Stock Market Today: March 18th - 22nd, 2024

Welcome StonkForums to the trading week of March 18th!

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


S&P Sectors End of Week:


Major Indices End of Week:


Major Futures Markets End of Week:


Economic Calendar for the Week Ahead:


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

 

'Bad News' Battered Bonds, Big-Tech, & Banks On The Week; Copper & Crude Rip
FRIDAY, MAR 15, 2024 - 04:00 PM

An ugly week on the macro side - hotter than expected inflation, slower than expected growth, weaker than expected labor market data...



Source: Bloomberg

...but the inflation issues sent rate-cut expectations reeling (now less than 3 cuts priced in for 2024)...



Source: Bloomberg

And as rate-cut expectations fell, Treasury yields rose... non-stop... all week with the belly of the curve underperforming (5Y yields up 28bps on the week)...



Source: Bloomberg

Yields all ended back up near their year-to-date highs...



Source: Bloomberg

Higher yields were initially shrugged off by stocks but as they kept rising, there was no arguing...



Source: Bloomberg

Small-Caps and Big-Tech were the week's biggest losers...



Banks were not pretty this week as The Fed's BTFP facility expired...



...and liquidity was sucked hard out of the RRP. $108BN drawn down in the last two days to fresh cycle lows...



Source: Bloomberg

Anti-Obesity drug stocks dared to end red...



Source: Bloomberg

AI stocks also pumped and dumped on the week...



Source: Bloomberg

The dollar surged this week - as BoJ chatter picked up - with its best week since mid-Jan (rebounding some from last week's dollar-plungefest)....



Source: Bloomberg

The dollar's gains were gold's losses as the precious metal ended the week down 1%...



Source: Bloomberg

Despite big net inflows this week...



Source: Bloomberg

...bitcoin ended the week only marginally higher (up around 3%), with choppy moves (day-session dips bought overnight), but ened back above $70,000...



Source: Bloomberg

...and ethereum was a little worse, down around 3%, on the week (thanks to Democrats' letter overnight pressuring the SEC on ETH ETFs)...



Source: Bloomberg

NatGas erased most of last week's gains...



Source: Bloomberg

Still there were some bright spots...



Crude surged on the week, breaking out of its range to its highest since early November...



Source: Bloomberg

And as goes crude, so goes wholesale gasoline... and then goes pump prices...



Source: Bloomberg

..but it was copper that really regained its legs, surging up to its highest since Feb 2023...



Source: Bloomberg

Finally, was this week's 'stalling' in NVDA 'the top'?



Source: Bloomberg

How ironic would it be if we saw peak AI just as Jensen unveils his latest and greatest at GTC on Monday?

 

Rotation
Fri, Mar 15, 2024

Investors have been waiting for a broadening out of the rally for even longer than they’ve been pricing in (and then pricing out) rate cuts, but while breadth may still be relatively narrow, there has been a good deal of rotation recently.

Let’s start with where the market stood heading into today. We measure overbought and oversold levels as a closing price that is one or more standard deviations above (below) the 50-day moving average (DMA). By that measure, the S&P 500 closed at overbought levels for 40 straight days through the close on 3/14. While that sounds extreme, we would note that in the period ending on August 1st of last year, the S&P 500 closed at overbought levels for 45 straight days in what was the ‘summer of overbought’.



Now let’s get to the part about rotation. While the S&P 500 has been overbought for the last 40 trading days, not a single sector has closed at overbought levels for as many days. As shown in the chart below, the streak for the Financials sector has been close at 39, followed by Industrials at 30 days. After those two sectors, no other sector has closed at overbought levels for even half as long as the S&P 500. To put that in perspective, since daily sector price data starts in late 1989, there have been eleven other periods where the S&P 500 closed at overbought levels for at least 40 trading days, and of those periods, there was only one (in 2012) in which not a single sector had seen 40 or more overbought straight closes on the same day that the S&P 500 reached 40.

March Quarterly Options Expiration Week: S&P 500 and NASDAQ Up 12 of Last 16

March Quarterly Option Expiration Weeks have been quite bullish. S&P 500 has been up 27 times in the last 41 years while NASDAQ has advanced 25 times. More recently, S&P 500 and NASDAQ have both advanced 12 times in the last 16 weeks. But the week after is the exact opposite, S&P down 27 of the last 41 years—and frequently down sharply. In 2018, S&P fell –5.95% and NASDAQ dropped 6.54%. Notable gains during the week after for S&P of 4.30% in 2000, 3.54% in 2007, 6.17% in 2009, and 10.26% in 2020 appear to be rare exceptions to this historically poorly performing week.


Remembering the Worst Bear Market Since the Great Depression


“I am an optimist. It does not seem too much use being anything else.” -Winston Churchill

Did you know one of the worst bear markets in history ended 15 years ago this past Saturday? If you were there then you no doubt remember it. Bank stocks were outright collapsing, with many down 90%. The global economy was in shambles, and people were losing their jobs all around. Retirement funds had been demolished and there was very little hope.

What do I remember about the Great Financial Crisis (GFC)? I worked at a very small research shop at the time and every Friday they’d bring a couple people into a room to let them go. Eventually they mixed it up and let people go on other days, which was nice, since it got to the point you were sick to your stomach by the time Friday rolled around, as it could be your day.

But like all bad things, it eventually came to an end. The S&P 500 fell 57% from its October 2007 peak before bottoming on March 9, 2009, ending the GFC bear market. Between the tech bubble bear market earlier in the decade and the GFC, the 2000s went down as one of the worst decades for stock investors ever. Even worse than the 1930s!

Benjamin Franklin once said, “There are no gains without pains.” In part due to that lost decade of the 2000s, we’ve been in the midst of incredible gains ever since. In fact, the S&P 500 is up more than 900% on a total return basis the past 15 years.



But let’s never forget, it wasn’t a straight line higher. We had many scares along the way. Near bear markets in 2011 and 2018, a 100-year pandemic accompanied by a 34% bear market in 2020 and then another 25% bear market in 2022 made it anything but an easy 15 years. Yet, in the midst of all of it, longer-term investors were once again rewarded for sticking to their long-term investment plans. They say the stock market is the only place where when things go on sale, people run out of the store screaming. Well, we saw a lot of screaming the past 15 years.

Here’s a TIME magazine cover that best summed up that time. Notice the date is March 9, 2009, the exact day of the low!



You don’t ever want to blindly invest based on magazine covers, but we do use magazine covers as potential contrarian indicators to get a good feel for what is priced in. Once something makes it to a magazine cover, chances are good markets have already taken it into account. TIME isn’t a financial publication, so when they have a very bearish or bullish cover, take note.

Seven months after the GFC bear ended, stocks were up nicely off the bottom and TIME came out with this all-time contrarian cover. They suggested it was time to retire the 401k, as who could possibly ever want to invest in stocks for their retirement again? At the time I saw this cover and said it was wildly bullish, as the cover captured the sentiment of so many people. That sentiment persisted for many years, as the memory of the GFC continued to haunt many investors.



Which brings us to the latest cover in the financial publication Barron’s.



Quite the difference in sentiment, huh? Maybe a 900% total return rally will do that, but this cover caused a huge ruckus on social media with many claiming the bull is now over. First off, if you want to get specific, Barron’s didn’t put a bull on the cover, as it is only the horns. At the same time, Barron’s is a weekly financial magazine, so they have more opportunities to use bulls (and bears) on their covers. My take on Barron’s is they’ve made many good calls, so to me, this by itself isn’t some big contrarian warning.

In late October for instance, they said to buy bonds, which was right in front of one of the greatest two-month rallies bonds have ever seen. You didn’t want to fade that one.



I did a quick Google search and found numerous covers with a bull on it in Barron’s the past decade. Here’s one of my favorites. After going nowhere for 13 years, stocks were just starting to break out to new highs and Barron’s was leading the charge in May 2013.



Speaking of May 2013, here’s a much younger version of myself that very same month, explaining to Maria Bartiromo and the quite bearish other guest, why we were going higher. The pushback I got for being a bull back then was never ending.

You have to remember, after the GFC people didn’t trust the stock market and for many years, and it was widely expected that a new bear was always right around the corner. I made a name for myself in 2009, 2010, 2011, 2012, and especially in 2013, as I was bullish when very few were. I’d go on CNBC all the time and the producer would ask if I was still bullish. When I answered yes, they’d always reply with something like, “Good, because I have a bear, but can’t find another bull to come on TV.” That was a signal to me all by itself that the rally had plenty of room to run.

In March 2024 there’s no question being bullish isn’t so lonely anymore. I’m seeing many of the more vocal bears from last year turn into bulls now (and they are doing their best to change the narrative on just how wildly wrong they were last year). No question this is a bit of a near-term warning. Various sentiment polls are flashing extreme optimism and put/call ratios are in the complacency range as well. None of this is end-of-the-world stuff, but it does say the bar is set quite high and any disappointment could lead to a well-deserved pause or break.

Let’s remember, the S&P 500 is up 16 of the past 19 weeks and up close to 25% since late October. 25% is a great year, let alone only 19 weeks! I found 20 other times the index gained at least 20% in 19 weeks and 6 months later the S&P 500 was higher 19 times and a year later 18 times. Even if we see near-term weakness, the overall bull market is likely alive and well.



Let’s wrap it up with one of our favorite charts. As good as things have been lately, this won’t continue. Even the best years tend to see multiple scary moments. Stocks gained 25% last year, yet a year ago this month we saw a regional bank crisis that caused many legit worries. We also had a standard 10% correction in late October which caused incredible amounts of fear. Volatility is the toll we pay for stock’s upside, and we haven’t had to pay that toll for a while now. Just have this in mind when the inevitable pullback comes. Volatility is normal, and even sometimes desirable, in a healthy market.



Labor: Not The Problem It Used to Be
Tue, Mar 12, 2024

In an earlier post, we discussed the latest NFIB survey of small businesses. While optimism was weak, a particular area of concern was employment. What businesses reported to be their most important problems reiterated this. As shown below, of all problems highlighted, labor took a backseat in February with a five percentage point decline in the share of businesses reporting quality of labor as their biggest problem.



When combining with the share reporting cost of labor to be their biggest problem, 27% of businesses reported these labor concerns as their most pressing. As shown below, that combined reading ties June and December 2020 for the lowest since May 2020.



As for what picked up the difference, the percentage of respondents reporting inflation as their biggest problem jumped back up to 23% versus the fresh low of 20% last month. At that level, inflation is once again the single most important issue among small businesses. That increase is also a bit contrary to the report's index on higher prices which fell to fresh lows in February.



While the increase in February in the share reporting inflation as their biggest problem doesn't exactly disrupt what has been an overall trend lower in inflation readings, one more pressing increase has been for poor sales. As inflation jumped to the forefront in the past few years, the share of businesses reporting poor sales as their biggest problem fell to historically low levels. While it is still low, the past year has seen a steady climb back up to 7%.



Small Businesses Cut Employment and Spending
Tue, Mar 12, 2024

Ahead of this morning's CPI release, the NFIB updated their Small Business Optimism Index. The headline reading dropped to 89.4 in February compared to 89.9 in January. That result is the reverse of what was expected as forecasts were penciling in the index to tick up to 90.5. With the lower reading, small business optimism returns to the low end of the past decade's range and is only 0.4 points above the post pandemic low set last April.



Diving into the individual categories of the report, breadth was weak. As shown below, of the inputs to the headline number, there were only two categories that increased month-over-month: Expected Real Sales and Expected Credit Conditions. As for the categories that are not inputs, every single one fell versus January. Given these declines, many areas are sitting in the bottom decile of their historical ranges.



One category in which declines are not exactly a bad thing in the current environment are the share of businesses reporting higher prices. While not an input to the headline index, the higher prices index fell another point down to 21. That is now the lowest reading in just over three years.



Outside of the drop in the inflation reading, some declines in other categories were less reassuring. As we discussed in today's Morning Lineup, employment metrics were particularly weak. Hiring plans have fallen for three months in a row and are now at the weakest level since May 2020. The drop in compensation plans was even more dramatic falling 7 points month-over-month. In the history of the data going back to early 1986, the only time this index has fallen by more in a single month was April 2020.

While businesses appear to be significantly curtailing plans for hiring and wages, the actual changes have been a bit more robust. The actual employment changes remains negative as it has throughout the post-pandemic period, and implying small businesses are on net firing rather than hiring. The compensation index is at the lowest level since May 2021, however, that level is basically consistent with the high end of the pre-pandemic range. The same would apply for those reporting job openings as hard to fill which came in at the lowest level since January 2021.



Employment is not the only area that small businesses are reportedly cutting back on. Expenditure readings were also weak in the most recent report. For starters, Capital Expenditure Plans have reverted downwards to multi-month lows alongside actual changes to cap ex. Meanwhile, a net 7% of businesses report plans to cut down on inventories. That is a historically low reading in the bottom 1.5% of all months on record. Finally, we would note that small businesses have some of the highest expectations for credit conditions since mid-2022.



The report also offers a look at the type of capital expenditures small businesses are making. That recent drop in capex appears to be driven in part by the largest category: equipment. Only 35% of respondents reported making such capital expenditures in the past six months, the lowest amount since April through December of 2020. Prior to that you'd need to go back to May 2014 to find as low of a reading.

 

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



S&P sectors for the past week-

 

Here are the current major indices pullback/correction levels from 52WK highs as of week ending 3.15.24-


Here is also the pullback/correction levels from current prices


Here are the current major indices rally levels from 52WK lows as of week ending 3.15.24-

 

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Here are the upcoming IPO's for this week-

 

Stock Market Analysis Video for March 15th, 2024
Video from AlphaTrends Brian Shannon


ShadowTrader Video Weekly 3/17/24
Video from ShadowTrader Peter Reznicek

 

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 (3/18-3/22) <-- click there to cast your weekly market direction vote and stock picks for this coming week ahead!

Daily SPX Sentiment Poll for Monday (3/18) <-- 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 3.18.24 Before Market Open:

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

Monday 3.18.24 After Market Close:

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

(T.B.A.)

Tuesday 3.19.24 Before Market Open:

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

(T.B.A.)

Tuesday 3.19.24 After Market Close:

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

(T.B.A.)

Wednesday 3.20.24 Before Market Open:

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

(T.B.A.)

Wednesday 3.20.24 After Market Close:

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

(T.B.A.)

Thursday 3.21.24 Before Market Open:

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

(T.B.A.)

Thursday 3.21.24 After Market Close:

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

(T.B.A.)

Friday 3.22.24 Before Market Open:

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

(T.B.A.)

Friday 3.22.24 After Market Close:

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

(NONE.)

 

And finally here is the most anticipated earnings calendar for this upcoming trading week ahead-
($MU $NKE $PDD $SAIC $LULU $STNE $FDX $CHWY $LUNR $XPEV $ERJ $GIS $ACN $SNDL $JKS $ASO $DRCT $DLO $NIU $BNTX $WULF $KBH $FIVE $HQY $LTRN $RAIL $TME $AIR $OLLI $SIG $GES $ZTO $DRI $XGN $BEAT $HUYA $OCFT $CMTL $CAL $BZUN $ACXP $ALPN $SCS $VTRU $FDS $BTBT $CNM $EXAI $EYEN $HROW)


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

• Most Anticipated Earnings Releases for the week beginning March 18th, 2024 <-- click there to view!

 

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

GLTA on this Monday, March the 18th, 2024!

 

Morning Lineup - 3/18/24 - Rebound
Mon, Mar 18, 2024

After a slow week for stocks last week, bulls are running this morning. Overnight, Japan surged 2.7% ahead of a BoJ rate decision tonight, and China rallied 1%. European stocks are only modestly positive in early trading even as the Nasdaq is indicated to open up well over 1% and the S&P 500 is higher by about 0.7%.

It’s going to be a busy week in terms of global monetary policy, including the Fed on Wednesday. The big event for today, though, is Nvidia’s Developer conference which kicks off today with a keynote speech from CEO Jensen Huang today right after the market closes.

Although it may not necessarily seem like it, the S&P 500 and Nasdaq have now both been down for two weeks in a row. In what bulls are hoping will ultimately end up being a pause that refreshes, nearly half of all sectors have moved out of overbought territory, including Technology which was down nearly 1% last week. The sector is still up nearly 7% on the year which puts it in the number five position in terms of year-to-date performance, trailing Energy, Communication Services, Financials, and Industrials.



We touched on this briefly last week, but it's been a pretty good couple of weeks for commodity-related stocks, and the two leading sectors last week were Energy and Materials with gains of 3.8% and 1.6%, respectively. Both sectors are at or very near ‘extreme’ short-term overbought levels, but from a longer-term perspective, they’ve forged very different paths. As shown in the one-year charts below, while the Materials sector (XLB) has been hitting 52-week highs on a near-daily basis for the last few weeks, the Energy sector is only now starting to test its 52-week highs from last fall. Does the sector still have enough gas in the tank to push through?

 

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 18th, 2024.

 

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

GLTA on this Tuesday, March the 19th, 2024!

 

Morning Lineup - If at First You Don't Succeed
Tue, Mar 19, 2024

It’s not a pretty morning for risk assets as two of the areas of the financial universe that had been the subject of the most investor enthusiasm – AI and crypto – are getting hacked this morning. In the AI space, after Jensen Huang’s keynote speech yesterday, investors are taking a sell-the-news reaction. Despite countless companies issuing press releases that they were “working”, “collaborating”, or “partnering” with Nvidia (NVDA), the stock is down just over 2% in the pre-market. The sell-the-news reaction also applies to Super Micro Computer (SMCI) which just announced that it was selling 2 million shares of stock. Based on yesterday’s closing price, that works out to $2 billion or just under 4% of the company’s market cap. In crypto, bitcoin is trading down over 6.4% in what would be its worst day in just over a year. Bitcoin is currently trading at just over $63,000, but overnight on one exchange (BitMex), it crashed down to $8,900 due to a large number of sell orders totaling $55.5 million. For an asset class that is worth over $1 trillion, a $55 million sell order causing a crash of that magnitude certainly doesn’t suggest a lot of liquidity.

On the economic calendar, Building Permits and Housing Starts were just released and both reports exceeded forecasts. Along with that, January’s reports were also revised higher. These better-than-expected housing numbers also follow yesterday’s better-than-expected homebuilder sentiment report.

For Williams Jennings Bryan, his destiny was clearly not to become President of the United States. Along with Henry Clay, Bryan is one of only two people to unsuccessfully run for President of the United States on the ticket of a major political party three different times (1986, 1900, and 1908). Do you know the other person? Benjamin Franklin (who it wasn’t) once said that “energy and persistence conquer all things” but for Bryan, his political career ended with “three strikes and you’re out”.

Like Bryan, the emerging markets ETF (EEM) is currently making its third attempt since the start of 2023 for a breakout above $42. There’s still time, but the last couple of days have seen the ETF’s momentum start to slow putting its ‘destiny’ of a move into the high 40s in question.



Whether or not EEM breaks above resistance will be dictated in large part by the performance of Chinese stocks which account for more than a quarter of the ETF’s holdings. Chinese stocks have been in a steady downtrend for most of the last year. For much of that period, the 50-day moving average acted as consistent resistance, but after breaking above that level after the Lunar New Year holiday, the Shanghai Composite made a beeline right for the 200-DMA. It successfully closed above that level on Monday for the first time since last August, but the ‘breakout’ didn’t last long. Last night, the Shanghai Composite fell over 0.75% and back below its 200-DMA. Unfortunately, the Shanghai Composite’s one-day above its 200-DMA wasn’t even long enough to qualify as a streak.



At 143 trading days, the Shanghai Composite’s streak of closes below its 200-DMA was the longest since November 2022 and the tenth time since China entered the World Trade Organization (WTO) in late 2001 that it closed below the 200-DMA for six months or more. While the break above the 200-DMA may sound like a positive technical development, historically it hasn’t been. In the year that followed those nine prior streaks, the Shanghai Composite’s median performance was a gain of 4.0% with gains 56% of the time.