Stock Market Today: March 25th - 29th, 2024

Welcome StonkForums to the trading week of March 25th!

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.)

 

'Powell Put' Sparks Surge In Stocks, Bonds, & The Dollar; Bullion & Black Gold Flat On Week
FRIDAY, MAR 22, 2024 - 04:20 PM

Positive macro, central bank love-fest, and AI catalysts... buy all the things...



US Macro 'outperformed' expectations this week amid more pro-cyclical data points...



Source: Bloomberg

...which combined with a dovish tilt by Powell (which lifted 20-24 rate-cut expectation)...



Source: Bloomberg

...and positive AI catalysts...



Source: Bloomberg

Put this all together - rates, growth, and secular momentum --and it is perhaps not surprising that stocks have reached another all-time high in the US.

Led to a solid week for all the majors with Nasdaq outperforming...



The S&P 500 trades at a 2025 P/E of 20+.

So the question may simply be: can the rates/growth/secular innovation dynamic be sustained long enough to allow corporate earnings to grow into the current market's valuation?

Shorts were aggressively squeezed Wednesday an Thursday...



Source: Bloomberg

Treasury yields ended the week lower, including the long-end (-4bps), but the short-end outperformed (-13bps)...



Source: Bloomberg

Which left the curve (2s30s) stepper on the week....



Source: Bloomberg

The dollar roared back to six week highs this week...



Source: Bloomberg

Bitcoin ETFs saw large net outflows this week...



Source: Bloomberg

And that weighed on the underlying with spot bitcoin back at $64,000...



Source: Bloomberg

Gold ended the week around unchanged, despite a hige spike intraweek to a new record high...



Source: Bloomberg

Crude prices ended the week unchanged, roundtripping from the early week gains...



Source: Bloomberg

And finally, this is not good news for Biden and his biddies...



Source: Bloomberg

Pump prices are heading up... and Biden's approval rating down at the sane tune.

 

Why High Interest Rates Haven’t Hurt the Consumer and Maybe Even Helped


“To see what is in front of one’s nose is a constant struggle.” -George Orwell

What I’m about to say might not go over well, but I’m going to do it anyways. Would you believe that in some ways higher interest rates have actually helped consumers? I get it. Half of you are furious with me for saying this, but hear me out first.

Here’s the chart that set X on fire recently. As interest rates have soared, so too have payments on debt. The big worry is eventually this will crush the consumer. I can admit I saw this first hand this year, as my daughter turned 16 and became a driver, and the rate for a car loan was substatially higher than when I got a car two years prior. Higher rates are real and when you use debt, they are adding to the pain.



Let’s look at that chart above one more time. We know that many mortgages are locked in at sub 3.5% rates and that is why interest on mortgages hasn’t spiked nearly as much as non-mortgage interest payments (think credit cards and car loans). Still, we know consumers are paying more for things if they are using debt. How can this possibly be a good thing?

I already wrote about why consumers appear to be in their best shape in decades here, so read this one when you get a chance if you haven’t yet (think wealth increasing more than debt). But now I want to take the other side of higher rates and that is savers are finally being rewarded.

It is estimated there is more than $6 trillion in money markets currently and most of those accounts are earning close to 5%. That right there is a plus side to higher rates. Yes, no one likes all the debt we have and no one likes seeing interest rates on credit cards soaring, but the flipside is that those who have cash are being rewarded like no time over the past few decades. I can’t tell you how many times I was told over the past 15 years how savers are getting nothing on cash. Well, that isn’t the case now.



Looking more closely, interest payments surged from $241.5 billion in December 2020 to the current level of $573.4 billion, for an increase of nearly $332 billion! Given the jump in rates from 0% to above 5%, higher payments make sense and no doubt would likely hurt consumers, as they are now paying more for things any time they borrow .

But while higher rates might mean higher borrowing costs, it also means higher rates of return for savers. For some reason, we don’t hear nearly as much about this positive development . Our team was hated last year for saying stocks would do well and the economy was going to avoid a recession. One of the main reasons we saw light at the end of the tunnel was we believed the consumer was quite healthy and would be able to weather the higher rates. That has happened. But another major plus (and honestly, not one we focused on) has been those same higher rates have helped savers.

Now let’s look at personal interest income. This was $1.5 trillion in December 2020, but was up to $1.83 trillion last month, for a jump in personal interest income of $330 billion. In other words, interest payments were virtually offset by the jump in interest income!



We are aware this isn’t an ideal backdrop for everyone, as many are struggling. But the truth is if you’ve owed stocks and a house the past decade or more, are college educated, and willing to work hard, then your net wealth is likely near all-time highs and these are the people who likely move the needle on the economy. My friend Ben Carlson wrote a great blog recently discussing many of these concepts and I agree with nearly everything he said. I especially liked this chart that showed household assets have grown more than household liabilities since 2020, pushing back against the narrative that we are drowning in debt.



Best Six Months Ends in April

After 5 months of solid gains, are markets ready for a pause?
Bullish Presidential Cycle Sitting President Pattern flattens out the mid-February to late-March seasonal retreat considerably without 2020 in the average.
April is the final month of the “Best Six Months” for DJIA and the S&P 500. From our Seasonal MACD Buy Signal on October 9, 2023, through (March 21, 2024), DJIA is up 18.4% and S&P 500 is up 20.9%. Fueled by interest rate cut expectations and AI speculation, these gains are approximately double the historical average already and could continue to increase before the “Best Months” come to an end.

This AI-fueled bull market has enjoyed solid gains since last October and will likely continue to push higher in the near-term, but momentum does appear to be waning with the pace of gains slowing. With April and the end of DJIA’s and S&P 500’s “Best Six Months” quickly approaching we are going to begin shifting to a more cautious stance. We maintain our bullish stance for 2024, but that does not preclude the possibility of some weakness during spring and summer.

IPO Activity Slow to Recover
Thu, Mar 21, 2024

The talk of the day is the debut of Reddit (RDDT) on public markets. The stock priced at the top of its expected range, and at the intraday highs traded 70% above the IPO price of $34. While Reddit's debut places some attention on new companies, overall IPO activity remains muted. In the chart below, we show the average monthly IPO issuance on a rolling 12-month basis in terms of both the number of companies and the $-value of those stocks. Following record issuance in the first couple of years of the pandemic, IPO activity has cratered to some of the lowest levels since the Financial Crisis. While there has been some recovery in IPO activity and Reddit (RDDT) puts IPOs back into the spotlight, there is still plenty of room to recover to levels observed over the past decade.



While not a perfect measure of recent IPOs, the Renaissance IPO ETF (IPO) seeks to track the space. Even though IPO activity has been weak, the ETF has been trending higher over the past year. With the most popular IPO in some time happening today, the IPO ETF has risen to 52-week highs right off extreme overbought levels.



A Dovish Fed Signals Rate Cuts Amid a Strong Economy – That’s Bullish


The Federal Reserve (Fed) left rates unchanged at their March meeting, but the headline was that the median official continues to project three interest rate cuts in 2024, each worth 0.25%-points. Going into this meeting, a big question was whether Fed members would lower that projection to just two cuts in their summary of economic projections (the “dot plot”). Keep in mind that even two cuts for an economy that’s running strong is a nice tailwind for growth. But there was concern that the Fed would signal a big shift in their thinking, spooked by two months of relatively hot inflation data. However, Fed Chair Powell pointed out that they’re not “overreacting” to recent data, just as they didn’t overreact to the soft inflation data over the prior six months. He stressed that the overall story remains the same: inflation is trending down along a bumpy path. I recently wrote about how the underlying inflation data points to more disinflation, and it’s positive that the Fed is viewing it the same way.

Bullish on the Economy, But Not Worried About Inflation
The details within the Fed’s dot plot were even more bullish. Fed officials upgraded their economic growth projections for 2024 from 1.4% to 2.1% (real GDP growth). That’s a big jump, and acknowledgement that the economy is strong. Their nominal GDP growth forecast for 2024 (real GDP growth + inflation) increased from 3.8% to 4.5%. Nominal GDP growth is where company profits come from, and by itself that’s positive as far as markets are concerned.



Even more interesting: they increased their core inflation (core PCE) forecast for 2024 from 2.4% to 2.6%.

All this to say, the Fed’s still projecting 3 cuts in 2024 – taking the federal funds rate down from 5.4% to 4.6% by the end of the year – even as they upgraded their view on the economy, and projected core inflation to remain above their target of 2%.



It’s one thing to project rate cuts in the face of a slowing economy and lower inflation. But they did the opposite, and that’s a big deal. In fact, the scenario of strong growth with easing inflation that allows the Fed to ease rates is exactly what we laid out in our 2024 outlook. We’d like to think the Fed read Carson Investment Research Team’s 2024 outlook.

Interest Rate Cuts Will Be a Tailwind for the Economy
Powell did say that the projected interest rate of 4.6% at the end of 2024 would be higher than their long-run estimate of the “neutral rate” of 2.6%, implying that monetary policy would remain restrictive. However, the economy managed to avoid a recession in 2022-2023 despite rates at 5.4%. Even better, the economy grew 3.1% in 2023 (inflation-adjusted), well above the 2010-2019 trend of 2.4%.

The labor market has been the backbone of the economy, with rising employment and strong wage growth coupled with easing inflation boosting consumption. Another positive from the Fed meeting is that Powell said they’re aware of the risks of doing too little, i.e. cutting rates too little and too late, and causing “unnecessary harm” to the labor market. They clearly want to hold on to the strong employment gains we’ve seen over the last two years. Up until last year, they were willing to risk higher unemployment if that’s what it took to quell inflation. That’s no longer the case. With inflation heading the right way (down), the Fed likely has the back of the labor market once again.

At the same time, interest rate sensitive areas of the economy, notably housing and equipment investing, have been a drag on growth since 2022. You can see this in the chart below, which shows the main components of our proprietary leading economic indicator (LEI) for the US. Consumption more than offset the drag from other areas of the economy and kept the economy humming. Well, there’s reason for optimism as former headwinds turn into tailwinds. Investors, consumers, and businesses sense that interest rates have likely peaked this cycle, and cuts are coming. Or LEI indicates that the economy continues to grow along trend, if not slightly above it (zero implies trend growth in the chart below).



Take housing as an example. Single-family housing activity makes up the bulk of residential investment within GDP, and that crashed in 2022 as the Fed raised rates. Housing dragged on GDP growth for nine straight quarters (through the second quarter of 2023). That shouldn’t be a surprise because housing is perhaps the most interest rate sensitive sector of the economy, and mortgage rates surged from around 4% to 8%. The good news is that single-family activity has been trending higher since late last year, as rates pull back in anticipation of rate cuts by the Fed. As of February, starts are up 35% from the prior year, and are now 27% above the 2019 average. Permits, which are a sign of future supply, are up 30% year over year and 19% higher than the 2019 average. In short, housing is likely to add to GDP growth this year.



Similarly, a pullback in rates will likely boost the manufacturing sector, as businesses start to invest more in equipment and machinery. Parts of the manufacturing sector, especially defense and hi-tech equipment, are already running strong, but it’ll be positive to see broader strength.

Ultimately, what matters for stocks is profits. And if the economy is strong, profits will continue to grow. The icing on the cake is that we could potentially see rate cuts boosting the most cyclical areas of the economy.

Yen Weakness Continues
Wed, Mar 20, 2024

Following Tuesday morning's widely anticipated decision from the BoJ to end the era of negative interest rates, BoJ Governor Ueda reiterated his view that it was "important to keep conditions accommodative" due to his view that there is "still some distance for price expectations to hit 2%". While the move out of negative rates was hawkish at the margin, it was also well-telegraphed in advance. Just as important, officials maintained their plans to keep policy easy. As a result of the actions and comments, the Japanese yen sold off on the news, and even though markets are closed for the Vernal Equinox today, it has continued to sell off in trading today. As shown in the chart below, the yen is once again testing the 152 level, an area where it has run into resistance multiple times in the last couple of years. The chart of the yen is starting to look a lot like a cup and handle formation which, from a technical perspective, is considered a positive pattern. This would imply that any breakout above the 152 resistance level would be followed by a weaker yen.



Taking a very long-term look at the yen, the roughly 152 resistance level has been in place for decades. The yen also weakened (rising price in the chart) towards those levels back in the late 1990s and late 1980s before rallying (falling in the chart). If the yen does manage to take out that 152 resistance level in the weeks/months ahead, there would be very little resistance between here and 200, and that would likely have some pretty major macro ramifications for capital flows in Japan and around the world.



Why Stocks Aren’t in a Bubble


“Please, God, just one more bubble.” Popular Silicon Valley bumper sticker after the tech bubble burst

With stocks back at all-time highs, many are of the opinion that stocks must be in a bubble. Take note, many of these bubble callers were the same bears that fought this bull market all the way up. Now they are taking a different angle on their incorrect calls and blaming things on being in a bubble, because it can’t possibly be their fault. It must be a bubble.

We disagree, as this is not a bubble. Could there be parts that feel a little over the top? Sure, the excitement toward the Mag 7 at the start of this year was maybe a bubble in how much everyone talked about these names and sure enough, we’ve seen both Apple and Tesla drastically underperform lately. But a bubble overall? We’d say no way.
Let’s start at the beginning. What is a bubble? I found this definition in a Forbes article and liked it:

A stock market bubble—also known as an asset bubble or a speculative bubble—is when prices for a stock or an asset rise exponentially over a period of time, well in excess of its intrinsic value. Eventually, prices hit a wall and then fall very far, very fast, as the bubble “pops.” Bubbles can occur to all kinds of assets in addition to stocks, from real estate and collectibles, to commodities and cryptocurrencies.

Famous bubbles include tulips in Holland in the 1600s, the South Sea bubble in London in 1720, railways bubbles of the 1840s, the roaring ‘20s and crash of 1929, the Japanese real estate and stock market bubble of the 1980s, the tech bubble in the US of the 1990s, and the housing bubble that burst in 2008. There were many others, like baseball cards, beanie babies, and even Wordle if you ask me. Bubbles can be anything that is popular, sees tons of excitement, then the hype is simply too much and the excitement falls, likely along with prices.

The other thing about bubbles is in some cases the prices drop in excess of 90% (or more) and rarely recover or can take decades to recover. It took Japan’s Nikkei 40 years to get back to new highs, while many tech bubble stocks will never recover their losses.

Is the Mag 7 a bubble? Many really smart people are saying this, but let’s not forget that these companies are making money, a lot of money. How many companies in the late 1990s soared simply because they added “dot com” to their names? Trust me, it was a lot. More recently the meme stock craze of 2021 stands out as a bubble. Many of those stocks had very little value, poor earnings potential, weak future growth along with headwinds to growth, yet traders pushed them up to astronomical levels. Sure enough, many of them have come all the way back to earth. Here’s AMC for a perfect example.



Back to the Mag 7 for a second. Amazon now sends you medicine and Apple is practically a bank with Apple Pay. In the past, a railroad stock was just a railroad stock, but that really isn’t the case anymore with these large companies. I will end it with a look at how much money these companies are making. They make a lot of money. A LOT OF MONEY.



Here are price/earnings (p/e) ratios on the Mag 7. I’m old enough to remember the late 1990s and how p/e ratios in the 100s were normal, at least until they weren’t. P/E ratios in the 30s, 40s, and 50s are indeed pricey, but, in my opinion, to say this is a bubble is a bit much.



Is the stock market over in a bubble? Some pockets are quite pricey, but overall we don’t see signs of a bubble. Small caps aren’t even at all-time highs (and are historically cheap relative to large caps) and the Nasdaq is practically flat since November of 2021. That doesn’t exactly scream stocks have gone too far, does it?

We’ve been overweight equities since December of 2021 and we comfortably remain there. One of the main reasons is earnings are really strong. In fact, forward 12 month S&P 500 earnings hit another record recently. Incredibly, earnings estimates have jumped 2% the past six weeks. Yes, stock have soared the past six weeks, but with earnings improving we think this helps to justify things.



Speaking of earnings, the trailing 12-month p/e ratio for the S&P 500 is about 26 versus the five year average of 23 and 10 year average of 21. Yes, stocks are a bit pricey, but by no means historically out of line. Then if you remove tech stocks from the equation, it is estimated those numbers drop another 3 points approximately, putting most stocks right in line with historical averages.



One of the big reasons many claim this is a bubble is because earnings last year were barely positive, while stocks soared, implying it was all multiple expansion. As American football analyst Lee Corso would say, “not so fast my friends.”

Going back to the end of 2019 though last week, the S&P 500 gained 71%. Not bad given two bear markets took place over this time. But where did those 71 points come from? Before I go there, returns can come from three places, earnings growth, multiple growth, and dividends.

Breaking things down like this we found the 71% gain was:

• 47% earnings growth
• 15% multiple expansion
• 9% dividends

In other words, that bubble came from mainly earnings and dividends. Not quite the story that loud guy on X told you, huh?



I will leave you with this. Here are two recent studies that suggest the continued path for stocks is indeed higher. The past 20 weeks the S&P 500 was up 24%, which is one of the best 20-week rallies in history. I found 22 other times stocks gained more than 20% in 20 weeks and a year later stocks were higher 21 times. in other words, this strength off of the late October lows is actually consistent with the beginning of longer-term market strength, not the end of bull markets.



Lastly, it has been a great start to 2024, with the S&P 500 up 8.3% as of the 50th trading day of the year (which was last Wednesday). We found 25 other times stocks were up at least 5% on day 50 and the rest of the year (so about 200 trading days) was up an incredible 24 times and up 12.6% on average the rest of the year versus the average return of 7.6%.



Inflation Projection No Rate Cut Soon

Until PCE is sustained at or below 2% they are not likely to cut. Our PCE projection chart reveals the Fed is not likely to be in a rush. They are slow to cut rates & only move quickly when a real crisis is at hand, which currently is not.

The Street is overly optimistic the Fed will cut rates sooner, substantially, & start well before the election to not appear political. But last week’s higher than expected CPI (0.4% monthly 3.2% yearly) suggests otherwise as PCE tends to follow CPI’s trend.

Headline PCE index, including food and energy “is the Federal Reserve’s preferred measure of inflation.” https://fred.stlouisfed.org/series/PCEPI

PCE’s monthly change was 0.3%, which put the 12-month rate at 2.4%, above the Fed’s stated 2% target. Anything above a 0.1% monthly change will keep inflation above 2%. Any monthly change greater than 0.1% is likely to delay any Fed rate cut until after midyear if not longer.

The Fed may have engineered the goldilocks soft landing, but with inflation persistent while the economy remains resilient and unemployment stays down, there’s no need for the Fed to rush to cut rates.


Homebuilder Sentiment Back to Expansion
Mon, Mar 18, 2024

Earlier today, the National Association of Home Builders published its March reading on homebuilder sentiment. The headline index rose back above 50 and into expansionary territory. Albeit back in expansion, the index is only at the highest level since last July, and that is well below much of the past decade's range.



The only sub-index of note was for future sales. This reading has risen month-over-month in four consecutive releases, which brings it up to match the June 2023 high.



On a regional basis, homebuilder sentiment is showing as much healthier in the Northeast and in the Midwest. While in the Northeast the index pulled back from a nearly two year high, the Midwest leaped 11 points month over month to the highest level since July 2022. That one month jump is tied for the fifth largest one month increase on record. The only larger recent increases were in June and July of 2020. As for the West and South, homebuilder sentiment rose and fell, respectively.



As homebuilder sentiment improves, the chart of the homebuilders, proxied by the iShares US Home Construction ETF (ITB), remains in its long term uptrend. Currently, the group remains overbought in spite of recently pulling back from its highs.



Finally, we would note that although homebuilders have been mostly headed higher, on a relative basis versus the S&P 500 (SPY), ITB has weakened a bit. Taking the ratio of ITB versus SPY, the homebuilders have been on an impressive string of outperformance over the past few years. However, that ratio has made a couple of lower highs since the end of 2023. While that is not to say the longer term trend is reversing, it has at least pumped the brakes so far this year.

 

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 3.22.24-


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 3.22.24-

 

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Here are the upcoming IPO's for this week-

 

Stock Market Analysis Video for March 22nd, 2024
Video from AlphaTrends Brian Shannon


ShadowTrader Video Weekly 3/24/24
Video from ShadowTrader Peter Reznicek
(VIDEO NOT YET POSTED.)

 

StonkForumers! Come join us on our stock market competitions for this upcoming trading week ahead!-

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StonkForums Weekly Stock Picking Contest & SPX Sentiment Poll (3/25-3/29) <-- click there to cast your weekly market direction vote and stock picks for this coming week ahead!

Daily SPX Sentiment Poll for Monday (3/25) <-- 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 3.25.24 Before Market Open:

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

Monday 3.25.24 After Market Close:

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

(T.B.A.)

Tuesday 3.26.24 Before Market Open:

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

(T.B.A.)

Tuesday 3.26.24 After Market Close:

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

(T.B.A.)

Wednesday 3.27.24 Before Market Open:

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

(T.B.A.)

Wednesday 3.27.24 After Market Close:

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

(T.B.A.)

Thursday 3.28.24 Before Market Open:

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

(T.B.A.)

Thursday 3.28.24 After Market Close:

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

(T.B.A.)

Friday 3.29.24 Before Market Open:

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

(T.B.A.)

Friday 3.29.24 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-
($GME $CCL $DRCT $RUM $ALT $WBA $UGRO $OUST $RH $BRZE $CTAS $PRGS $WPRT $PLBY $PAYX $BTM $CNXC $WATT $HUT $SNX $MKC $VUZI $BKKT $GREE $AZUL $NCNO $SYRA $REKR $ZVRA $VRNT $BLRX $LUNA $FC $SMTI $TMC $VIOT $QBTS $GDS $GHG $CWCO $OXM $PL $CXM $DOOO $SMTC $DARE $DOYU $PBLA $FUL $JEF)


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

• Most Anticipated Earnings Releases for the week beginning March 25th, 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 25th, 2024!

 

Morning Lineup - 3/25/24 - A World of Overbought
Mon, Mar 25, 2024

There's a bit of a hangover in the markets this morning as equity futures are lower across the board. Besides the fact that markets just need to digest last week's gains, news out of the EU over probes into Alphabet (GOOGL), Apple (AAPL), and Meta (META) haven't helped. Also, in China, the government is now banning the use of AMD and Intel (INTC) in government computers.

On the economic calendar, the Chicago Fed National Activity Index came in better than expected rising to 0.05 vs -0.34 expected. The only other reports scheduled for today are New Home Sales at 10 AM and the Dallas Fed Manufacturing report at 10:30.

Last week, the S&P 500 had its best week of the year, but the rally wasn’t only here in the US, though. As shown in the snapshot of regional international ETFs from our Trend Analyzer below, of the 18 ETFs listed, all but one was up and just three – Latin America (ILF), International Dividend Achievers (PID), and Emerging Markets (VWO) – didn’t close out last week at overbought levels (1+ standard deviations above the 50-day moving average). It’s also worth noting that 17 of the 18 ETFs shown are also up YTD.



Here in the US, it was a broad rally last week as Real Estate was the only sector ETF to finish in the red, and seven of eleven sectors rallied over 1%, including three that were up over 2.5%. Normally, when you have a big gain in the market like last week, you can expect to see Technology at the top of the performance list, and while the 2.25% gain for the sector was pretty much right in line with the S&P 500, it was ‘only’ the fourth best-performing sector on the week. On a YTD basis, Technology ranks as just the fifth best-performing sector, and six other sectors are more extended relative to their 50-day moving average. Technology has been far from a dog lately, but it’s certainly given up some of its leadership position, and it’s understandable with several of the mega-caps now in the crosshairs of US and EU regulators.

 

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 25th, 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 26th, 2024!

 

Morning Lineup - 3/26/24 - Spicing Things Up
Tue, Mar 26, 2024

There’s a positive tone in futures this morning which is helping to reverse Monday’s decline. With earnings season not kicking off for a couple of weeks, investors are left to grapple with whether the results from Q1 will be enough to justify the rally since late October. The only significant earnings report this morning (and this week for that matter) was from spice maker and seasoning behemoth McCormick (MKC) which reported better-than-expected EPS and sales and is trading up about 6% in the pre-market. That better-than-expected result was telegraphed last week when General Mills (GIS) reported better-than-expected EPS and sales and noted in its conference call that it was seeing a pickup in the percentage of Americans choosing to eat at home. Outside of MKC, though, we’re in a bit of a vacuum for earnings results, and that will leave investors forced to focus almost exclusively on economic data and attempt to extrapolate that into company results.

Outside of the equity market, treasury yields have seen a modest downside bias along with the dollar, and Bitcoin is little changed after surging back above $70,000 yesterday. While not necessarily a financial story, the collapse of the Francis Scott Key Bridge in Baltimore after a container ship crashed into it overnight will pose problems for ship traffic in the Port of Baltimore and a traffic nightmare for cars not to mention the tragic loss of life. As fans of The Wire will remember, the port is one of the largest in the nation. Bloomberg also reported that no other port in the United States handles more imports of autos and light trucks.

It’s a holiday-shortened week for the stock market but not for the economic calendar, and the most important report of the week could be Friday’s release of Personal Consumption Expenditures (PCE) for February when the equity market will be closed in observance of Good Friday. Already released inflation data for February suggested that the January increase may have been more than an aberration. Therefore, traders will pay close attention as PCE is typically considered the Fed’s preferred inflation measure.

While the release of PCE only covers February, already released regional Fed manufacturing reports for March showed some encouraging signs. We’ll start with the bad news first. In the Dallas Fed Manufacturing report, released on Friday, the Prices Paid component ticked up from 15.4 to 21.1 - the highest level since September. While the Dallas Fed report showed a pickup in prices, the Empire and Philly Fed reports showed a deceleration. In the Empire report, March’s reading of 28.7 partially reversed some of the February surge, but outside of February’s reading, it would have been the highest level since last May. Saving the best news for last, the Prices Paid component of the Philly Fed report plunged from 16.6 down to 3.7. Not only is that barely in positive territory, but it’s also the lowest monthly reading since May 2020.

To round out the five regional Fed reports, the Richmond Fed report will be released at 10 AM today and the KC Manufacturing report comes out on Thursday. Overall, the first three of the regional Fed reports show a mixed picture in terms of inflation, but there were some welcome trends.

 

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 26th, 2024.