Stock Market Today: March 27th - 31st, 2023

Welcome StonkForums to the trading week of March 27th!

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.)

 

'What Lies Beneath'? Market Headlines Mask Mayhem Below The Surface This Week
At the macro level, strong PMI data today was the icing on the cake of a 'strong' economy, pushing the US Macro Surprise Index to its strongest since April 2022 As Fed Funds were hiked to fresh cycle highs. Financial Conditions appear to be back into decoupling mode from 'tight' monetary policy. Whether it's rate or credit-tightening, the transmission process is broken...



With more of a market focus, here are some facts from this tempestuous week that may surprise:

Let's start in Europe, because today's chaos started there. Deutsche Bank's credit risk exploded higher today...



The jawboning was magnificent - nothing to see here, move along!

“Deutsche Bank has fundamentally modernized and reorganized its business model and is a very profitable bank,” Chancellor Scholz said Friday at a news conference in Brussels when asked about the lender’s situation.

“There is no need to worry about anything.”

“We view this as an irrational market,” Citigroup Inc. analysts including Andrew Coombs wrote in a note.

“The risk is if there is a knock on impact from various media headlines on depositors psychologically, regardless of whether the initial reasoning behind this was correct or not.”

“We have no concerns about Deutsche’s viability or asset marks,” Stuart Graham, an analyst at Autonomous Research wrote.

“To be crystal clear - Deutsche is NOT the next Credit Suisse.”

“It is a clear case of the market selling first and asking questions later,” said Paul de la Baume, senior market strategist at FlowBank SA.

But the collapse in Credit Suisse CDS spreads helped put some lipstick on the EU banking system's pig...



Source: Bloomberg

Overall, European bank markets roller-coastered dramatically, rallying off the opening lows after the CS bailout then reversing weaker to end the week. By the close, EU bank stocks were only modestly lower while Senior EU bank credit was tighter...



Source: Bloomberg

European 'sub' debt ended better on the week with spreads modestly tighter...



Source: Bloomberg

But while the index looked fine, Deutsche Bank's 1Y Sub CDS (classic derivative counterparty risk hedge) literally exploded...



Source: Bloomberg

Despite today's carnage in European banks, Europe's broad stock markets ended the week in the green (thanks in large part to Monday's post-CS bailout panic-bid short-squeeze)...



Source: Bloomberg

Back to the US, the major equity indices remained largely resilient this week (rising Fed balance sheet?). As today's Emergency FSOC meeting took place, stocks began to rebound... Small Caps ended the week in the red with Nasdaq leading (as MSFT, AAPL 'safe havens' soared). S&P and Dow ramped today



The S&P 500 was very technical again this week. finding support early in the week at the 200DMA, rallying up to its 50DMA and reversing there. Falling back down to find support at the 200DMA again before bouncing back above the 100DMA today...



Utes and Real Estate were ugly this week as Tech, Energy, and Materials outperformed. Financials were flat...



Source: Bloomberg

CRE/Office REITs continued to collapse this week...



Source: Bloomberg

Which shouldn't be a surprise as 'Big Short 3.0' CMBX crashes to fresh lows...



Source: Bloomberg

The Regional Bank stock index ended the week practically unchanged (after ramping up to unchanged today)...



But under the surface things were ugly for FRC, RILY, TCBI, COLB, and PACW plunged from early week gains...



Before we leave equity-land, as Goldman's Chris Hussey points out, corporate investing activity was already poised to shrink before the recent bank stress, but the tightening lending standards coming out of the recent bank volatility is likely to further way on corporate investment spending...



Treasuries were mixed on the week with the long-end underperforming and the belly best. However, overall, it was another week of crazy vol in bond-land...



Source: Bloomberg

The 2Y Yield tumbled today to its lowest in almost 7 months, well below the 4.00% level...



Source: Bloomberg

The yield curve steepened notably this week (5s10s uninverted) with 2s10s back at its least inverted since October...



Source: Bloomberg

At the short-end of the curve, the yield curve collapsed from Powell's hawkish Congressional hearings...



Source: Bloomberg

And the 2Y yield is now over 120bps below the current Fed Funds rate...



Source: Bloomberg

Jeff Gundlach says it all...

UST 2 Year versus 10 Year is now inverted 40 basis points.

Was 107 basis points just a few weeks ago.

All UST Yields two years and out are well below the Fed Funds rate.

Red alert recession signals.

— Jeffrey Gundlach (@TruthGundlach) March 24, 2023
The dollar erased all of the post-Powell plunge but ended the week lower (3rd week lower of the last 4)...



Source: Bloomberg

Crypto was modestly higher on the week with BTC and ETH both up around 5% at their best but giving back most of those gains today...



Source: Bloomberg

Copper, Oil, and Silver all rallied on the week (while NatGas tumbled)...



Source: Bloomberg

Despite gold's appeal, it ended the week basically unchanged, rebounding from the early week losses and topping $2000 twice intraweek...



WTI could not hold above $70...



Finally, at one point today, the market priced for a small chance of an inter-meeting rate-cut (but overall has reduced the odds of a May hike to just 25%)...



Source: Bloomberg

Additionally, we note that the market is massively more dovish than The Fed's dotplot with regard to where rates will be at year-end...



Source: Bloomberg

That is 150bps! The market is clearly projecting a worsening financial crisis and/or a hard-landing recession... and stocks sure ain't pricing that in!

Additionally, options traders are dramatically betting on lower rates/yields down by year-end as SOFT Dec23 Skews show incessant upside demand (h/t Nomura's Charlie McElligott)



Source: Bloomberg

Larry McDonald perhaps summed up the situation best:

"Dear Central Banks - When you see suppress the true, market driven cost of capital for longer and longer periods of time. You incentivize the HTM yield reach across the banking system. Then you juice rates 500bps in 13 months to “fight” inflation and light it all on fire"

It took The Fed's QT program 11 months to reduce its almost $9 trillion balance sheet by $625bn... and 2 weeks to retrace two-thirds of that!!



Source: Bloomberg

If everything's "fine" then why is The Fed balance sheet exploding higher again?

 

Best and Worst Stocks Since the COVID Crash Low
Fri, Mar 24, 2023

We are now three years out from the COVID Crash low, and even with the past year's weakness, most assets continue to sit on solid gains. For major US index ETFs, the S&P Midcap 400 (IJH) is up the most having slightly more than doubled while the S&P Smallcap 600 (IJR) is not far behind having rallied 95.9%. Value has generally outperformed growth, especially for mid and small-caps although that has shifted somewhat this year. For example, while its gains have been more middling since the COVID crash, the Nasdaq 100 (QQQ) has been the strongest area of the equity market in 2023 thanks to the strength of sectors like Tech (XLK) and Communication Services (XLC). Although those sectors have posted strong gains this year, they have been the weakest over the past three years while Energy (XLE) far and away has been the strongest asset class. Paired with the strength of energy stocks has been solid runs in commodities (DBC)more broadly with the notable exception being Natural Gas (UNG) which has lost over 40%. Bond ETFs are similarly sitting on losses since the COVID Crash lows. As for international markets, Mexico (EWW) and India (PIN) have outpaced the rest of the world although Emerging Markets (EEM) as a whole have not been particularly strong; likely being dragged on by the weaker performance of China (ASHR) which holds a large weight on EEM.



Taking a look at current S&P 500 members, nearly half of the index has more than doubled over the past three years. As for the absolute best performers, Energy stocks dominate the list with four of the top five best-performing S&P 500 stocks coming from that sector. Targa Resources (TRGP) has been the absolute best performer with a nearly 900% total return. Other notables include a couple of heavy weight stocks: Tesla (TSLA) and NVIDIA (NVDA) with gains of 563.9% and 412.9%, respectively.



On the other end of the spectrum, there are currently 25 stocks that have posted a negative return since the COVID Crash low. The worst has been First Republic Bank (FRC) which has been more of a recent development. Whereas today the stock has posted an 83.1% loss, at the start of this month it would have been a 65% gain. Another standout on the list of worst performers has been Amazon (AMZN). Most other mega caps have more than doubled since the March 2020 S&P 500 low, however, the e-commerce giant has hardly offered a positive return.



Sector Performance Experiences a Historical Divergence
Fri, Mar 24, 2023

The first quarter of 2023 is coming to a close next week, and checking in on year to date performance, there has been a big divergence between the winners and losers. Although the S&P 500 is up 2.84% on the year as of yesterday's close, only three of the eleven sectors are higher. Not only are those three sectors up on the year, but they have posted impressive double digit gains only three months into the year. Of those three, Consumer Discretionary has posted the smallest gain of 10% whereas Technology and Communication Services have risen 17.2% and 18.1%, respectively. The fact that these sectors are home to the main mega cap stocks -- like Apple (AAPL), Amazon (AMZN), and Alphabet (GOOGL), which have been on an impressive run of late -- helps to explain how the market cap weighted S&P 500 is up on the year without much in the way of healthy breadth on a sector level.





One thing that is particularly remarkable about this year's sector performance is just how rare it is for a sector to be up 10%+ (let alone 3) while all other sectors are lower. And that is for any point of the year let alone in the first quarter. As we mentioned in yesterday's Sector Snapshot and show in the charts below, going back to 1990, there have only been two other periods in which a sector has risen at least 10% YTD while all other sectors were lower YTD. The first of those was in May 2009. In a similar instance to now, Consumer Discretionary, Tech, and Materials were the three sectors with double digit gains back then. With those sectors up solidly, the S&P 500 was little changed on the year with a less than 1% gain. As you can see below, though, by the end of 2009, every sector had pushed into positive territory as the new bull market coming out of the global financial crisis was well underway.



The next occurrence was much more recent: 2022. Obviously, it was a tough year for equities except for the Energy sector which had a banner year. Throughout most of the year, the sector traded up by well over 20% year to date even while the rest of the equity market was battered.



The Fed Expects Banking Stress to Substitute for Rate Hikes
Posted on March 23, 2023

The Federal Reserve raised the federal funds rate by 0.25% at their March meeting, bringing it to the 4.75-5.0% range. This is the ninth-straight rate increase and brings rates to their highest level since 2007. However, the most aggressive tightening cycle since the early 1980s, which saw them lift rates all the way from near zero to almost 5%, is near its end.



Up until early February, Fed officials expected to raise rates to a maximum of about 5.1% and hold it there for a while. However, since that time, we’ve gotten a slew of strong economic data, including elevated inflation numbers. This pushed fed officials to give “guidance” that they expected to raise rates by more than they estimated back in December.

Market expectations for policy also moved in conjunction. Prior to February, markets expected the Fed to raise rates to 5% by June, and subsequently lower them by about 0.5% by the end of the year. But strong incoming data and Fed guidance pushed expectations higher, with the terminal rate moving up to 5.6% and no cuts in 2023.

The Silicon Valley Bank crisis changed everything
The bank crisis that erupted over the last couple of weeks resulted in a significant shift, both in expectations for policy and now the Fed as well. See here for our complete rundown on SVB and the ensuing crisis.

Market expectations for Fed policy rates immediately moved lower. Markets expected the stress in banks to translate to tighter credit conditions, which in turn would lead to slower economic growth and lower inflation.

This was nicely articulated by Professor Jeremey Siegel, one of the foremost commentators on financial markets and fed policy, in our latest episode of the Facts vs Feelings podcast, Prof. Siegel said that tighter credit conditions, as lending standards become more strict, are de facto rate hikes.

Fed Chair Powell more or less said exactly the same thing after the Fed’s March meeting. The 0.25% increase was an attempt to thread the needle between financial stability and fighting inflation. Fed officials also forecast the fed funds rate to hit a maximum of 5.1%, unchanged from their December estimate. This is a marked shift from what was expected just a few weeks ago, with Powell explicitly saying that tighter credit conditions “substitute” for rate hikes.



There’s a lot of uncertainty ahead
While the recent bank stresses are expected to tighten credit conditions and thereby impact economic growth and inflation, there are a couple of open questions:

1. How big will the impact be?
2. How long will the impact last?

These are unknown currently. Which means future policy is also unknown.

Fed officials expect to take rates to 5.1%, i.e., one more rate increase. And then expect to hold it there through the end of the year. In short, they don’t expect rate cuts this year.

Yet investors expect no more rate increases and about 0.6% of rate cuts in the second half of 2023. Markets expect the policy rate in June to be at 4.8%, while expectations for December are at 4.2%.



There’s clearly a huge gulf between what the Fed expects versus what investors expect. This will have to reconcile in one of two ways:

1. Market expectations move higher – if economic/inflation data remain strong and credit conditions don’t look to be tightening significantly.
2. Fed expectations move lower – if the banking sector comes under renewed stress, credit conditions could tighten significantly and eventually lead to weaker data.

Things are obviously not going to go in either direction in a straight line. It’s going to be a bumpy ride as new data points come in, not to mention news/rumors of renewed problems in the banking sector.

Seasonality Keeps Claims Below 200K?
Thu, Mar 23, 2023

Initial jobless claims remained healthy this week with another sub-200K print. Claims fell modestly to 191K from last week's unrevised reading of 192K. That small decline exceeded expectations of claims rising up to 197K. Given claims continue to impress, the seasonally adjusted number has come in below 200K for 9 of the last 10 weeks. By that measure, it has been the strongest stretch for claims since last April when there were 10 weeks in a row of sub-200K prints. Prior to that, from 2018 through 2020 the late March and early April period similarly saw consistent readings under 200K meaning that some of the strength in the adjusted number could be on account of residual seasonality.



In fact, this point of the year has some of the weeks in which claims have the most consistently historically fallen week over week. Taking a historical median of claims throughout the year, claims tend to round out a short-term bottom in the spring before an early summer bump. In other words, seasonal strength will begin to wane in the coming months.



While initial claims improved, continuing claims worsened rising to 1.694 million from 1.68 million the previous week. Albeit higher, that remains below the 2023 high of 1.715 million set at the end of February.



A Fed Day Like Most Others
Thu, Mar 23, 2023

Yesterday's Fed decision and comments from Fed Chair Powell gave markets plenty to chew on. As we discussed in last night's Closer and today's Morning Lineup, there have been a number of conflicting statements from officials and confusing reactions in various assets over the past 24 hours. In spite of all that uncertainty, the S&P 500's path yesterday pretty much followed the usual script. In the charts below we show the S&P's average intraday pattern across all Fed days since Powell has been chair (first chart) and the intraday chart of the S&P yesterday (second chart). As shown, the market's pattern yesterday, especially after the 2 PM ET rate decision and the 2:30 PM press conference, closely resembled the average path that the market has followed across all Powell Fed Days since 2018.

The S&P saw a modest bounce after the 2 PM Fed decision and then a further rally right after Powell's presser began at 2:30 PM. That initial post-presser spike proved to be a pump-fake, as markets ultimately sold off hard with a near 2% decline from 2:30 PM to the 4 PM close.



So what typically happens in the week after Fed days? Since 1994 when the Fed began announcing policy decisions on the same day as its meeting, the S&P has averaged a decline of 10 basis points over the next week. During the current tightening cycle that began about a year ago, market performance in the week after Fed days has been even worse with the S&P averaging a decline of 0.99%. However, when the S&P has been down over 1% on Fed days (like yesterday), performance over the next week has been positive with an average gain of 0.64%. As always, past performance is no guarantee of future results.



What Now? An Update on Recent Bank Stress.
Posted on March 22, 2023

It’s been less than 2 weeks since Silicon Valley Bank’s stunning 48-hour collapse, and a few more banks have been caught in the fray. New York regulators closed the doors on Signature Bank on Sunday, March 12. A week later, US banks injected $30 billion into First Republic Bank to keep it afloat, and UBS acquired rival Swiss bank Credit Suisse in a government-brokered deal. In the midst of the chaos, your Carson Investment Research team was there for you with client-facing content, professional advice, and investment solutions. In fact, we think this event presents an opportunity to invest in the more stable large-cap financial companies and recently upgraded the sector to overweight in our House Views Advice.



Why is this happening?
The rapid hike in interest rates caused an asset and liability mismatch for banks. Due to many years of low-interest rates, banks invested assets in interest-earning loans and bonds that would be repaid over the next five-plus years, which at the time was a logical way to earn a higher yield. Regulators considered government bonds to be among the safest ways a bank could invest its capital. As interest rates rose, bond values dropped. Interest rates rose at the fastest pace in history, and the safe assets that banks invested in lost value to the tune of more than $620 billion in unrealized losses as of the end of last year. This decline in value left weaker banks underwater and, when coupled with depositors pulling money out, caused them to collapse or seek costly capital raises.

Why this matters to investors?
The weakness in the banking sector will likely lead to tighter lending standards, potentially slowing economic growth. The reason we’re in this mess, to begin with, is that the Fed hiked interest rates to slow the economy because inflation was rising too quickly. Perhaps the 16% drop in oil prices over the past two weeks reflected this slower growth and bodes well for continued falling inflation. Thus, the Fed is closer to achieving its goal.

Maybe it’s an overreaction as “banking crisis” headlines stir painful memories of 2008. Either way, an environment with slower growth and lower inflation isn’t a bad time to invest. Bonds and stocks could both perform well, especially stocks of companies with the ability to grow earnings. We also reiterate our House Views Advice overweight on the large-cap Financials sector. The largest US banks are well-capitalized and are gaining market share from the smaller regional banks. We believe this calamity provides an opportunity for stronger banks and investors to capitalize on.

FANG+ Flying
Wed, Mar 22, 2023

As we noted in today's Morning Lineup, sector performance has heavily favored areas like Tech, Consumer Discretionary, and Communication Services in recent weeks. Playing into that sector level performance has been the strength of the mega-caps. The NYSE FANG+ index tracks ten of the largest and most highly traded Tech and Tech-adjacent names. In the past several days, that cohort of stocks is breaking out to the highest level since last April whereas the S&P 500 still needs to rally 4% to reach its February high.



Although FANG+ stocks have been strong recently, that follows more than a full year of underperformance. As shown below, relative to the S&P 500, mega-cap Tech consistently underperformed from February 2021 through this past fall. In the past few days, the massive outperformance has resulted in a breakout of the downtrend for the ratio of FANG+ to the S&P 500.



More impressive is how rapid of a move it has been for that ratio to break out. Below, we show the 2-month percent change in the ratio above. As of the high at yesterday's close, the ratio had risen 22.5% over the prior two months. That comes up just short of the record (22.6%) leading up to the pre-COVID high in February 2020. In other words, mega-cap Tech has experienced near-record outperformance relative to the broader market. However, we would note that this is in the wake of last year when the group had seen some of its worst two-month underperformance on record with the worst readings being in March, May, and November.



Is This The Most Important Chart in The World?
Posted on March 21, 2023

The latest worry du jour has been about Swiss Banking giant Credit Suisse Group AG (CS). Think about this, it was down 24% last week and then another 53% on Monday. Here’s the catch, it was down more than 90% from the all-time highs at the beginning of last week before all the really bad news started to come out.

Now here’s the big question, should anyone really be surprised that CS was in trouble? When a stock is down this much, honestly, I don’t think the fact that it had some skeletons in the closet should be much of a shock to anyone. Well, the Swiss government gave rival Swiss bank USB a sweetheart of a deal to buy their long-time competitor, so they did it to the tune of $3.2 billion. How this all shakes out is not yet written, but given stocks bounced globally on Monday and UBS added 3% after being down close to double digits pre-market, things appear to be calming down.



One more note about this deal. UBS called it an acquisition, while Credit Suisse called it a merger. Is this a sign that this one might be off to a rough start?



Taking a closer look at yesterday, the majority of banks and regional banks had big gains. Yet, First Republic Bank fell 47% on Monday. Think about that, another bank was cut in half and a major Swiss bank was cut in half, but financial stocks, in general, bounced and some by a wide margin.

Our take here is that the market is starting to sniff out that many of these issues are company-specific and not an industry-wide phenomenon. SVB loaned out primarily to tech and start-ups, while those two areas dried up significantly over the past year, putting them in the crosshairs of trouble. Then two other crypto banks fell, which was not a shock given how cryptocurrencies did last year. The truth is that banks in general, are still in good shape; we just have some bad apples upsetting things. For more of our thoughts on financials, here’s a recent House View Spotlight sharing how we view the group in a positive light.

I’ll leave you with what very well could be the most important chart in the world right now. Financials currently sit above huge support right above their 2007 peak. Turning to the Financial Select Sector SDPR ETF (XLF), the $30 level is quite significant. Should this violate this area and move lower, it could be a warning that more pain is coming. Yet, should we find support near current levels (our expectation), it could be a nice area to consider overweighting the financials sector.



What could be next? It is hard for us to ignore the fact that stocks have been higher in 17 of the past 18 years in the month of April during a pre-election year. Yes, there are many worries and concerns out there, but market sentiment is quite low, and that could set the stage for a surprise springtime rally.



March Seasonality Prevails, Banking Fiasco Be Damned

It’s encouraging typical March seasonal patterns have overcome recent bank failures, recession talk and fearmongering. The early March pullback was steeper than normal, but the usual mid-month rebound appears to be materializing.

Last week’s gains could be an indication we have seen the worst of the banking fallout and the end of the pullback. Triple Witching Weeks have tended to be down in flat periods and dramatically so during bear markets. Positive March Triple Witching weeks in 2003 and 2009 confirmed the market was back in rally mode.

The week after March Triple Witching is notoriously nasty. S&P is down 27 of the last 40 year – and frequently down sharply. Positive or flat action this week would be constructive.

In the old days March used to come in like a bull and out like a bear. Nowadays March has evolved into an inflection point where short-term trends often change course. The market is clearly at an important juncture and it’s a good time to remember Warren Buffet’s wise words to “Be greedy when others are fearful.”

Bank failures are never a good thing, but the swift actions of regulators likely prevented further damage to the industry. At the least, the banks are likely to be under even greater scrutiny going forward. In the near-term we expect more volatile trading. Further out we expect the market, and the economy will recover like they both have historically done.

Carson House View Spotlight: Overweight Industrials
Posted on March 20, 2023

Carson House View Sector Rating: Overweight
Carson’s House Views are the foundation of our asset allocation recommendations. Our partners and clients can utilize these directly through our proprietary House Views models or expressed independently using various ETFs available on our platform. Currently, we’re overweight the industrial sector due to a favorable economic and fiscal policy backdrop, solid fundamentals, and reasonable valuations. While this area outperformed in 2022, falling about 5.5% compared to an 18.1% decline in total return for the S&P 500, Carson Investment Research believes that industrials are positioned to continue performing well over the coming years.

Fundamental growth is expected to remain healthy
It’s been interesting times for the industrial sector recently. While demand has rebounded strongly since the pandemic, but supply chain bottlenecks have moderated sales growth and margins for many. However, these now appear to be lifting. This, coupled with the movement to re-shore manufacturing, favorable fiscal policies like the 2021 Infrastructure Investment and Jobs Act, and rising military budgets from the Russia/Ukraine war, bodes well for future growth.



Industrials contain many subsectors
Industrials are somewhat of a catch-all collection of firms that don’t fit neatly into other classifications. There are 12 subsectors that comprise this area ranging from machinery firms like Caterpillar to database companies like Verisk Analytics. That said, manufacturing and transportation are the underlying commonality for most of these companies. The largest subsector is Aerospace & Defense, which not only includes military equipment but also production for commercial aviation. Due to the war in Ukraine, global defense budgets are on the rise with the European Union expected to increase its related spend by over 35% and Japan’s expenditures doubling over coming years.



Machinery is the second largest subcomponent. It’s the most diverse subcomponent with 17 stocks. However, Caterpillar and Deere represent nearly 40% of it. Currently, there’s a mix of headwinds and tailwinds. On the positive side, there’s increased fiscal spending, higher commodity prices, and China’s re-opening. Headwinds include higher financing costs for construction financing and continued supply chain issues. That said, this is an area that will be a long-term beneficiary of technology adoption as tractors and bulldozers are being covered with sensors that help automate operations and throw valuable data into the cloud.

Railroads is another area that we favor. These are inherently great businesses with strong competitive dynamics, pricing strength, and high operating leverage. Re-shoring manufacturing back to the US should be a tailwind for this subsector as well as autonomous trains since labor is one of their biggest expenses after fuel.



Bottom Line
Carson Investment Research is overweight industrials due to our expectations of continued healthy economic growth, constructive commodity prices, rising defense spending, and favorable government programs that are encouraging re-shoring manufacturing back to the US. Valuations aren’t demanding, especially considering the expectations for double-digit growth in earnings and free cash flow over the next three years.

Nasdaq Leaves the S&P in the Dust
Mon, Mar 20, 2023

Looking at the major US index ETF screen of our Trend Analyzer shows just how disconnected the Nasdaq 100 (QQQ) has become from other major index ETFs recently. As shown below, as of Friday's close, QQQ actually finished in overbought territory (over 1 standard above its 50-DMA) whereas many other major index ETFs were oversold, some of those to an extreme degree. On a year to date basis, the Nasdaq 100 (QQQ) has rallied more than 14% compared to low single digit gains or losses for the rest of the pack.



Historically, the major indices, namely the S&P 500 and Nasdaq, tend to trade at similar overbought and oversold levels. In the chart below we show the Nasdaq 100 and S&P 500's distance from their 50-DMAs (expressed in standard deviations) over the past five years. As shown, typically the two large cap indices have seen similar albeit not identical readings. That is until the past few weeks in which the two have diverged more significantly.



On Friday there was more than 2 standard deviations between the Nasdaq's overbought 50-DMA spread and the S&P 500's oversold spread. As shown in the chart below, that surpassed recent highs in the spread like the spring of 2020 to set the highest reading since October 2016.



Going back to 1985, the spread between the Nasdaq and S&P 500 50-DMA spreads diverging to such a degree is not without precedent, but it is also not exactly common. Friday marked the 16th time that spread eclipsed 2 standard deviations for the first time in at least 3 months. Relative to those prior instances, the current overbought and oversold readings in both the S&P 500 and Nasdaq are relatively middling. However, only the instance in early 2000 similarly saw the Nasdaq technically overbought (trading at least a standard deviation above its 50-DMA) while the S&P 500 was simultaneously oversold (at least one standard deviation below its 50-DMA).

 

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 3.24.23-


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 3.24.23-

 

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Here are the upcoming IPO's for this week-

 

Stock Market Analysis Video for March 24th, 2023
Video from AlphaTrends Brian Shannon


ShadowTrader Video Weekly 3/26/23
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 Weekly Stock Picking Contest & SPX Sentiment Poll (3/27-3/31) <-- click there to cast your weekly market direction vote and stock picks for this coming week ahead!

Daily SPX Sentiment Poll for Monday (3/27) <-- 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 3.27.23 Before Market Open:

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

Monday 3.27.23 After Market Close:

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

(T.B.A.)

Tuesday 3.28.23 Before Market Open:

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

(T.B.A.)

Tuesday 3.28.23 After Market Close:

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

(T.B.A.)

Wednesday 3.29.23 Before Market Open:

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

(T.B.A.)

Wednesday 3.29.23 After Market Close:

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

(T.B.A.)

Thursday 3.30.23 Before Market Open:

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

(T.B.A.)

Thursday 3.30.23 After Market Close:

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

(T.B.A.)

Friday 3.31.23 Before Market Open:

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

(T.B.A.)

Friday 3.31.23 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-
($CCL $BNTX $LULU $MU $IZEA $SKLZ $WBA $HTHT $FUTU $LOVE $RH $PAYX $IHS $GOEV $CALM $PLAY $RUM $CTAS $CNM $MKC $BB $EVGO $VERO $AUGX $RGF $GMDA $SNX $RAIL $AEHR $PVH $SRT $UGRO $AADI $PRGS $DNMR $NEOG $CONN $IMBI $SOL $LOV $GROY $EE $ABOS $CNXC $UNF $AMPS $JEF $ESLT $CURI $DARE)


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

• Most Anticipated Earnings Releases for the week beginning March 27th, 2023 <-- 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 a little over 2 hours from the cash market open.

GLTA on this Monday, March the 27th, 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 trading week ahead!

 

Morning Lineup - 3/27/23 - No News is Good News
Mon, Mar 27, 2023

The market had echoed the sentiment of Andrew Jackson for the last several weeks, but this morning, they’ve put those fears aside. A deal from First Citizens Bank to acquire the assets of SVB Financial coupled with the fact that there were no other major headlines of trouble over the weekend here or in Europe, specifically with Deutsche Bank, has futures firmly in positive territory to start the last trading week of the first quarter. The economic calendar is quiet today with the Dallas Fed Manufacturing survey being the only report scheduled for release (10:30 Eastern). In Europe, the major equity indices are all up by more than 1%. It’s a good start at least!

For the equity market, we’re kicking off the last week of the quarter in a bit of a limbo period as the S&P 500 closed out last week modestly above its 200-day moving average (DMA) after briefly breaking below it during the trading day Friday. That was a moral victory for bulls, but it came just a day after it failed to close above its 50-DMA on Thursday after briefly breaking through it to the upside.

Given the pre-opening strength in equities and lack of new stresses in the financial sector, treasuries are selling off this morning, especially at the short end of the curve as the two-year yield is up close to 20 basis points (bps) and inching towards 4%. Crude oil is back above $70 per barrel, and gold is down 1.5% after failing to hold the $2,000 level last week.



Within the S&P 500, it was a broad rally last week as nine of eleven sectors (even Financials!) finished the week in positive territory. The only losers were Real Estate and Utilities which were both down close to 2%. On the upside, it was an interesting mix as Communication Services and Technology led the way higher (so surprise), but right behind those two sectors, Materials and Energy both also rallied over 1%.

 

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, March 27th, 2023.

 

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, March the 28th, 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 - 3/28/23 - Melatonin Market
Tue, Mar 28, 2023

You couldn’t really ask for a more sleepy morning in the markets as futures are basically unchanged. S&P 500 futures are up less than a point, the Nasdaq is indicated to open down less than two points, and the Dow is indicated to open up by less than a point as well. Treasury yields are higher with the 10-year yield up by 4 basis points (bps) to 3.57% while the 2-year yield is up by 7 bps and back over 4%.

We could see the market wake up later on today with Wholesale Inventories at 8:30, the FHFA House Price Index at 9:00, and then finally at 10, we’ll get Consumer Confidence and Richmond Fed. The Richmond Fed report will be the fifth and final of the five Fed manufacturing reports that are reported each month, and like the rest of them (which showed no growth), it is expected to come in negative, although not as bad as February’s reading.

Investors can’t seem to make up their minds as to where stocks should go from here, how the bank crisis will play out, and whether the FOMC’s next move will be a rate hike, a rate pause, or a rate cut! Think about it. How often is it that credible arguments can be made for any of those three decisions? With that uncertainty, is it any surprise that the S&P 500 is sandwiched right between its 50 and 200-day moving averages (DMA)?



Even as the S&P 500 shows the characteristics of an indecisive market, there’s more dispersion at the sector level. Of the eleven sectors, seven (shown below) closed yesterday below both their 50 and 200-DMAs.




On the upside, the only two sectors above both their 50 and 200-DMAs are Communication Services and Technology (below). That leaves just one sector – Industrials (XLI) – which, like the S&P 500, is sandwiched between those two averages.

 

Here is a final look at today's market and futures maps, as well as how each sector performed individually at the close on Tuesday, March 28th, 2023.