher to open last night (OPEC+ hawkish) then plunging from the moment Europe opened, and accelerating after ISM weakness...



Source: Bloomberg

Cryptos were higher on the day, helped by Musk changing Twitter's icon to DogeCoin...



Source: Bloomberg

Front-month gold futures surged back above $2,000...



Source: Bloomberg

Finally, Oil's surge has lifted Bloomberg's broad Commodity Index above is 6-month downtrend line, and above its 50DMA...



Source: Bloomberg

Commodities are up 6 of the last 7 days... not what Mr.Powell and Mr.Biden want to see.

 

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 a little under 2 hours from the cash market open.

GLTA on this Tuesday, April the 4th, 2023!

 

Good Tuesday 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!

 

Morning Lineup - 4/4/23 - Ctrl+Alt+Del
Tue, Apr 4, 2023

We're looking at a modestly positive start to the trading day with overseas markets leading futures higher. The Reserve Bank of Australia announced a pause in its rate hiking cycle, and PPI fell more than expected in the Eurozone, and inflation expectations in the region slowed from 6.2% down to 5.8%.

48 years ago today, a college dropout and a computer programmer in Boston started one of the most successful business stories in US history. The number of millionaires minted from “Micro-Soft’s” founding in 1975 is nowhere near the number of ‘blue screens of death’ and subsequent airborne staplers flying across the room that its software has caused, but when it comes to money printing presses, they don’t get much more efficient than Microsoft (MSFT). With its market cap of just over $2 trillion, Microsoft is now the second-largest company in the US. To put it another way, $10,000 invested in MSFT stock on the day of the IPO would be worth A LOT more today – like, 20 million more.

The chart below shows the rolling 10-year price performance of MSFT stock since 1996 (ten years after the company went public). The early years for the company were a great time to be a stockholder or a Microsoft employee with stock options, but the heady days of gains came to an end in the early 2000s when the US government launched its antitrust suit against the company. After a judge originally ruled that Microsoft violated parts of the Sherman Antitrust Act, the company later won on appeal, and the verdict was overturned. Microsoft may have won in the courtroom, but it was losing in the stock market. The stock’s rolling 10-year returns plummeted throughout the early 2000s and even went negative for the first time in its history during the financial crisis.



Looking just at the last twenty years, the last decade has been another golden era for the stock, in what has been a legendary reinvention of the company. It’s hard enough to lead one major industry trend, but to completely change your business model and do it again is rare indeed. While the chart above makes it look as though returns for the stock have continued to languish in the last ten years, that’s only because of the perspective of the stock’s returns during the 1990s. As late as 2021, the stock’s rolling 10-year return was a gain of over 1,200%. Even after the market turmoil of the last year or so, MSFT stock is still up over 900% in the last ten years which works out to an annualized gain of 25%. Yup 25%! Feel free to run the numbers in Excel yourself or just go over to Bing and ask GPT.

Another lesson of Microsoft's stock performance over the last several decades is the power of compounding and the fact that sometimes, the best action is no action. An investor frustrated with the stock's performance in the early 2000s could have easily sold the stock to chase the next best thing. Not only would they have taken a major tax hit on their gains, but by switching, they would have missed out on what has been a stock run unequaled by the vast majority of other publicly traded stocks. That doesn't mean that you should always stick with an underperforming position, but if you are going to make a move, you want to be as sure as possible that the alternative is a better option.