Stock Market Today: February 26th - March 1st, 2024

Welcome StonkForums to the trading week of February 26th!

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.)

 

Best Week For Bullion In 2024 As Mega-Caps Melt-Up On Bad Breadth
FRIDAY, FEB 23, 2024 - 04:00 PM

Ok, so everyone knows, NVDA is awesome, topping $2 trillion in market cap intraday this week (after a $2BN hike above consensus)...



Source: Bloomberg

...but today saw a smidge of profit-taking...



MAG7 stocks were obviously up on the week (the sixth in the last seven), but today's weakness took the basket back below its prior record high...



Source: Bloomberg

There's no way, right?



Source: Bloomberg

Small Caps ended the week down around 1% while the rest of the majors surged 1.5-2% on this holiday-shortened week...



And the best-performing sector of the week was... drum roll please... NOT tech. Consumer Staples were best, energy worst (but green), and Technology middle of the pack...



Source: Bloomberg

Bonds were bid to end the week with the long-end outperforming overall and the curve flattening around the 5Y...



Source: Bloomberg

The yield curve (2s30s) flattened bigly on the week to its most inverted since 2023...



Source: Bloomberg

Rate-cut expectations for 2024 continued to slide, now at just a 30% chance of 4 cuts (70% of 3)...



Source: Bloomberg

...and June is now the favored month for rate-cuts to start...



Source: Bloomberg

But stocks don't care about The Fed... for now...



Source: Bloomberg

Macro data continued to strengthen - just as we said it would given the lagged impact of the massive loosening of financial conditions...



Source: Bloomberg

Gold ended the week with its best day in February, up 6 of the last 7 days to close at the highs sine the start of the month...



Source: Bloomberg

The dollar drifted lower on the week, but recovered from an ugly overnight puke on Wednesday



Source: Bloomberg

Bitcoin drifted lower this week...



Source: Bloomberg

Despite solid net inflow from ETFs...



Source: Bloomberg

While bitcoin was down, ethereum significantly outperformed, topping $3,000 during the week. This dragged ETH up to one-month highs relative to BTC...



Source: Bloomberg

Oil prices tested up to January's highs (WTI $79) before fading back lower today and lower on the week...



Source: Bloomberg

Finally, under the hood, it's kinda worrying...

the S&P jumped more than 2% on Thursday as investors cheered blowout results from Nvidia Corp., even though only 73% of its members advanced. That’s the lowest participation for an up day of this magnitude since the immediate aftermath of the 2020 election, when the S&P 500 gained 2.2% while only 47% of its members went up. Since then, 2% up days have been accompanied by an upward move in 92% of its stocks, on average, data compiled by Bloomberg show.



As Jason Goepfert noted on X, the performance divergence between the S&P 500 Index and individual stocks on the New York Stock Exchange was even more extreme. The index’s 2.1% rally came as less than 60% of stocks on the New York Stock Exchange advanced. The mismatch was seen just three other times in the past 60 years - 1987, 2008 and 2020, data compiled by Sentimentrader show.



The Arms Index, also called the Short-Term Trading Index, or TRIN, compares the number of advancing and declining stocks to advancing and declining volume. Readings below 0.5 historically suggest there’s more demand for shares since that would mean volume is higher in the average up stock than down ones, while a move above 2.0 is a sign investors are dumping equities, according to market technicians. Following Thursday’s rally, it sat at a level of 1.3, meaning buying pressure was still well off its peak from late last year.



And as Nomura's Charlie McElligott noted earlier, the most analogous week to this week, just happens to be 1/7/2000 (in terms of spot, vol, and breadth moves).

 

March: Historically Solid, but Plagued by Steep Losses in Election Years 1980 & 2020

As part of the Best Six/Eight Months featured in the 2024 Stock Trader’s Almanac, March has historically been a solid performing month with DJIA, S&P 500, NASDAQ, Russell 1000 & 2000 all advancing more than 64% of the time with average gains ranging from 0.7% by Russell 2000 to 1.1% by S&P 500.

March has a mixed track record in election years. Average performance is hammered lower by steep declines in 2020 and 1980. DJIA and S&P 500 have both advanced in 11 of the last 18 election-year Marchs, but the forementioned declines drag average performance to just 0.2% and 0.4% respectively. NASDAQ, Russell 1000 and Russell 2000 are hit even harder due to fewer years of data. Declines in 2020 were the result of the covid-19 pandemic while 1980’s losses can be attributed to surging inflation that peaked at 14.6%.


Inside Nvidia’s Earnings: Accelerating Demand for AI


“Forget self-driving cars, AI is transforming every industry, and Nvidia is at the center of it all” – Venture Capitalist, TechCrunch

With bated breath, investors eagerly awaited the final earnings report of the “magnificent 7.” Among the seven, Nvidia’s report was perhaps the most hotly anticipated, given it’s the driving force behind accelerated computing and artificial intelligence. This tech darling, responsible for significant market gains over the past year and a half, carried the weight of the entire AI industry on its shoulders. An earnings beat was expected, though how large of a beat left investors wringing their hands. In the days leading up to the report, shares of Nvidia had fallen about 8% as investors took profits. It turns out, Nvidia beat fourth quarter earnings estimates by $0.57 (~12%) and raised guidance for the first quarter above expectations. Ultimately, shares climbed back to the level they were at before the nervous excitement began as AI chip demand continued to accelerate.



Generative AI has reached a tipping point and demand for artificial intelligence is exploding. In the fourth quarter, the company’s sales more than tripled and earnings increased nearly six-fold. Demand is extremely robust, and the company will be short supplied for the foreseeable future. Investors expect its earnings will double again in the upcoming year, as Nvidia extends its streak of shattering expectations. CEO Jensen Huang said, “Demand is surging worldwide across companies, industries, and nations.” Nvidia H100 accelerator chips serve as the backbone of artificial intelligence and companies like Amazon, Meta, Microsoft, and Alphabet are scrambling to acquire them.

Generative AI represents a technological leap that pushes past the boundaries of prior generations of computing. Until this breakthrough, computers relied on complex algorithms to crunch numbers, solve equations, and manipulate statistics at ever increasing speeds. Generative AI, however, has the ability to learn, adapt, and create, using not only calculations but also text, images, sounds, and other inputs. This is having a significant impact on various fields, from drug discovery to artistic creativity. Nvidia’s chips happen to be perfect for building and training artificial intelligence models because they are so adaptable. The company developed a software ecosystem over the past decade that makes it easy for developers to manipulate and optimize their chips, as opposed to competitor’s chips that are purpose built and less malleable. Nvidia is clearly in the dominant position for the initial wave of AI, though competitors like AMD and Intel are trying to catch up.

It’s becoming increasingly clear that AI will become ubiquitous; it’s already being adopted at an alarming rate. Nvidia’s report reassured investors that AI’s prolific spread isn’t slowing down, but we’re hearing that from many other companies as well. UnitedHealth Group noted how it uses AI to improve customer service and employee productivity, Bank of New York Mellon is using it to do mundane or repetitive tasks. Nvidia noted that nearly every automotive company in the world is using AI, for design and efficiency, though many are also developing autonomous driving capabilities. Quest Diagnostics is using it to improve quality and JPMorgan is using it to improve fraud detection. AI is not just about Nvidia, or the Magnificent 7; it is already impacting companies across the world. As Nvidia’s earnings confirm, investments in AI aren’t slowing down for the foreseeable future, which is good news for the stock and the stock market.

Par for the Course After Presidents' Day
Tue, Feb 20, 2024

As we noted in today's Morning Lineup, international equites were generally lower yesterday while US markets were shuttered in observance of President's Day. The US is continuing the negative tone today with the S&P 500 down roughly 50 bps as of this writing. Of course, seasonality is never the sole reason for ups and downs of the market, but we would note that today's weakness is basically par for the course coming back from Monday's holiday. In the charts below, we show the average daily change and percentage of time with a move higher for the S&P 500 during the week of Presidents' Day since 1970 when the stock market began to observe the holiday on the third Monday of February.

As shown, historically the S&P 500 has averaged an 18 bps decline the first day back from President's Day with positive performance less than half the time. Furthermore, assuming the declines hold through the close, today would mark the fifth year in a row that the S&P 500 fell on the Tuesday after President's Day. Wednesdays and Thursdays of the week of Presidents' Day have historically seen even more consistently negative price action albeit the average declines are much smaller at 2 bps and 3 bps, respectively. Finally, Friday tends to see a rebound with an average gain of 17 bps and positive performance 57% of the time.

One Worry Right Now? The Calendar.


“I’ve been on a calendar, but I’ve never been on time.” -Marilyn Monroe

The S&P 500 fell slightly last week. It was probably due to happen, as this comes on the heels of the first time in history the index was higher 14 out of 15 weeks while advancing more than 20%. In other words, some type of a pause would be perfectly normal.

Looking at last week’s weakness, it was mainly due to large tech and communication services names, while areas like small and mid-caps actually gained on the week. We all know how well the largest tech names have done over the past year, so some potential weakness taking place is noteworthy. But then, there are always opportunities somewhere and if we do see continued rotation out of some of the highfliers we wouldn’t be surprised to see flows move to some of the under-loved areas of the market like small and mid-caps.

Take note that February is typically one of the weaker months of the year, but most of that weakness happens the second half of the month. Since the first half of February was strong, we’d suggest being open to possible weakness over the coming weeks.



Additionally, our Carson Cycle Composite suggests the potential for a break heading into late March is quite high. This composite looks at various types of years and combines them into one cycle. We look at the average year, average year the past 20 years, year four of the Presidential cycle, and year four of a new President, the year after a 20% gain, and years that had a higher January. As you can see here, combining all those years has the potential for near-term weakness on alert.



We Aren’t Alone Anymore

This time a year ago we would tell anyone who would listen that the economy was likely going to avoid a recession and stocks were going to have a great year. Not many agreed (it felt like no one agreed to be honest), but fortunately things played out as we expected. We are now noticing many others are coming around to our more optimistic views, which is why we called our 2024 Outlook Seeing Eye to Eye.

But in the near term, to see many bulls coming into the fold is a potential concern. I’ve even seen some of the more vocal perma-bears from last year claiming they are now bullish. Of course, they blame the Fed or United States Secretary of the Treasury Janet Yellen for the rally, as if they have some magic button that creates a bull market. They don’t and they surely don’t have an easy button that lets productivity grow at 3.9% annualized the past three quarters either. The stock market is strong because corporate profits are improving, the consumer is healthy, inflation is trending lower, and the Fed is likely going to start cutting over the coming months.

Multiple sentiment polls are indeed showing big jumps in optimism, which has my contrarian bell dinging. I’m a big fan of the Bank of America Global Fund Manager Survey and it just showed overall sentiment at the highest level in two years. Now note, this is still nowhere near previous peaks, which says we could have a ways to go before the ultimate peak, but this jump in optimism should be noted.



One more from that recent GFS that caught my attention was the number of managers looking for ‘no landing’ is jumping. If you’ve followed us then you know all of last year Sonu Varghese, VP, Global Macro Strategist, was saying the plane had plenty of fuel and never needed to land, but it appears others are finally catching onto what he was saying all along. This is fine, but from that contrarian point of view is worth noting. Since avoiding a recession is normal, falling concern about the economy isn’t contrarian in itself, but we do lose some of the potential extra fuel from bearish views unwinding.



The Valentine’s Day Indicator Flashes Green, Not Red

We want to be clear here. Should stocks take a well-deserved break, we would still expect likely higher prices by year end. The economy remains on a firm footing overall, we expect to see record earnings this year, profit margins are curling higher, business investment is strong, inflation overall remains in a downtrend, and the Federal Reserve Bank (Fed) will likely begin cutting over the coming months. We were bullish all of last year, when many others were forecasting a recession and a bear market. Fortunately, we continue to see many positives out there overall.

Here’s one more bullish bullet point. The S&P 500 was up more than 4% for the year on Valentine’s Day, which trigged a positive Valentine’s Day Indicator. We found 28 other times stocks were up at least 4% for the year on this day and the rest of the year was quite green, higher 26 times (92.9% of the time) and up more than 13% on average, compared with the average year up 7.5% and higher 73.0% of the time.

 

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 2.23.24-


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 2.23.24-

 

​

Here are the upcoming IPO's for this week-

 

Stock Market Analysis Video for February 23rd, 2024
Video from AlphaTrends Brian Shannon


ShadowTrader Video Weekly 2/25/24
Video from ShadowTrader Peter Reznicek
(VIDEO NOT YET POSTED.)

 

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

========================================================================================================

StonkForums March 2024 Stock Picking Contest & SPX Sentiment Poll <-- click there to cast your monthly market direction vote and stock picks for March of this year 2024!

StonkForums Weekly Stock Picking Contest & SPX Sentiment Poll (2/26-3/1) <-- click there to cast your weekly market direction vote and stock picks for this coming week ahead!

Daily SPX Sentiment Poll for Monday (2/26) <-- click there to cast your daily market direction vote for this coming Monday ahead!

========================================================================================================

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!

 

​

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 2.26.24 Before Market Open:

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

Monday 2.26.24 After Market Close:

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

(T.B.A.)

Tuesday 2.27.24 Before Market Open:

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

(T.B.A.)

Tuesday 2.27.24 After Market Close:

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

(T.B.A.)

Wednesday 2.28.24 Before Market Open:

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

(T.B.A.)

Wednesday 2.28.24 After Market Close:

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

(T.B.A.)

Thursday 2.29.24 Before Market Open:

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

(T.B.A.)

Thursday 2.29.24 After Market Close:

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

(T.B.A.)

Friday 3.1.24 Before Market Open:

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

(T.B.A.)

Friday 3.1.24 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-
($MARA $SNOW $CRM $U $AMC $ZM $CELH $DVN $ZS $AI $SOUN $FSLR $PARA $WDAY $NCLH $LI $PLUG $FSR $OKTA $BIDU $CAVA $DPZ $HIMS $DELL $FUBO $CNQ $IONQ $RKLB $MLCO $ARRY $BRK.B $BYND $AXON $LOW $LMND $AZO $OKE $WW $SPLK $DNA $IRBT $NVAX $DUOL $BBY $KRYS $ADSK $SPCE $HPQ $CRON $AAP)


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

• Most Anticipated Earnings Releases for the week beginning February 26th, 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 under an hour from the US cash market open.

GLTA on this Monday, February the 26th, 2024!

 

Morning Lineup - 2/26/24 - Busy Data Week
Mon, Feb 26, 2024

After a short and extremely limited week of economic data last week, I hope you’re ready for a full week of trading and a busy week of data. Kicking off the week, futures have been little changed as traders await the release of New Home Sales and the Dallas Fed report. Overnight, most Asian equity indices were lower to kick off the week even as Japan bucked the trend to trade at another record high. Europe has also been sluggish in early trading, but overall, the pace of news has been quiet.

Taking a long-term look at the chart of the S&P 500, we’ve essentially seen a textbook breakout. After trading at new highs in late 2023, the S&P 500 successfully tested its breakout level early this year and hasn’t given investors much of an opportunity to get in ever since.



Looking more closely at a shorter-term chart of the S&P 500, it has been "walking the line" of a steep uptrend of higher highs since mid-November, and while the steepness of the trend hasn’t accelerated it has retained its steady ascent.

 

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, February 26th, 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 over an hour into the US cash market open.

GLTA on this Tuesday, February the 27th, 2024!